How New Tech is Changing Consumer Purchasing Behavior

New Tech Changes Consumer Purchasing Behavior
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Consumer purchasing behaviour is always evolving. Normally, it’s down to new technological innovations cutting out unnecessary steps in the buying journey allowing shoppers to get what they want, the way they want it, quicker. We’ve all gotten used to this but usually it takes time – often years – for new technology to settle in and become a normal part of everyday life.

However, life in 2020 has been different for all of us. The circumstances resulting from the COVID19 pandemic have meant that the majority of consumers have started shopping online, and digital purchasing is being adapted to faster than ever. One stat is pretty telling – just 9% of consumers regularly did their grocery shopping online pre-pandemic, and now 63% state that they do with the majority set to continue. 

Here are how other industries are faring online vs. offline:

New Tech Changes Consumer Purchasing Behavior

The advent of new shopping technology such as Voice Assistants (Alexa, Google Home), Personalization, and Digital Wallets, is spurring this on making buying online easier as well as more helpful and interactive. Any ecommerce business that hasn’t considered adapting to or implementing the latest purchasing innovations for their own customer journeys will soon find themselves falling behind their competition. Consumers adapt to good ideas quickly, and are especially loyal to those who give them a better shopping experience.

We look at some of these new tech innovations and the way they’re changing how consumers are interacting with and purchasing from ecommerce outlets.

 

Voice Assistants and Chatbots’s Effect on Consumer Purchasing Behavior

The popularity of smart home speakers has exploded: as of January 2020, in the USA one in four people (157 million) have one, and over 10 million have been purchased in the UK. It’s estimated that by the end of 2023, there’ll be 8 billion in use! Why is this such a big deal for ecommerce in particular? 

Microsoft reported that 40% of the consumers they surveyed in the US, UK, Canada, India, and Australia had used voice technology to buy online. COVID19 has only accelerated their use – one in five smart speaker owners use them for shopping and – 52% of voice assistant users say they use the technology “several times a day or nearly every day”. These are already massive usage figures, so it’s important for businesses to prepare themselves accordingly.

It’s worth investing into optimizing your content for voice search to ensure you’re at the top of search results for voice search queries, especially long-term ones. Make sure your content has ‘Rich Answers’ – Knowledge graphs, panels and boxes as well as answers for common questions that can become Featured Snippets (the Google answer box at the top of the search engine results page). Featured snippets are used as the answer a smart speaker will read out, so it’s good to incorporate these into your content offering. Local listings are a priority for voice search too as users often ask for services or information ‘near me’. With 91% of businesses stating that they’ve begun optimizing for voice technology, this is a vital area for ecommerce businesses to be ready for.

Chatbots are another new tech innovation that have been widely implemented since being introduced a couple of years ago. They’re a useful, automated customer service solution for consumers to connect with your company to inquire about orders, sales, and queries. More than half of consumers say they’re more likely to shop with a business that offers a chat service, and millennials (those born between 1980 and 2000) have said that chatbots are their preferred way to connect with a company. For ecommerce businesses dealing with a lot of customer service queries at all hours of the day, Chatbots are a great way to keep issues attended to and your customers happy.

 

Personalization and Multichannel Marketing and Consumer Purchasing Behavior

As much of ecommerce operates internationally, personalization has become a key part of delivering consumers a tailored and individual shopping experience wherever they are. This can mean giving better recommendations and more concise information (cost, availability, shipping details) that can help to increase sales – 93% of companies have seen increased conversions when using personalized marketing strategies. 

Consumers clearly respond well to it too – 40% stated that they bought something more expensive than planned due to their personalized experience. With the wealth of data at hand, using it to create a better experience will only increase customer loyalty to a brand or company.

Multichannel Marketing – a sales approach that integrates a customer experience across different channels such as text messages, social media, and email – is another marketing development that is having a huge impact on conversion rates. Marketers who use three or more channels in one campaign have seen a 287% higher purchase rate than campaigns that use only one, and a 90% higher customer retention rate. 

Using a multichannel marketing approach can create another opportunity to make customers aware of better deals or what’s still in their shopping cart waiting for purchase. It’s also becoming more and more impactful as many e-shoppers are already taking an omnichannel approach to buying online. They’ll often find and browse products through mobile, then complete their purchase on a desktop/laptop after further research.

A further issue that both Personalization and Multichannel Marketing can help with is Shopping Cart Abandonment. Cart abandonment rates are very high in a lot of countries – over three quarters of online shoppers do this for a variety of reasons such as insufficient information or uncertainty of the checkout process. Using both strategies properly can vastly decrease abandonment numbers and ensure customers are retained and converting.

 

Digital Wallets and Mobile

The use of Digital Wallets – such as PayPal and Apple Pay – across the world is vastly varied. In some regions such as the Asia-Pacific market, they’re hugely popular and are already much more integrated into the ecommerce shopping experience for many. Digital wallets make up 58.4% of all Asia-Pacific ecommerce transactions compared with credit (20%) and debit cards (4.2%). 

However, other regions tell a different story in regards to Digital Wallet adoption:

Consumer Purchasing Behavior Per Region

Digital Wallet use in Europe, Middle East and Africa is popular for the majority of ecommerce purchasing accounting for 24.6% of transactions although credit cards and debit cards are still widely used. North America is still lagging quite far behind Digital Wallet adoption – only 23.7% of transactions used them which is lower than credit cards but higher than debit cards. South America is even further behind – Digital Wallets made up for only 13.8% of e-transactions whilst credit cards are used much more. 

Knowing the differences of how these regions spend online is vital to offering consumers their preferred option. Simply having various payment methods at the checkout screen can be the difference to a customer converting or not. However, the increase in ecommerce spending and the rate that Digital Wallets are being used – up 77% in North America between 2015-18 – it’s clear that Digital Wallets will continue to grow as a payment option, especially after 2020! 

Another important consideration is the relevance of mobile-purchasing. Currently, orders made from desktop computers are still worth more money on average and have more items. However mobile accounts for more than half of all time spent on retail websites. As previously mentioned, modern day shoppers use an omnichannel approach to buying online so ensuring an ecommerce store is optimized for mobile use is a must. Google even added a site’s mobile-friendliness to its search criteria in 2018 highlighting just how relevant it is for web users.

Pre-pandemic estimates forecasted that mobile purchases would be worth $3.56 trillion by 2021 to make up 73% of the total global ecommerce spend. Post-pandemic, these figures are likely to be much higher. We’ve seen the rate at which consumers have adapted to ecommerce from offline shopping already and since the lockdown measures began in March, 45% of consumers have stated that they’re using their mobile phone more as a shopping channel. We’ll have to see in 2021 just how much mobile purchasing makes up ecommerce spending.

 

Continue Research Consumer Purchasing Behavior

As new tech continues to alter and change consumer behaviour towards ecommerce, it’s vital for businesses to continue researching, understanding, and using them to their advantage. The ecommerce marketplace is congested and creating a seamless experience for your customer, whether it’s a payment method or a little personalization, can go a long way. Online or offline – it’s still about keeping the customer satisfied!

 

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