Traditionally, the second quarter has been characterized as a cool-down period for the e-commerce sector. In Q1, returns are typically processed from a busy Q4 holiday season, and in Q2, consumers' wants and needs are reviewed. This is a good opportunity for online retailers to re-evaluate their e-commerce business. In Q2 2021, many emphasized at-home consumption, health-related purchases, grocery e-commerce, and consumers looking for products that serve an excellent purpose. Due to the pandemic inching closer to endemic status, consumers are in search of other opportunities to spend this year.
Last year, spikes in inflation did not affect holiday spending. However, with the Federal Reserve starting a series of interest rate hikes this quarter, and the Russian-Ukraine War causing shortages worldwide, there is continued concern that combative pricing and promotion methods will come under increased scrutiny, leading to a decline in sales. Supply chain problems are being worsened by a lack of labor, which is causing retail ships loaded with goods to become stuck at sea. There is an insufficient number of dockworkers, trucks, and drivers in the ports to keep the supply chain operating. Despite these concerns, Adobe Analytics reported in March that U.S. consumer spending on e-commerce is predicted to hit a record $1 trillion this year because of the pandemic-induced shift to online shopping.
Here are the top three consumer trends e-commerce sellers need to pay attention to this quarter:
Focused On Experiences
Travel and entertainment are expected to play a larger role in consumer spending this quarter. If you are a company involved in e-commerce or logistics, this might cause you to wonder, "How can I help with travel and entertainment?" Despite the fact that these are more experience-based purchases, there are still ways you online sellers can benefit from this fundamental shift in consumer behavior. What items from your store can you place in front of consumers to help them with their experiences? For those in clothing retail and electronics, it is easy to see the synergy. In order to gain a competitive edge, physical stores are investing significantly in capturing the attention of shoppers and providing experiences that promise lower friction and a better-integrated shopping experience. E-commerce sellers should follow suit. A number of engaging technologies, including virtual reality, hands-on experiences, and in-store app functionality, are gaining significant traction in this trend. Since its inception in China a few years ago, live streaming has also become a widespread method of selling products online recently. Shoppable videos are harnessed by online sellers and brands in an effort to increase social commerce opportunities, and consumers are enthusiastic about buying products in a community setting immediately after they are unveiled.
Expectation vs. Reality
Today's consumers are fed up with feeling duped by brands. A previously understanding customer now appears hostile to a less-than-stellar experience. More and more consumers are choosing to shop only with companies that have an abundance of positive reviews or a strong market presence. In their opinion, the experience should be seamless; they expect retailers to know their preferences and to engage with them on a more personalized and relevant basis. Consumers want to feel confident about the products they are purchasing and transparency remains a key factor. Additionally, consumers are increasingly choosing to spend their money with brands that share the same ideals as they do. They care deeply about how a business operates - if your values don't match their own, it could end a sale before they even begin browsing. Understanding the customer has always been a priority in retail, but now it is no longer optional.
Demands for Faster Fulfillment Options
Due to the growing difficulty of finding goods in stores, fulfillment options are becoming increasingly important to online shoppers. It seems consumers will expect no less when it comes to shipping and delivery. Due to a lack of "Buy Online, Pick up In-Store" (BOPIS) options, shoppers are avoiding certain retailers, proving how important it is to provide such choices. Furthermore, several studies have found that two out of three online shoppers prefer delivery over pickup for their purchases. According to consumer trends 2021 insights, 27% of consumers expect to receive something they’ve purchased online the same day or the next day, yet same-day delivery is still rarely available through e-commerce websites. Fast shipping is essential for consumers with 47% of consumers reporting they would be willing to spend more money on a product if it meant faster shipping. Based on a report by Shopify, 66% of consumers expect free shipping on every order. Online sellers can benefit from looking into opportunities that will allow them to get products to customers more quickly, especially with shipping delays and concerns over the supply chain being more common now. Undoubtedly, consumers are doubling down on wanting fast and free shipping. How do you combat these expectations without throwing money out the door? A shipping solution is the answer.
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