The pandemic is functioning as a catalyst for the already booming e-commerce sector in Europe. It is accelerating many existing developments, such as the increased use of digital technologies or the growing acceptance of social and mobile commerce. However, this year, retailers should assign special priority to optimizing the user experience.
During the pandemic, European e-commerce is experiencing above-average growth: with an increase in sales of around 20 percent, exclusive online retailers are considered to be the main beneficiaries of this situation. The same is true for cross-border platforms.
User experience is crucial for market competitiveness
Restrictions on virus containment have accelerated the shift from stationary retail to e-commerce and thus permanently changed consumer behavior. Even previously cautious, mostly older consumers have turned to online commerce in order to shop safely.
While national borders are becoming increasingly unimportant, the demands regarding the user experience are continually rising. For online retailers, it pays to know, serve and advise customers comprehensively. Here’s what should be considered:
– Acting out on a cross-channel-approach, enabling seamless shopping experiences
In addition to the rapidly increasing use of mobile devices for online purchases, industry experts are witnessing the disappearance of traditional boundaries between sales channels. Customers often use multiple channels for their purchases and take a situational approach. A mix of stationary and online retail as well as telephone and online service is not uncommon.
Suppliers would do well to be present on as many relevant digital channels as possible to offer their consumers a seamless shopping experience. However, international companies looking to gain a foothold in Europe should note that the European market is heterogeneous. Therefore, it is important to know the local habits and to serve the preferred channels of the respective target group in the local language.
– Using technologies – optimizing the user experience
Which customer doesn’t want to be personally pampered – e.g., greeted in a friendly manner and always given individual advice – when shopping? Just a few years ago, this was one of the most important advantages of stationary retail. Nowadays, online stores are also capable of providing this service: digital technologies such as Artificial iIntelligence (AI) and Big Data make it possible to provide customers with individually tailored merchandise offers in real time.
Based on user data, previous purchases, and search engine queries, companies can comprehensively personalize product selections at the right timing. Using AI is a key factor in this process. This is also confirmed by Divante’s Global E-Commerce Trend Report 2021. With the help of AI, companies are able to optimize the user experience of each individual customer and thus gain a competitive advantage.
Other innovative approaches to customer service and engagement, such as Augmented Reality, will also increasingly come into focus. Alas, this not only due to the fact that consumers are more comfortable when they can try on clothes in virtual changing rooms or test furniture virtually in their own homes. Studies show that these advantages can effectively reduce exchange rates, which is particularly advantageous in times of high parcel volumes.
– Social media as a growing sales channel
Even prior to the pandemic, it was said that social commerce, i.e. the direct sale of products via social networks such as Facebook, Instagram or Pinterest, would change the shopping habits of European consumers. This development has gained momentum: Consumers are spending more time on social networks and find them increasingly interesting for shopping activities. Companies are responding with increased influencer collaborations and have already allocated more budget to influencer marketing in 2020.
According to the Divante Report, a large proportion of consumers (87 percent) believe that social media helps them to make the right purchasing decision. Through postings, potential customers are directly addressed and directed to products in the online store. This increases the chance of higher sales for retailers. Traditional websites, on the other hand, are losing importance.
– Examining new sales channels: Messaging and Voice Commerce
Offers for social shoppers extend to conversational commerce via instant messaging services: Led by WhatsApp Shopping, a new sales channel could establish itself at this point, paving the way to a “new shopping normal”. Thanks to the new “Cart” function, providers are able to contact potential customers directly via WhatsApp chats and offer them information, advice and even the direct purchase of a product. And what is required for this is not much more than an overview of articles.
Online retailers should also keep an eye on voice commerce via smart speakers such as Amazon’s Alexa or Google Assistant. An increasing number of customers can already consider making a voice-controlled purchase. Eventhough the big breakthrough is still to come, the number of customers who make purchases by voice is rising steadily.
– Security: a sales argument of increasing relevance
A positive user experience when shopping online also includes the issue of security. For the majority of European consumers, data protection and security are decisive aspects that speak for or against a purchase.
In addition, online retailers should also protect themselves: With the strong growth of online commerce, fraud attempts are on the rise. For example, the survey “Fraud in e-commerce” shows that almost all online stores surveyed in Austria, Germany and Switzerland (97 percent) have already fallen victim to fraud. The main reason cited for this is purchase on account, where payment is made only after having received the goods. Nevertheless, purchase on account is set to remain the most popular payment method in 2020, especially in German online retailing. Retailers can achieve up to 40 percent more sales as a result. At the same time, they face the task of detecting risks and fraud attempts with the help of innovative technologies – automatically at best.
– Sustainability in e-commerce – more than just a trend
In view of plastic packaging, rising return rates and long supply chains, the path to greater environmental sustainability in online retail still seems a long way off. While in Europe, sustainable e-commerce is still in its beginnings, it is certainly already more than just a trend.
In view of the global climate crisis, the increase in corporate attentiveness is enormous. Ever more consumers, especially younger target groups, are paying attention to environmental compatibility when shopping online and agree, for example, to goods being shipped in reusable cartons. Further, the length of the supply chain is also becoming a purchasing argument. Internationally active retailers are well advised to have a stronger focus on recyclable packaging materials, climate-neutral package deliveries, and sustainable and socially responsible business models. Local best practice examples can provide impulses as to which efforts in this regard are already being realized in European e-commerce.
Seizing the opportunities of change, generating more revenue
The above-mentioned trends for European e-commerce are proving to be an opportunity for internationally operating companies to stand out from the growing competition and generate more sales. The focus of all those efforts is clearly on improving the user experience: European consumers want to receive individual advice and service – preferably across channels and in real time. Retailers should adapt to these growing demands. For this to succeed, they should rely on new technologies such as AI and Big Data, and build up expertise in the profitable use of data. Last but not least, business success is based on an innovative logistics concept. This should enable a service-oriented approach from the processing of an order to possible returns and ensure a reliable and timely delivery of goods.