For years, direct-to-consumer (D2C) retailers have relied on tools like free shipping and discounts to encourage purchases among online shoppers. But now, the ecommerce landscape isn’t quite so simple.
In fact, we’re beginning to see a rising preference among consumers for highly personalized and engaging shopping experiences.
Recently, Nogin commissioned The Harris Poll to conduct a survey among more than 2,000 US adults aged 18 and older.* The survey shows that a significant majority of Americans are active online shoppers with 96% having made online purchases in the past year, and 26% having made an online purchase in the past 24 hours.
Notably, while the data showed that traditional incentives like free shipping (81%) and discounts (68%) still top the list of what inspires online shoppers to make purchases, consumers are increasingly motivated by personalized experiences, with 20% of online shoppers saying they are inspired by personalized promotional emails and 17% by personalized brand recommendations.
Now, with the holiday season on the horizon, it’s especially vital that D2C retailers embrace the rising tide of personalization, strengthening their ecommerce capabilities to build better, more engaging experiences, targeted to each individual shopper.
As retailers strive to align ecommerce strategies with diverse consumer preferences, here are four key trends to keep in mind:
Personalized experiences help drive buying behavior among online shoppers
The data is in and it’s clear that personalized experiences matter to consumers. Among online shoppers, 20% report that personalized promotional emails serve as a compelling motivator for making a purchase, while 17% find themselves swayed by personalized brand recommendations. The survey found that, among online shoppers, men are more likely than women to be inspired to make an online purchase based on personalized recommendations from a brand (19% vs. 14%). Meanwhile, younger online shoppers are more likely to be influenced by personalized recommendations than their older counterparts (22% of 18-44 year olds, compared to 12% for 45+). Adopting conversion optimization techniques can further enhance these personalized strategies, driving higher engagement and improved sales outcomes.
AI Personalization Examples
Artificial Intelligence (AI) is transforming personalization across various industries, particularly in e-commerce. AI allows businesses to analyze vast amounts of data to understand customer preferences and behavior. This enables the creation of highly personalized shopping experiences that cater to individual needs and preferences. For example, AI-driven recommendation engines can suggest products based on a customer’s past purchases and browsing history, leading to increased customer satisfaction and higher sales. To explore more about how AI personalization is revolutionizing the e-commerce sector, check out ai personalization e-commerce. This resource provides in-depth insights into the practical applications of AI in personalizing the e-commerce experience, offering valuable information for businesses looking to enhance their digital strategies.
Social media has become the new storefront, with online shoppers of all ages making purchases through social ads.
The rise of social shopping is likely due to the significant time consumers spend on social media platforms and the personalized recommendations delivered by social algorithms that strongly resonate with shoppers. A robust e-commerce social media tips strategy can capitalize on this trend. As many as 70% of online shoppers report making purchases directly through social media ads, with 29% of those making purchases this way more frequently this year than last year.
Notably, social shopping has become prevalent among all age groups, including more than half (56%) of online shoppers aged 65+ who have made purchases through social media ads. Among those who make purchases directly through social media ads, those ages 18-44 are more likely than those ages 45+ to say they made more purchases through social media ads this year compared to last year (36% vs. 22%).
Free shipping is the top incentive that inspires online purchases
For many shoppers, the prospect of free shipping might be the tipping point that triggers a purchase. However, understanding consumer behavior analysis reveals that free shipping (81%) and discounts (68%) top the list of factors that online shoppers say would inspire them to make a purchase. Interestingly, more online shoppers would be inspired to make an online purchase if free shipping is offered (81%) than if free returns are available (48%).
Lack of integrated payments, high shipping costs and difficult return policies are likely to cause an online shopper to abandon a purchase
Consumers want ease throughout the shopping experience — and they don’t want to pay too much for shipping. In fact, more than 3 in 4 online shoppers (78%) say high shipping costs would make them likely to abandon an online order (78%), followed by difficult return policies (44%). Meanwhile, almost 1 in 4 online shoppers (23%) say not having integrated payments at checkout would increase their likelihood to abandon their online purchase.
However, the impact of purchase abandonment due to the lack of integrated payment offerings and buy now, pay later (BNPL) options varies by age: Online shoppers ages 18-34 are twice as likely as those ages 35+ to say not having integrated payments at checkout would increase their likelihood to abandon their online purchase (36% vs. 18%). With regard to BNPL, online shoppers ages 18-44 are more likely than those ages 45+ to say not having the option to pay with BNPL services would increase their likelihood to abandon their online purchase (18% vs. 7%).
Want more insights into online shoppers’ attitudes and behaviors? Check out the press release here. For the full results of Nogin’s survey, please email: roger@nogin.com
*This survey was conducted online within the United States by The Harris Poll on behalf of Nogin from August 29-31, 2023, among 2,041 adults ages 18 and older, of whom 1,973 are online shoppers (i.e., have made a purchase online in the past year). For complete survey methodology, please contact nogin@bocacommunications.com.
