Over the past two decades, digital commerce has evolved decisively and rapidly in the direction of greater sophistication and complexity. Channels have multiplied, digital shelves have been extended exponentially, product information has become more readily available and transparent. Consumers have been empowered by increased opportunities for product discovery, all the knowledge they need to make fully informed purchasing decisions has literally been placed in the palm of their hands, and they have been handed an ever growing list of fulfilment options to suit a wide range of needs.
Complexity for ecommerce operators has translated into convenience for the consumer. That has become the standard which has driven growth in digital retail. Those who have done it best - Amazon, most famously - can be credited with transforming the way all of us think about shopping.
Wunderman Thompson Commerce launched its now annual Future Shopper report three years ago, with the aim of providing first-hand insight into digital retail trends from the people who make all the difference - shoppers themselves. 2019 marks our biggest survey yet, covering a multinational sample of more than 15,000 regular online consumers from the US, UK, Spain, France, Belgium, The Netherlands, Germany, and Czech Republic.
A NEW PHASE FOR DIGITAL COMMERCE
As we have expanded the scope of our survey, we have found evidence that the evolution of ecommerce is now entering a new phase. Driven in the first instance by the increasing possibilities of mobile technology, consumers are finding their shopping options are becoming even more immediate and ubiquitous. The established model of having to click through to a dedicated ecommerce site with a dedicated shopping cart to make a purchase is being challenged. Social media giants like Instagram are starting to add native transaction platforms to shorten the journey between inspiration and purchase. In the not too distant future, it is more than likely that the majority of digital platforms we engage with for business or leisure will include some kind of integrated channel for the purchase of goods and services.
At the same time, machines are starting to take the weight of many day-to-day shopping tasks. In categories like grocery, we are seeing an increase in Programmatic Commerce™, with the Internet of Things enabling our devices and appliances to make decisions on when to reorder items on our behalf. AI applications are able to learn our purchasing habits over time to facilitate this process, while more and more of us are using AI-powered personal assistants with names like Alexa to make purchases with nothing more than a simple voice prompt.
But while Alexa is another example of Amazon’s gold-standard talent for innovation in the field of digital commerce, our latest Future Shopper survey also finds evidence that, just maybe, the US giant’s quest to dominate the global ecommerce market is coming under threat. Amongst younger shoppers, particularly the 16 to 24 year old ‘Generation Z’ group, we found loyalty to and trust in Amazon noticeably lower compared to older shoppers, for whom Amazon has become something of a go-to default.
So with social commerce going native and a new generation of embedded technologies meaning you don’t necessarily even have to head to a marketplace or ecommerce site to make a purchase anymore, are we seeing a levelling of the playing field that gives brands and retailers new cause for optimism in their digital prospects?
THE BATTLE FOR HEARTS AND MINDS
Commenting on the findings of The Future Shopper 2019, Neil Stewart, Global CEO at Wunderman Thompson Commerce, said: “Brands and retailers are locked in a battle with Amazon over who will own the customer of the future. Industry consensus is that the retail giant is dominating, but the numbers show that its grip on shoppers might not be so strong when it comes to the younger generation. Gen Z consumers hold different values to their parents’ generation, and this carries through to how they shop. They aren’t loyal to the Amazon brand yet, and other retailers need to act now to take advantage of this by delivering the innovation and experience that will engage younger shoppers, now and in the future. Miss this window of opportunity, and they could lose the war for the hearts, and shopping dollars, of the next generation of customers.”
To triumph in this struggle for digital hearts, minds and dollars, brands and retailers alike need to arm themselves with in-depth understanding of digital customer journeys and the factors that influence purchasing decisions online. Our latest survey provides clear insight on three key phases of the digital shopping experience - inspiration, search and choosing a place to purchase - gathered straight from the mouths of customers.
On inspiration, our survey results show consumers are truly platform-agnostic, using a multiplicity of channels for product discovery and recommendations. Asked for a top three, more than half of our survey respondents (51%) said they use search engines like Google to generate ideas for purchases, with a third (33%) using brand websites and 32% using social media. This means brands and retailers have to take a truly omnichannel approach to inspiration, building a presence in as many places used by their customer base as possible.
Things narrow down when it comes to searching for specific products, to do things like compare prices or read user reviews. Here, Amazon still dominates, with 56% of respondents saying they head straight to the marketplace to start their search. Brand and retailer websites make up the other significant channels for search. This narrowing from discovery to focused product search presents an opportunity for brands. It is at this point of transition that you really want your products to be front of mind, ready for the evaluation stage, and this is therefore where media and marketing spend can reap the best returns.
Finally, on where consumers choose to make their purchases, the assumption has long been that if shoppers search on Amazon, they buy on Amazon. Yet Amazon’s hold on consumers may not be as strong as it once appeared. 61% of consumers who took part in our survey said they would buy elsewhere if they got a better price. In addition, around a quarter said they would be happy to overlook Amazon if they were offered better loyalty programme (26%) or more convenient delivery options (23%). What is more, nearly half (48%) said they still preferred the experience of a real store, which rises to 53% amongst Gen Z shoppers. Almost one in five (18%) of the latter also suggest brand ethics would play a part in their decision not to buy through Amazon.
Overall, then, as digital commerce becomes more embedded in day-to-day online activity, as channels multiply and technology accelerates the quest for convenience and immediacy, the message from consumers is that there is no hallowed ground when it comes to making decisions about how and where they shop. The assumption that Amazon always comes first is starting to show cracks. With the right partners to help manage the complexity of product discovery and multichannel marketing, by being laser-focused on price, range and convenience, retailers and brands alike still have plenty to be optimistic about in digital commerce.
Written by Hugh Fletcher
Head of Thought Leadership (EMEA) and Head of Marketing (UK)
Hugh is a go-to spokesperson for tech trends impacting eCommerce, and one of Wunderman Thompson Commerce's most prominent thought-leaders on digital innovation and change.
A note about the Future Shopper 2019 survey
Research for this Future Shopper 2019 report was conducted by independent research consultancy Censuswide. A total of 15,188 consumers, who shop online at least once a month were surveyed, across 8 international markets, led by UK and US.