Three years after the COVID-19 pandemic, some economists are pessimistic about the outlook of the global economy, predicting another recession. That means, as a merchant, it’s important to take the pulse of your shoppers to find out what they’re most likely to respond to.
One of the more obvious strategies to employ heading into 2023 is increasing your customer lifetime value through upsells to boost revenue. Which, to be fair, is something you should already be focusing on. But what else can ecommerce professionals do?
Here are five ways shopper behavior will change in 2023, and how it will impact ecommerce brands.
1. You can find a lot of new shoppers on TikTok
Almost 25 billion TikTok users in the U.S. report using the platform to both discover products and to make new purchases. According to The New Consumer and Coefficient Capital’s survey, 19.5 billion U.S. users surveyed also reported that they use TikTok to stay up-to-date with various brands.
What may be even more impressive is that 26.3 billion U.S. TikTok users reported purchasing an item strictly based on the item’s presence in TikTok videos. This ultimately culminated into a total of 26.6 billion purchases made directly through the app, itself.
The big takeaway? TikTok isn’t just great for brand awareness or marketing to strictly Gen-Z audiences—it’s an app that boasts a staggering conversion rate for ecommerce businesses.
2. Leverage influencer marketing as much as possible
Another growing trend in the ecommerce marketing space is employing the use and image of different levels of celebrities to either endorse, use, or promote your products. While it’s been on the rise for the better part of the last decade, influencer marketing only keeps getting more popular and driving home the results. In fact, influencer spending in 2021 reached just shy of $14B, revealed in research carried out by the Influencer Marketing Hub.
The interesting part about influencer marketing is that it doesn’t just consist of A-list actors wearing some new brand of jeans on billboards (though it still helps). Influencer marketing can be much more creative and organic, especially when giving influencers free reign to develop and post their own user-generated content (with your products) across various mediums like Instagram, TikTok, SnapChat, and other channels.
For example, Zac Efron recently surfed the airwaves (both literally and figuratively) by becoming a brand ambassador for Park City, Utah’s Kodiak Cakes brand. This commercial is a solid example of influencer marketing. Ultimately, in this example, the brand has final say in how the ads appear. But, you can also employ influencers to create their own content featuring your products. Professional big wave surfer, Felicity Palmateer, represents a flurry of brands including various women’s health brands and even Ryderwear women’s athletic gear (as well as wireless headphones).
Plus, having influencer endorsements has been shown to double engagement on social posts. Best of all, you don’t have to shell out millions to snag an A-list celebrity. Recent reports show that even 40% of brands opt to use “micro influencers,” which typically includes fairly undiscovered “celebrities” who have large followings on their social accounts.
3. Customers want more sustainable, ethical business practices
There is no doubt that sustainability is crucial for our planet’s future. Creating green and environmentally responsible business practices should be a focus of any business. Most importantly, your shoppers are demanding it, too. IBM research found that nearly 80% of surveyed people report that environmentally-sustainability practices are moderately and/or very important in order to make a purchase.
But it’s also important to acknowledge that just committing to green product creation isn’t enough for ecommerce businesses to be truly sustainable. Online retailers need to ensure that they offer an environmentally-friendly returns process because roughly 5 billion pounds of returned products end up in landfills each year—just from ecommerce returns.
You can eschew your carbon footprint and minimize landfill waste by offering pre-printed returns labels with your packages. You may even wish to incentivize customers to seek exchanges as opposed to returns—or even offer a return-free refund policy.
That said, you could also adopt a returns management platform like Loop to optimize your returns or engender a carbon-neutral returns policy. Having a platform like Loop can help you gain holistic insights into your returns data, empowering you to determine which products aren’t profitable as returns—or which can’t be resold—and can, therefore, be donated or recycled.
Loop can help incentivize your shoppers to opt for exchanges, as opposed to returns, in real-time, offering them the opportunity to explore similar items in your inventory. You can even include a discount or loyalty points for choosing the exchange option.
4. Offer multiple payment options and simple, hassle-free returns
Depending on the products you sell, it is definitely worthwhile for ecommerce brands to offer various payment options for your shoppers. Obviously, if you’re selling a large amount of SKUs with varying costs, you should offer your customers the option to pay in simplified and modern ways such as accepting credit and debit cards, PayPal, Venmo, or Zelle. But one of the most emerging financial trends is offering customers the ability to access Buy Now, Pay Later (BNPL) platforms such as Sezzle.
BNPL availability has grown by 900% since just 2018. These options are particularly useful for ecommerce brands with high-cost products, such as electronics or home appliances. These BNPL platforms help increase buyer decision-making by offering same-as-cash or even monthly payment plan options with small, incremental interest charges. Most importantly, online shoppers are much more likely to make a purchase given the availability of the BNPL option.
When it comes to returns, you need to offer a clear, simple process if you want to succeed in ecommerce, period. Ecommerce businesses, on average, should anticipate roughly 30% of all products sold to be returned at some point. More crucially, offering easy returns is the best way to increase customer lifetime value, as 92% of shoppers say they will buy again from an ecommerce brand if they offer a simple and hassle-free returns process.
If streamlining your shipping and returns process feels insurmountable, you should consider using Loop. Not only does having an automated returns platform pave the way for easy returns management, it also prioritizes offering exchange options for your customers – even better, it paves a road for ROI. You’ll also receive valuable insights as to why your customers are seeking a return/exchange for each product. This kind of granularity will allow you to evaluate product quality and site/product messaging, both of which can help minimize returns in the future.
5. Focus on shaping customer relationships and creating more lifetime value
As previously discussed, offering returns, refunds, or even complimentary item exchanges are a steadfast way to increase and maintain repeat business. So will offering varying payment options. Remember, even though we may be facing economic uncertainty, that doesn’t mean that people have stopped spending money or making purchases—they’re just much more shrewd, deliberate, and analytical about it.
Also: if you’re an ecommerce brand that hasn’t ventured into the foray of offering loyalty programs, you need to, stat. It’s one of the most effective ways to increase customer loyalty and extend customer lifetime value. Euromonitor recently did a study and found that 63% of buyers regularly participate in customer loyalty programs because of the discounts and special offers they receive. Others join because of the ability to receive free products and to gain access to members-only perks and exclusive rewards.
For etailers, it’s wise to create a point-based or accrual system based on purchase histories. But what if you could even incentivize your shoppers to opt for exchanges instead of returns by using a similar system? For example, some ecommerce companies that use Loop’s software give their buyers the option to explore products from a real-time inventory to make an exchange instead of a return. Additionally, they further incentivize the buyer to make an exchange by offering bonus credit and extra loyalty points for those who opt for the exchange.
Book a demo with Loop today and learn how you can save time and money.