Understanding the shifting consumer attitudes in e-commerce is vital for businesses to thrive in this evolving landscape. Adapting to the unique preferences of each generation, addressing the challenges of fraud, and delivering exceptional customer experiences are key to success in today's era of e-commerce.
ClearSale has revealed the findings of its State of Consumer Attitudes on Ecommerce, Fraud & CX 2022-2023, highlighting the biggest changes in consumer behaviour and attitudes.
Another recent survey by Stackline also emphasized the dynamic world of consumer preferences, showing that ratings and reviews had the biggest impact on brand performance.
The pandemic effect
The COVID-19 pandemic brought about a huge shift in consumer behavior and attitudes, reshaping the e-commerce landscape. With the sudden closure of brick-and-mortar stores, consumers and businesses alike had to adapt swiftly to the digital realm. The transition was smoother for some and a daunting challenge for others, causing a divide between experienced and novice online shoppers.
By the end of 2020, e-commerce saw a 60% increase in shopping activity, with experts suggesting that the equivalent of five to seven years of online retail growth occurred in just four months. This shift was accompanied by changes in consumer preferences and purchasing habits across various industries.
Adapting industries
As travel and airlines bore the brunt of the pandemic, consumers turned to home improvement projects and redecoration, bolstering the home goods industry. In 2021, as people realized the need to occupy themselves for an extended period, the consumer electronics industry saw a surge in activity. E-commerce shoppers began gravitating towards smaller-value items, such as apparel and accessories, while seasoned online shoppers were more inclined to invest in high-ticket purchases, like mattresses and sofas.
However, the availability of stimulus checks and forgiveness loans in recent years has diminished, coupled with economic concerns. As a result, consumer spending patterns are leveling out or declining, with 23% of consumers spending less than $50 per month in 2022, compared to 12% in 2021, while 51% spent $50-$200 per month in 2022, compared to 38% in 2021.
Generational shopping habits
One of the biggest revelations in this evolving landscape is the emergence of distinctive generational shopping habits. The different generations, from Gen Z and millennials to Gen X and baby boomers, show unique behaviours and preferences. For instance, younger consumers shop online more frequently, with 54% of Gen Z and millennials shopping online three or more times per month, often for apparel under $200. In contrast, older generations shop online less often, with 59% of Gen X and baby boomers shopping online only once or twice per month but tend to purchase apparel and home goods.
These generational differences extend to e-commerce channels and personalization, highlighting the need for a tailored approach to cater to the diverse needs and attitudes of each generation.
The escalating challenge of fraud
As consumers adapted to online shopping, fraudsters took advantage of their inexperience, leading to an increase in fraud reports. Between 2020 and 2021, the Federal Trade Commission received nearly 5 million fraud reports, amounting to $3.5 billion in losses. E-commerce payment fraud is projected to exceed $206 billion by 2025, with evolving fraud schemes that range from traditional tactics to innovative models.
However, as fraud increases, consumers grow more cautious about where they shop online. Nearly half of consumers who participated in the research reported that they experienced more fraud in 2022 than the year before, making consumers much more wary about where they shop online.
A significant portion of respondents preferred being contacted to confirm orders, a unique approach that aligns with ClearSale's fraud prevention solution.
The importance of CX
The impact of customer experience (CX) in e-commerce cannot be overstated. While the perception of your brand is crucial, the actual shopping experience holds more significant weight in customer loyalty. CX must cater to the diverse demands of customers, with younger generations seeking personalization and older generations desiring more straightforward experiences.
Key considerations for ecommerce businesses
Shipping is nearly as vital as pricing for consumers, and 80% of consumers said they would be willing to wait longer to receive their products if the shipping was inexpensive or free, while 64% of consumers review a site's return policy before placing an order.
In addition, contactless payments and digital wallets are increasingly popular, with 82% of Gen Z shoppers and 78% of millennial shoppers preferring digital wallets as a payment option. Over half of the two generations combined would abandon their purchase if a digital wallet option wasn't available.
