Novel behavioural challenges for e-commerce players

In 2020, global retail e-commerce sales reached over $3.9 trillion worldwide, a 10.2% increase over 2019. Perhaps the most notable recent trend in the world of e-commerce is the unprecedented use of mobile devices. In the third quarter of 2020, smartphones accounted for over half the world’s website traffic. The disparity between desktop and mobile traffic around the globe is more than double in favour of mobiles in every country apart from those in North America.

Although mobile traffic to e-commerce sites is very high, actual sales through it lag those via desktop net-access. This low conversation rate through the smartphone is an area of concern. The nature of interaction a person has with her or his smartphone is quite different from the way s/he interacts with a desktop. The smartphone is always with you, you interact with it very frequently, but these interactions are of very short duration. To improve the conversation rate of e-commerce through handsets, marketers must develop a deep understanding of an individual’s relationship with this gadget. This knowledge should be the foundation on which appropriate persuasion stimuli are developed for smartphone users.

Studies show that shoppers are more likely to buy online on Wednesday, Thursday and Friday. Saturday saw the biggest dip in online sales volume. This insight is in line with some of the earlier studies showing that e-commerce is an ‘in-between’ activity. In contrast with brick-and-mortar shopping, the insight that online shopping is an activity where not much effort is put in has significant impact on the type of stimuli created for e-com. During those short in-between moments, for example, the shopper is not in a mood to absorb too much information. Communication that is more visual in nature, with a lower cognitive load, would therefore be ideal.

According to the Sales Cycle report, 43.8% of those visiting an e-commerce site do make the effort to visit product-detail pages. This surely is a sign that these shoppers have some interest in buying that product. 14.5% of the total visitors take another significant step in their purchase journey and add the product to their cart. But only 3.3% of the visitors to the e-commerce site complete a purchase transaction. This data on the abandonment rate is quite surprising. These are customers who have added items to their shopping carts, but have not gone on to buy them. An abandonment rate of 84% for jewellery is understandable because these are infrequent and expensive purchases. But abandonment rates of 61% for groceries and 72% for pharmaceuticals is surprising because these are mostly essential items.

Today, with massive developments in search engine optimization and data analytics capabilities, there is a lot of emphasis on targeting the right shopper. But high abandonment rates are an indication that the real e-commerce challenge is not about initiating browsing behaviour, nor managing search behaviour. The business’s actual challenge begins where the shopper adds a product to her or his cart.

To mitigate the abandonment problem, we should know ‘why’ of this behaviour. One explanation is that searching for a product online is much like the window shopping of the brick-and-mortar world. But in the digital world, you also get to add the sought product to your cart, a ‘reward experience’ close to actually purchasing the product. Another explanation is that while putting a product into a physical shopping cart is an indication of a purchase intention in a regular supermarket, adding something to a cart in the e-commerce world does not indicate the same. Instead, adding to an online cart is a way of comparing a few close options before the final purchase decision is made.

The mediums that are most effective in tackling the abandonment problem are the product tile and product display pages. These are available closest to the point of abandonment. But, unfortunately, while millions of dollars are spent on the brand’s website and a lot of thinking goes into developing TV commercials and other promotions for the brand, very little importance is given to the design of the product tile and product display pages. Even the elementary lessons of persuasive communication seem to be forgotten while designing them.

Much more thought must go into designing persuasive product tiles and display pages. What is the predominant emotion at the point of purchase? Do stimuli like reviews work for categories like toothpaste that people have been buying for decades? Is the final price the best persuasion stimuli, or is the perception of a significant price reduction more persuasive? Will a product’s climate sustainability credentials be an ideal nudge to seal the purchase decision? There are many questions that we need to find answers for before we can design a really persuasive product tile or product display page.

The truth is that no one has really figured out the last-mile appeal of the e-commerce business. Even for many companies that have been around a long time, it is still day one on that score. The game is all about identifying small incremental changes that, as they get compounded over time, could accelerate the business’s rate of growth. It’s about seeking progress over perfection.

Biju Dominic is the chief evangelist, Fractal Analytics and chairman, FinalMile Consulting