Customer Service | Digital Commerce 360 https://www.digitalcommerce360.com/topic/customer-service/ Your source for ecommerce news, analysis and research Thu, 15 Feb 2024 21:17:21 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 https://www.digitalcommerce360.com/wp-content/uploads/2022/10/cropped-2022-DC360-favicon-d-32x32.png Customer Service | Digital Commerce 360 https://www.digitalcommerce360.com/topic/customer-service/ 32 32 Shopify jockeys for big growth in B2B https://www.digitalcommerce360.com/2024/02/15/shopify-jockeys-for-big-growth-in-b2b/ Thu, 15 Feb 2024 20:25:35 +0000 https://www.digitalcommerce360.com/?p=1317544 While Shopify Inc. reported robust 2023 financial results, with total gross merchandise volume on its clients’ ecommerce sites up 23% to $75.1 billion, it noted even strong growth in its B2B business. Harley Finkelstein, Shopify’s president, said on a Q4 and  year-end earnings call this week that the vendor’s B2B gross merchandise volume doubled last […]

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While Shopify Inc. reported robust 2023 financial results, with total gross merchandise volume on its clients’ ecommerce sites up 23% to $75.1 billion, it noted even strong growth in its B2B business.

Harley-Finkelstein-Shopify

Harley Finkelstein, president, Shopify Inc.

Harley Finkelstein, Shopify’s president, said on a Q4 and  year-end earnings call this week that the vendor’s B2B gross merchandise volume doubled last year. He added that, in the fourth quarter, Shopify’s business with B2B companies “was up nearly 150% year over year.”

Shopify did not immediately reply to a request for specific figures on B2B-related revenue and GMV, but executives said on the earnings call that that they see the B2B market playing an increasingly vital role in Shopify’s growth plans.

An ‘exciting’ B2B growth opportunity

Finkelstein — referring to B2B as a “big and exciting growth opportunity” — said Shopify is experiencing B2B market growth with two types of companies: existing Shopify retail merchants adding a B2B channel, such as The Home Depot, home furnishings retailer Lulu and Georgia, and jewelry retailer BaubleBar; and newcomers to Shopify like Carrier, a global manufacturer of heating and cooling and other building-management systems.

He added that getting a client company like Carrier, which signed on as a client in Q4, was “opening the door to a whole new opportunity of industries we previously didn’t serve.”

Jeff Hoffmeister, Shopify’s chief financial officer, added that Shopify is seeing more demand from large enterprise B2B companies for the vendor’s multiple technology offerings, including Shopify Plus, international B2B sales, online payments, and physical store point-of-sale systems that integrate with Shopify’s ecommerce platform.

“All those things are the growth engines for the future,” he said.

Shopify says its store point-of-sale terminal is designed to integrate with the Shopify ecommerce platform and support “over 1,000 physical stores.” Referring the POS systems as new “on-ramps or entry points into Shopify,” Finkelstein said they “substantiate our role as the unified commerce operating system for merchants, whether they come to us to sell online, off-line, or anywhere in-between.”

He added, “We are building on our commitment to help merchants sell to all of their customers from a single, unified commerce platform, with upgrades to our B2B offering, including headless B2B storefronts and support for sales reps.”

Among other new features, the ecommerce technology company has also launched for merchants on the Shopify platform:

  • Shopify Bill Pay, an expense management tool that lets merchants pay their vendors directly from their Shopify administrative application.
  • Shopify Credit, a “pay-in-full” business credit card designed to help manage monthly cashflow and earn cashback savings without paying interest or fees.
  • Shopify Collective, an application that enables merchants to source products from other companies on Shopify and have them shipped directly to customers.

Perks of unified commerce and integrated POS

A unified commerce environment, including integrated POS systems, can play a vital role for B2B companies trying to keep up with omnichannel commerce that extends to their physical branches and other outlets, B2B industry experts say.

“Key aspects such as ERP integration, branch-selling, and tools that aid the end customer in their job are crucial for a successful B2B platform,” says Justin King, managing partner of advisory firm B2X Partners. “Shopify’s acknowledgment and incorporation of these elements, along with their significant growth in B2B GMV and the acquisition of B2B-only merchants, position them as a potentially formidable player in the B2B e-commerce technology sector. Their commitment to providing a unified commerce platform for both online and offline B2B transactions further solidifies their intent to capture and expand their market share in this domain.”

Jay Schneider, the founder of digital advisory firm B2BSquared, adds that the Shopify platform still needs to show that it can handle complex online B2B interactions, such as those involving displays, configurations and quoting of products with extensive lists of attributes and complex pricing.

Finkelstein said that Shopify generated $441 million last year from its offline offerings, including POS hardware, “more than five times what our offline revenue was just four years ago.” Shopify estimates its total addressable market for offline and B2B business at “over $450 billion,” he said, adding, “We have barely scratched the surface of this opportunity and expect it to be a key growth driver in 2024.”

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Google Cloud releases generative AI tools for retailers https://www.digitalcommerce360.com/2024/01/12/google-cloud-releases-generative-ai-tools-for-retailers/ Fri, 12 Jan 2024 18:29:11 +0000 https://www.digitalcommerce360.com/?p=1315461 Google announced new tools using generative AI for retailers through its Cloud Business on Thursday. The tools will employ the emerging technology to improve online shopping experiences through retailers who use Google Cloud, the technology company said in a press release. The announcement comes a few days before The National Retail Federation’s Big Show, where […]

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Google announced new tools using generative AI for retailers through its Cloud Business on Thursday. The tools will employ the emerging technology to improve online shopping experiences through retailers who use Google Cloud, the technology company said in a press release.

The announcement comes a few days before The National Retail Federation’s Big Show, where retailers and technology vendors will gather to discuss industry trends and test new products.

Google’s new generative AI retail tools

One of the tools is a generative AI-powered chatbot that can be embedded on retail websites and apps. Google refers to the chatbots as virtual agents. It says the chatbots can carry out “helpful and nuanced conversations with shoppers using natural language and can provide product options based on a shopper’s preferences.”

For example, the virtual agent chatbots can give shoppers personalized recommendations. The suggestions might be based on budget, preferred colors, type of event and other factors, according to Google. Retailers can roll out the feature in as little as a few weeks.

Google also introduced a new large language model (LLM) that it says will improve search capability on retailers’ websites. Retailers will be able to customize an LLM based on their product catalog and the shopping patterns of customers. That will improve search results and surface more relevant products for consumers, Google says.

The technology company also debuted an AI tool for customer service operations. Google launched AI customer service agents that can integrate with whatever customer relationship management system a retailer already uses to take on tasks like scheduling appointments or checking order statuses. Retailers can use AI for customer interactions with real agents, too. Google’s tool will use AI to summarize customer service conversations and help agents find relevant internal information to help customers, it says.

“In only a year, generative AI has morphed from a barely recognized concept to one of the fastest-moving capabilities in all of technology and a critical part of many retailers’ agendas,” Carrie Tharp, vice president of strategic industries, Google Cloud, said in a statement. “With the ability to accelerate growth, boost efficiency, fuel innovation, and reduce toil, generative AI solutions are ready to be deployed now, and Google Cloud’s recent innovations can help retailers recognize value in 2024.”

AI and retail

Retailers and technology companies are embracing AI to cut costs and improve customer experiences. 

Victoria’s Secret announced a multi-year deal with Google to use the generative AI chatbot on its retail website. The purpose of the deal is to use the tool to make personalized recommendations to Victoria’s Secret customers.

“The integration of Google Cloud’s AI and generative AI technologies will not only improve the online shopping experience for our customers, but also will empower our internal teams to drive innovation across various business functions,” said Chris Rupp, chief customer officer at Victoria’s Secret. “This partnership signifies a new era for Victoria’s Secret & Co., where cutting-edge technology meets our passion for enhancing the customer journey and reinforcing our position as a leader in retail.”

Adore Me, another lingerie brand under the Victoria’s Secret umbrella, has already been using generative AI technology through Google Cloud, the retailer said.

Victoria’s Secret is No. 52 in the Digital Commerce 360 Top 1000, a ranking of North America’s leading retailers by online sales.

AI’s impact in retail is growing. Salesforce says AI influenced 17% of all online orders made in November and December. It also says AI accounted for $194 billion in sales over the holiday season. 

Walmart also just announced plans to use AI in new ways at CES. The retailer is adding generative AI-powered search to its app using Microsoft’s Azure OpenAI. A new InHome Replenishment feature will also use AI for Walmart+ members, it said.

Walmart ranks No. 2 in the Top 1000. It also ranks No. 9 among global marketplaces by gross merchandise value.

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3 must-know CX trends for B2B commerce in 2024 https://www.digitalcommerce360.com/2024/01/11/3-must-know-cx-trends-for-b2b-commerce-in-2024/ Thu, 11 Jan 2024 16:27:15 +0000 https://www.digitalcommerce360.com/?p=1315383 The CRM software market value is anticipated to increase from ~$64B in 2022 to ~$146B by 2029, and 91% of top businesses are investing in AI — with that percentage expected to increase. CX and B2B trends In the fast-evolving landscape of customer experience, the influence of AI stands as a central force, with data-driven […]

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GeertLeeman_SAP-CX

Geert Leeman

The CRM software market value is anticipated to increase from ~$64B in 2022 to ~$146B by 2029, and 91% of top businesses are investing in AI — with that percentage expected to increase.

With business AI, the B2B space can take customer relationships to a new level.

CX and B2B trends

In the fast-evolving landscape of customer experience, the influence of AI stands as a central force, with data-driven innovations ushering in a new era of personalized and interactive experiences. Businesses are gearing up to navigate a dynamic terrain where industry-tailored solutions, connected enterprise insights, and AI-driven personalization converge to create the ultimate customer experience.

Let’s look ahead to 2024 and examine my predictions for how certain technology advancements will elevate customer experience and boost business revenue and profitability.

1. A focus on industry-tailored solutions will improve business outcomes

When it comes to CX — and B2B — trends, it’s not one-size-fits-all. What works for a manufacturing company may not be best for a retailer.

“Generic software often comes with a plethora of features, many of which might be irrelevant for a specific industry,” Kamran Khan, an IT and business development specialist, said. “Tailored solutions, on the other hand, are laser-focused on the exact requirements of an industry, ensuring that every feature and function is relevant and adds value.”

Industry-tailored CX solutions are designed with a deep understanding of a particular industry’s specific challenges and dynamics. This understanding ensures that the CX strategy addresses customers’ unique needs and pain points  within that industry, leading to more effective and relevant customer interactions. This approach improves customer satisfaction, loyalty, and a competitive edge in the marketplace.

2. Unified CX will overtake the siloed approach to customer satisfaction

Nearly two decades of research by multiple analysts shows that anywhere from 20%-70% of CRM projects fail. Why? These systems concentrated on connecting sales, service, and marketing rather than focusing on integration across the entire enterprise.

With an intelligent approach to customer experience, all teams across the enterprise — service, marketing, sales, logistics and operations — speak to each other. Organizations can connect insights like fulfillment business processes with insights from customer touchpoints, like service and commerce. This approach leads to a truly unified and exemplary experience for the customer.

3. AI will drive personalized customer relationships and efficient business processes

In my experience, brands are more likely to make a sale to an existing customer and are significantly less likely to sell to new customers. Therefore, it’s more expensive to attract a new customer than it is to retain an existing customer.

With AI capabilities embedded within CX technology, businesses significantly increase their chances of improving customer retention. By analyzing the full breadth of enterprise data in addition to customer data, such as past purchases, service history, and industry preferences, businesses can provide a better experience for their customers overall. As a result, this drives revenue and increases a business’s bottom line.

Additionally, with business AI, the B2B space can take customer relationships to a new level. We’re finally seeing a pivot from input-heavy, output-poor systems to systems in which business professionals have insights at their fingertips that truly work for them. They’re able to do their jobs more effectively, and ultimately, make their customers happier and more loyal. In all, integrating AI-based technology into CX strategies drives personalized customer relationships, more efficient operations, and empowered decision making at all levels in the organization.

Wrapping up, in 2024, I predict that the B2B market will undergo a dynamic and engaging transformation of customer experience. Organizations that prioritize industry nuances, break down data barriers, and harness the power of AI will find themselves well-positioned to thrive in this dynamic and competitive landscape. The forthcoming year promises a new chapter in B2B interactions characterized by innovation, efficiency, and a scalable customer-centric focus.

Geert Leeman is the chief revenue officer of SAP CX, a software line of SAP SE.

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Retailers strive to provide a rich online customer experience   https://www.digitalcommerce360.com/2023/11/23/retailers-provide-rich-online-customer-experience/ Thu, 23 Nov 2023 13:00:24 +0000 https://www.digitalcommerce360.com/?p=1311402 The online customer experience is where retailers can shine in translating the beauty of their products that may be more apparent in person, into the digital world.    What’s in the November 2023 edition of Strategy Insights? Most of the time, that’s through images. In a Digital Commerce 360 and Bizrate Insights survey of 999 online […]

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The online customer experience is where retailers can shine in translating the beauty of their products that may be more apparent in person, into the digital world.   

What’s in the November 2023 edition of Strategy Insights?

Most of the time, that’s through images. In a Digital Commerce 360 and Bizrate Insights survey of 999 online shoppers in October 2023, 52% of online shoppers say multiple product images are important to delivering a well-designed and functional online experience. That’s second only to detailed product descriptions, with 58% of shoppers citing this. The infographic “What consumers love, and don’t love, about online shopping” visualizes all of the results from this survey. It includes:

  • Online shoppers’ largest frustrations with online shopping
  • How they shop on mobile
  • Customer service woes
  • Personalization preferences

While images and descriptions are table stakes, a robust online customer experience goes well beyond this.   

For example, the amount of retailers using video has grown tremendously, which the article “Lights, camera, conversion: How some retailers use videos to entice shoppers to buy” showcases. Featured in the article is The Home Depot Inc., which publishes several videos on a single product page, each catering to its different shopper personas, says Michael Newsome, the home improvement chain’s senior director of category experience. 

Enhancing the customer experience

Another way retailers work to enhance the customer experience is through blog and editorial content. This area of the website works to give shoppers more information about the products they are buying or the brand they are shopping from. It can help increase conversion, and retailers say it can boost their SEO value. The article “Retail blogs can deliver sales but only with a strategic plan” details the wins and pitfalls of operating an on-site blog.  

Many retailers also work to enhance the customer experience with free loyalty programs. They give shoppers perks and is a lucrative way to entice acquired shoppers to spend even more with a brand. The article “Successful loyalty programs give consumers an incentive to spend more” features three exclusive interviews with executives from major retail chains Chico’s, Michaels and Sephora. They share insights on how they drive their millions of loyalty program members to spend even more.  

And lastly, all this would all be moot if the retailer’s site doesn’t load quickly. Shoppers, especially on mobile, will abandon the site and their purchase. The article “Retailers are building mobile websites to meet consumer demand for interactive features” details how merchants build robust mobile sites without dragging down the speed.   

 The November Strategy Insights “How Retailers Create the Best Customer Experience” contains these feature-length articles. Download the free PDF here

April Berthene
Editor, Strategy Insights  

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What consumers love, and don’t love, about online shopping https://www.digitalcommerce360.com/2023/11/22/what-consumers-love-about-online-shopping-customer-experience/ Wed, 22 Nov 2023 14:00:28 +0000 https://www.digitalcommerce360.com/?p=1312344 What makes consumers want to shop online? What frustrates them when they’re on retailers’ websites? What makes a great customer experience when shopping online? In a Digital Commerce 360 and Bizrate Insights survey of 999 online shoppers in October 2023, 52% of online shoppers say multiple product images are important to delivering a well-designed and […]

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What makes consumers want to shop online? What frustrates them when they’re on retailers’ websites? What makes a great customer experience when shopping online?

In a Digital Commerce 360 and Bizrate Insights survey of 999 online shoppers in October 2023, 52% of online shoppers say multiple product images are important to delivering a well-designed and functional online experience. That’s second only to detailed product descriptions, with 58% of shoppers citing this. This infographic, “What consumers love, and don’t love, about online shopping,” visualizes all of the results from this survey. It includes online customer experience preferences about:

  • Online shoppers’ largest frustrations with online shopping
  • How they shop on mobile
  • Customer service woes
  • Personalization preferences

Mobile site experience is catching up to desktop

Mobile commerce has gained traction over the years, and with that comes a desire for a better mobile site experience. 61% of online shoppers rank desktop shopping experience at an 8 or above compared with 54% of mobile web shoppers. When looking at rankings of a 7 or above, 71% of online shoppers rank desktop at a 7 or above. Meanwhile, 70% of mobile web shoppers rank desktop at a 7 or above.

The November Strategy Insights focuses on how online retailers create the best customer experience, and it includes feature-length articles.

The online customer experience on mobile is catching up to desktop.

Online retailers excel at providing easy and fast site navigation

60% of respondents said easy navigation met or exceeded their expectations on retailers’ websites this year. The only other response that more than 50% of respondents selected was about search. They said they could quickly find products with the search box or search filters on retailers’ sites.

Close to half (47%) of respondents said shipping and return policy information met or exceeded their expectations. On the low end of the spectrum, just 12% said tools or quizzes helped evaluate their needs. Similarly, 12% said additional content such as how-to guides helped met or exceeded their expectations.

The November Strategy Insights focuses on how online retailers create the best customer experience, and it includes feature-length articles.

Shopping on a smartphone vs. desktop

Digital Commerce 360 and Bizrate Insights asked how consumers compare using their smartphone and desktop to shop online. Nearly a third (31%) said they browse and purchase on mobile. Meanwhile, more than a quarter (27%) said they browse on mobile but typically buy from their desktop. A fifth (20%) said it’s easier to compare products via desktop, so they both browse and buy there.

When it came to speed, nearly a quarter (24%) said the checkout and payment experience on mobile was easy to navigate. Meanwhile, 10% said the mobile site they shopped on did not load fast enough, so they left it. Similarly, 10% said the mobile site did not load fast enough, so they switched to desktop to shop with that retailer.

In terms of optimization, 15% of consumers said mobile sites they shopped on were not optimized for their screens. 13% said the mobile sites had too many pop-up ads, making it difficult to navigate.

The November Strategy Insights focuses on how online retailers create the best customer experience, and it includes feature-length articles.

What frustrates consumers when they shop online?

Nearly three in 10 consumers said it frustrated them this year when promo codes they entered were not applied in their shopping carts. Just over a quarter of respondents (26%) said they had to scroll too much, and the same number said it frustrated them when search results showed out-of-stock products.

Just 7% said it frustrated them that pay-later financing options were difficult to use or didn’t exist on the site where they shopped. Also on the low end of the frustrating online customer experience, 14% said they retailers’ sites lacked clarity around when a product would be delivered.

The November Strategy Insights focuses on how online retailers create the best customer experience, and it includes feature-length articles.

It’s all in the (product) details

More than half of survey respondents (58%) said detailed product descriptions are important to them when it comes to delivering a well-designed and functional online shopping experience. Also, just over half (52%) said it’s important to them that a product has multiple images.

More than a third of respondents want to be able to add products to a wish list (37%). And a similar number want brief summaries of customer reviews (36%). On that note, a third (33%) want product reviews with user-submitted photos.

Not many consumers said blog content was important to them (6%), nor quizzes and the ability to match needs with specific products (10%), or social media content on the website (10%).

Shoppers like personalization when it helps them shop quickly

More than four in 10 shoppers (41%) want the ability to quickly access products they had recently viewed. A third want their account information stored and updated, along with past order history (33%). At the same time, many want the ability to opt out of personalization because they don’t want to be tracked (29%).

Product details and multiple images are key to best-in-class online shopping.

Customer service: keep it quick and don’t make ’em come back

Half of respondents said they want customer service to resolve their issue in one service, and fast. Nearly as many (47%) want to have a live chat with a human. Similarly, 44% said they want to speak directly with a person to resolve their issue. They key point here: whether by text or voice, these consumers want to talk to real people, not bots.

And focusing in on that, 75% of consumers said live chat with a human is one of the top three ways they prefer to communicate with online retailers to resolve an issue with an order. Email (73%) was next, and then phone calls (62%).

Speed and done in one contact are top priorities for customer service teams.

The November Strategy Insights How Retailers Create the Best Customer Experience contains the complete infographic in this article, plus feature-length articles.

April Berthene contributed to this article.

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Online shopping tools and features top online retailers offer for the online customer experience https://www.digitalcommerce360.com/2023/11/20/customer-experience-online-shopping-tools-features/ Mon, 20 Nov 2023 14:00:17 +0000 https://www.digitalcommerce360.com/?p=1311931 This infographic provides a snapshot of online shopping tools and features, product detail page enhancements, customer service methods and overall retailer tools that Digital Commerce 360’s Top 1000 and Top 100 retailers offer to online shoppers for the best customer experience.   Customer experience tools top online retailers use For website features, 64.0% of Top […]

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Planning for the 2023 holiday season https://www.digitalcommerce360.com/2023/08/14/planning-for-the-2023-holiday-season/ Mon, 14 Aug 2023 20:05:53 +0000 https://www.digitalcommerce360.com/?p=1233409 The height of the pandemic is over. The shipping and supply chain crisis is under control. And inflation is starting to wane.   Of course, the headlines from the past three holiday seasons are the backdrop to the current retailing environment and the upcoming holiday season for businesses. But fortunately, the sense of crisis has faded […]

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The height of the pandemic is over. The shipping and supply chain crisis is under control. And inflation is starting to wane.  

Of course, the headlines from the past three holiday seasons are the backdrop to the current retailing environment and the upcoming holiday season for businesses. But fortunately, the sense of crisis has faded for U.S. consumers. There’s not even a November election to distract shoppers.   

In some sense, the 2023 holiday season may be the most “normal” in years for online retailers. And that means opportunity to prepare your business for the holiday season and boost holiday sales.  

Prepare your business for the holiday season

According to Digital Commerce 360 research data, over the three-year period 2020-2022, the Top 1000 online retailers in North American generated $75 billion more in ecommerce revenue than they would have if pre-pandemic growth rates had continued.   

So what are retailers doing with all this extra sales revenue prior to November and to boost holiday sales? The Digital Commerce 360 August Strategy Insights, “The 2023 Holiday Planning Report,” digs into what retailers and small businesses are planning for the holiday season. A number of retailers are investing in the ever-buzzy artificial intelligence. Generative AI has taken hold of everyone’s interest, including those in the online retail industry. In “Will AI take over customer service this holiday season?” retailers discuss their investments in generative AI and how they expect it will help this holiday season.   

Communication always is key for online retailers, and especially when holiday-related purchases are in transit to shoppers. In “Keeping customers updated during the shipping process can make or break the experience,retailers share how they’ve improved their shipping communications so shoppers can be confident that their purchases will arrive when the retailer promises, or that they will immediately be notified of any issues. This is especially important as businesses prepare for the holiday season.    

And, of course, the end note to the holiday season is always returns. This year, online retailers are making their return policies stricter, shortening the window or considering making sales final. “Retailers revisit return policies ahead of the holiday season” discusses this trend and provides examples of retailers opting to enhance their return operations.  

It’s also worth noting that online holiday season sales have slowed in the past few years, according to Adobe Analytics data.   

While the 2022 holiday season brought in the largest online revenue to date ($211.70 billion in web sales in November and December, according to Adobe) that represented only 3.5% growth compared with the 2021 online holiday season.  

So while the above-mentioned investments will likely improve the customer experience, customer satisfaction and customer retention, it may not lead to meteoric online sales growth this holiday season.   

Perhaps the best way online retailers can prepare for this “normal” holiday season is with reasonable expectations of neither a boom nor a bust, but a solid season.   

To read more about how online retailers are preparing for the 2023 holiday season, download the August Strategy Insights “2023 Holiday Planning Report.”

— April Berthene, Editor, Strategy Insights 

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Retailers add ChatGPT to their holiday bag of tricks https://www.digitalcommerce360.com/2023/08/08/retailers-add-generative-ai-tech-like-chatgpt-to-their-holiday-bag-of-tricks/ Tue, 08 Aug 2023 17:58:45 +0000 https://www.digitalcommerce360.com/?p=1244588 Retailers may have been too busy with the holiday crush last Nov. 30 to notice when the OpenAI consortium released the generative AI bot ChatGPT for public use. But generative AI quickly became the hottest topic in tech, and early adopting online retailers plan to put it to good use this holiday season. Fashion retailer […]

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Retailers revisit return policies ahead of the holiday season https://www.digitalcommerce360.com/2023/08/03/retailers-revisit-return-policies-ahead-of-the-holiday-season/ Thu, 03 Aug 2023 17:28:57 +0000 https://www.digitalcommerce360.com/?p=1233392 Retailers are pulling back on their generous return policies, says Rob Garf, vice president and general manager of retail at ecommerce platform and technology provider Salesforce Inc.   88% of global retailers plan to make their return policies stricter this year, according to a Salesforce survey of 1,125 retail decision-makers across North America, Asia-Pacific, South America […]

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Apparel and accessories shoppers accelerate online buying https://www.digitalcommerce360.com/2023/07/24/apparel-accessories-shoppers-accelerate-online-buying/ Mon, 24 Jul 2023 15:54:45 +0000 https://www.digitalcommerce360.com/?p=1047765 Apparel, like any category, has unique challenges and opportunities. It’s still recovering from a slow 2020 when the category grew 26.4% compared to 42.6% for the Top 1000. So what are online shoppers thinking about apparel buying online and across channels? Digital Commerce 360 in conjunction with Bizrate Insights surveyed 1,003 online shoppers in June […]

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Apparel, like any category, has unique challenges and opportunities. It’s still recovering from a slow 2020 when the category grew 26.4% compared to 42.6% for the Top 1000.

So what are online shoppers thinking about apparel buying online and across channels? Digital Commerce 360 in conjunction with Bizrate Insights surveyed 1,003 online shoppers in June 2023 to see where online shoppers stand.

Seven in 10 online shoppers are buying at least the same or more apparel online

One can’t help but conclude that with one in three online shoppers spending less on apparel in stores year over year that digital is the beneficiary and may be for some time to come.

Shoppers frequent store favorites

Retailers must understand that customer retention has important implications for purchasing apparel, with half of shoppers asserting they have their favorite stores and frequent them. Companies will need to be aggressive to become part of any apparel shopper’s routine, but the good news is that it will be worth the effort.

An understanding of fit and sizing also supports such a notion as 38% will go to retailers where purchases have been made in the past when looking for specific products.

Shoppers acknowledge that they like to get something new (31%) and update their wardrobes seasonally (30%). The web provides an opportunity for 20% to browse trends online and for 19% to look for new brands. When it comes to specifics, 18% shop mostly for special occasions and make purchases for social activities. Just 11% say their purchases are work-related, and work-from-home models may be a factor as wardrobe demands have changed.

Money still matters for 20% as they track retailer markdown strategies and only buy on sale.

I’m surprised to see that a lack of sales associates in stores pushes only 10% of those surveyed to buy online, as it is certainly challenging to hire in today’s employment climate. Additionally, it’s interesting that a lack of in-store inventory drives online buying more by 25%. Just 14% prefer to take advantage of store pickup options. There are many dynamics to monitor as shopper sentiments often shift over time.

Online shoppers use a multitude of features when shopping for apparel/accessories online focusing on targeted information that aids selection

Shoppers like to zero in on products, and it’s efficient to use search filters such as sizing, color or type, as 56% noted. It’s also significant that 46% appreciate the ability to compare products. Fit tools are also valuable, as sizing can be one of the biggest challenges when buying apparel. The fact that 13% find the ability to customize products also important may be a response to that as well.

First and foremost, 66% call out ratings and reviews as being most important. In the same vein, 34% enjoy seeing photos from other shoppers. Zoom is also a standard among apparel shoppers at 54%.

Online shoppers are accustomed to knowing products will be delivered. Additionally, a majority cited accurate delivery windows as high on the list of important website features.

Merchandising was more limited in its value but still had a role to play with new products (34%), product recommendations (29%), top sellers (25%) and trending products (19%) delivering the following importance results. Content was least significant and saw the following lower penetrations with videos (13%), how-to guides (12%), and livestreaming (6%) lower on the importance scale.

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Apparel and accessory shoppers visit stores to see and try on products, save money and get products quickly

While the physical store is seeing sales decline, it still has a role to play for 63% of participants who enjoy trying on products while 59% appreciate seeing the merchandise in person. For 56%, it’s a timing issue when they need items quickly. Store shoppers are also likely to return products to the store (31%) as they prefer seeing a quick credit to their accounts.

Some shoppers want to have guaranteed inventory availability while the same number prefer to pick up in store (19%).

Money-savings always comes up strong. 45% cited their interest around in-store sales or promotions. Along the same lines, 43% don’t want to pay for shipping.

It’s nice to see that 28% of online shoppers want to support local/small businesses. There also appears to be a trust issue as 28% feel more confident about store purchases.

Online shoppers buy from a variety of retailers with Amazon attracting the most apparel, accessory and shoe shoppers

The ecosystem of players in this category is complex. Like many categories, Amazon manages to find itself dominating. 74% of our survey participants shopped for apparel on it.

Amazon is No. 1 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in the Online Marketplaces database, which ranks the 100 largest global marketplaces.

Department stores play a strong role in this category as well at 47%. Brands are also an integral online destination for 37%, along with specialty retailers at 36%. Mass merchants Walmart (at 46%) and Target (32%) are also entrenched sellers.

Marketplaces are also significant; 30% providing selling opportunities for large and small sellers alike. Price-sensitive sellers like warehouse clubs and off-price retailers are neck and neck at 23%. Resellers only saw 20% penetration, though gains are likely to come in the next couple years.

To bring Amazon’s impact further into focus, four in 10 apparel buyers purchased 26% or more of their online apparel purchases in the past year on Amazon. It certainly feels like this dominance just might continue into the foreseeable future.

Each year, we gauge how aggressive shoppers are in adopting online apparel services. In all honesty, I’m surprised at the low penetration of some of these other services given their longevity in the market.

One in four ordered apparel from a company outside of the U.S. Beyond that, 18% say they have purchased custom products online that were designed to their specifications, while 17% have purchased a used/previously owned product from an online consignment seller. Sustainability is seeing inroads, as 15% have purchased apparel from an online retailer based on their sustainability stance.

Two in three apparel buyers find the overall look and feel most important to their online buying

Tastes in online branding have evolved, especially in the past few years. This is powerful. 36% enjoy seeing a presentation of diverse models that mirror the population. The brand’s story and history has always had a role to play, and 34% of respondents find it important. It’s positive to see that in a category like apparel, 25% find a brand’s sustainability practices important. Beyond that, it’s charitable giving (17%), social and political views (17%), and diversity stance (16%). Fair trade views are of lesser importance.

Seven in 10 online shoppers care about sustainability, though their buying strategies vary

Looking further into sustainability, just 21% say they seek sustainably minded retailers, with 9% already buying and only 12% willing to pay extra. Half of the respondents care about sustainability, but they simply are not willing to pay the price. Of those, 17% won’t pay more and 33% do not seek it. The 29% who have no interest in sustainability may be hardest to move into a more positive camp. Hopefully, these shifts will begin to take place in the near term.

Four in 10 online shoppers avoid retailer customer service departments

Email and in-store interactions topped the list of those touchpoints most likely to drive conversion at 22%, with a phone call to customer service (at 19%) and live chat with a human being close behind (at 17%). Interesting to note that people were a factor, so I will be watching to see if more recent tactics like social media and bots become conversion drivers in greater numbers as one might expect.

Social media is not part of the shopping process for three in 10 online shoppers. It does, however, prompt advertising clicks, get shoppers inspired and allows them to learn from others and follow products.

40% of online shoppers purchase apparel and accessories on social media platforms. This, too, suggests that time will be required for revenue growth via social media platforms.

Getting on the customer’s “favorite” list

Online apparel and accessory buying is still poised for growth, though we shouldn’t count out physical stores just yet. These categories are served by a broad ecosystem of traditional retailers and brands, though Amazon once again manages to dominate. Branding along with the features and tools retailers make available are powering positive shopping experiences, though finding the right size remains an issue. There are certainly stories still to be written from sustainability to social media. Positive customer service is always in fashion and will serve all retailers — apparel/accessories and otherwise — well.

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