As consumer preferences and digital marketplaces maintain their rapid pace of change, what trends are expected to influence sellers in 2024? 🤔
Channel Shopping
A new study by Rithum, an ecommerce network and platform, reveals that three in four consumer now explore three different marketplaces when making online purchases.
Despite the growing popularity of challengers, Amazon retains significant trust, with 42% of consumers expressing confidence in the platform, while 34% go to a merchant’s direct-to-consumer site, and 21% explore other private marketplaces.
Ecommerce execs, reflecting on 2023 performance, identified the competitive marketplace and reduced consumer spending as major challenges. However, those who outperformed expectations credited marketplace diversification, emphasizing the importance of expanding sales channels.
As sellers gear up for 2024, Amazon and eBay stand out as top marketplace choices, signaling a need for sellers to diversify their marketplace strategies. With multiple sales channels to manage, however, seller strategies are becoming more robust, exploring more diverse marketing tactics, such as marketplace advertising and social media marketing, and leveraging more sophisticated tech stacks.
Related: How Amazon Sellers Should Use Shopify to Strengthen Their Profits, Walmart: The Future of Online Shopping
Fear of Missing Out (FOMO)
Customers’ desire to stay abreast of the latest trends and to avert the fear of being left out frequently leads to impulsive purchasing decisions. Sellers face the challenge of understanding and leveraging this behavior strategically by positioning their products to evoke a feeling of exclusivity and urgency. Recognizing the impact of FOMO on consumer behavior allows sellers to craft campaigns that tap into the innate desire to be part of the latest and most exclusive trends.
Consumers’ FOMO on deals specifically influences purchasing decisions, with marketplaces like Amazon playing a significant role, according to Rithum.
Rithum’s study shows that 39% of consumers made a purchase after encountering an ad on Amazon. Alternatively, 23% of buyers discovered products through Google ads, indicating that for some products, this additional external traffic can prove to be a good addition to marketing strategy.
Related: 3 Ways to Level Up Your Amazon Advertising Strategy, How to Use Google Ads to Improve Amazon SEO, 3 Little Known External Traffic Types that Will Boost Sales & Rank for Your Amazon Business
Reduced In-Person Shopping
According to PYMNTS, about half of Amazon Subscribe & Save members prefer online shopping over in-person retail. This suggests that digital retail subscriptions are gaining traction, providing consumers, particularly millennials, with convenient scheduled deliveries.
The study also found that subscribers to services like Stitch Fix (a personalized clothing and accessories) and Chewy’s Goody Box (pet supplies) are reducing their in-person shopping, emphasizing the appeal of personalized experiences accessible from desktops and smartphones.
While convenient, these online retail subscriptions the impact to in-store shopping is not yet staggering as a dual approach is still the norm and likely will be for some time. Fewer than 5% of subscribers claimed subscriptions entirely replace in-store visits for specific item categories. This underscores the coexistence of both online and in-person shopping experiences, showing that retail subscriptions have not entirely eliminated the need for physical store visits in certain product categories.
What does this mean for you?
Sellers must prioritize seamless customer experiences, from subscription membership to shopping to delivery. Poor service or frequent stockouts increases cancellation likelihood from customers bound to put their subscription dollars into competitors’ pockets.
It also means that initially capturing that subscription relationship proves very important, as once set, you are likely to receive recurring orders from that buyer for some time.
You also need continuous subscription innovation for lasting loyalty. This includes diverse payment options, improved inventory systems, accurate product information, and reliable delivery services. Similarly, we may expect to see traditional stores developing enhanced in-store experiences and integrate digital subscriptions to stay competitive.
Rising Return Rates
Barriers expected in 2024 include meeting customers’ sustainability expectations and handling increased return rates.
Over the last two years, major retailers have been adopting measures such as shortening refund and exchange windows and introducing restocking fees to curb the surge in return rates.
According to a survey conducted by Appriss Retail and Incisiv, 91% of retailers are grappling with return rates that are outpacing their revenue growth rates. The dilemma lies in the fact that many of the returned items are unsuitable for resale or must be subject to a pricey grade and resell services, resulting in profit and revenue losses and contributing to significant waste.
In response, retailers have implemented a return fee as a deterrent for shoppers. For instance, ecomm giant Amazon has introduced a fee for some UPS returns in April 2023, encouraging shoppers to reconsider before initiating a return.
Similarly, J.Crew and Gap Inc.-owned stores such as Athleta, Gap, Banana Republic, and Old Navy have opted to trim their return windows as a strategic move to reduce overall return rates. These initiatives highlight the industry’s collective effort to address the challenges posed by escalating return rates, aiming to strike a balance between customer satisfaction and sustainable business practices.
However, this move could have an adverse impact on profits, as asking customers to pay a fee for returns could affect brand loyalty. As a result, shoppers may decide to cut back on purchases or turn to other retailers.
Therefore, rather than centering efforts solely on optimizing the returns process, retailers should concentrate on tackling the root causes of returns, such as quality, fit and style issues, and enhance the image quality of products on their websites. Amazon negative product reviews and the FBA Returns Dashboard can provide insights into areas of improvement. This approach may also involve integrating technologies like augmented reality (AR) try-on tools or showcasing items in a See It In Your Space capacity.
Simplifying this aspect of the shopping experience can instill confidence in consumers, fostering a sense of certainty in their purchases. Ultimately, this improved experience has the potential to sway even the most budget-conscious shoppers into making purchase decisions with greater assurance.
Shoppable Features within Social Commerce Sites
A shoppable feature refers to interactive elements within ads that enable users to directly explore and purchase products without leaving the platform. These elements, found on social media sites like Instagram, Facebook, Pinterest, TikTok, and Google, enhance user engagement by incorporating clickable product links, in-ad purchases, product tags, shopping catalogs, and even augmented reality try-ons.
This frictionless integration of shopping capabilities into ads transforms static content into dynamic and actionable experiences, providing users with a convenient pathway from product discovery to purchase. Shoppable features not only enhance user convenience but also offer advertisers a more direct and measurable way to drive sales through their online ad campaigns.
For that reason, TikTok is testing a shoppable feature, potentially transforming all posts into sales opportunities. The new feature automatically identifies objects within videos on TikTok, which prompts viewers to explore related items on TikTok Shop by directing them to a page showcasing various products. This marks a departure from the previous norm, where only authorized influencers and brands had the privilege of tagging products in their posted content on TikTok.
Meanwhile, Meta’s collaboration with Amazon streamlines on-platform purchasing, simplifying the user experience and enhancing ad targeting within Facebook and Instagram.
If your goal is to capitalize on expanding social commerce horizons, prioritizing and refining shops and product catalogs is crucial. By concentrating efforts on optimizing these features, you can position yourself at the forefront of the future online shopping experience, taking advantage of the widespread availability of product ads on prominent social platforms.
Related: AI in eCommece: Trends Redefining Shopping Experiences
Key Takeaway
The bottom line is consumer behavior is continuously evolving, shaping new opportunities for sellers. To continue meeting customer expectations and gain a competitive edge, sellers are faced with adapting to consumer trends, diversifying marketplace strategies, and exploring innovative solutions like automation tools to provide personalized shopping experiences.
The challenge lies in knowing which horse to back. With so many changes happening at once, and so many competing innovations, sellers must decide which ones are the most likely to grow legs. Picking the right strategy and avoiding being consumed by short-lived trends will undoubtedly be a contributor to the success of sellers in 2024.
