As US Consumers Get More Cautious, Consider These Ecommerce Strategies
As consumer spending slows and consumer confidence shrinks in the U.S., it’s time for ecommerce businesses to take a fresh look at data-driven strategies for delivering best-in-class CX, enhancing or expanding their sales channels, and optimizing value for customers. A February 2023 PwC survey found that 96% of consumers plan to “adopt cost-saving behaviors over the next six months.” That may translate into more ecommerce deal-hunting, as 43% of the respondents also said they plan to shop online more during that period.
With virtually all U.S. consumers becoming more cost-sensitive, it’s imperative for online retailers and brands to find ways to maintain healthy revenues. That doesn’t mean–and shouldn’t mean–competing solely on price. Instead, consider these options, based on data from ClearSale’s 2022 Consumer Attitudes on Ecommerce, Fraud & CX, for meeting your customers’ expectations, reducing cart abandonment, and growing your customer base. This annual survey engages 5,000 online shoppers over the age of 18, even distributed across the U.S., Canada, Mexico, Australia, and the U.K.
Promote your deals
Price-sensitive shoppers are focused on finding the best bargains. Even if your business normally competes on value and experience over price, it’s worth considering special deals that align with your brand image and your customers’ expectations right now.
Consider that among consumers who switched brands in the past year, 66% did so for better deals, per Salesforce. That’s not surprising in light of Consumer Attitudes survey data, which found that 71% of shoppers buy online because of the prices, while 42% do so because of sales, specials, and coupons.
The ability to offer deals may become even more important if Amazon turns Prime Day into a seasonal event, as some analysts predict. With more opportunities to buy at the best possible price several times a year, consumers would have less incentive to buy at higher prices from other online retailers.
Make the most of your marketplace presence
Of course, Amazon isn’t just a competitor to many online retailers and brands. It’s also a marketplace where they extend their reach and attract new customers, and marketplaces are extremely popular with consumers. 37% of Consumer Attitude survey respondents said they sometimes or always place their online orders through a marketplace. That’s higher than the number who sometimes or always order on their phones (34%) or through social media (9%). Having a presence on one or more major marketplaces also makes it easier to connect with customers who are looking for deals during major sales events like Prime Day.
Review your shipping costs and options
The cost of shipping is a concern for many online shoppers. 80% of Consumer Attitudes survey participants said they prefer free or low-cost shipping options even if it means waiting longer for their purchases to arrive. A 2023 consumer survey by PwC found that delivery costs were a factor for 40% of shoppers who plan to shop less online and more in-store in the next six months.
If it’s been a while since you reviewed and updated your online store’s shipping options and pricing, this could be a good time to do so. Voice of customer data from surveys, customer service conversations, and carrier selections at checkout can help you identify the shipping options that are most appealing to your customers now.
Highlight your security features
Online shoppers are concerned about fraud and data security, so take the right steps to reassure them. 17% of Consumer Attitudes survey respondents said they’d abandoned an online cart within the past year because they didn’t trust the site with their credit card information.
A simple badge from your fraud-prevention or web security provider on your checkout page can be enough to alleviate consumers’ concerns. More than three-quarters of the respondents (76%) said they feel more comfortable sharing their personal data with an online store if the website displays its security certification.
Work on your cross-border customer experience
While consumer confidence slipped recently in the U.S., there are other markets where consumers feel more confident about their economies–including the fast-growing ecommerce markets of Mexico and Brazil. Courting customers from outside your home country can help to insulate your business from economic slowdowns in individual markets while also growing your customer base. And there’s a growing number of online shoppers who prefer to order from overseas retailers or from a mix of local and international sites.
In the Consumer Attitudes survey, 6% of respondents said they prefer to order from overseas, while 40% prefer to order locally and internationally. Among those who prefer to buy from overseas, 53% said that preference had increased in the past year. Offering digital wallet payments, multilanguage site options, and cost-effective international shipping options can build loyalty with this growing group of shoppers.
Keep optimizing your ecommerce checkout
With all the work invested in bringing your customers to checkout, it’s critical not to lose them at the end. Give your customers the payment options they prefer. For example, digital wallets and BNPL made 70% of the shoppers in the Consumer Attitudes survey feel more secure, and 55% may abandon their cart if they have to key in their credit card data with a new retailer.
In addition to providing alternative payment options, keep a close eye on your fraud, false decline and order approval KPIs to see if there are fraud-control issues you need to address. 83% of Consumer Attitudes respondents said they wouldn’t shop again at a site where their credit card was used for fraud, and 41% will abandon a retailer after a false decline.
Not all of these strategies will be right for every business, but implementing those that are a good fit can help your online store weather this predicted period of slower U.S. consumer spending and gain more loyal customers in the process.