Sarah Elizabeth
Integrating emerging technology and digital innovations into the buyer’s journey, ecommerce companies are finding new and exciting ways to engage with current customers and reach new ones. In fact, experts anticipate online retail sales will grow from an estimated $4 to $6 trillion in 2024. But those changes also come with challenges related to fraud, chargebacks, false declines and brand impersonations. Here are eight of the most important online shopping trends – including the good and the challenging — for ecommerce companies to be aware of in 2024.
1. Security/Privacy Remains Top of Mind for Consumers
Ecommerce is evolving faster than ever, and that means customers are expecting their orders faster than ever.
Businesses are trying to meet those expectations by speeding up the ecommerce process — including simplifying checkout and adding same-day shipping.
But that puts big pressure on companies who are also trying to authenticate transactions, according to Rafael Lourenco, ClearSale’s Executive Vice President and Partner. Shorter checkout forms mean less data available for fraud prevention systems to screen, and faster shipping means more companies are relying more heavily on automated decisions. It’s no surprise, Lourenco says, that more automated declines are happening … and that inevitably leads to more false positives.
So how are businesses expected to balance these new demands while also reducing fraud and increasing security?
First, reassure customers you’re a good steward of their private data.
Your customers will be grateful for that — and more loyal, too. As AI continues to shape online shopping, privacy and data security remain a top concern among shoppers of all age groups, but especially older online shoppers, who are concerned about how their personal information will be handled.
The solution? According to Forbes Councils Member Denis Sinelnikov, “Retailers must invest in advanced security technologies and adopt transparent practices to build trust with their customers.”
Individual shoppers’ preferences can’t be businesses’ only concern. With cross-border commerce on the rise, it’s more critical than ever that companies be aware of the regulations and guidelines required in the countries and regions they’re selling into. That means both well-known privacy laws like GDPR and country-specific localization requirements that are intended to protect consumers’ identity and privacy.
2. Personalization Continues as a Consumer Must-Have
Perhaps the most integral component to driving ecommerce growth in the current online retail space is personalization. And with retailers having seemingly unfettered tech and digital potential, customers expect you to leverage emerging solutions to cater to them on specific, personal levels.
In other words, consumers demand customization, from payment options (including local payment options) to emails to AI chatbots. They want their ecommerce experience to feel as if you designed it for them and them alone.
In a recent survey, 52% of respondents reported they expect AI to deliver product recommendations based on browsing history, while 40% expect personalized discounts and offers. In fact, that same survey revealed only 12% of respondents thought that AI doesn’t have the potential to improve shopping at all.
Here’s how you might do it: Consider analyzing customer data to personalize marketing efforts and target specific demographics. That might mean deploying mobile-centric campaigns to reach Gen Z and millennials, while employing desktop-focused strategies for Gen Xers and boomers.
But here’s the fine line you must walk: Balancing personalization and an improved shopping experience with respecting customer privacy preferences. This, too, is more of an art than a science, requiring you to continuously monitor customer responses to personalized initiatives and adjust strategies as needed to find the optimal level of personalization. Test and iterate.
3. AI Becomes an Online Shopping Fraud-Fighting Tool
But it’s not just retailers who are learning to leverage AI for better business outcomes.
Fraudsters, too, are innovating through this emerging technology. Generative AI is very good at creating fake identities that pass as authentic ones, and that presents a serious threat. Not only are companies spending their marketing resources engaging with synthetic customers (which seems harmless enough initially), but adding controls to prevent generative AI-enabled synthetic identity fraud may end up increasing false positives and adding to checkout friction — and that may cost companies more than actual fraud itself. Thankfully, though, there are measures you can take to guard against that, including fighting AI with AI.
Upping your fraud prevention to include both AI and machine learning can help excel at identifying anomalous and suspicious orders and doing so quickly. These solutions can also spot potential fraud across large swaths of transactions, which might indicate synthetic identity fraud or bank account takeover fraud.
Another way to combat the trend of synthetic customers masquerading as true customers is to look at the buyer’s shopping history over both the long and short terms. Seeing several recent high-value purchases could indicate a nefarious shopping spree by a synthetic shopper who’s trying to cash in.
4. AR/VR Opens New Doors for Online Retailers and Consumers
Another trend taking online shopping by storm is augmented and virtual reality. These technologies have left the game room and entered the dressing room, offering exponential potential to many online retailers.
Take shopping for eyeglasses, for example. One of the biggest sources of friction for shoppers looking for new glasses online is their inability to try a pair on before making a purchase. While some brands have combatted this obstacle with a free trial period, others are leveraging AR and VR to smooth out this ecommerce experience.
AR and VR use the camera on a customer’s phone or computer to create a digital, real-time representation of what a specific pair of glasses will look like on that customer’s face. This not only eliminates the friction in the sales funnel created by the inability to tangibly experience glasses, but it also increases the buyer’s confidence they’re getting exactly what they want.
But eyewear retailers aren’t the only ones who are leveraging AR/VR: The fashion industry also recognizes the gap between the in-person shopping experience and the virtual one. And while AR/VR can’t replicate a shopper touching the quality of the fabric or seeing how it looks online, it can help bridge the gap by allowing shoppers to see how clothing items fit on their uploaded selfies or customer-created avatars. That results in shoppers previously reluctant to make purchases sight unseen much more inclined to pull out their credit cards and far less likely to return those purchases for a refund.
5. Omnichannel Experiences Influence the Buyer’s Ecommerce Journey
The emphasis on omnichannel experiences is another 2024 trend online retailers should pay close attention to.
Digital innovations have led consumers to expect a seamless, consistent, holistic experience from retailers. That means your shopping experience remains optimal across devices, allowing customers to transition seamlessly between mobile and desktop platforms. It also means your online and tangible experiences can and should go hand-in-hand to drive sales.
The “research online, purchase offline”(ROPO) and “buy online, pick up in store” (BOPIS) phenomena are perfect examples of this integrated experience. While these aren’t brand-new trends, they’re wielding an increasingly significant influence in buyer journeys.
Today’s shopper rarely makes a purchase without doing their research. Consumers may be considering an in-store purchase of a blender at Target, but before they do, they’re going online — checking out reviews, comparing prices on different marketplaces, and even sourcing feedback from friends and family.
And in today’s post-COVID shopping world, being able to place an order online while on the go and simply pulling into the store’s parking lot to pop the trunk, have employees bring out purchases, and be on their way in a matter of minutes makes omnichannel experiences like BOPIS a must-have.
This shopping journey is drastically different than what it was just a few short years ago, which means businesses must be willing to dive into customer research to better understand their target customers’ journey and track and analyze their buying data. One way to do this is through A/B tests — a smart strategy that can help businesses evaluate the most effective strategies for engaging customers on multiple platforms.
But a seamless journey doesn’t mean it’s a perfect one. There’s still a serious risk of fraud, particularly in BOPIS transactions. With fraudsters able to access stolen goods quickly, scammers will be long gone with the items they obtain through fraudulent BOPIS orders by the time their victims ever notice what’s happened. And as technology and shopping channels evolve, businesses must ensure they’re revisiting, re-evaluating and refining their omnichannel approach over time.
6. Social Commerce Bolsters Customer Trust
Be honest: What do you do with much — if not most — of your downtime? The answer is probably that you spend it on your smartphone, which isn’t unusual at all. What captivates much of your attention span while on your phone, though?
For many, and for much of their time, it’s social media. It only follows, then, that ecommerce on those platforms should be booming.
And it is. Social commerce is expected to eclipse $1 trillion in 2024, and the social platforms on which consumers can buy are also growing.
TikTok Shop recently burst onto the ecommerce scene with seemingly great success, relying heavily on user-generated content to appeal to, relate with, and build confidence in buyers.
But not all social platforms are created equal when it comes to consumers’ trust. While more Gen Zers are putting their time and money in TikTok, older millennials, Gen Xers and baby boomers are putting their time and confidence in Facebook.
That means businesses can’t treat their social commerce marketing on all platforms the same. Instead, as you develop your social ecommerce strategy, you must understand your customers and their buying habits — and then use platform-specific data to launch new offerings and marketing strategies.
Go a few steps further in instilling social commerce confidence by taking these proactive measures to mitigate risk:
- Deploying advanced fraud detection systems that utilize machine learning algorithms and AI to analyze transactional data and detect suspicious patterns in real-time
- Implementing behavioral analytics tools to monitor user behavior and identify anomalies or deviations from typical purchase patterns
- Utilizing device fingerprinting techniques to track and analyze device attributes such as IP address, geolocation, and device type
- Enabling two-step verification to verify the authenticity of transactions and mitigate the risk of fraudulent purchases
- Educating customers about common social commerce fraud schemes, such as phishing scams, counterfeit products, and fraudulent sellers
- Training frontline staff, customer service representatives and fraud prevention teams on recognizing and responding to social commerce fraud incidents
In doing so, you’ll build that consumer trust and deliver the social shopping experience your customers need and want.
7. Sustainable/Eco-Friendly Brands Get an Advantage
Environmental concerns are growing in priority for consumers. As millennials and Gen Zers account for more and more market share, sustainability becomes increasingly important, which is why it remains on our list of top ecommerce shopping trends for 2024.
A 2022 survey of more than 13,000 consumers worldwide found that 66% had stopped doing business with a company because of differences in values. That same survey found that a company’s environmental practices were a deciding factor for 78% of consumers.
So what’s an ecommerce retailer to do to capitalize on this concern?
It turns out that sustainability can show up in dramatically different — but equally important — ways, like smart shipping services and creative return options. Amazon, for example, offers its Amazon Day Delivery option, which means fewer trips needed to make deliveries and a reduced average number of boxes used. The result? Lower carbon emissions.
On the other end of the buying journey, some major retailers now offer “returnless refunds” on some products to avoid the environmental impact of sending an order back. Customers receive their refund but are encouraged to donate the refunded item to the charity of their choice — a win-win for everyone.
8. Voice Search Becomes Increasingly Common in Online Shopping
“Alexa, tell retailers they also need to leverage voice search as a means of ecommerce to complement their omnichannel shopping experience.”
Retail revenues on this platform were forecast to top $80 billion in 2023, so if you haven’t taken the leap into this new channel, you might consider it. Voice commerce is an easy way for shoppers with “fat fingers” to quickly and easily search for (and find) the products they want and need on mobile devices. Plus, in today’s post-COVID world, shoppers are embracing solutions that offer no- or low-touch options — even if it’s their own devices.
However, because voice commerce is still in its relative infancy and the technology behind it is still being perfected, you’ll need to be vigilant against impropriety, vulnerabilities and susceptibilities to fraud. This creates a fine line for retailers to navigate: You want to provide secure voice commerce experiences, but not to the point that your anti-fraud measures create friction in the customer experience.
There’s limitless potential for ecommerce businesses in 2024 — as long as you’re paying attention to emerging opportunities, trends and innovations. Online sales are racing toward record highs this year, but as exciting as these possibilities are, the challenges and risks accompanying them are just as serious.
As you navigate these new trends and integrate them into your buyer’s ecommerce experience, you must continue to prioritize your customer’s security — adopting advanced technologies and transparent practices to build and maintain that all-important consumer trust and protect them against fraud.
At ClearSale, we help countless companies do just that. By staying on the leading edge of ecommerce sales and fraud trends, we make sure you’re positioned to capitalize on new trends when they emerge while still protecting revenue and customers.
Contact us to learn how we can protect your hard-earned sales in 2024 and beyond.
