It’s hard to believe that just seven months ago we were coming out of a record-breaking holiday season, experiencing all-time low unemployment rates, and profiting from high consumer confidence. The stars were optimistically aligned for another successful year for eCommerce. The future of digital looked bright until 2020 took an abrupt turn.
As COVID-19 spread across the world, stores and offices shut, workers went remote, consumers’ spending habits and behavior changed, and some businesses struggled to keep up with change. But through it all, digital was the one constant for consumers. But while digital has always been a rapidly changing industry, the pandemic sent many businesses scrambling to beef up their online presence, capitalize on the new onslaught of digital traffic and keep up with changing consumer needs.
In January, before the pandemic, Contentsquare released a series of predictions for what we expected the year would have in store for the digital landscape. Just like how many things didn’t quite go to plan this year, many of our predictions were accelerated by the sudden need to prioritize digital — things we thought would gain more importance over time turned crucial overnight.
Here’s a look at what we got right:
1. Our Prediction: In 2020, the “experience wars” will heat up.
Start of 2020 Context: As brands continue to compete for customer attention and loyalty both in-store and online, they must do more than just provide a great product or service. Companies can no longer think of in-store and online as two separate entities. They need to take an omnichannel approach to build innovative in-person and online experiences that wow customers no matter where and how they interact with a brand.
What Actually Happened: The pandemic and subsequent shuttering of retail stores across the country brought many industries to a standstill. Companies scrambled to update their online presence, but for many brands, the loss of in-store revenue was insurmountable. Brands like Neiman Marcus, GNC, Brooks Brothers, Pier 1 Imports, and many more filed for bankruptcy.
Many brands were able to get creative and capitalize on the rush of digital traffic. Curbside pickup, virtual try-ons, live virtual gatherings with celebrities and fans, and contactless delivery gave customers new ways to interact with their favorite brands and shop from the safety of their own homes. Brands scrambled to think of innovative ways to win customer’s business, accelerating the future of digital transformation as shifting customer behavior made having an exceptional online presence a necessity—not just a nice-to-have. Successful companies were able to maintain that personalized human touch even without in-store interactions and adapt the experience in real-time to fit new and fast-changing consumer needs.
2. Our Prediction: D2C will become the flagship store.
Start of 2020 Context: 2019’s surge of direct-to-consumer (D2C) brands was projected to continue into 2020. Brands found success in cutting out the traditional retail route and selling products and services directly to customers online—think Casper, Quip, and Freshly. Aside from bringing customers more reasonable prices, many D2C brands seem to have cracked the code around building great, personalized, and value-driven experiences to their customers because they own and analyze every touchpoint on the customer journey.
What Actually Happened: D2C brands’ digital-first mindset prepared them for the sudden dependence on online shopping. While most brands were relatively unphased by store closings, many had to overcome supply chain challenges, deal with slower shipping times, and adjust to changing consumer needs. Even in the face of a global pandemic the future of digital D2C brands looks promising. Market research estimates 2020 D2C sales will grow to $17.75 billion, an increase of 24.3% over last year. Even as stores across the world reopen, Contentsquare data reveals customers seem to prefer the convenience and safety of online shopping, a new trend that might be here to stay.
Non-D2C brands can learn from the end-to-end business approach of D2C brands. Owning the customer journey can give businesses more insight into their customers, their behavior, and their needs. Businesses can also have more control over their brand and build both brand awareness and a community that inspires customer loyalty. For example, while technology company GoPro depends on online marketplaces to sell their products, they’ve also adopted a D2C approach. The company made sure to incorporate inspirational video storytelling to create an innovative shopping experience for its audience of experience-seekers and adventurers. This enabled GoPro not only to increase direct-to-consumer sales, but also gave them more control over the end-to-end customer experience.
3. Our Prediction: Brands will flip the acquisition model.
Start of 2020 Context: Instead of trying to get as many visitors as possible, we predicted brands would put more emphasis on what happens once a customer journeys through their website to better understand who they should be marketing to and how. Brands were beginning to recognize how a strong customer experience can inspire customer loyalty and drive revenue. In fact, a study by Frederick Reichheld of Bain & Company reveals that increasing your retention rates by 5% can increase profit by up to 95%. Instead of pouring money into customer acquisition, more and more businesses will invest in analyzing customer behavior and understanding customer journeys to better serve and target users who’ve already interacted with their brand.
What Actually Happened: Brands slashed their global ad spend by almost $50 billion after the start of the pandemic. That’s more than an 8% decrease in spending, according to the World Advertising Research Center. While traditional media outlets like TV, newspaper, and radio saw the largest impact, online media also took a hit.
Between reduced ad spends, store re-openings, and decreased global traffic, brands have to be strategic to surface opportunities to acquire, convert, and retain more shoppers. Companies need to better understand how visitors interact with their site, identify and improve areas of frustration, and provide relevant, personalized experiences to convert visitors to customers.
Not only do companies need to provide relevant, vibrant experiences, but they need to evolve to meet changing customer wants and needs. This has been most apparent in the last few months as customer preferences have shifted dramatically. Brands have had to be aligned and empathetic to the ways their consumers navigate a health crisis, beyond just shopping for goods.
Even in the face of uncertain economic performance, many brands doubled down on their commitment to corporate social responsibility, by supporting frontline workers, extending help to employees, offering discounts for unemployed individuals, donating to small businesses, etc. Crocs, for example, used its platform to help donate shoes to healthcare workers, donating over 860,000 shoes across the globe. Club Med brought families together by sharing and organizing activities families could participate in from the safety of their homes. The New York Times removed its paywall from all coronavirus content, so everyone could access accurate news on the pandemic. Ford, General Motors, and Tesla converted factories to produce ventilators and medical equipment. The list goes on.
As COVID-19 continues to change the way customers view the world, businesses must focus on the future of digital and continue to show they are mission-driven, compassionate, and socially responsible to win over customers and set their business apart.
While this year has been quite a rollercoaster, 2020 is far from over. While no one knows what else this year has in store for the future of digital and eCommerce, we’re hoping it’s pretty uneventful (fingers crossed).
But, just like how this year has only given us a taste of what it has in store, we’ve only shown you three of our annual digital predictions. For the complete breakdown of the rest of our annual predictions and a look at how COVID-19 has impacted traffic, transactions, and conversion rate across different industries, check out our new “Adapting to The Unpredictable: Using Customer Intelligence for an Always-Relevant CX” Report.New Year, New UX: Three Digital Experience Trends On The Horizon For 2020
It’s 2020, the beginning of a new year, and more notably, a new decade. With our environment shifting constantly around us, and both our physical and digital worlds increasingly blending together, it can be difficult to imagine what lies ahead.
Here are a few trends we observed in 2019 that we believe will gain even more momentum as digital CX surges ahead in the new decade.
Are Bottom Navigations Making a Comeback?
As mobile traffic continues to grow, so does the size of our smartphone screens. Screen sizes have almost doubled since the first iPhone release, with market share shifting drastically to larger screens as sales increase. In 2019, 43.4% of the market share was dominated by screens sizes 6” and above. Reaching the top of mobile screens remains difficult, which is why smartphone manufacturers have adapted thumb zones for larger mobile devices.
To adjust to changing device designs, we are slowly seeing the navigation shift back down to the bottom of the mobile screen. More recently seen at the top of the screen, top-level functions on some apps and mobile sites are coming back down to the bottom of the display, where they are easier for users to access quickly, no matter the device size. Take a look at Uber and Lyft:
Most of the key and primary functions are at the bottom of the screen, with an additional tab bar. Secondary functions that are not associated with the current and most primary tasks are still findable behind the hamburger menu, which remains at the top of the screen.
From Work to Home, Across all Devices
Given the surge of mobile use in the past decade, syncing across different devices in different environments is now a far from a perk, but is now a must. User experience (UX) continues on even after users interact with their first device. For example, users may start watching their downloaded Netflix shows on a plane, but finish them on their phone or tablet, or even on the less mobile, but highly relevant, smart TVs at home.
Because our physical and digital devices are continuously blending together — at least as far as usage is concerned — it is imperative for companies to store specific user data in order for the experience to continue smoothly. From saving items in your shopping wishlist to pausing past streamed or downloaded shows, users want to be able to log into their accounts from any device, and pick up exactly where they left off.
Augmented Reality, from Your Makeup to Your Shoes
Yet another sign of the physical and digital worlds coming together, augmented reality integrations are ramping up across channels. Retailers are attempting to bridge the gap between brick-and-mortar and digital experience (DX) by creating immersive environments to create added value for customers.
According to Gartner, 100 million consumers are projected to shop in AR online and in-store in 2020, with 46% of retailers planning to deploy AR or VR solutions.
Although 69% of the nation shops online, 56% of those who shop online say they would prefer to shop in-store. So in-store environments continue to matter, despite speed and convenience winning when it comes to digital experiences. As networks and connections increasingly improve with the advent of 5G, AR technology is helping brands to bridge the gap between users’ in-store and digital experience.
Check out this immersive experience with Sephora’s Virtual Artist:
It is the perfect marriage between customization and virtual reality. Users can upload an image of themselves (or use a model) and see the results of multiple product lines and a variety of styles. What the user is “wearing” is listed below the image, and can be removed or clicked on to go directly to the relevant product page.
The Future of CX is Already Here
Technology that might have seemed impossible a decade ago is today a reality. The devices we use are now deeply connected to our lives, creating a closer connection than we have ever had with our consumers. If there’s one lesson we’ve learned in the last decade, it’s to embrace the new, and expect our consumers will do the same.
Hero image: Adobe Stock, Via rcfotostock