Retail after the website
The blueprint of modern commerce
The top five most visited retail websites in 2022 were Amazon, eBay, Walmart, Aliexpress, and Etsy.com. They are all aggregators. The most visited mono-brand website is IKEA, which is only the ninth most-visited site on the list. Regardless of the consumer traffic and this customer behavior, a lot of retail brands still spend significant money, effort and time to turn their websites into “experiences.”
Consumer comments like, “I was wondering why your website is a monstrosity?” or “Your website has become unnavigable … Just show the bloody product” notwithstanding, retail CEOs often make it their priority to be intimately involved in setting website aesthetics. Home pages are regularly political battlefields for corporate lieutenants, settings of misplaced strategic priorities, reflections of organizational power struggles and CEO ego plays.
In China, the world’s largest e-commerce market, brand websites are not where consumers shop. Chinese virtual malls, like Alibaba marketplaces (Tmall, TaoBao and Alibaba), JD.com, and Pinduoduo make up 83.6% of the retail e-commerce market, according to research firm eMarketer. The two key drivers of online sales are live-streaming (with 20% of shoppers buying directly from live videos) and instant messaging feeds like WeChat, with embedded mobile payment systems, which are used by 90% of Chinese shoppers.
In the West, mobile app users spend an average of 201.8 minutes per month shopping, compared to 10.9 minutes per month for website users. Compared to mobile sites, consumers view 4.2 times more products per session in-apps, and they are also guided further down the purchase funnel, with 3 times higher conversion rates compared to mobile sites and 1.5 times more conversions per session than via desktop. In-app shopping is especially prevalent among Millennials, with 58 percent mentioning it as their preferred mode of purchase.
For Gen Z, with 98% of smartphone penetration, social media apps are the main source of product searches, brand engagement, product information, and purchase influence. Sixty percent of TikTok’s user base is Gen Z, and it is this generation’s preferred search engine, source of reviews, and discovery of new products to buy and places to go to. Gen Z is keen to visit a store based on a retailer’s social media posts; most of this generation visits a retailer they have never been to because of social media, according to Marketing Charts.
Nearly two thirds of Gen Z shops mostly in physical stores, according to Retail Touch Points, an online publishing network. Younger consumers perceive shopping as a social activity, entertainment, fun, and a pastime that — through selfies, photos, polls and product reviews — bridges digital and physical worlds. Shopping gives them the opportunity to showcase their taste, create social capital, and influence others.
Entertainment, community and curation — not heavily branded experiences — are the blueprint of modern commerce. Modern commerce is more like the digital version of going to a mall than scrolling through products on an e-commerce site. Modern commerce is rich in serendipity, product discovery, socializing, and entertainment. It looks more like a leisure activity than a transactional exchange that’s been over-optimized.
For this to happen, retailers need to stop treating their websites as hubs of their customer experience journey and as centerpieces of their sales efforts. It is strategically hard to justify taking customers from wherever they are to somewhere else in order to sell to them. Instead, sales need to happen where customers are. Just like TikTok and Instagram integrated e-commerce features to drive monetization, retailers need to integrate community and entertainment features to enhance customer acquisition, activation, and retention.
Read the rest of this analysis on The Sociology of Business.
