Shopping in Tough Times: What Matters to Customers?

The Environment is Changing

The year 2024 brought challenges to British retailers in the form of declining market shares, higher shipping costs, and growing interest in brick-and-mortar shopping. Despite these obstacles, the end of online sales is not in sight. Companies are certainly feeling the increased costs of logistics and online advertising, but there’s still room to explore new e-commerce marketing strategies.

“It’s also unlikely that large brick-and-mortar stores, which invested in strengthening their online capabilities during the pandemic, will change their commitments. This current scenario presents both challenges and opportunities for small and medium-sized retailers,” says the Capterra report.

The Path to Purchase

Consumers start their e-commerce, online shopping journeys through various channels, primarily search engines and retailer websites. There’s increasing talk about the decline in searches through traditional web channels, and the difference in approach between Gen Z and Baby Boomers is striking.

The UK survey showed that 75% of consumers start their online search in search engines, while 55% use individual retailers’ websites or apps. However, when it comes to finalizing a purchase, 71% of consumers prefer retailers’ websites or apps, followed by marketplaces (49%) and department store websites (43%). This also shows the importance of having a presence on social media and the ability to optimize visibility in search engines.

The Impact of Social Media on Online Shopping

Despite their potential, social media play a secondary role in online shopping. Although 20% of surveyed consumers start product searches on social networks, only 7% complete their purchase there. 31% of consumers expect their social media spending to increase in the coming year.

For those who use social media in their shopping journeys, the main platforms are Instagram (69%), Facebook (54%), and TikTok (50%). Consumers use social media primarily to search for products (73%), discover discounts (61%), and new brands (58%), with 46% looking for small or local brands. Interestingly, only 23% start searching on social media to communicate with brands, and 33% prefer not to communicate with brands on these platforms at all.

Consumers use multiple devices for online shopping, with smartphones (47%) slightly outpacing laptops and desktop computers (46%). This confirms that companies need to think about optimizing their sites and apps for various devices, especially phones.

Payment methods also play a crucial role in consumer satisfaction. Preferred methods include credit or debit cards (92%), digital wallets (37%), BNPL services (18%), and gift cards (15%).

What Influences Purchases

Inflation and unstable financial situations are reflected in the UK as well. In times of cost-of-living crisis, low prices and discounts become the main deciding factors on whether to make a purchase or not. User reviews and brand trust also significantly influence consumer decisions. Building a reputation and gaining customer trust is not easy, but it can be achieved through clear brand identity, reputation monitoring, community management, ensuring data protection, and providing secure online payments.

As stated in the report: “With 83% of surveyed consumers participating in loyalty programs at grocery stores and 33% at cosmetics and personal care stores, this concept is not useless to consumers, and businesses that don’t offer these programs could miss out on strengthening their customer base. It’s no surprise then that grocery stores (63%) and cosmetics and personal care stores (43%) were also the two categories where surveyed consumers tended to shop with the same brand instead of exploring different brands. Despite loyalty programs being underutilized in many industries, they can be beneficial for companies.”