Shopping for inspiration
Amazon may be the number-one retail destination for millennials, but with its focus on fulfillment, rather than the enjoyment of discovering new products, 1 in 10 millennials say they don’t always know what they’re looking for and it’s hard to find inspiration on Amazon.
The ‘Everything Store’ has a wide array of products and the ability to deliver them efficiently, but Amazon was never about providing engaging, unique, or inspirational experiences, and that’s why customer experience remains the single greatest opportunity for any retailer fighting Amazon. Retailers should be employing the kind of experiential shopping for which Amazon just isn’t suitable.
The millennial’s search for product inspiration often starts on social media networks, and referrals from social feeds to ecommerce sites continue to rise. With the global time spent on social media each day having grown from 90 minutes in 2012, to 135 minutes in 2017 there are even greater opportunities for product and brand discovery, and for gathering data to offer personalised, curated product discovery.
Retailers looking to better cater to millennials shopping for inspiration should also pay close attention to mobile as part of an omnichannel strategy that hinges on ‘mobile first’. The most popular channel for carrying out research ahead of making an online purchase is mobile (voted for by 45% of millennials), but the majority complete the purchase on their desktop or laptop, with millennials expecting a seamless cross-channel experience wherever they start or end their shopping journey.
Improving CX with continuous improvement
You don’t need Amazon’s budget to surprise and delight consumers. Any retailer can use targeted and focused experimentation to deliver differentiated experiences that speak to millennials shopping for inspiration.
If you’re really innovating, failure is implicit, and a ‘fail fast’ digital culture has been key to the success of fast-fashion superstar ASOS. The pure-play is pushing industry expectations on how fast retailers can innovate, releasing around 700 tech updates during the first four months of 2018. The retailer crowdsources new ideas and isn’t afraid to relaunch categories that failed the first time around.
Continuous improvement is ultimately about becoming a customer-centric organisation and thinking about how to improve every part of the customer journey across all touchpoints. Amazon Go, for example, addresses key customer pain points around payment and checkout and is all about simplifying the customer experience.
Customer experience mapping allows retailers to explore what consumers are thinking, hearing, feeling and doing, at every stage of the user journey, rather than only considering what they do and the services they require. By focusing on user mindset, rather than just age or demographics, retailers can really understand motivations and surface opportunities to meaningfully improve the customer experience.
Retailers need to focus on end-to-end customer journeys, regardless of device, but the components of their omnichannel strategies, including ecommerce websites, need to be constantly reviewed and improved.
Catering to voice commerce
Every ten years we experience a leap in technology that reduces friction and makes our lives more convenient. That’s according to Amazon Alexa’s Meryem Tom, who believes that voice is the next frontier.
With 22% of UK millennials saying that they own a voice-activated speaker (and with another 17% saying that they plan on purchasing one in the next 12 months) it follows that there will be a growing demand for a voice economy. After all, physically asking for a product is often easier than typing out an inquiry, so voice commerce will likely play a growing role in product discovery.
At the moment, just 1% of millennials are researching products using a voice-activated speaker, and only 1% make the majority of their online purchases on such a device. But of those who already have, or intend to purchase, a voice-activated speaker, 47% say they are very likely (20%) or likely (27%) to use it to make purchases.
Voice may be yet to really grab millennials’ attention as a shopping channel, but it can already be useful for consumers shopping with intent, i.e. those who know exactly what they want and trust Amazon’s algorithms. And with Amazon having added a screen to Echo, browsing opportunities on these devices are improving all the time. Echo Look, for example, is much more geared towards those shopping for inspiration, and combines the power of Alexa with machine learning and advice from fashion specialists to create personalised outfit recommendations.
As adoption grows and consumers become more comfortable using the technology, they’ll start to question why they can’t order more complex products without having to do anything other than talk to their voice-activated speaker. In the near term, however, retail businesses looking to jump on this trend should focus their efforts on the types of products most likely to be purchased through this channel which, for now, are repeat, low-price-point items (around 70% of voice purchases are for specific, ‘known’ products).
With Alexa, Amazon is primed to recommend its products before others, but tailoring search terms to differentiate against competitors can help retailers improve their chances of being found. And working to achieve Amazon’s ‘choice’ status is key, with customers very likely (85%) to accept Amazon’s recommended product.
Shopping for fashion and luxury inspiration
The Amazon era is yet to really hit the fashion and luxury industry; after all, you don’t expect to see a designer handbag in the same basket as your lower-value commodity items.
Our research shows that only 18% of millennials purchase ‘high-value clothing items’ on Amazon. The term is of course subjective and open to individual interpretation, but this suggests that Amazon is not the preference for bigger-ticket fashion purchases, and that it may have a way to go to capture consumer imagination in the way that the likes of Farfetch have done.
The most commonly-cited reason millennials give for why they avoid Amazon when it comes to high-end fashion is their preference for purchasing these items in a physical store. This is the ongoing challenge for the fashion and luxury industries: bringing the tactile and sensory experience of bricks-and-mortar to the world of ecommerce.
Amazon has growing fashion ambitions and it’s expanding its private label ranges and categories. For now it has relatively low penetration in the luxury market, with a 12.9% share in the global apparel and footwear ecommerce market, according to Euromonitor, but it’s not unthinkable that it could shift the thinking of its 100 million Prime members towards Amazon as a fashion destination. Its recently-launched Prime Wardrobe try-before-you-buy box is an intriguing foray into fashion product discovery.
As Brian Sugar, CEO of PopSugar, puts it: ‘Luxury brands exist on the aspirational brands they’ve built, and Amazon is the anti-brand. Is Amazon going to change its entire site and experience and branding in order to please these luxury brands? In the short-term, luxury brands are not likely to let Amazon sell their high-end items. But in 20 years, what won’t you be able to buy on Amazon?’
It’s a similar picture when it comes to niche and handmade products. Amazon Handmade was launched in 2015 as a direct competitor to Etsy, a pioneer in selling unique handmade items online, with an IPO and $2 billion valuation to its name. Our research shows that only 8% of millennials regularly purchase from Handmade – the least-popular product category with this demographic. This is despite the continued growth of the artisanal and handmade trend, and the fact that millennials are turning to Etsy sooner than other demographics.
Etsy has turned product search and discovery into an artform, and Amazon’s struggle to win-over millennials in this space appears to support the argument that Amazon is geared towards those shopping with intent and looking for fast fulfillment.
The type of products Etsy has made a name for itself selling are often unique, handcrafted, personalised, and considered items that require a degree of story-telling and rich product information including high-resolution images. Where Amazon is the ‘Everything Store’, Etsy has made a success out of finding its niche. Where Amazon can be overwhelming in its product inventory, Etsy is about curation, expertise, and specialist purchases.
But it’s not just about products; the compelling online experiences it offers have been key to its success. According to Google, Etsy is the most user-friendly mobile website and capitalises on the fact that millennials use mobile more than any other device to search for products online. Its homepage features a prominent search bar and returns results quickly, making predictions from just a few keystrokes. In addition to the usual search filters of price and relevance, Etsy allows shoppers to search based on options such as whether an item comes with free shipping or gift wrapping, while a guest checkout reduces friction for new customers.
Where Amazon is more about quick buys, Etsy is about search and discovery and its rich content and gift guides are designed to provide inspiration and help move shoppers along the purchase journey.
Amazon’s legacy when it comes to new technology and understanding consumer behaviour has much to teach the world of online fashion and luxury, but the success of luxury and niche players like Etsy shows what’s possible when retailers focus on identifying and meeting customer needs through the types of experiences Amazon isn’t yet able to provide.