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Today’s Retail Shopping Behaviors Are All about Relevance. Here’s Why.

Oct 25, 2022

Omnichannel customers spend around 10% more than shoppers who use a single channel. Return rates are up 13% year on year. The time it takes for a customer to return and make another purchase decreases with every purchase. These are just some of the findings from Voyado’s new report on current shopping behaviors.

Based on data from 150 million purchases, the report offers valuable insights into the way customers shop. It also shines a light on what is underpinning most of these behaviors – relevance. Unfortunately, too many retailers are overlooking this crucial factor in their strategies.

Loyalty Isn’t a Project

For the first time since 2008, retail is seeing the return of the ‘lipstick effect’. Customers are shopping more but buying fewer or cheaper items because of global economic challenges and rising inflation.

At the same time, retailers are moving their focus away from growth to maintaining margins. This is unsurprising given that the cost to acquire a customer is up 50%. Marketing costs have increased as well.

Keeping hold of the customers that you already have is vital. Sales generated by known customers account for 50-70% of a retailer’s total sales on average, so losing these shoppers can have devastating effects on a retailer’s bottom line. Especially, when you consider loyal customers have up to 50% higher average spend on each transaction.

The problem is that too many retailers still think of loyalty as a project to be completed once. But loyalty is an ongoing thing that needs to be constantly developed and kept fresh for today’s customers.

The best way to do this?

Think about relevance.

Over 70% of adult customers are omnichannel consumers.

Irrelevant Communications Are Harming Retailers’ Businesses

Relevance matters because customers expect to be seen, appreciated, and inspired in a way that adds value. This is the case for all interaction and sales channels.

What’s interesting is that the gap between brands that do relevance and those that don’t are getting bigger. Although 70% of retailers have customers who have registered accounts online, only 5% use that information to personalize communications.

Many retailers use their communication channels to create short-term boosts in sales. This can have the unwanted consequence of coming across as spam. In fact, in the last year, the volume of emails sent has grown massively but click rates are down.

According to Optimove, 71% of consumers say they are most receptive to promotional messages based on the relevancy of the offer. A drop in click rates suggests that consumers feel many of the communications they receive are irrelevant.

Voyado’s new shopping behaviors report found that the email communications that aren’t seeing their open rates decrease are cart abandonment messages. This is because they’re the perfect example of relevance – you put something in a cart that you are interested in buying and are reminded of it.

Getting relevance right matters because it takes an average of 553 days for customers to make four purchases from a retailer. That figure might come as a shock to many, but it also represents a huge opportunity.

This is in part because the time it takes for a customer to come back and make another purchase decreases with every purchase made. One of the best ways to get consumers to make these crucial purchases faster is through relevant recommendations.

Customers Don’t Just Buy Relevant Products – They Also Keep Them

Relevance has a part to play in almost every aspect of retail today.

Over 70% of adult customers are omnichannel consumers. This means that retailers who only offer a single channel way to buy may seem irrelevant alongside their competitors.

This has a real effect on their bottom line as customers who use more channels spend approximately 10% more than those who don’t.

Voyado also found that return rates are up 13% year on year, including partial returns. While this isn’t a new issue, retailers’ focus on growth in previous years means the sector has never really grasped the challenges around returns.

Moves to charge consumers for e-commerce returns have been met with pushback from shoppers. 47% of consumers say they wouldn’t shop with an online retailer that charges for online returns, according to research by ROI Hunter.

The issue is further complicated by the fact that many retailers have found that their most profitable customers have high return rates. This is partly because consumers are migrating previous shopping behaviors from physical to online channels.

However, a lot can be done to reduce the volume of returns including improving product pages, providing more product images, and creating a strategy around post-purchase communication.

Improving the relevance of the products that consumers see on social media, in email communications, and on the homepage is also crucial. It cuts out the work that the customer must do to find the right products for them and increases the chances of them keeping their purchases.

The beauty of relevance is that it will always be significant to customers. While shopping behaviors will change over time, the importance of relevance never will because consumers will always want products that fit their lifestyles and needs.

For more insights into how consumers are shopping today, listen to our Modern Commerce Talk podcast on The Truth about Today’s Retail Shopping Behaviors.

Whatever sector of retail you’re in, Voyado’s new report will give you valuable takeaways about what your customers are thinking and doing when spending money. Get your copy here.