What a difference a year makes: 12 months ago, Mirakl released the first edition of its consumer survey of 10,000 shoppers around the globe, The State of Online Marketplace Adoption. We marveled at the influence of the “power shopper” — high-frequency shoppers who made online purchases once a week or more. These highly valuable customers were coveted by online retailers across categories, reshaping the internet economy according to their preferences.
But in 2023, inflation has cast a shadow over ecommerce, and brands must now refocus on a different persona. Goodbye “power shoppers,” long live “value shoppers.” Value shoppers are those who are actively looking for better value when shopping as a result of inflation. According to this year’s survey, a remarkable 89% of shoppers across the globe fall into this category. These consumers haven’t stopped shopping, but they do need to make the most out of every dollar in their budget. What they’re looking for, and how they’re spending their hard-earned income, is changing as a result.
This year’s report, Consumer Preferences in the Digital-First Economy, surveyed 9,600 consumers from 16 different countries. The key themes provide important clues for online-only and omnichannel retailers alike as they look for a winning strategy during these uncertain economic times.
Loyalty? What Loyalty?
Over the past few years, one of the dominant strategies in retail has been to double down on customer loyalty. Brands that identified their most valuable customers aimed to build on those relationships, increasing shopping cart sizes, frequency of purchases and customer lifetime value. Whether it was through loyalty programs, highly curated product offerings or a convenient shopping experience, brands had a number of levers to pull when trying to increase customer spend.
But this year’s survey shows that, while customers still look to their trusted brands, they no longer have the luxury to maintain strong brand loyalties at all costs. Inflation has introduced a new pressure on top of customers’ already weighty expectations for convenience, selection and a great experience. Only 17% of respondents said they will continue to shop with the brands they trust, regardless of price. What’s more, 43% have already stopped shopping with a specific retailer because of rising prices. Brands cannot afford to get complacent during the current downturn — by the time they realize they’ve missed the mark, those customers will already be shopping elsewhere.
Consumers Look for Value Online
If consumers are rethinking their traditional allegiances in search of better deals, then the data is clear on where they’re finding them. Three-quarters of global respondents report that better value can be found online, and they plan to increase online spending over the next 12 months as a result. In every downturn, there are winners and losers, and this shift to ecommerce represents an opportunity for omnichannel brands to become recession success stories.
Of course, shoppers aren’t just going online because of better value. They see online shopping as more convenient and reliable than the brick-and-mortar experience. Over the last six months, 55% of consumers said the products they need have been out of stock more frequently in physical stores. When a product they normally purchase in-store is out of stock, half of all respondents said they then try to find it online often, or very often. Once that happens, they don’t go back: three-quarters of those respondents said they will shop for that product online first the next time they need it.
Marketplaces Build Momentum
One trend remained consistent over the past two years. In both boom and bust, marketplaces are gaining momentum among consumers across the globe. In fact, according to this year’s survey, consumers globally now conduct 46% of their online shopping through marketplaces, a 10% increase from 2021. Why? Marketplaces bring together inventory from multiple sellers in a single ecommerce site, which means each seller is incentivized to make a competitive offer. Two-thirds of survey respondents said they prefer marketplaces because of the variety of reasonably priced offers and organization of items, and more than three-quarters recognize marketplaces as the most convenient way to shop.
Importantly, marketplaces are much more than just Amazon. There are hundreds of retailers that now offer a curated marketplace assortment alongside their owned inventory, and collectively marketplaces see billions of dollars in sales each year. Even so, 60% of consumers still wish more of their favorite retailers had online marketplaces.
As retailers continue to weather the storm of reduced consumer spending, they should focus on strategies that will allow them to regain control and deliver value to their customers today. Consumers are telling retailers what they expect in exchange for their loyalty: a great selection of products, conveniently available at a price point they can afford. Focusing on value and the customer experience first will pay dividends, both during the current downturn and as the market turns around again.
Joe Sawyer leads Mirakl‘s global marketing as Chief Marketing Officer, helping accelerate the company’s growth while establishing category leadership. He joined with more than 20 years of experience in technology-led innovation, first as an ecommerce analyst at Forrester in the U.S. and Europe before transitioning to leadership roles in marketing and business development at SAP, Amwell and ReliaQuest. He has lived, worked and studied in six countries and holds a BA from Bowdoin and MBA from INSEAD.