Sensitive shoppers and shrunken wallets
As the world takes baby steps out of lockdown, many would have realized the world has changed. There is good news and bad news for retailers. The good news is that people are still spending. The bad news is that the burgeoning e-commerce scene now has to jostle for a share of a shrunken wallet. Shopping behaviors have changed as well with more people shopping from home. Accenture says they expect a 160% increase in e-commerce purchase from new and low frequency buyers.
How can retailers service customers effectively through AI?
With finite spends and confined shopping, AI driven recommendation engines and chatbots on e-commerce sites are now more important than ever to guide and influence a customer’s purchase. We explore key consumer sentiments that are at play today and how retailers and business owners can ride on them and maximize their recommendation engines and chatbots’ impact on their customers’ journey.
Consumer sentiment #1:
Mindful shoppers look for value-for-money essentials
Nielsen reported up to a 59.6% increase in sales of goods like cereals, diapers, cleaning solutions during this period. It is not surprising that in countries like Singapore, grocery stores are doing exceptionally well. Loyalty to stores will be reappraised as value and availability become key purchase decision drivers. Consumers who can’t find what they are looking at their usual stores are less likely to wait and will explore new vendors.
Source: Nielsen Online and Offline data to Feb 2020
Take action: Offer value and show availability
1. Capitalize on ‘near me’ and availability signals in your site’s recommendations to steer buyers to click. Delhi based online grocery retailer, Grofers and food delivery retailer Zomato have capitalized on the market scale these signals offer and teamed up to offer food and grocery delivery for over 80 cities in India.
2. Recommend product bundles. Explore grouping fast moving with slow moving essentials in recommendations to accelerate stock clearance. Software Advice, a research firm for web POS systems reported 90% of respondents in their survey have implemented bundling consistently in their businesses.
Consumer sentiment #2:
A new appreciation for self and societal well-being
Healthcare, fitness and wellness related businesses will see an increase in attention. Accenture reported that 80% of consumers surveyed feel more or as connected to their communities and 88% of them expect these connections to sustain after the virus is contained. Nielsen reported that 83% of consumers surveyed said they will continue to focus on health and supplement spends.
Take action: Contribute to the fight
1. Offer public care services to stay active physically and keep their emotions and thought systems in check. Swimwear company, Summersalt converted their customer service live chat into a customer happiness chat service, offering emotional support to any customer who might not be in the mood to shop and need to have a conversation with someone. The venture start up reported no decline in sales during this period.
2. Offer complimentary or discounted services directly to consumers or via corporate well-being programs who have been affected by Covid-19.
3. Recommend by mood. Fine tune your web’s recommendation engine to receive inputs on users’ needs, emotions and state of mind to offer recommendations that will have immediate appeal.
Consumer sentiment #3:
Improvement projects on the rise
Extended time at home gives people space and time to self reflect. Naturally, self or home improvement projects become a priority. Accenture highlighted that homes and other DIY types of activities will see a surge this year.
According to Accenture, 48% of consumers are upgrading themselves with new skills.
Take action: Plan roadmaps and recommend resources
1. Offer skill gap analysis. Online course providers as well as learning and development leaders in companies can offer skill gap analyses and match relevant courses to the individual’s needs. The Singapore government’s skills development agency, SkillsFuture provides Singaporeans with personalised skills and resources to members based on their resume and goals.
2. Plan career road maps. Life coaches as well as HR leaders can use recommendation engines to leverage their companies’ skills framework, like this one from SkillsFuture, to provide career pathways for individuals who are planning or reassessing their career trajectory.
3. Recommend home improvement projects. Home improvement retailers, be it renovators or materials suppliers, can provide pre-packaged home improvement projects bundled with necessary materials and recommend them to site visitors based on their site behavior to help accelerate decision making.
Recommendation engines and chatbots as hedges not just levers
The companies and organisations highlighted are but a few that have shown that with recommendation engines and chatbots in place, they can ride on current consumer sentiments and play a decisive role in engaging customers and secure returns. With usage overtime, they offer valuable insights to customer behavior, emerging needs and effectiveness reports that will give businesses the competitive advantage and optimise business performance for the long run. It’s high time companies and organisations see them not only as tactical levers but strategic mechanisms that future-proof businesses in a volatile market.