eCommerce Industry Trends & Insights
Fabian Rodriguez: Hey, everyone. In today's episode of The Honey Buzzcast: eCommerce Industry Trends& Insights, PayPal Business Marketing's Alex George chats with me, Fabian Rodriguez, the producer of The Honey Buzzcast about trends that brands need to be aware of in order to capitalize on gains in eCommerce and the post- pandemic retail landscape. Hey, everybody. I'm Fabian Rodriguez, producer for The Honey Buzzcast, and I'm here with Alex George. Alex leads business marketing for Honey, a PayPal brand. And today, we're going to talk about what brands need to know, to capitalize on eCommerce gains in the post- pandemic retail world. Alex, how are you?
Alex George: I'm doing well, Fabian. How are you today?
Fabian Rodriguez: I'm doing okay. All right. So I'm just going to jump right in, Alex. We all know that the pandemic's global lockdown has forced a new way for consumers to shop for goods and services. Today, we're going to talk through some of the biggest emerging shopping trends and discuss which ones we think will be here to stay even as the lockdown orders have been lifted in many parts of the world.
Alex George: Yes, Fabian. So there are three really big trends that we've seen at Honey and in the commerce space more broadly that we don't see going away anytime soon. So the first one is an obvious one, eCommerce, right? Consumers shopping online. It shifted from being a complementary option to folks shopping the traditional way in brick- and- mortar retail stores to the dominant mode of purchasing during the pandemic.
Fabian Rodriguez: So Alex, do you think that online shopping is going to continue to be the dominant mode of buying goods and services even as the world continues to open back up post- pandemic? What are you seeing at Honey and in the industry more broadly?
Alex George: Yeah, Fabian. So based on our data and broader industry analytics, it looks at the very least, the rate of online shopping will equal that of in- store shopping. So even before the pandemic, we had already seen how the biggest national retailers were optimizing their eCommerce solutions to compete with Amazon. And look, according to a US Census Bureau report, online shopping increased by 32% in 2020 alone compared to 2019. It will be imperative for retailers to continue to find ways to meet shoppers at each stage of the shopping journey and provide totally personalized engagement.
Fabian Rodriguez: So can you give an example of how brands can provide personalization?
Alex George: Sure. So let's take one of Honey's specific solutions or tools. It's called Droplist, and it allows shoppers to save items that they're interested in and get alerts from Honey when the prices on those items drop. So the items that I select will be different than the ones that you might select, but the tool provides this personalized service that speaks directly to your individual personal product interests.
Fabian Rodriguez: Alex, you mentioned three big trends that you're seeing. We discussed the rapid adoption of eCommerce during the pandemic. What's another one?
Alex George: All right, Fabian. Purposeful shopping. The pandemic's economic effects have run the gamut. Many consumers suffered financial damage inflicted by job losses and furloughs, but others found themselves with additional financial resources as their usual spending opportunities were curtailed. Despite these differences, shoppers on all points of that spectrum searched for smart pricing. Those whose finances were affected watched their spending dollars out of necessity. Yet those with stable situations still cut back on impulsive buying, likely reacting to widespread uncertainty and wary of what the future would hold. A McKinsey study found that value was cited as the top reason for trying a new brand. Honey's research has reflected these trends during the downturn as well. In its Honey Consumer Shopping Behavioral Study from September 2020, American shoppers reported that painful price led to negative feelings such as anxiety, frustration, and guilt. But it was possible to assuage those feelings with a more attractive price. So for example, 67% of respondents in that same report reported that they felt less guilty making a purchase if they found a deal, with some even comparing it to comfort food, believe or not.
Fabian Rodriguez: So what can brands do to ensure that they're meeting the consumer need for more purposeful shopping?
Alex George: All signs point to consumers who will continue to shop carefully and look for a credible reason to purchase, which means that brands need to determine how to satisfy that desire. So offering contextual cues is one important motivator, given that 62% of Americans told Honey in its Consumer Shopping Behavior Study that they experienced fear of missing out on deals when they pass up a deal that's been presented to them. So Honey's solutions, for example, work for all merchants, including luxury brand. So Honey's solutions, for example, work for all merchants, including luxury brands, because its tools are anchored around deals and incentives, not pricing discounts.
Fabian Rodriguez: And how about the third big trend you and the Honey team have seen?
Alex George: This one is definitely closely tied to the first two trends, Fabian. Consumers have upended their past shopping behaviors and loyalties to specific retailers and brands. During the pandemic, people have trialed new brands for a number of reasons. Many have more time to browse different online stores, or they had to find a replacement for their existing favorites when retailers were plagued with inventory, shipping, and supply challenges. In a Ketchum Survey, 45% of respondents reported that they had changed at least one brand preference because of the pandemic. And a majority, 62% expected that those brand preferences would change for them permanently, which presents a valuable opportunity to retailers trying to reach consumers as they embrace this new spirit of discovery and seek new options. In addition, consumer dollars have been regularly shifting to new categories. For example, I think a lot of people know that shoppers gravitated toward home improvement products during the quarantine because they were spending so much time at home. And now, many refreshing their wardrobes with more glam looks as they begin to reemerge in the spaces outside of their homes. But while new merchants have attracted new dollars, that does not necessarily mean that visitors intend to abandon those brands that have served them well and continue to excite them. Honey research also found that 80% of its shoppers continue to shop their favorite brands online at the same pace that they had before COVID-19 hit.
Fabian Rodriguez: So again, I'm going to ask the same question. What should brands be doing to leverage consumers shifting loyalties and affinities?
Alex George: Well, look, given that dichotomy, the push- pull between new brands and favorite standbys, it is incumbent on brands to pull out all the stops and drive sales by leveraging programs and offers that meet customers, whether existing fans or new buyers at meaningful touchpoints in their journey, engendering loyalty in the form of return visits and repurchasing by the same customer again and again, known as what we call in the industry, customer lifetime value is vital. One landmark study in the Harvard Business Review notes that it costs anywhere from 5 to 25 times more to acquire a new customer than to maintain and grow an existing relationship. So just as consumers are innovating, so too should brands. Honey's Head of US Partnerships, who I work closely with, Debbie O Neill was quoted in a Retail Dive report recently saying that," The common phrase,'That's how we've always done it,' comes to mind." But brands realized that that path was dangerous. She found that many brands that we work with had previously only used one or two of Honey's solutions. They were committed to changing up their approach and trying new options. And she emphasized that Honey prioritized working closely with its clients on customized tailored strategies that could help them get in front of customers, and then ensure that shoppers had the best possible experience with their brands. Look, we work with more than 10,000 brands globally, everything from the big names to the mom and pop shops. And we were able to surface fresh choices to our shoppers, to help widen their selection and support their desire to be experimental. To that end, Honey tested co- branded consumer marketing strategies to help brands garner additional audience engagement. So for example, we featured them in Honey's posts and our YouTube videos, co- branded podcast experiences, influencer programs, and other social media opportunities. Any avenue that could help retailers get in front of new and existing Honey shoppers, we help them to do that. That additional exposure, in many cases, translated to additional revenue for participating partners. It's just one example of how we're well- positioned to help brands pivot to meet the ever- changing needs of shoppers.
Fabian Rodriguez: Well, Alex, this has been great. Thank you so much for sharing these emerging trends and insights into how brands can best meet the post- pandemic shopper where they are in today's shopping environment.
Alex George: It's my pleasure, Fabian. Great talking with you. Thank you.
Fabian Rodriguez: Thanks for listening to this episode of The Honey Buzzcast: eCommerce Industry Trends& Insights. To learn more about how Honey can help grow your business, reach out to honey- partner- support @ paypal.com. And be sure to follow us on Apple Music, Spotify, or wherever you listen to podcasts.
Podcaster and founder of Culture Collaborative Media, Fabian Rodriguez, chats with Alex George, PayPal's Global Business Marketing expert about trends in eCommerce in 2022 and beyond. The two focus on how customers interact with Honey, the rise of purposeful shopping as a result of the COVID pandemic, and how to think about customer loyalty.