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Consumers Are in Charge of the Digital Path to Purchase

May 26, 2022


Although retailers still talk about the digital path to purchase as an alternative to the traditional shopping journey, the lines between paths to purchase have blurred. Tom Standage (@tomstandage), editor of The Economist‘s ‘The World in 2021‘, writes, “The adoption of new technological behaviors in response to the pandemic, from video-conferencing to online shopping, means usage has already reached levels that were not expected for many more years.”[1] He adds, “Grannies have discovered online shopping.” With all generations getting more comfortable on the digital path to purchase, most retailers have adapted to this new reality and are pursuing omnichannel strategies. Nevertheless, they are having to adjust to the fact that customers are now more in charge of their purchasing journey. Bradley Hearn, a product marketing manager at ChannelAdvisor, offers the following depiction of a typical customer journey:


When you need a new TV, what’s the process you take to buy one? First, you’ll probably grab your phone or tablet and begin researching different brands and models to decide what kind of TV you want. Then, you start browsing various retailer sites to see where the best deal is. Finally, you find the best deal, and you’re ready to buy, either online or in-store. This scenario is just one example of the modern consumer journey. Consumers are in control from beginning to end. They’re gathering information, weighing their options and deciding where they want to buy from — most of which is done mostly online.”[2]


A report published by Edge by Ascential predicts, “$2.4 trillion in gross merchandise value (GMV) will move online worldwide between 2021 and 2026, more than double the amount generated by all of the leading store-based channels.”[3] That’s a number retailers can’t ignore.


The Modern Shopping Experience


Although the digital path to purchase is gaining traction among consumers, it doesn’t spell the death of physical retail. The latest generation to capture retailers’ attention is Generation Z. Marketing expert Ray Schultz (@rayschultz) reports that Gen Zers are more nostalgic than older generations and nearly half of them prefer shopping in stores rather than online.[4] Even so, Dmitry Atamanyuk (@AtamanyukDmitry), CEO of Global Digital Marketing Group, writes, “IBM reports that nearly 75% of this generation would choose a smartphone as the preferred device for both work and pastime. … Purchasing goods and services for them is much easier via their smartphones. Thus, to appeal to Gen Z, a company has to optimize for mobile devices. As of today, more than 85% of Gen Zers find out about new goods through social media apps installed on their smartphones. Their buying preferences are heavily impacted by what they learn about products and services on social media.”[5]


Target is a good example of how the traditional shopping journey and the digital path to purchase have converged. Journalist Jason Aten (@JasonAten) explains, “Target sells things online, of course, but its primary way of interacting with customers is still through its physical retail stores. In fact, its entire online business is built not on warehouses, but on those stores. Target is using its most valuable assets, its stores and its people, to serve its customers regardless of how they want to shop. … More than 95 percent of all of its orders, both digital and physical, were fulfilled by stores. That number highlights just how effective the strategy really is.”[6]


As Atamanyuk points out, younger generations rely a lot on social media and that channel now plays a significant role in retail sales. Schultz reports, “98% of consumers plan to make at least one purchase through social media this year, and 68% have already bought via social, according to a study by Sprout Social, a provider of social media management software. But social shoppers are choosy: For one thing, 60% are more likely to buy from brands that highlight inclusivity in their content. This is cited by 73% of Gen Z and 72% of millennials.”[7] Schultz also reports that Gen Zers expect the metaverse to play a larger role in their shopping future.


Cognitive Technology and E-commerce


Nick Heethuis (@NickHeethuis), founder of TripleShot Marketing, observes, “There isn’t an industry in the world that is immune to the influence of artificial intelligence (AI). From virtual reality (VR) gaming systems to AI robots in industrial manufacturing, the development of AI technology is revolutionizing the way we interact with the world. But e-commerce is especially susceptible to AI disruption, as learning technologies and algorithms are currently transforming the way we buy and sell goods online.”[8] He goes on to discuss four ways cognitive technologies are already being used in e-commerce. They are:


1. AI Copywriting. According to Heethuis, “The introduction of artificial intelligence copywriting is revolutionizing the way brands create their sales copy. AI writing tools can generate marketing copy within seconds. Instead of hiring copywriters or ad agencies to write headlines, blog intros, or product descriptions, brands are now able to use AI software. These tools can offer digital ad copy, social media content and other e-commerce copy using advanced AI language models.”


2. Chatbots and Virtual Assistants. Most consumers understand that when they open an online chat they are not speaking to a human but to a chatbot. Heethuis reports, “While e-commerce has always had customer service representatives who can offer phone support, it wasn’t until recently that AI helped fill in the gap to provide customers with immediate assistance. The use of chatbots and other virtual assistance is increasing among e-commerce retailers, providing 24/7 support to all their online customers.”


3. Personalization. According to Heethuis, “AI is also incredibly adept at providing a personalized experience to customers through accurate product recommendations and advertising. AI algorithms will sift through enormous datasets to retrieve actionable insights into customer behavior that will help them better predict exactly what a customer needs, when they need it. … Personalization is the key to a pleasant customer journey, which is why so much e-commerce advertising is now using artificial intelligence algorithms.” Retailers, however, have to be careful about being too personal. Once you cross the creepy line it is difficult to regain a consumer’s trust.


4. Inventory Management. Finally, Heethuis writes, “Another area of e-commerce where AI’s predictive analytics are reshaping the terrain is in the context of inventory management. Storage facilities don’t have the space or the money to always keep everything in stock, which is why it’s important to prioritize the products you need, when you need them. Inventory must be kept up to date, stored properly and ordered ahead of time — based on predictions of customer demand.”


Concluding Thoughts


Deren Baker, CEO of Edge by Ascential, reports, “Our data shows that ecommerce will be the largest driver of retail growth over the next few years, with online retail accounting for almost 40% of global retail sales by 2026. Increasingly, product discovery, and even the whole shopper journey, is taking place on social media sites like Facebook and TikTok. … Meanwhile, traditional brick-and-mortar retailers are taking leaps in their digital transformation. … As retail enters a new generation where the shopper path-to-purchase is most likely to start on a mobile phone or a laptop, the digital shelf is the primary place where shoppers discover, select, purchase and engage with products online, and therefore is fundamental to a brand’s future growth.” Heethuis also believes that investing in cognitive technology is also essential to growth. He concludes, “As the market for AI in e-commerce continues to grow, any brand not investing in [AI’s] potential will be left in the dust.” That’s because consumers are in charge of their purchasing journey and cognitive technology can help retailers understand their shopping preferences.


[1] Tom Standage, “New technological behaviours will outlast the pandemic,” The Economist, 16 November 2020.
[2] Bradley Hearn, “Understanding the New Consumer Journey,” Customer Think, 11 March 2022.
[3] Edge by Ascential, “Shoppers to Spend $2.4 Trillion Online by 2026, According to Edge by Ascential’s Annual Future of the Digital Shelf Report,” Business Wire, 22 March 2022.
[4] Ray Schultz, “Gen Z Bets: Group Demands Transparency, But Not So Worried About Privacy,” Email Insider, 3 February 2022.
[5] Dmitry Atamanyuk, “Generation Z Marketing: How To Reach Your Target Audience in 2022,” Toolbox, 31 January 2022.
[6] Jason Aten, “This 1 Number Explains Target’s Strategy to Beat Amazon. It’s a Stroke of Genius,” Inc., 18 April 2022.
[7] Ray Schultz, “Almost All Consumers Expect To Shop Via Social This Year, Study Says,” Marketing Daily, 21 February 2022.
[8] Nick Heethuis, “Four Ways Artificial Intelligence Is Transforming E-Commerce,” Forbes, 15 February 2022.

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