Hey there! Can you wake me up when January ends? 😴
Your order this week:
VR to recreate brick-and-mortar shopping?!
Amazon hijacks the car-buying experience
Why did the boomer shop at TEMU?
Guest checkouts
To free or not to free [shipping edition]
VR to recreate brick-and-mortar shopping
Retailers are exploring the convergence of physical and digital shopping experiences, with virtual reality (VR) emerging as a bridge between the two realms.
According to the PYMNTS Intelligence study “How We Will Pay Report” one in three digital-first consumers expressed interest in using VR to shop remotely, with 4% already doing so.
Luxury brand Manolo Blahnik offers “The Manolo Blahnik Archives: The Craft,” a virtual room showcasing craftsmanship and creative processes. J. Crew debuted immersive shopping experiences with Obsess, introducing 3D virtual stores accessible via smartphones.
The trend reflects a broader shift towards immersive retail experiences. With consumer interest in VR rising, retailers have an opportunity to differentiate themselves and meet the needs of digital-first consumers.
By embracing VR and other innovative technologies, retailers can enhance engagement and drive sales in today’s competitive landscape.
Amazon Shaping the future of car-buying
The U.S. car sales market, valued between $2.5 trillion and $3 trillion, faces disruption as Amazon ventures into online car sales. The National Automobile Dealers Association provides this estimate, setting the stage for Amazon’s ambitious foray.
Amazon’s recent pilot program, commencing with select Hyundai dealers and exclusive to employees, mirrors its prior ventures in diverse sectors like travel and groceries. Jeff Dyke, president of Sonic Automotive, notes the significant demand for cars among Amazon’s 150 million Prime customers.
Approximately 25% to 30% of car buyers express interest in online transactions, a figure surging to 40% among electric vehicle enthusiasts, according to Chris Sutton of J.D. Power. Despite pioneers like Tesla and Carvana, online car sales represent a small fraction of total sales.
However, challenges persist, particularly in navigating stringent state laws protecting franchised dealerships. While some remain skeptical, Dyke acknowledges Amazon’s potential to disrupt the industry, citing its technological prowess and resources.
As Amazon’s program unfolds, the automotive sector braces for potential shifts, mindful of the transformative implications on traditional sales models.
Why did the boomer shop at TEMU?
Temu, the Chinese e-commerce platform, has carved a niche adored by older generations, according to NurPhoto, a research firm.
Particularly boomers and Gen Xers, who frequent the site and spend more compared to younger demographics. NurPhoto’s research unveils this trend, sparking curiosity and speculation.
With a remarkable 700% surge in website traffic, Temu’s allure among older generations prompts questions about its appeal. Insights from Attain, drawing from credit card data, illuminate the disparity in shopping habits across age groups. While Gen Z and millennials engage moderately, boomers stand out, averaging 5.6 orders per shopper—double the rate of Gen Z.
Experts ponder the reasons behind this phenomenon, from Temu’s diverse product mix to its gamified discount strategies. Skepticism lingers, questioning if older consumers are less tech-savvy or if they find joy in inexpensive finds.
The enigma invites dialogue, urging boomers and Gen Xers enamored with Temu to share their perspectives. As the narrative unfolds, understanding the allure of Temu to older generations remains a mystery.
Increased CTR on guest checkouts
In digital commerce, the checkout process is the final frontier, where guest checkout options with one-click functionality foster repeat business and enhance loyalty.
Recent developments from PayPal highlight the appeal of streamlined checkout experiences, reducing friction for users by recognizing 70% of shoppers and reducing checkout times by 40%.
Research indicates that 55% of customers encounter payment friction, prompting many to opt for guest checkout, particularly during the pandemic, where manual entry of payment details prevailed among three quarters of eCommerce shoppers.
Checkout experiences wield significant influence, with two-thirds of consumers considering it pivotal in merchant selection. Additionally, suboptimal checkouts contribute to a staggering 70% of abandoned shopping carts, underscoring the importance of optimization.
In response, industry players like PayPal and Paytm are pioneering streamlined checkout solutions, while Mastercard’s Click to Pay initiative reports a promising 70% increase in transactions year-over-year.
As digital commerce evolves, the quest for frictionless checkout experiences remains paramount, shaping consumer behavior and merchant strategies.
Free shipping dominates online shopping preferences
Recent market research by PYMNTS Intelligence reveals a pivotal shift in consumer behavior online. According to their study, free shipping emerges as the primary factor influencing online shopping choices, particularly among older generations. Marketplaces excel in this arena, outperforming retail and branded stores.
Surveying over 3,500 U.S. consumers, the research emphasizes the importance of aligning shopping features with consumer preferences to foster loyalty. Nearly two-thirds of respondents consider free shipping crucial when selecting an online vendor for the first time, with three out of four expressing a likelihood to continue patronage if offered free shipping.
Beyond free shipping, streamlined checkout processes rank high in consumer priorities, particularly for online shoppers. Marketplaces demonstrate superiority not only in free shipping and hassle-free checkouts but also in ancillary services like order tracking and returns.
Despite marketplace dominance, brands and retailers have opportunities to differentiate themselves by enhancing these strategic features, thereby competing effectively. As consumers increasingly prioritize convenience, adapting to their preferences becomes paramount for sustained success.
Signing off,
The Merchant @CartHustle