Despite the proliferation of online shopping, 65% consumers still prefer to shop in brick-and-mortar stores, according to new research. Items such as groceries, toiletries, home decor, and clothing are the primary consumer products driving consumers to in-person shopping. Customers say they prefer to see the items and test them out before buying them.
In an effort to make digital channels more appealing, brands are improving search and filtering, product recommendations, and chatbots that can assist consumers with simple queries.
For the most part, these enhancements are welcomed by customers who appreciate better search experiences, as well as recommendations. Consumers also value virtual try-on features which help close the gap between online and in-person apparel shopping experiences.
The only AI feature that seems to be frustrating consumers, though, are these new chatbots, which they report often misunderstand queries, or are unable to answer complex or very specific questions.
Chatbots have yet to fulfill the role in-store customer reps have been playing for decades, and it is quite possible that they never will. Moreover, while augmented reality features have been well-received, only 1% of the world's retailers offer these services. Which means many customers are still going to make their way to the store to shop for products they want to test. In the absence of AR, customers are left with the in-app product photographs as the only representation of the product they want to buy. And today’s consumers are tech-savvy enough to understand that product photography is a highly curated and favorable representation of the product.
So how can brands help customers feel understood and see their wishlist items in action, without asking them to drive down to a store? Klarna has a few answers:
a) Ask influencers: Klarna offers a chatbot-like service on its app, but it also allows consumers to interact with “fashion experts” that can help guide consumers to the product they need and answer questions about the product itself. It's the in-store customer rep and personal shopper wrapped into one online conversation with a real person.
b) Product in-action: Rather than relying on product photography alone, customers have access to Creator storefronts, where videos and photographs of creators trying on products can be found and products can be directly purchased. Although creators have a vested interest in selling certain products, they are also beholden to ensuring the products they curate are worth their mettle. If a creator is seen to be pushing products that are low-quality or overpriced, they lose credibility and risk alienating their audiences. On the other hand, unlike brand ambassadors that often don’t use the products they market, creators can sample and curate products from multiple brands in one place and only market the products they find useful.
Klarna also has a recommendation feed that builds upon the digital shopping features customers already like using. Building on its core payments business, Klarna has almost reinvented itself as an online shopping destination. In place of customer representatives and retail displays, the app uses the creator economy. The company’s GMV actually rose by 13% in Q1 2023, in a tough market.
Like Klarna, Affirm and Amazon also have influencer programs. Discovering products through search feels like it’s in the past – almost 31% of social media users now discover new items through influencers.