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The Ecommerce Trends You Need To Know For 2024

An image capturing the presence of a globe on a computer screen.

The one thing that remains constant with the ecommerce industry is that the landscape is constantly changing – and this year has been no exception. 

Brands are navigating an ever-complex environment marked by economic uncertainty, shifting consumer behavior, and the ongoing demand for seamless omnichannel experiences. On top of this, sustainability and ethical practices have become increasingly important to consumers throughout 2023, raising the bar for brands to align with their shoppers’ values.

2023 has also witnessed a surge in competition in the ecommerce space, with an estimated 4.1 million live sites using Shopify right now. Yet only 2.86% of ecommerce website visits convert into a purchase.

So, when faced with increasing competition, growing consumer demands and dwindling sales conversions, how can brands possibly win in 2024? Dive into our expert predictions to uncover the specific approaches required to lead the way in the coming year.

 

1

Rewards get more rewarding: the rise of value-driven loyalty programs

Today’s customers are seeking more value than ever from their loyalty programs, and brands who don’t rethink their rewards could get left behind by these savvy shoppers. With the average American consumer participating in 16.7 customer loyalty programs, the question for 2024 becomes not ‘Should you have a loyalty program?’, but rather ‘How is your loyalty program better than the others?’.

While we know that customers seek value, it’s important to recognize that discounts aren’t the universal solution. A significant 66% of consumers say that their spending behavior is influenced by the opportunity to earn rewards. This emphasizes the necessity for brands to provide rewards that extend beyond just discounts; personalized, relevant, and valuable rewards tailored to the individual customer are crucial! By offering these kinds of rewards, you can win over your customers while also differentiating from your competitors.

So how can you make your rewards more rewarding? Here are our top tips for doing just that.

Free product rewards

Offering free products is a powerful way to reward your loyal customers while also introducing them to new items from your product line. This works particularly well for certain industries, like beauty and cosmetics, where members can try out new products to incorporate into their beauty routines.

You can see below how MAC allows their members to redeem their points on products. They offer flexibility in how members can use their rewards and also let them select products they actually want.

Screenshot 2023 12 07 At 14.04.44

Eco-rewards/charitable rewards

In today’s environmentally conscious world, consumers increasingly seek brands that align with their values and demonstrate a commitment to sustainability. Offering eco or charitable rewards is a great way to tap into this growing segment of the market and offer genuine value to your customers who feel strongly about these causes.
Rewards could involve planting trees on their behalf, donating a portion of sales to environmental causes, or recovering ocean plastic like REN Clean Skincare do.

REN Clean Skincare’s environmental rewards

Giving customers the power to choose from a variety of rewards, including discounts, products, experiences, or charitable donations, allows them to select the rewards that best align with their individual preferences and needs. This personalized approach allows customers to choose the reward that they perceive to be the most valuable, so you really can’t go wrong with this catch-all option.

2

More than just Gen Z Purple

In 2024, the landscape of ecommerce is expected to undergo a significant transformation, with Generation Z taking a leading role. This year, it is anticipated that brands will shift their focus to tailor ecommerce experiences specifically for Gen Z consumers. As the first generation to be fully immersed in the digital world from a young age, Gen Z has increasingly high expectations for ecommerce platforms' performance. Their influence goes beyond the basic transactional nature of online shopping. This generation, noted for its high level of education and diversity, is actively shaping the future of online commerce through its unique preferences and values.

In the coming year, Gen Z's emphasis on sustainability, transparent ingredient sourcing, and the influence of social media personalities in their buying choices will become even more pronounced. Brands that resonate with these principles will not only be keeping up with trends but also addressing key factors crucial for the success of ecommerce entities in 2024. Gen Z's thoughtful approach to environmental and ethical issues is revolutionizing the ecommerce sector. Companies that align with these values are expected to experience substantial growth.

As Gen Z becomes the dominant consumer group, their focus on aesthetics goes beyond superficial aspects, like the popular ‘gen z purple' color, which not only rose to prominence in 2023 but was also named Pantone’s color of the year. Ecommerce Accountants note that brands are increasingly prioritizing fundamental functionalities like speed, clarity, and transparency. These elements are becoming essential aspects of online experiences, overtaking mere visual attractiveness.

Our extensive site design and research at Vaan throughout this year has unearthed valuable insights into the intricacies of Gen Z’s preferences. We’ve discovered that this generation is not just interested in the superficial aspects of a product; the demographic is detail-oriented and values comprehensive information. Understanding what goes into a product, the reasons behind its formulation, and how to maximize its benefits are critical considerations for Gen Z buyers. As an example, while building out Rhode Skin, Hayley Bieber’s skincare site, our research led us to integrate an API-based ingredient data tool called Clear for Me, offering a transparent display of each ingredient highlighting why it’s an integral part of the product. This commitment to providing detailed and relevant information has yielded tangible results, with our team receiving unsolicited TikTok reviews, such as the one available here.

ecommerce trends: The impact of Gen Z consumers

Navigating the dynamic between brand identity and conversion rate optimization (CRO) specific to Gen Z is an ongoing journey. Striking the right balance between cultivating a brand that resonates with the values of this generation and optimizing for conversion is a nuanced challenge. As we look ahead to 2024, the evolution of designing specifically for Gen Z emerges as a central focus for brands seeking sustained success in the ever-evolving e-commerce landscape.

3

Genuine engagement with your audience: micro-influencers and customer loyalty

A shift in online privacy protection requirements is becoming apparent as we get closer to 2024. Legislators, as well as big players in the space, are sending signals that customer data will no longer be as readily available as it was until now.

This poses a few very important questions to marketers, the most important being, “How do we target someone about whom we don’t know anything?”.

That’s where key concepts like genuine engagement, micro-influencers, and customer loyalty come into play.

Genuine engagement means looking at quality over quantity in your metrics. Does it really matter if 100 out of 1000 people clicked on your email, if they didn’t actually do anything meaningful after they did? Sure, your click rate needs to be above a certain threshold, but it doesn’t really contribute to your brand’s growth or your audience’s engagement.

In our opinion, the only real way to establish genuine connection (and thus elicit genuine engagement) between a brand and its audience is through intermediaries. Brands, essentially being a fictional amalgamation of people, content, ideas, and products (in no particular order), can only “reach out” in a simulated way. Enter – micro-influencers!

The main benefit of micro-influencers over other kinds of influencers, and other kinds of D2C marketing, is the fact that their size allows them to focus more on their audience, custom-tailor their content, and incite meaningful conversations about your brand and your products.

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How many times have you found yourself engaging with a forum before you made a decision to buy a product or subscribe to a service? Micro-influencers allow you to do just that in a systematic way with a planned budget and a clear set of performance indicators.

After the micro-influencers have done their thing, and connected you with your audience, you then have to put all of the data you’ve been willingly given to good use. From an email marketing perspective, this is when you would seriously consider developing your customer loyalty platform, turning your newly generated customers into evangelists and even micro-influencers themselves.

The silver thread connecting all of these different concepts is privacy, or in a more general sense, data ownership. If the customers don’t trust an ethereal concept, such as a “brand”, enough to give them their data, then your intermediaries, micro-influencers and customer loyalty advocates, will do the trick. That’s why we think this will be the most interesting trend of 2024.

4

In an era where major brands launch Black Friday discounts as early as September, smaller brands cannot rely solely on price competition. Offering 30% off for an entire quarter is simply not viable. Instead, medium-sized brands should focus on standing out through campaigns that resonate with their customers’ values and ongoing conversations.

Consider loyalty programs with a community impact or those that integrate social conversations, growing alongside your customer base. Brands must recognize that the needs of their best customers evolve over time. It’s crucial to engage and reward customers at different stages of their lives, aligning with their changing needs. A prime example is Knix, which adeptly transitioned from targeting millennials in their reproductive years to addressing perimenopause issues, thus evolving with their clientele. Their campaigns focus on fostering community and addressing challenging topics, with their products complementing these initiatives rather than being the sole focus.

Future loyalty programs are likely to emphasize social change and genuine community building over mere transactional benefits like coupons. Brands could innovate by rewarding customers for engaging with their content, such as visiting blogs or community portals. This approach, focusing on meaningful interactions rather than just sales, is poised to attract venture capital interest in the brands of tomorrow.

5

Planning your 2024 marketing strategy without depending on third party cookies

Third-party cookies are going away in 2024! With rising concerns about privacy, tech platforms like Google have been phasing out third-party cookies for the last couple of years, with Chrome shutting down tracking in August 2024. ICYDK, Third-party cookies are created by third-party domains other than the website that a user is visiting, and they are used to track user behavior and gather data for targeted advertising.

While this might feel a little scary as a concept, if we plan and adjust our strategies thoughtfully, we can minimize the impact this will have on your business. This means how we spend our marketing budget and its perceived impact will need to change.

For one, we recommend rethinking top-of-funnel spending. A good way to think of this change is that marketing is a casino, and with third-party cookies, you were counting cards, and now (like in an actual casino), you’re no longer able to. Gambling on ads just became riskier; it’s still effective, but you need to cast a wider net to guarantee a return. This brings back the return of vanity metrics like impressions and brand awareness, where starting to spend on PR, out-of-home marketing, and connected TV will suddenly seem more enticing.

Secondly, investing in your retention marketing is just going to make more sense. Those are the customers you have data on and can create thorough marketing experiences for. Why do customers keep choosing your brand over others? Because you built a community and an experience they can’t get anywhere else. You can do this with strong loyalty programs (shoutout to LoyaltyLion) that leave customers feeling celebrated with exclusive perks and rewards. Another is personalization with smart banners and interest-based journeys based on their behavior, giving them a customized email and SMS experience.

Pexels Tim Samuel 6697306

And lastly is working with tech partners that support conversion as well as use first-party data to help you optimize. The ones that we’ve been recommending to all of our clients are Because and Black Crow AI. Because – the platform – turns every step of your website journey into a dynamic conversion machine and increases conversion by 33%. Using badges, in-cart messaging, and banners, every element is dynamic to your customer and enhances the UX to guide users down the path to the purchase journey. Rounding it out, Black Crow AI supercharges your marketing strategy with the power of AI prediction and Identity Resolution. Used in tandem with retargeting flows, this can Increase revenue by 20% by identifying every visitor and engaging with them more effectively.

6

A mobile app makes any retention strategy stronger and customers stickier

For 2024, brands are focusing on improving CX to drive retention. One lever to expand reach & engagement, drive revenue, and diversify acquisition strategies is by adding a mobile app to your marketing mix.

An app elevates your mobile CX because it’s the smoothest way to shop on mobile and the best way to engage with your customers where they are. A mobile app adds legitimacy to your brand presence, helping you to stand out with features like unlimited push notifications, instant page loading, one-click checkout, real estate on your consumer’s phone, and more—so customers purchase more often and spend more. App users have proven they’re more die-hard fans, with higher conversion rates, revenue per session, and lifetime value than mobile and desktop web.

Many smart brands designate the mobile app for their community of VIP customers by making it a hub of app exclusives, and content, and as a valuable communication channel for updates. Ultimately mobile app customers feel special, won’t churn, spend more, and stay forever. As a result, the mobile app drives loyalty and revenue for ecommerce merchants because it captures customers that spend more in-app, more often and longer.

BÉIS saw an app as an opportunity to diversify, scale, and boost customer loyalty. With the goal of increasing customer loyalty and retention, the app delivered and keeps customers spending 19% more (AOV) with its mobile app, and ‍sees a 67% higher app conversion rate vs mobile website.

 

For True Classic, an app is an awesome opportunity to combat skyrocketing acquisition costs with even higher LTV. Making the app the center of the retention stack allows the True Classic team to personalize the CX and remove friction to convert. The brand sees a 200% higher conversion rate in app vs mobile web and 91.5% retention rates on the app.

A mobile app is a trend for a reason, and more brands are hopping on the train. From fashion, beauty, CPG to home goods — the value of offering a mobile app to customers is critical. Considering Gen Z is emerging as a purchasing powerhouse and is reshaping ecommerce, it’s no surprise that 67% plan to do their 2023 BFCM shopping in mobile apps.

7

Embrace the AI advantage

AI isn’t just a fleeting trend. It’s rapidly transforming marketing workflows, and we’re only just starting to tap into its potential to drive even more personalized marketing. As an e-commerce marketer, you need to embrace the power of AI to stay ahead in the ever-evolving digital landscape.

Imagine delivering tailored messages to each customer based on their individual behaviors. This level of personalization has been a dream for marketers, but now AI is making it a reality. You won’t need to rely on data scientists (or try to become one yourself) to make sense of your customer data. Instead, AI solutions can help you make sense of a vast amount of behavioral data, so you can deliver the right experience to the right consumer, at the right time.

Using predictive AI, you can spot key trends, identify high-value customers, or determine when a shopper is likely to make a purchase. From there, you’ll be able to send the right incentives (and even unlock progressive offers) based on your own data, maximizing your ROI. For example, you can offer a new subscriber $10 off on their first purchase, knowing it’s the offer that’s likely to convert them. As they make follow-up purchases, you can offer $7 and $5 off, since you know their lifetime value has increased significantly.

Making this vision a reality in 2024 will mean investing in the right tools that will empower your team to harness the potential of AI and extract valuable insights without the need for deep technical expertise.

The promise of truly 1:1 marketing is becoming a lot more attainable. With AI, you can deliver tailored experiences to your customers, improve your campaigns, and drive better results. Embrace the power of AI and position yourself at the forefront of the new frontier of marketing in 2024.

9

Enhancing retention at a lower cost

For a very long time, brands and marketers were spoiled with low customer acquisition costs and a strong economy, where brands focused on extreme growth regardless of the cost, even if the return was negative.

To put it in perspective and show you some numbers: as of 2023, we are generally losing $29 on every new customer we acquire, whereas pre-pandemic in 2019, this number was as low as $9.

My prediction for 2024 is that brands will reduce their acquisition budgets and invest more heavily in customer retention.

Here’s what brands are doing and will be doing more of in 2024:

1. In-depth analysis of their customers using generative AI, RFM analysis, cohort analysis, etc. In short, the brand will be investing to understand and identify who their ‘whales’ are, those bringing in 80% of the revenue. They will focus on converting more of their existing customers into ‘whales’ and keeping them longer with the brand.

2. Brands will strategize using tools and tactics to keep customers shopping with them rather than with competitors. This could include a loyalty program, a community, exclusive educational resources like courses for customers, store credit versus discounting, and brand subscriptions similar to Amazon Prime, which provide additional benefits. In short, all these programs are designed to identify and closely tie the customer to the brand.

3. Brands will be consolidating marketing tools to save money and create an omnichannel, continuous journey for customers.

4. Brands will switch their focus from desktop to a mobile-first experience. According to DataReportal, 56% of all web traffic comes from mobile in 2023, a significant increase from 37% in 2011. As we can see, customers prefer mobile, so we need to optimize not only the store but the experience in general. In fact, our agency Flowium back in 2021 switched to designing and optimizing emails for mobile first and desktop secondary.

Pexels Lisa Fotios 1092644

5. Brands will look for ways to replace some costs with AI tools or tools that can perform the same functions but for pennies on the dollar.

These predictions are something we see already starting to happen in the second half of 2023, and I believe they will continue to develop in 2024.

11

In-app purchases have exploded in the past year with the likes of TikTok and other social media platforms pushing creators to sell on their platforms. With consumers having less time and always looking for the most convenient way to purchase goods, in-app purchases are becoming a more popular way to order as there is no need for them to even switch to a different website/app to buy.

We also predict that as users shop more via their favourite influencers it’s crucial to make it easy for those leads to come onto your website and find the items they have seen on social media. Creating sections on your site dedicated to ‘As seen on social’ or even just having a social tag on the items shown via social media can greatly improve conversion on your site.

10

Brands will lean-in to post-purchase survey data to drive revenue in 2024

We’re fans of direct communication here at Triple Whale. There’s no better way to learn from your customers than to ask them what you need to know.

Brands who know where their customers are coming from can be more confident in how they spend their marketing dollars.

And, they are.

We compared a cohort of our customers who have a Post-Purchase Survey installed (1987 stores) to stores without a PPS (4454 stores), and the numbers don’t lie.

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Stores with PPS are spending less money on acquiring new customers. Why? Because they understand which ads are converting, and they can put more money behind the ones that do.

Additionally, the in-platform data doesn’t always tell the whole story, since conversions are often attributed to a click-related event. MaryRuth’s discovered that their return-on-ad-spend (ROAS) for TikTok was 900% higher than previously reported when Triple Whale’s Total Impact Model gave proper credit to customers who reported they saw a TikTok ad. Having a Post-Purchase Survey installed allows you to confidently understand where your customers came from, and double-down on those revenue generating ad platforms instead of wasting coin on lesser ones.

We predict that brands will continue to integrate and utilize Post-Purchase Survey data because it helps them spend more efficiently, and more efficient spend is better for driving revenue in 2024.

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AR/VR = evolved engagement

VR/AR and zero/first-party data go hand in hand in 2024 because they are both centered on creating a personalized experience for a consumer. With VR/AR there is a world presented where a consumer can feel like they are already seeing the benefits in action of the product. This visual creates an environment for a consumer to overcome many objections at once, creating FOMO, and a tangible attachment to products.

When consumers can address and overcome their own objections, you’ll see a change in shopping behavior allowing you to shift your marketing from a reactive stance (objection handling) to a proactive one (experience it for yourself). Now, mix in the rise of zero and first-party data capture/use, and you’re on your way to a truly 1:1 shopping experience that builds trust along the purchasing journey through relevance and interest.

With personalization via VR/AR and trust building with zero and first party data we see a magical opportunity for conversions and meaningful engagement to be explored AND scaled. When you consider how many objections come with online shopping it seems obvious that a website would be there to help you shop and not just show you a product.

In general, shopping online will require more interactivity for long-term growth of a relationship between a brand and consumer, think private shopper mode enabled! Over the years we have been slowly but surely creating more engaging online shopping experiences as a result of public demand.

A customer can be swayed or dismayed by a shopping experience, and that’s why we will see AR/VR emerge to provide real-time and “in their hands” experiences.

Introducing AR/VR, live chat, and personal shoppers will yield higher engagement and conversion rates. But before even getting to the high-tech approach, so many brands could reap the same benefits through a better understanding of their audience and leveraging visitor profiles to create similarly personalized experiences reacting in real-time to their behavior.

Final thoughts

With retention dominating the ecommerce landscape like never before in 2024, now is the time to start making the necessary changes that will give you a head start! To sum up, here are some of the goals you need to be shooting for:

  • Introducing more meaningful and valuable rewards in your loyalty program
  • Building stronger relationships with micro-influencers
  • Prioritizing your mobile app experience
  • Embracing the opportunities that AI provides
  • Using social media as a platform to sell

Thinking of investing in loyalty for 2024? Our ROI calculator will help you determine how successful your loyalty strategy will be.

Special thanks to our friends at LoyaltyLion for their insights on this topic.
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Retention Marketing: Your Key To Lower Customer Acquisition Cost In 2024
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