Then everything changed.
Consumers went online, companies went online, and so did the shelves. As Forbes said, today’s digital shelf is an endless aisle with unlimited merchandise from thousands of global retailers. Thus, the era of ecommerce has begun!
And just like the aisles, the opportunities for retailers became endless. New revenue streams, unlimited product offerings, selling D2C (direct-to-consumer), having direct access to shoppers, and chances to personalize the shopping experience.
A dream come true
It was almost like heaven. Online stores were popping up left and right. At the end of 2010, Shopify had just announced their series A funding. A shift to ecommerce became vital to every enterprise retail company’s strategy. It marked the beginning of a decade of explosive growth.
Global ecommerce sales reached $572B in 2010 (in today’s terms, think of an industry like Digital Advertising that’s sitting at $531B in 2022). The trend continued dominating the retail world, with global sales hitting $4.7 trillion in 2020. And by 2025, total spending is expected to exceed $7 trillion (eMarketer Global Retail Ecommerce Forecast, Feb 2023).
The golden era of commerce definitely arrived. Compared to only 7.4% of the ecommerce market share back in 2014, in less than 10 years, 20.8% of retail purchases are expected to take place online in 2023 (Forbes, Feb 2023). Literally every third person in the world is buying online right now – that’s 2.64 billion people!
You’ll agree, this type of growth is just MASSIVE! And it’s only going to keep growing. The reason for this growth is quick consumer adoption. Remember, consumers are the ones that dictate everything. What we sell, where we sell, and how we sell it. The online store concept was so convenient because it put things that people wanted in the place people were spending their time on – that little thing called the internet.
Even on the business side, a growing number of technology companies – such as Algolia, Klevu, Coveo, Nosto, and Syte – started sprouting up like weeds, trying to tackle ongoing challenges retailers had and solving them for the betterment of the ecommerce industry. Better conversions, better experience, better engagement, more sales.
And all of that – is a complete bust!
Something is rotten in the state of Denmark.
Yes, we’ve seen more sales. But not as a result of innovation, better technologies, and more enjoyable buying journeys. It was only the result of the organic growth of the industry. The market grew, and organically, the numbers increased. Which makes it a vanity metric.
Has ecommerce actually changed at all since the early 2010s?
The average ecommerce conversion rate in 2010 was around 5%. The average ecommerce website conversion rate in 2023 is between 1% and 3%, while a Shopify store converts at 1.4% on average (Shopify, 2021).
So we’ve got an industry growing at an astounding rate. An unimaginable number of both companies and consumers have either built ecommerce businesses or are buying from them. Global retail behemoths expect the future to be an online-only world. And yet the conversion rates not only failed to grow, but we also saw a significant decline in the percentages.
There’s definitely something wrong with the fundamentals of the ecommerce world. Moreover, we can see some extremely worrisome trends dominating the industry as well.
If we take a look at the website bounce rates, according to Oberlo, almost 1 in every 2 website visitors just leave, without interacting further, indicating a complete misalignment between the visitor intent and the content of the website or landing page.
Back in 2013, merchants would spend $9 on average for every new customer acquired. In 2022, that number stood at $29, making it a 222% increase in CAC (customer acquisition cost) in the preceding eight years. Imagine running a bar, and every time someone opens the door, you hand them $29 dollars?!
Let’s take into consideration the fact that return rates have soared over the years. According to NRF, the 2022 total return rates remain extremely high at 16.5%, compared to 2020, when it was at 10.6%. Now, we could go into why exactly people return items, but one thing is undeniably clear: All that glitters is not gold.
We see a true paradox, where the industry is growing on one hand – there’s more sales being conducted than ever, but on the other hand, the fundamental conversion metrics have not changed for the better. The industry just bubbled up as the demand racked up. However, the businesses selling online have not actually seen growth in terms of how they operate.
Ecommerce is built on sand.
So what’s up?! How come the conversions have gone on a downward trend, yet there’s never been more demand?
Well, first of all, the experience of finding a product on a website is so cumbersome that only a shopper with an extremely dire need to buy something new will force themselves into the grueling task of sifting through countless pages of products they are not looking for, they don’t like and that DO NOT INSPIRE THEM.
The fake personalization a shopper goes through, seeing “similar” recommendations that make zero sense, is revolting. It’s wasting both the shopper’s AND the retailer’s time. And nobody is going home happy.
The fact that the shoppers have countless choices actually makes them have none. There are 100s and 1000s and millions of products on retailers’ endless shelves. And the way to make the selection even slightly more manageable is to use – filters?!
It almost feels like all the creativity has left the ecommerce world. It’s like nobody even considers there can be another way. Almost no retailer is taking responsibility to make sure their shoppers see a selection catered to their individual needs.
The technology that should have been the foundation of the industry hasn’t kept up with the growth rate and the demand. As long as retailers don’t start putting highly relevant products in front of their shoppers, they will continue losing the race!
The moment they start treating their website as a living thing, as a medium able to communicate with their shoppers, that’s when they will start winning!
That’s when their store will stop being a weak imitation of the offline world – a static billboard that shows either the biggest discount or the newest collection.
It will become an interface for people to express themselves and to find pleasure in spending time with their favorite brand. And the conversions will naturally rise as the by-product of organic demand.
Customers already know what they want. Retailers, it’s on you to put those items in front of them.
It’s time to shape the future of your ecommerce store
The ecommerce landscape is shifting, and your business should too. Your customers are not just numbers in a vanity metric. They are individuals with unique tastes and preferences, and they deserve to be treated as such.
Here’s the truth: 97% of shoppers leave without buying anything, and 99% of your products never get discovered by your shoppers. In the sea of endless choices, your beautiful, relevant products are lost. But what if there was a way to put exactly the right product in front of exactly the right shopper?
Enter Miros – the AI-powered solution that is redefining product discovery and exceeding shopper expectations.
Our Wordless Search solution recognizes your shopper’s buying intent through their browsing behavior and surfaces the exact products they’re thinking about. It’s almost as if their minds are being read. With Miros, we are putting only the most relevant products in front of your customers, enhancing their shopping experience, and skyrocketing your conversion rates.
It’s time to give your shoppers the next-generation experience they were always willing to pay for. With Miros, let’s make your ecommerce store not just a platform for transactions, but a gateway to a world where shoppers find items they love, every single time. Don’t let your ecommerce store be built on sand.
Let Miros be the bedrock of your online success.
