Is the Machine Era Over? Ending the 'Sting' of Online Shopping
Ecommerce and marketing leaders are pouring vast amounts of money into improving their online conversion rates. Yet the answer to their problems has been widely overlooked - until now.
So the story goes, in August 1994 two young American cyberspace entrepreneurs celebrated what was the first retail transaction on the Internet. They created a basic process that allowed credit card numbers and data to be hidden so that other “web geeks” poking around online couldn’t see it. The method involved clicking a series of buttons online and creating a basket before filling out a painful series of forms and sending an email with the details for the shipment. The first item ever sold online was a STING Album on CD.
That moment set in motion one of the most profound revolutions in history, bringing shops all over the world to their customers 24/7 for the first time. Shopping from home evolved from turning glossy catalog pages, tuning into the Home Shopping Network, and licking stamps to instantaneous global access for any product you wanted, delivered right to your door.
After 26 years being at the center of the online shopping evolution, I marvel at what it has become and also start to wonder….Why are we still clicking ADD TO CART and shopping through robotic forms like those two guys way back in ‘94?
Do we love the “Sting” of online shopping and all of its dreadful flaws, or is there a better way?
Despite all the incredible backend optimizations over the past 3 decades to search, page speed, bots, mobile, smart collections, recommendations, supply chain and data personalization, brands are still asking customers to point and click their way through a static catalog, and make up their mind based on whatever information a merchant has chosen to include on a series of pages. Even the most sophisticated retailers on the planet like Amazon.com have sites that look and act like print catalogs, hardly veering from its original layout, except more buttons and more steps.
Every year it seems there’s a new metric or acronym brands are focusing on to try and move the needle on sales and engagement. You’ve probably heard some of the latest ones - Retention. CX. LTV. All of this “innovation” has resulted in a massive (drumroll for dramatic effect)..... 3% customer conversion rate! This means for every 100 shoppers only 3 of them will checkout. Yikes. That’s barely cause for celebration.
If 100 customers walked through a physical store and only 3 checked out they would be swiftly out of business. And hypothetically out of those 3 customers, one of them will return what they bought, and the other one got the wrong size. It’s fascinating that online retailers and ecommerce platforms have not only accepted this broken method, but poured unimaginable efforts into giving their customers the exact same mundane experience that millions or billions of unhappy customers have really only tolerated, not loved, for decades. We have replicated a flawed early prototype of shopping online at a staggering rate.
Lately I’ve been hearing brands hit the stage and pronounce “We want to provide a more personalized and engaging experience for our customers, so meet our new AI chatbot / virtual avatar, etc. etc.” Providing a more human experience with a robot is just inherently funny.
On the one hand, I get it. It’s not all wrong. The promise of ecommerce for retailers was the ability to service millions of shoppers at scale in a model that was the antithesis of mall shopping. Customers choose when they shop, where they are, how they look, what else they’re doing, and how long it takes them.
The realization retailers need to make is treating their ‘online clickable catalog’ is just that; a store with no employees, lots of words and a few pictures - and the results speak for themselves. And not in a great way. That's not even mentioning the return rate of online shopping that would horrify you if you Google it. This has caused powerhouse brands like Zara and others to start charging for refunds, because it's costing them billions of dollars a year in reverse logistics, customer service manpower, and lost or damaged merchandise.
Culture plays a massive factor in how we shop. AI has no culture. It simply can’t. It doesn’t understand a size guide in proportion to a body type or what “slim fit” really means. An algorithm or bot or virtual concierge has no idea what dress Olivia Rodrigo wore to her first Met Gala. It has no idea what’s appropriate to wear to a tailgate party for the Superbowl cause it likely doesn't even know who’s playing. It can’t tell you the types of techniques or products that work best to get the look from Hailey Bieber’s latest post.
A bot misses an understanding of this Context. Culture. Personal experience. You can’t recreate those human things with artificial intelligence. When you visit a store and interact with a human, you can have back and forth about these specific inspirations or needs; it’s unique to that person. You can chat about the news or the weather, or a trip you’re planning, and get real human suggestions to guide your purchase. You can walk through the store, look through the aisles and get closer to detail, size, and texture unlike anything online that exists today.
At GhostRetail, we are pushing forward knowing that there are some things people do better than machines. We offer live, on-demand 1:1 video ecommerce that connects shoppers with real people in real time. Now, customers can finally tap into a real human - not a virtual concierge, or a bot - to have the trusted guidance they’d expect from an in-store experience, without sacrificing the things that make ecommerce convenient.
It’s amazing how the shortfalls of online shopping - the DIY buyer journey, the tedious frustration of trying to guess what size will work, the ease of cart abandonment in search of a cheaper product or a coupon code - can all be remedied when you add a human element into the mix. Our clients, including customer-obsessed brands like American Eagle and Canada Goose, are realizing off the charts metrics that are crushing typical ecommerce KPIs. We’re talking 20x higher conversion rates, 30%+ bigger basket sizes, not to mention a decline in returns and delighted customers.
Improving the online shopping experience does not mean a sweeping trade of humans for machines. There are plenty of people who don’t need that human element to convert (although that 3% industry conversion rate may tell us otherwise…) But it’s time to recognize that a solely independent experience devoid of human interaction isn’t cutting it anymore. The machine-first era is over, at least for now.
With the rise of social commerce, live selling, and creators, we can see elsewhere that people want to shop in new ways and connect with other people, experts, and influencers. Pairing real people with the incredible power of the internet is where the magic happens - and ecommerce brands need to step up and offer an experience in this vein or get left behind.
It’s time to let go of the broken way of point-and-click shopping from good old ‘94. And like Sting named one of his greatest hits, “If You Love Some Somebody, Set Them Free”.