Research from search-as-a-service platform Algolia – which helps businesses better understand the needs of their ecommerce users/customers – revealed that online retailers are losing an average of £85 per customer due to poor online search function, which leaves shoppers frustrated.
The research, which was conducted by Censuswide in May 2024, on a nationally representative sample of 2,001 UK-based respondents, found that almost a third of shoppers were abandoning their purchases before checkout.
This figure rose to £113 among Gen Z shoppers and stood at £87 among Millennials.
The importance of search functionality
When commenting on the findings, Algolia noted the importance of search function and said it believed that retailers were losing out due to poor search functionality.
It highlighted that Gen Z and Millennials, who it said made up 25% of the UK's total retail spend, said they often abandoned purchases because of search issues impacting revenue.
It also noted that the research showed that social media trends were very important for UK beauty consumers when searching for products online, again particularly among the Generation Z and Millennial cohorts.
The business highlighted and online shoppers are demanding increasingly personalised experiences and instead of seeking out traditional personal shoppers, they're turning to AI.
Of those quizzed, 42% said they were interested in AI-driven personalisation.
Products based around social media retail trends
The research also found that Gen Z consumers were willing to pay 33% more for products that were based around social media retail trends such as ‘clean girl aesthetic’ or ‘Y2K’, when compared to the national average.
Algolia noted that "Y2K", "streetwear", and "clean girl aesthetic" are currently the most searched-for fashion and beauty trends on social media platforms, with all three having a combined total of 19.5m searches across its platform in February, March and April 2024.
However, there is a disconnect between online discovery and in-store purchases – as 58% of consumers said they couldn’t find Y2K products, 56% couldn’t find streetwear, and 65% couldn’t find ‘clean girl aesthetic’ items directly through retailer websites.
The research also found that Generation Z (58%) and Millennials (58%) were the most likely consumer cohorts to use social media platforms such as TikTok and Instagram to discover and follow trends, but that a significant portion struggled to convert this interest into purchases.
Among Gen Z shoppers, 43% reported abandoning potential purchases due to difficulty searching for trend-related items on ecommerce, while 42% of Millennials said the same.
The firm dubbed this a “lost opportunity”, which it said is “further highlighted by the fact that 50% of Gen Z and 57% of Millennials would be more likely to buy if retailers offered easy search functionalities for social media trends.”
CEO: "retailers must take note"
The CEO of Algolia, Bernadette Nixon, said that Gen Z and Millennials currently account for 25% of the UK's total retail spend, but that this “is predicted to grow to 39% by 2030 as more Gen Z enter the workforce, making them a powerful group of shoppers.”
Nixon said that retailers “must take note and cater towards these online generations by adapting their search capabilities to fit their needs."
Based on the research, Algolia highlighted that AI personalisation is one option for retailers to offer more trend-based search options for potential customers.
The report revealed that 42% of people would be interested in using an AI personal shopper if their favourite retailer used their past searches on its site to train it. This stat rose to 67% among Gen Zs and 64% among Millennials.
"With the rise of social media as a trend discovery engine, retailers should implement AI personalisation to bridge the gap between inspiration and purchase,” concluded Nixon.
“By understanding individual preferences and tailoring search functionalities to recognise trending aesthetics like Y2K or 'clean girl aesthetic,' AI can empower consumers to find exactly what they're looking for and convert social media buzz into real sales."
