In today’s economic climate, with the rising cost of living, consumers are increasingly discerning purchases and consulting more for recommendations. A recent survey by software research site Capterra reveals that only 18 per cent of Australian online shoppers trust reviews made by social media influencers. This is a significant gap compared to the 76 per cent who expressed they trust reviews from everyday social media users.
This survey analysed Australians’ online shopping behaviours, identifying key attributes that drive their purchasing decisions. Businesses can benefit from the study when it comes to increasing conversions. Despite the decline in influencer marketing effectiveness, the study shows that peer suggestions from regular users remain a primary source of product discovery, as consumers deem these reviews more authentic. Targeted online advertisements can also capture attention and convert to purchases when aligned with consumer interests.
Navigating a turbulent economy
Product recommendations are crucial in assisting consumers during their shopping journey, especially when matched with popular search filters. Notably, price filters are the most used, with 84 per cent of shoppers indicating their importance, followed by size (66 per cent) and brand (48 per cent). The cost-of-living crisis in Australia has led over three-quarters (78 per cent) of online shoppers to value recommendations based on current discounts or deals. Consequently, discounted products are likely to attract budget-conscious consumers.
Capterra’s 2023 Consumer Trends eBook reveals that 82 per cent of Australians have adjusted their spending due to economic conditions. Furthermore, the current study analysed generational differences in online shopping habits with regard to price sensitivity. The unique behaviour of Gen Z shows that they are the least influenced by low prices and pay more attention to visual appeal.
Building trust and credibility
Maintaining and building trust is crucial for increasing conversion rates, as customers who trust a brand are more likely to make purchases and recommend to others, thus generating more peer reviews from the everyday customer. This way, brands can leverage interpersonal relationships for their conversions. User reviews play a significant role, with 62 per cent considering them a vital factor in their online purchase decisions over the past year for new products and services.
E-commerce businesses could focus on sharing genuine user reviews and leveraging review websites. These platforms are trusted by 59 per cent of users and can be easily implemented into eCommerce sites to gather and display authentic reviews, enhancing the overall credibility and trustworthiness of the brand.
Striking the right balance in targeted advertising
Despite 92 per cent of social media users seeing too many online advertisements, 61 per cent have looked up more information about a product after seeing an ad. However, it is essential to balance the frequency of advertisements, as nearly half (43 per cent) of users have blocked specific advertising or unfollowed brands due to excessive ads. Repeated exposure leads to ad fatigue, reducing effectiveness.
Catering content to the users’ interests and implementing segmentations can lead to higher brand engagement and purchases. 42 per cent of online shoppers appreciate relevant product advertisements, while 41 per cent value offers or discounts.
“Adopting diverse strategies to understand customer behaviours is vital for businesses seeking to boost conversions,” said Andrew Blair, Analyst at Capterra. “As market dynamics constantly shift, maintaining customer trust is crucial and poses a question to the relevance of influencers. As part of a marketing strategy, influencers should reevaluate their style and approach to regain the authentic image consumers used to find appealing”.
