New research from end-to-end AI-first search and discovery platform Algolia explores the current usage, investment, and value of search, personalization, and hybrid retail strategies—revealing how retailers are investing in search to future-proof their eCommerce experiences.
The firm’s third annual Ecommerce Site Search Trends 2023 report, in partnership with B2B research specialist Coleman Parkes Research, reveals insights from technical and business decision-makers from omnichannel and digital retailers.
“Search is a powerful tool that unlocks conversion opportunities, leads to repeat business, and drives loyalty, ultimately increasing revenue,” said Piyush Patel, chief strategic business development officer at Algolia, in a news release. “However, almost half (47 percent) of businesses reported that they have yet to invest or have under-invested in search and discovery, missing a critical opportunity to improve customer experience and drive increased revenue.”
How would you describe the company’s level of investment in its ecommerce search function?
“As consumer expectations continue to rise, retailers that adopt AI search that understands intent will deliver more relevant search results and give themselves a tremendous advantage for years to come,” said Patel.
Key highlights include:
Sizing up search investments
- Forty-two percent of retailers indicate that they accelerated investment into search during the previous 12 months
- Although over 50 percent of retailers said that an increase in revenue was the driver for search implementation and 71 percent of retailers who have implemented sophisticated search capabilities report that search has helped drive revenue, almost half of retailers (47 percent) have yet to sufficiently invest in search
To what extent are you satisfied or dissatisfied by the revenue which you directly achieve via search?
In-house challenges remain
- Despite critical benefits like fast implementation and continuous updates without disruptions, just 27 percent of retailers opt for off-the-shelf search SaaS offerings, while the majority (73 percent) build search in-house or in collaboration with a third party
- Two in five (41 percent) of retailers leveraging in-house or third-party partners say they lack the expertise needed, and just 1 percent note that they do not face any challenges related to search development
What were the driving factors behind search implementation within your business?
All eyes on personalization
- Most retailers (71 percent) consider personalization to be a large or integral part of their business for the next 12 months
- In terms of the personalization experience, personalized shopping profiles are the most prevalent offer (73 percent of retailers), followed by subscription to email messaging programs in exchange for a more personalized experience (50 percent)
Which of the following types of personalization have you implemented, if any?
The race to meet customer demand
- The survey reveals that 46 percent of retailers implemented search in an effort to meet demand
- Readying supply chain/inventory management is the most common form of preparation for increasing online sales (52 percent), followed closely by investing in site search (46 percent)
How is your business preparing for the predicted increase in online consumer sales? (All businesses that think online sales revenue will increase next Black Friday)
State of omnichannel and hybrid retail models
- To optimize the shopping experience for online and offline consumers, nearly 9 in 10 retailers (87 percent) operate a hybrid retail model
- Despite explosive demand for omnichannel retail experiences, 51 percent of retailers have yet to adopt omnichannel strategies
How have your search capabilities been developed?
“This report emphasizes a critical truth—strategic investment in search and personalization will be absolutely pivotal to a company’s ability to meet customer demand going forward,” said Andy Easton, research director at Coleman Parkes Research, in then release. “Retailers and ecommerce leaders that prioritize these technologies as an integral part of their businesses will excel regardless of economic turbulence and ever-evolving consumer behavior.”
The firm surveyed 900 technical and business decision-makers from omnichannel and digital retailers with global revenues of $100M+.