Algolia research: online retailers losing an average of £1.7bn per year due to poor search functions

Algolia has published research showing how influential fashion, beauty and homeware social media trends are for UK consumers when searching for products online, especially amongst Generation Z and Millennials.  

Involving a survey of 2,001 Brits, this reveals that online retailers are losing an average of £85 per customer due to poor online search function, leaving consumers frustrated and almost a third abandoning purchases before checkout.

This number rises to £113 among Gen Z shoppers and £87 among Millennials.  

"Y2K", "streetwear", and "clean girl aesthetic" are currently the most searched for trends on social media platforms. This popularity is reflected in search volume, with Algolia’s research showing all three having a combined total of 19.5 million searches across their platform in February, March and April 2024.

But, there's a disconnect between online discovery and in-store purchases. 58% of consumers can't find Y2K products, 56% can't find streetwear, and 65% can't find "clean girl aesthetic" items directly through retailer websites. 

Compared to other generations, Gen Z (58%) and Millennials (58%) are the most likely to use social media platforms such as TikTok and Instagram to discover and follow trends. However, a significant portion struggle to convert this interest into purchases.  

43% of Gen Z and 42% of Millennials report abandoning potential purchases due to difficulty searching for trend-related items on retailer websites.

This lost opportunity 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.  

Bernadette Nixon, CEO at Algolia, says, "Research shows that Gen Z and Millennials currently account for 25% of the UK's total retail spend.”

“However, this is predicted to grow to 39% by 2030 as more Gen Z enter the workforce, making them a powerful group of shoppers. Retailers must take note and cater towards these online generations by adapting their search capabilities to fit their needs."  

The research revealed that 42% of people would be interested in using an AI personal shopper if their favourite retailer used your past searches on its site to train it.

However, this rises to 67% amongst Gen Zs and 64% amongst millennials. Further to this, 41% of Gen Zs and 48% of Millennials believe AI trained shopping assistants can compile better outfits than they can.   

Nixon says: "With the rise of social media as a trend discovery engine, retailers should implement AI personalisation to bridge the gap between inspiration and purchase.”

“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."