Algolia’s State of Search Report Reveals Retail’s Ability to Drive Higher Conversions through Modern Search

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87% of retailers with only basic or intermediate search experiences noted higher propensity to lose shoppers through churn and poor engagement

Algolia, the leading API Platform for Search & Dynamic Experiences, today released its State of Search Report, compiled in partnership with B2B research specialists, Coleman Parkes. This second annual report reveals insights from 900 technical and business decision makers from omnichannel and digital retailers with global revenues of $100M+, exploring the current usage, investment and value of search technologies.

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“The data shows that retailers understand the value of search and headless architecture”

“Under-investing in modern digital commerce is a critical mistake that we continue to see in the retail industry,” said Jason McClelland, CMO of Algolia. “If you can’t accurately serve online shoppers with what they want at the moment they want it, they’ll immediately move on to the next site. In this report, retailers will find out how search technologies can make or break a retailer’s ability to deliver on the last mile of customer experience.”

This State of Search Report reveals how successful retailers are using search to beat their competition. Key highlights include:

Advanced Search Creating Clear Winners

  • Only 13% of retailers claim to offer shoppers an advanced search experience
  • The 87% of retailers with basic or intermediate search experiences also noted a higher propensity to lose shoppers through churn and poor engagement
  • Four in five (79%) retailers have little or no personalization or recommendation functionality on their commerce site; only 26% noted the use of AI to optimize search results relevance

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Preparing for Holiday Surges in Demand Proves Challenging

  • Two in five (39%) retailers admit they are not prepared to respond to new surges in consumer demand
  • Sixty-five percent (65%) of retailers feel their ability to meet last year’s Black Friday demand needed to be better handled; 47% were unable to scale to meet the demand, and 25% wanted to be able to iterate and merchandise better

Retailers are Equating Quality Search with a Frictionless Customer Experience

  • When asked to identify the top areas impacted by search, retailers prioritized customer service (79%), frictionless experience on the website (76%), and product availability (75%)
  • Over a third (35%) of retailers have increased their search investment in the last 12 months, at an average of 11%, and 44% of businesses will increase search spend over the next 12 months
  • Eighty-one percent (81%) of retailers noted that Covid-19 has impacted their decision to advance their search function

Aligning Search Technologies to a Headless Architecture

  • Forty-nine percent (49%) of retailers recognize that headless architecture allows for time saving and 42% recognize that it creates a faster time to market
  • Ninety percent (90%) of retailers think that the fit of their search technology to a headless architecture is critical or somewhat important, however, only 23% of retailers think that the fit of their search solution in a headless architecture is ideal
  • Fifty-six percent (56%) of respondents recognized that API-first solutions create improved services and 47% of respondents noted ease of use

“The data shows that retailers understand the value of search and headless architecture,” said Ian Parkes, Founder and Director at Coleman Parkes Research Ltd. “Retailers’ future investments in search technology need to focus on solutions that are compatible with headless architectures. This will help address many of the pain points that were uncovered throughout the State of Search Report.”

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