It’s no secret that the advent of digital technologies has changed how consumers shop, as well as how businesses reach their customer, but understanding individual consumer preferences remains a hurdle for many businesses. A new study offers critical insight and global comparisons into how, when and where consumers shop.
Pitney Bowes has issued their third annual Global Online Shopping Survey of 13,000 adults, highlighting key demographic shopping preferences across the world. Key findings from the UK include:
• UK shoppers (98 per cent) shop online monthly
• To find products online, shoppers in the UK choose online marketplaces (59 per cent), search engines (54 per cent) and online retailers (52 per cent)
• Close to half (48 per cent) of UK shoppers claim that they have not returned unwanted purchases, because they did not know how to, or because it is inconvenient
• When it came to last year’s holiday season – almost one-third (31 per cent) of UK shoppers experienced challenges with their orders, whether that was shipping issues or poor communications from the retailers
• About half (49 per cent) say price is the reason they shop cross-border – conversely, close to three-fourths (72 per cent) say shipping costs are why they are discouraged from shopping cross-border and over half (52 per cent) say return policies.
Overall, the report finds that cross-border ecommerce has become prevalent among consumers around the world. It’s no surprise that consumers frequently make domestic online purchases (94 per cent), however more than two-thirds (66 per cent) of consumers that have ever made a domestic online purchase have also made an online purchase from another country in the past year. Singapore (89 per cent), Australia (86 per cent) and Hong Kong (85 per cent) have the highest number of cross-border shoppers, while countries like Japan (34 per cent) and the U.S. (45 per cent) are still growing in cross-border confidence.
The survey findings suggest that online shopping has become a way of life for many shoppers. Nearly one-third of these consumers now say they make domestic online purchases on a daily or weekly basis, with over two-thirds in China reporting this regularity. As domestic online shopping becomes more frequent, it can create familiarity and comfort to reach across borders. Not surprisingly, cross-border shopping occurs less frequently than domestic shopping with the majority of consumers (58 per cent) shopping monthly or annually. Top countries for monthly/annual cross-border shopping include Australia (78 per cent), Singapore (77 per cent) Canada (72 per cent), Mexico (71 per cent) and Hong Kong (70 per cent).
What also drives cross-border shopping is the mutually-beneficial union between physical stores and online shopping, which could provide a huge opportunity for retailers and brands. Survey findings uncovered that 63 percent of consumers that have shopped cross-border are now participating in what Pitney Bowes is describing as “In-store Global. Online Local.” This phenomenon is when consumers make in-store purchases during their international travels, and follow up with online purchases from that same cross-border retailer. Most cross-border shoppers in South Korea, China and India cited that they often or always revisit a retailer online following international travels.
Today’s consumers have the power of choice, whether choosing to shop online direct to a retailer website or an online marketplace, and the study shows that consumers like it that way. In fact, while consumers may have a preference for one channel over the other, very few shop exclusively through one online channel.
Approximately half of consumers say that all or most of their online shopping, whether domestic or cross-border, is through an online marketplace. The top countries in which shoppers choose all or most of their cross-border marketplace purchases are Japan (70 per cent), China (61 per cent), Germany (59 per cent) and India (55 per cent).
About a quarter of global shoppers choose the retailer’s direct site for all or most of their cross-border shopping. The top direct-to-retail countries are Canada (35 per cent), South Korea (34 per cent) and Australia (33 per cent). The remaining shoppers shop both marketplaces and retailers with no leading preference. This suggests that retailers should consider a broad presence and multiple channels to reach global shoppers.
“Consumers across the world have spoken. We have moved beyond the days of marketplace or retailer; in-store or online; or even in-country or cross-border,” says Lila Snyder, President, Global Ecommerce, Pitney Bowes. “The world is shopping—everywhere—as new consumer behaviours and trends have emerged. Entering the holiday season and a new year, retailers and marketplaces alike should take note and capitalize on these shifts in consumer behaviour, which open up new opportunities for brands and retailers at home and abroad.”
Throughout the shopping journey, mobile devices are playing an increasingly greater role. Roughly half of shoppers in Singapore (51 per cent), India (50 per cent), Mexico (49 per cent) and China (47 per cent) were most likely to use a mobile device (including tablets and phones) for browsing. When it comes to order tracking, over half of shoppers in China, Hong Kong, India, Singapore and South Korea use these devices. Even though mobile is not the first choice for completing a purchase (33 per cent), surveyed shoppers often use their mobile device for part of the shopping journey. For example, in the U.S. one-third of shoppers (33 per cent) use mobile for completing a purchase, however mobile usage increases significantly (47 per cent) when tracking an item post purchase. The data reveals a strong tracking application as highly strategic to reaching the mobile shopper.
The survey results also uncovered insight into how consumers are finding products online. While marketplaces (62 per cent), search engines (43 per cent) and retailers’ sites (39 per cent) continue to be popular discovery tools, countries like Hong Kong (26 per cent), Australia (24 per cent) and Singapore (22 per cent) rely on email communications to find new products.
And now nearly one-fifth (19 per cent) of consumers are discovering new products through social media channels, especially in Hong Kong (45 per cent), Mexico (32 per cent), India and Singapore (both 30 per cent). In fact, Hong Kong consumers are just as likely to use social channels to discover new products as they are a retailer’s website, while consumers in Mexico are more likely to use social media than visit a retailer’s website.
The need for choice was also evident with regard to payment types. While survey results varied by country, no one payment option was chosen by a majority of cross-border shoppers. Credit cards (45 per cent) were the most preferred method of payment online. E-wallets, which allow consumers to store multiple payment accounts in one place (i.e. PayPal, Alipay), were identified as another popular payment method (34 per cent) for cross-border purchases.
Choice again proved to be a crucial theme, as limiting options for payment alienates a significant number of would-be consumers. When asked about the most important factors in selecting a payment option, consumers cited service fees/total cost of purchase (33 per cent), value of the purchase (25 per cent), and offer of a purchase protection plan (25 per cent) as the most important considerations when selecting a payment option.
Online shipping and returns continue to be a major pain point for consumers, despite merchants’ efforts to improve their shipping and returns processes. When asked about holiday shopping, 42 percent of consumers say they experienced related challenges when shopping online for the 2015 holiday season.
In fact, even the most basic elements of the customer experience such as shipping the right item; accuracy in address and tracking; a transparent returns policy; and proper duty and tax were all cited as challenges. Hong Kong (65 per cent), India (59 per cent), South Korea (55 per cent), Singapore and China (both 54 per cent) were among the countries experiencing the greatest headaches with online shopping during the 2015 holiday season.
Even in the U.S., almost a third of consumers (31 per cent) reported experiencing challenges during last year’s holiday shopping season, putting the pressure on retailers and marketplaces to make significant improvements in the consumer experience heading into this holiday.