Consumer Multi-Channel Advertising Peaks Retail Selling

by , Dec 18, 2013, 6:15 AM
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According to the Walker Sands 2014 Future of Retail Study to help retail technology companies anticipate consumer behaviors, online shopping has reached a pivotal tipping point with less than 1% of consumers surveyed stating they never shop online.  62% of consumers shop online at least once a month demonstrating a major opportunity for retailers who have strategies in place to generate revenue across channels.

Frequency of Amazon Online Shopping

Shopping Frequency

% of Respondents

1+ times a month

40%

7-12  times a year

20

1-2 times a week

17

4-6 times a year

12

1-3 times a year

6

3+ times a week

5

Source: Walker Sands’ 2014 Future of Retail Study, December 2013

Although the rate at which consumers are shopping online still has room to grow, certain industries, such as consumer electronics, books and clothing are seeing more than half of their shoppers going online to make a purchase.

Most Popular Online Category Purchases

Product Category

% of Respondents

Consumer electronics

69%

Clothing and apparel

63%

Sporting goods

20%

Office supplies

30%

Food and groceries

20%

Luxury goods

6%

Household goods

38%

Pet supplies

20%

Tools and home

18%

Consumer packaged goods

28%

Books

67%

Source: Walker Sands’ 2014 Future of Retail Study, December 2013

The study found that 95% of consumers have purchased from Amazon in the past year. Most surprisingly, 40% of shoppers are willing to purchase any type of product from Amazon. The rate at which they’re purchasing on Amazon causes concerns for retailers, especially as the frequency and range of product types they are willing to purchase continues to expand.

The study uncovered a number of offerings, including free shipping and returns, enhanced site security and augmented reality capabilities that retailers can provide to drive more consumers to purchase on their website.

Improve Consumers Online Purchase

Incentive

% of Respondents

Free shipping

80%

1-day shipping

66%

Free returns and exchanges

64%

Easier online returns

48%

More confidence in payment security

42%

Same-day shipping

41%

Multiple orders shipped at once

42%

Easier instore returns

39%

Visual try-on capabilities

37%

Source: Walker Sands’ 2014 Future of Retail Study, December 2013

While it’s a common misconception that the only way retailers can compete with Amazon.com is through price matching tactics, it can be difficult for retailers, especially smaller businesses, to keep up with the low prices and cut overhead enough to match or beat Amazon.com, while still earning a profit. The listed tactics offering additional benefits to customers, offer retailers several opportunities to create experiences that exceed Amazon.com.

Consumers are comfortable purchasing large ticket items costing hundreds of dollars online without seeing the product in person first. 45% of consumers are willing to spend as much as $500 on a product online without seeing it in-person first, and nearly one-in-10 consumers are willing to spend more than $1,000 online without seeing a product in person.

  • 21% of consumers will spend between $501 to $1,000 on an online product with free shipping and returns,
  • 16% of consumers are willing to spend the same amount without free shipping and returns.
  • Nearly 30% of consumers will spend more than $1,000 on a product online with free shipping and returns, versus 10% who would do so without free shipping and returns.

 When free shipping and returns are offered, consumers spend even more online. While free and fast delivery can be costly for retailers, the study demonstrates they could be well worth the investment if customers purchase as much more as they say they would.

Another way retailers can differentiate themselves from Amazon and capture a greater portion of online sales is by providing omni-channel experience and greater personalization. 64% of consumers have used their mobile device to research products while in a brick-and-mortar location. It’s critical for retailers to provide a seamless experience as they move from a mobile device to in-store to their laptops.

44% of consumers “strongly agree” or “agree” that they want product recommendations based on past purchases. Shoppers who use mobile devices while at a brick-and-mortar location are also 21% more likely to want Amazon-like personalization when shopping in store. 52% of consumers would be more likely to shop at a retailer offering in-store navigation on a mobile device, and 59% would be more likely to shop at a store offering self-checkout via a mobile device.

Three in five consumers interact with brands on social media. The most popular channel is Facebook, on which 55% of consumers report engaging with brands, followed by:

  • Twitter (21%)
  • Pinterest (10%)
  • YouTube videos have influenced a purchase at least once for 53% of consumers
  • 17% of consumers have discovered a product through Pinterest

The most popular reason consumers interact with brands on social media is for coupons and promotions (78% of consumers). Consumers also use social media to discover the latest news and products from brands (65% of consumers), receive customer support (24%), and to see what others are buying (19%).

Plastic has established a stronghold among today’s consumers. 62% of consumers surveyed reported having less than $20 cash on hand, says the report:

  • Only one in four consumers have used cash to pay for something in the previous 24 hours
  • 43% of consumers haven’t used cash in the last three days
  • 23% haven’t in the last week
  • 5% of consumers say they never use cash and will not go anywhere that only accepts cash
  • Only 8% of consumers are currently using mobile passbook-like apps to check out

Currently, the most popular items that consumers prefer to rent instead of buying include:

  • Books (16%)
  • Consumer electronics (8%)
  • Tools (7%)

These same categories are expected to increase exponentially in the next year, with 32% of consumers expecting to rent books, 24% expecting to rent tools, and 21% planning to rent consumer electronics.

Expected Percentage of Rental Growth in 2014 

Product Category

% of Respondents

Household goods

22%

Consumer electronics

90%

Clothing and apparel

48%

Sporting goods

123%

Luxury goods

113%

Pet supplies

15%

Tools and home

29%

Books

69%

Source: Walker Sands’ 2014 Future of Retail Study, December 2013

The report concludes that retailers have an opportunity to capture new customers online and increase sales through a compelling omni-channel strategy. Incorporating free shipping and returns can alleviate some of the uncertainties associated with purchasing online and motivate consumers to spend more online, opines the report. Shoppers are willing to spend more online as long as it’s easy and free for them to exchange or return when needed.

For more information from Walker Sands, please visit here.

 

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