Commentary

Outsmart eCommerce Giants

According to Radial, simplifying omnichannel commerce technology and operations, 72% of US online shoppers have a membership to an eCommerce marketplace such as Amazon or eBay. Their recent study entitled “Outsmart eCommerce Giants to Win Online Shoppers in 2018” shows that the retail industry dominated headlines throughout 2017 as it underwent a period of significant transformation, from new channels for shopping to industry consolidation, and a string of store closings, the shopping experience has changed substantially from just five years ago.

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The survey, conducted by Radial, shows that eCommerce marketplaces are impacting global online shopping trends such as:

  • Online shoppers are purchasing lower cost items
  • 60% of shoppers report that purchasing products at the lowest price possible is most important
  • The majority of US shoppers expect free shipping
  • 34% of US shoppers expect two-day shipping

The study explores what more than 4,000 consumers across four different regions of the world - United States, United Kingdom, Canada and Australia - value in their online experience, where opportunity exists, and how brands and retailers can execute to ensure that they maintain a competitive position as the industry continues to rapidly transform.

Understanding who your shoppers are and what they are purchasing online is critical for eCommerce success, says the report. While each company must drill into their specific target market and audience at a granular level to understand nuances, there are consistencies that exist across the globe.

Women Are More Frequent Online Shoppers

Gender

Country

% Frequent Shoppers

Women

USA

38.2%

 

Canada

24.6%

 

Australia

23.8%

 

UK

41.3%

Men

USA

31.7%

 

Canada

22.3%

 

Australia

18.4%

 

UK

30.9%

Source

The types of products being purchased online are similar across regions as well:

  • Clothing and accessories is the top category consumers purchase online (55.5%), followed by electronics (43.2%), then health and beauty (28.7%)
  • The UK was the only outlier, replacing groceries (31%) for health and beauty as their third most popular choice.
  • Alternatively, groceries placed fifth in the US, Australia and Canada, but the US was in the lead among that group at 25% (Canada 17% and Australia 18.1%).

According to a global study conducted by Euromonitor International, a consumer market research firm, global online food and beverage sales will rise 80% over the next five years. The increase in online grocery is consistent, says the report, with the survey finding that most online shoppers are purchasing lower cost items and generally spend less than $100 per month on goods.

The recent boom of marketplace memberships has set the tone for the greater eCommerce industry and, in the process, made it more difficult for individual brands to satisfy consumers, says the report. This is due to the convenience that marketplaces offer, with such a broad range of products and a “one-stop-shop” that eliminates the need for consumers to subscribe to multiple websites or download multiple apps.

The impact that Amazon (and eBay before it) has had on consumer convenience is substantial, as the majority of consumers who shop online hold a membership to an eCommerce marketplace. Survey results, says the report, found that 20% more American consumers hold memberships than other English-speaking countries at 72.6%, with Canada and the UK even (58.6% and 58.2%, respectively), and Australia close behind at 55.8%.

Among these marketplaces, Amazon is the clear favorite in global markets where it is available, recently displacing eBay. The survey findings prove that major eCommerce marketplaces and industry leaders are setting the tone for consumer expectations. Because Amazon is so prevalent across most English-speaking regions, it is impacting consumer standards when shopping elsewhere. The report addresses these expectations and how retailers meet them:

  • Foremost, price is king. Over 60% of respondents across regions reported that the most important factor when shopping online is that the goods they are purchasing are the best (lowest) price -- 66.9% in Canada, 64.5% in the US, 63.4% in Australia and 61.2% in the UK
  • Knowing and trusting the brand behind the product came in second across the board, at a considerably lower rate - 49.8% in Canada, 47. 7% in the UK, 44.4% in Australia and 42.8% in the US. This finding alone proves the importance of retailers finding ways to build brand loyalty in order to maintain name recognition and remain competitive.
  • Shipping times and easy returns are relatively equal in importance to the consumer. In the US, consumers are split between expecting their goods to be delivered within two days or less (34.6%) and expecting them in under a week (34.1%), showing that retailers have some flexibility in their delivery windows. Less than 9% of respondents across regions listing that delivery times “don’t matter” to them.
  • Easy online returns produced similar numbers, with consumers in the US caring most about this at 37%, and Canada in second at 34.3%.
  • With the rise of eCommerce, free shipping has become a commodity in the US, with 60% of consumers not expecting to pay for their goods to ship and 23.5% willing to pay up to 10 dollars. The correlation of cost and delivery timeline is inconsequential, as long as consumers don’t have to pay for their goods to ship, they are willing to wait for them to arrive. Across the board, says the report, “two-day delivery,” “one-click checkout,” and “in-store pickup” were reported as being of lesser importance.
  • With data breaches on the rise, cyber security should be a top priority for retailers. According to a survey conducted by Aite Group, 37% of US consumers would stop shopping with a retailer if they experienced fraud after a data breach. UK and Australian shoppers were much less forgiving 56% and 62% respectively would no longer be customers.

Lessons Learned, says the report…

The drastic rise of eCommerce has resulted in a re-setting of customer expectations. Retailers should focus on emerging global markets where opportunity to gain a foothold and directly impact the customer experience remains strong.

While retailers work to keep up with market leaders, such as Amazon, in the US and abroad, they should set their sights on cross-border strategies to gain a leg up. Brands that can get ahead of the inevitable commoditization of eCommerce offerings stand a better chance of gaining influence in new regions.

Above all, retailers must understand their customers. Through having a grasp on what their customers are looking for and at what price, retailers will be able to build the ideal experience for their base. Consumers are shopping online for convenience and are interested in purchasing various items. With these underlying motivations in mind, retailers will be better positioned to build eCommerce strategies that highlight and differentiate their offerings.

To read the complete report, please visit here.

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