PwC: High Shipping Costs A Deal Breaker For Online

High shipping costs top the list of deal-breakers for holiday shoppers, followed by cybersecurity concerns.

Some 40% of Millennials expect they will have more returns this year compared with last, based on the amount of orders being placed online. 

Overall, 53% of consumers said return policies will impact where they shop, and 41% plan to return items in the store to avoid shipping costs.

“High shipping costs are clearly driving behavior, but so is curbside pickup,” said PwC Consumer Markets Lead Tyson Cornell.  “Curbside pickup is positively impacting consumer loyalty to brands.”

At first, curbside pickup was an add-on service, but in 2021 it will differentiate businesses.

Consumers were less positive in November than they were in October, but more than they were in August, when PwC first asked about their intentions for holiday shopping, reflecting an uncertainty that continues to reshape the economy at large.

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Those participating in the study said they will be more generous this year when it comes to giving gifts to people outside their immediate circle of family and friends, perhaps recognizing the importance of those who are essential to daily life in the midst of a pandemic.

With more people staying out of stores and shopping online, shipping costs and slow delivery times weigh heavily on whether or not consumers will shop at a retailer. High shipping costs became a deal-breaker for 71% of shoppers, the top concern for online shoppers across ages and demographics this year.

Some 68% of consumers say free shipping positively impacts their loyalty toward a brand, and 47% are concerned about items arriving late. This is true for Gen Z and Millennial consumers at 49% versus all other consumers at 45%.

There are a few key things that will drive behavior in 2021. “Forty-seven percent said they would use other websites if they provided faster shipping,” he said, pointing to examples that drive behavior. “Depending on your age it makes a difference.”  

Some 68% of Gen Z and 58% of Millennials said they would use other websites if they provided fast shipping.

Free shipping outranks all other benefits at 68%, followed by discounts for future purchases at 51%, free samples at 49%, premier access to sales at 44%, curbside pickup at 40%, and direct brand interaction via social media at 34%. 

Consumers said the biggest deal-breaker is the long lines for in-store shopping -- which has been an issue for consumers for several years now. Some 78% again identified long lines, underscored by health-related capacity restrictions in a COVID-19 environment. Still, 45% said they would remain loyal -- shopping online instead -- while 32% said they would switch brands.

PwC's holiday data shows the amount consumers planned to spend on travel and entertainment this holiday season fell, but said they would increase the amount spent on gifts by 9%, compared with the prior year. Of that, 16% would go to family and friends, and 21% to pets.

“Spikes in certain markets have put a strain on retailers,” Cornell said. “They’ve had to manage demand in fluctuating markets.”

 

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