Price is paramount for online shoppers
Consumers are frequently focusing on cost rather than brand loyalty when they shop online, according to a new survey.
A new consumer insights study, "Outsmart eCommerce Giants to Win Online Shoppers in 2018: A Guide," by Radial surveyed more than 4,000 consumers in the United States, United Kingdom, Canada and Australia to understand their online buying habits and expectations.
The study found that the majority of consumers who shop online hold a membership to an e-commerce marketplace such as Amazon or eBay. America leads the pack with nearly 20 percent more memberships than other English-speaking countries, at 72.6 percent. Across the regions, Amazon is the favorite marketplace. Other marketplaces including Jet.com, Rakuten, Alibaba and Allegro fall significantly short, controlling less than 15 percent of consumer memberships.
Trends in customer expectations and habits appeared across all regions where marketplaces are prevalent, most notably:
- Online shoppers are purchasing lower cost items online; the U.K. reported the largest group of value shoppers, with 56.2 percent spending less than $100 per month. The U.S. was split between those that spend less than $100 per month (42.2 percent) and those that spend $100-$500 per month (42.3 percent).
- Over 60 percent of respondents across all regions reported that purchasing products at the lowest price possible is most important to them when shopping online.
- In the U.S., 60 percent of consumers expect their goods to arrive at their doorstep at no cost. Only 23.5 percent expressed a willingness to pay up to $10 USD and 6.3 percent were willing to pay between $10 and $25. As delivery cost rose, consumer willingness to pay declined.
- Timeliness of deliveries remains important to customers, however, in the U.S., respondents are flexible, expecting to receive packages in two days or less (34.6 percent) or under a week (34.1 percent). That said, across all regions, less than 9 percent indicated delivery times "don't matter" to them.
- Ancillary factors, including "one-click checkout," were reported as being of lesser importance, proving that cost reigns king for online shoppers.
- As shorter delivery times and lower fees become commoditized in marketplace-driven retail economies, retailers will need to find new ways to demonstrate value for their customers. According to the study, the top categories for global consumer online spending include clothing and accessories (55.5 percent), electronics (43.2 percent), and health and beauty (28.7 percent), with grocery showing significant traction in the U.K. (31 percent). By understanding what and why consumers are shopping online, retailers can better tailor their offerings to meet demand.
"To succeed in today's economy, retailers do not need to take extraordinary measures to get ahead," said Stefan Weitz, executive vice president, technology services at Radial. "They need to understand their customers and provide value where it matters most. However, things like free shipping are easier said than done, and retailers are struggling to meet expectations while remaining profitable. By partnering with a third-party provider to cut costs, expedite processes, and guarantee security, retailers can ensure benefits are applied directly to their customers."