More online shopping leads to more frustration: study
25 October 2018
As online retailers and marketplaces prepare for record volumes of ecommerce orders this holiday season, a new study found that 61 per cent of consumers globally felt let down by their online shopping experience during the last holiday season. This figure is up significantly from 47 per cent in 2017, and 41 per cent in 2016.
According to the study, the 2018 Pitney Bowes Global Ecommerce Study, by ecommerce solutions provider Pitney Bowes, consumers pointed to post-purchase experiences, including items arriving late, expensive shipping, tracking inaccuracies, confusing returns policies, and lost or incorrect items as reasons for their dissatisfaction.
“More and more, consumers are telling us that the post-purchase experience – what happens after the order – is every bit as important, if not more, than the shopping experience that occurs before the order,” said Lila Snyder, president of commerce services at Pitney Bowes. “The silver lining for retailers: consumers are giving you the blueprint for how to get it right, and those who get it right will be rewarded with customer loyalty and revenue growth.”
Consumers in India are shopping online more frequently, and they prefer marketplaces
Nearly everyone is shopping online – 94 per cent of consumers globally; unchanged year-over-year. But, the frequency with which consumers shop online is accelerating. Globally, 35 per cent of online shoppers make an online purchase at least weekly. In India, 68 per cent of online shoppers are purchasing from a marketplace, as opposed to a shopping with an online brand.
Snyder says the uptick in shopping frequency, while welcome news for retailers, is also contributing to the rise in consumer dissatisfaction. “Individual consumers are spending more time shopping online and waiting on products, creating a greater probability for a bad experience,” she said. “As volumes rise, retailers are struggling to keep up with the demand in terms of physical infrastructure and the technology to manage it effectively.”
India prefers fast and free shipping
The study shows that consumers start to make judgements on the post-purchase experience even before placing their orders. At the same time, consumers are becoming more demanding in their expectations for “fast and free.” Only 47 per cent consider 2-day free shipping “fast.”
“If there is one finding for retailers to pay attention to, it’s this one: fast and free shipping is a must,” said Snyder. “Retailers invest millions of dollars in marketing to drive consumers to their ecommerce sites, but all of that expense and effort is for naught if they don’t also invest in attractive fast and free shipping offers that meet consumer expectations.”
Consumers still rank “free shipping” as more important than “fast shipping.” Globally, 76 per cent of consumers prefer “free” over “fast.” In India, 56 per cent of consumers prefer free shipping over faster delivery.
A bad post-purchase experience can cost retailers multiple customers
According to the study, 90 per cent of online shoppers in the US will take an action that can hurt a retailer’s brand in response to a bad post-purchase experience. Their reactions range from sharing their frustrations on social media to never purchasing from the offending site again. Among millennials, 30 per cent will go public about their poor experience, complaining in an online review or social media post, potentially affecting the buying decisions of their entire social networks.
The importance of the post-purchase experience voiced loud and clear by consumers was further validated by the results of retailer surveys. Successful high-growth retailers (25 per cent or greater YoY revenue growth) place a greater emphasis on the post-purchase consumer experience than their slower growth competitors. This includes providing services like free returns and day-definite guaranteed delivery. 54 per cent of high-growth retailers offer two - three day free shipping, while 60 per cent of low-growth retailers (10 per cent or less YoY revenue growth) offer 4-7 day free shipping. High-growth retailers also tend to meet or exceed consumer demands for accurate, real-time tracking, free and fast shipping, easy returns with pre-printed labels, prompt refunds and even attractive branded packaging.
One trend that may be influencing expectations around quality of packaging is the growth of subscription box services. 27 per cent of online shoppers are subscribed to at least one such service, including 51 per cent of millennials and 47 per cent of households with children.
“Successful high-growth retailers and brands not only exceed their customers’ expectations on the post-purchase experience, but they leverage every consumer touchpoint to build brand awareness, further strengthening customer loyalty,” said Snyder.
In the battleground for consumer attention, the study found that marketplaces continue to soak up 60 per cent of online purchases, but it also found opportunity for retailers who invest in their brand and delight consumers throughout the shopping and post-purchase experience. 61 per cent of online shopping occurs when the consumer knows specifically what brand and product they’re looking to buy. In these cases, more than half (54 per cent) prefer to buy from a retailer website over an online marketplace. This presents an opportunity for brands and retailers to build customer loyalty and trust by repeatedly delivering exceptional post-purchase experiences.
The same rules apply for cross-border shoppin
The cross-border ecommerce market continues to mature. For the first-time, fewer consumers said they were shopping cross-border dropping from 70 per cent in 2017 to 64 per cent in 2018.
The US, China and Japan were the only countries where the number of cross-border shippers increased in 2018. Still, the market continues to grow because those who are shopping cross-border are doing so more frequently. This was true in nearly every country we surveyed. Twelve-percent of consumers globally are now shopping cross-border at least weekly, up from 10 per cent in 2017.
Consistent with the results of the study, frustrations with shopping cross-border can be attributed primarily to shipping that is too slow, or too expensive. Other frustrations include the inconvenience of returning unwanted items and poor customer service.
The 2018 Pitney Bowes Global Ecommerce Study is based on surveys of more than 13,000 consumers in 12 markets, combined with surveys of 650 retailers in the US, UK, India and Australia. The report is intended to help guide retailers and marketplaces in their investment decisions and go-to-market strategies.