You know the old (but still completely accurate) saying: „Information is power”? Well, it’s true – the more you know about consumer shopping behavior, the better strategic decisions you can undertake to increase profitability and achieve objectives.
However, with the current amount of information pouring down on your from everywhere on the World Wide Web and the increase in #fakenews and quantity over quality, it really becomes challenging to eliminate all the noise and extract key learning points and effective strategic insights.
Thus, selecting reputable content publishers as your source of information can help one make informed decisions based on relevant and accurate statistics.
A research study commissioned by Magento with YouGov in 2019 was launched today and examines responses from over 9,500 respondents from 15 countries across Europe, the Middle East and Africa. With a research spanning over 18.000 respondents, this report shows crucial factors that affect online retailer preferences, as well as customer viewpoints on data sharing, environmental policies and new technologies.
KPMG’s 2017 global research on 18,430 consumer behaviors, preferences and attitudes can be leveraged by consumer companies seeking to improve their approach towards winning and retaining customers online.
Namogoo asked more than 1,300 online shoppers about their shopping behavior, what online and offline distractions are competing for their attention, and what factors most influence them to embrace — or abandon — their online shopping experience.
We crunched the stats for you and followed up with this article to help your eCommerce business stand out from the crowd.
So, buckle up as we dive into the key takeaways on:
- What makes customers want a retailer’s offerings?
- What are the usual consumer shopping behavior pain points they experience?
- How do you turn customers into repeat customers?
Come in – we’re open
Busy lifestyles, an increasing demand for convenience, crowd avoidance, coupled with advances in technology, logistics, payments and trust resulted in a booming eCommerce industry which surpassed the €621BN mark in Europe in 2019 and a US$1.9 trillion global online shopping arena.
As featured by Oberlo, Statista shows that there are 2.05 billion digital buyers worldwide and the number is expected to steadily grow and hit 2.14 billion by 2021. This is huge, more so if you compare it to the global population of 7.8 billion people.
Thus, the eCommerce industry is booming, but then again, so is the competition.
So, what is it with this shopping behavior? Why do we buy things online? Why do we buy things offline?
Time – Since time is the most precious asset nowadays, it’s no surprise that consumers prefer shopping online for various time related benefits. The number one reason people shop online is that they’re able to shop at all hours of the day, alongside saving time, avoiding crowds and the convenience of not having to go out shopping.
The price tag – 56% of the consumers surveyed in the market research eCommerce Shopping Trends by Magento Commerce cite the price as being a key indicator for shopping online. On top of that, it also helps if eCommerce retailers offer free delivery and free return policies, which are considered valuable by 66% and 53% of the surveyed respondents.
Moreover, there are certain categories such as clothing or electronics, where the “touch and try” experience applies, where customers use a hybrid shopping system where they browse physical stores to find what they need or want and then use price comparison tools online to determine the best price tag. It’s clear that eCommerce retailers can offer lower prices given the fact that you cut off costs with furnishing and maintaining a physical store, rent, personnel and large inventory.
Broad inventory – You can find more items online given the fact you are not limited by a physical shelf space and you can also find them easily, precisely if you use an optimized search feature. Also, you are not geographically limited, being able to buy from different cities, countries or continents products you may not find in a specific place. Lastly, you can use a marketplace and find all the items you want in a single place. For example, Amazon started out as a retailer niched on books but is now a huge marketplace where you can literally buy anything
Rating system & peer-to-peer feedback – Reading reviews and gathering as much information as possible in the consideration phase is becoming a trend in the online shopping arena. As found by Magento, 41% of consumers said a brand’s reputation would make them more likely to shop with that company again.
A 2013 European Consumer Centres’ Network web survey showed that 82% of respondents read consumer reviews before shopping and BrightLocal states that 90% of consumers read less than 10 reviews before forming an opinion about a business. A customer acquisition study conducted by Hubspot found that 77% of consumers shared positive experiences with their friends, or on social media/review sites in the last year and with Yelp receiving their 100 millionth review last year, there’s no denying that reviews are the go-to source for consumers wanting to research a product before making a purchase.
On a side note, fake reviews, according to different estimates, represent between 1% and 16% of all ‘consumer’ reviews – as an example, it was quite the news when the owner of an online review company in Italy received a jail sentence of nine months and was ordered to pay €8,000 in costs and damages for posting fake reviews on TripAdvisor on behalf of hospitality businesses.
Just so you know, though, the European legislation protects consumers against unfair commercial practices, such as bait advertising, false claims, misleading offers or aggressive practices. However, there is also an onus on the consumer to take every reasonable precaution and do research about a trader, product, or service. And as a final back-up plan, 1 in 4 shoppers will abandon their cart if free returns are not offered, so, even if the reviews are not accurate, knowing that you can return the item you purchased for free, goes a long way.
According to a 2018 survey on 2500 consumers, conducted by Periscope by McKinsey on consumer packaged goods (CPG) shopping behavior, researchers found that at least 70% of the respondents are undertaking some form of online CPG shopping activity, with beauty and personal care products on top of the shopping list for consumers in France (47%), the UK and Germany (46%), and the U.S. (38%).
Furthermore, the greatest balance of multichannel shopping preferences are exhibited by consumers from France (40%) and UK (39%) followed by Germany (33%) and then U.S. (32%).
As opposed to shopping online, there are still a great number of people who choose physical stores for their purchases. And understanding this shopping behavior can help one adapt the online shopping experience to smooth things out and provide peace of mind for the offline shoppers.
Expensive products and perishable items are among the most difficult types of items to sell online, being closely followed by products consumers want to touch, smell or try on before the acquisition phase.
In the KPMG 2017’s Global Online Consumer Report, the main reasons consumers choose to shop in physical stores are related to the “touch & try” experience, with 56% wanting to see or touch the item first, before purchasing it, which heavily relates to 41% being concerned that products look different and 55% wanting to try the item on before purchasing it.
Besides the touch & try experience, consumers choose to shop in stores due to shipping aspects, with 34% of the respondents citing delivery times and 25% shipping costs.
Other reasons include trust issues and the overall enjoyable shopping experience.
Hence, eCommerce retailers have a great opportunity window to “leverage consumer insights to appropriately curate assortment, improve digital share of visual inventory, personalize conversations, and run promotions that maximize returns across channels”, as mentioned by Brian Elliott, managing partner at Periscope By McKinsey.
Angel Maldonado, Founder of eCommerce search and navigation expert EmpathyBroker, noted in an interview with TotalBusinessMagazine:
“As we see more and more consumers going online, and more frequently, this presents a great opportunity for eCommerce retailers but it also means more than ever they need to get the digital experience right.
Creating more memorable online experiences not only generates sales, it creates emotion, brand connection and loyalty. It’s no longer enough to offer great products or have the coolest store. It helps, yes, but in the end, it all comes back to emotions, to making people feel unique and special. Smart retailers are thinking more about people, relationships and creating memorable and joyful digital experiences.”
On the same note with Maldonado, in KPMG Global Online Consumer Report – The truth about online consumers, Joel Benzimra, Global Advisory Lead for Consumer Markets, KPMG International highlights the importance of customer service and an engaging digital experience:
“To create loyalty with Millennials, brands need to first cover the basics—that means top notch customer service and quick, individualized responses, through the channels they use such as social media and messaging. But beyond that, brands need the right content strategy. They need to engage Millennials with communications that are both entertaining and informative. Elements of gamification or exclusivity can work well. Some of the footwear brands that are popular with Millennials use limited editions to create product and brand buzz. Millennials will line up physically and digitally to get their hands on these exclusive products.”
Shopping behavior pain points
First of all, in the case of eCommerce retailers or agencies whatsoever, running a digital business has some basic aspects you need to take into consideration.
Shopping journey pain points
The Namogoo study found that 87% of people say that clear product images make for a great online shopping experience for them. The second most important factor for a great online shopping experience is reviews, slightly more important than product descriptions and not something that all retailers focus on. The least important item, despite the explosion in video content generally, is product videos.
Magento also notes in its study that among the most important website features, 53% of shoppers want an easy to use website that loads fast (37%), both on desktop and mobile. 36% also value products being in stock.
In terms of checkout, aspects you ought to take into consideration are the option for guest checkout as well as a fast and easy checkout process.
Financial consumer shopping behavior pain points
Although price was cited by 57% of consumers as a top factor in deciding which website to buy from, the next key attributes were enhanced delivery options and easy return policies; the findings are also featured by Magento’s study, with the top acquisition factors citing: 66% Free delivery, 56% price, 53% free returns policy and 40% delivery time less than 5 days.
Be transparent and upfront with the prices, especially when it comes to shipping and additional taxes. If a customer uses a comparison price tool and selects your online store based on price, but then finds out the selected price is exclusive of various fees, you risk losing the sale.
On top of that, Magento shows 36% of consumers would avoid an online retailer if they did not accept credit cards, while 34% want to be able to pay by debit card and 19% of consumers would like to pay by direct bank transfer. 29% cared about digital e-wallet payment methods and only 5% wanted to be able to pay with cryptocurrencies.
Other shopping behavior pain points
Customers, like everyone else for that matter, love to be delighted – and when you do your best to provide a personalized experience, they will love you back and will probably tell their friends about it. Word of mouth goes a long way and results in sales. Live customer service representatives, 24/7 support, coupons, freebies, incentive programs, personalized promotions, limited time promotions (FOMO) and keeping their data secure will help you hit the next level.
Magento shows that 34% of customers will become repeat customers if loyalty schemes are available and 54% of consumers care that their personal data is protected by retailers, more so now after GDPR (General Data Protection Regulation) was launched on May 25th 2018, imposing new regulations on how businesses are allowed to obtain, store, manage, or process personal data of EU citizens.
“The older consumers are very concerned about data privacy and hence trust in the companies they buy from and share information with is important. On the other hand, younger consumers are less concerned about privacy. As long as they can gain a benefit from sharing their information, they will do it. This trait will become mainstream in the future.” — Stephan Fetsch, Head of Retail, KPMG in Germany
Also, it is worth noting that 31% of consumers will unsubscribe from a mailing list if they are sent irrelevant information, as shown by Magento.
Other interesting statistics on EMEA shopping behavior revealed by the studies:
- UK shoppers make the least amount of unplanned purchases: Only 8% said they make at least one unplanned purchase with every online transaction vs. 12% across EMEA.
- France is the least convinced that online shopping is good for the environment with only 7% saying this was true.
- Spanish consumers rated free delivery (71%) and personal data protection (66%) more important than any other country.
- Germany was amongst the countries that were least likely to make a purchase through Instagram Shopping (2%) and purchase products because they were endorsed by an influencer (5%).
- The Netherlands cares about personalisation: 35% said they would unsubscribe from a mailing list if the retailer sent them irrelevant communications.
- Shoppers from Italy cared most that retailers accept e-wallet payments with 47% saying they would avoid a retailer that doesn’t accept that payment method.
Repeat customers? Yes please!
When applied, the strategic takeaways on consumer shopping behavior listed in this article have the power to supercharge your eCommerce business.
Since we mentioned convenience and we are quite sure you want it, here’s a quick summary of these strategic insights:
- If you were pondering on the decision of opening an online store, numbers don’t lie (or at least that’s what they say) so, there’s never been a better time to start one. Hence, if you were waiting for a sign, there you go! 🙂
- Provide excellent customer support and have a customer care & delight strategy in place
- Optimize for convenience: is it easy for your customers to find what they want? Create a great shopping experience for your customers and it’s more than likely they will come back:
- a great theme optimized for both mobile and desktop devices,
- a quick loading speed,
- detailed product pages with accurate descriptions,
- trust & social proof aspects: reviews, return policy, warranties, data privacy
- multiple payment options
- transparent costs and if possible, free delivery,
- an optimized checkout process and abandoned cart follow-up,
- and an overall strategy for a stellar customer experience
Additional resources on consumer shopping behavior you might want to take a look at:
- 2019 eCommerce Shopping Trends by Magento Commerce
- You can also join Magento’s webinar on Feb 27th where Adobe’s EMEA Marketing Director, Peter Bell will share his insights on the value of experience and convenience to build loyalty that lasts.
- 2018 Periscope by McKinsey
- 2017 KPMG Global Online Consumer Report – The truth about online consumers
- Namogoo Online Consumer Behavior Survey
- It’s Your Time to be Like Amazon, Now!
- e-Commerce Success – the Shocking Truth
Lastly, please do me a little favor and share this article with others, for there’s a good chance that it will help them with their eCommerce businesses. 🙂