It’s no secret that online shopping has become an important part of our everyday lives. In fact, many retailers are starting to cease differentiating between online and offline since commerce is commerce – and both channels play a major role in driving global trade and overall business growth. But the way customers shop and buy online is evolving. From device preference to shopping destinations, new research from Pitney Bowes shows how global ecommerce opportunities are shifting as consumers become more comfortable with domestic and international online retail.
The 2016 Pitney Bowes Global Online Shopping Study surveyed thousands of consumers in more than a dozen countries to examine ecommerce in three core areas: in-country (domestic) online shopping, holiday shopping preferences and cross-border (international) online shopping. Across the board we found that consumers around the world love shopping online, and for many, it’s a regular part of their routine. In fact, 94 percent of survey respondents said they have made an online domestic purchase in the last year, with 30 percent saying they buy online daily or weekly.
We also observed interesting new buyer experiences, like the habit of many tourists to buy online from a foreign retailer after visiting their physical store while on a trip. We call it “In-store global, online local,” and a surprising 75 percent of cross-border consumers are taking part in this phenomenon.
Cross-border ecommerce continues to become a more frequent habit among global shoppers. In total, 66 percent of respondents said they shop cross border, with 58 percent saying they do so on a monthly basis. A smaller portion (8 percent) said they shop with international retailers every day or every week, but in certain key markets (China, Australia, Singapore and Canada), cross-border shopping is generally becoming a part of everyday life.
What does it all mean for retailers? There’s a huge appetite for online shopping among global consumers, but buying habits and preferences are unique country to country. The path forward for growth-minded retailers is to learn and understand these preferences, so that they can create the most effective global ecommerce strategy for both domestic and international markets. This year’s study provides important insight to help define those strategies.
Where and Why Buyers Shop Online
Should retailers sell through their direct website, a marketplace or both? Globally, 45 percent of shoppers said they make most or all of their domestic purchases through a marketplace, compared to 24 percent through a retail site. The splits were similar for international purchases: 46 percent via marketplaces, and 22 percent via retail websites.
But, that doesn’t mean a marketplace-exclusive approach is the only way to go. In a handful of markets (Australia, Canada, France, Hong Kong and South Korea), local buyers showed strong preferences for retail websites over marketplaces. So, a presence in both channels makes the most sense, tapping into the factors that draw consumers to each destination.
Survey input states that buyers like marketplaces because they offer quantity, including a wider product assortment, one-click checkout, quicker delivery and perks like discounts, loyalty points and free shopping. However, retail websites are valued because they offer a personalized customer experience, better quality products and because customers trust those brands.
To find the best mix, consider how you can make the most of both channels. You could offer great bargains on select products on your marketplace storefront, but then direct shoppers back to your retail website for richer customization options. You could also bridge the experience by offering perks like free shipping and convenient features like one-click shopping on your own retail website.
Discovering New Online Shopping Experiences
Retailers know mobile is an emerging frontier for ecommerce. But, interestingly, 60 percent of consumers said they mostly use computers and laptops for everything in the buying process, from browsing to tracking a package. Still, mobile is on shoppers’ radar: China, Mexico, Singapore and the U.S. were the most popular markets for mobile shopping, especially for tasks like package tracking.
The emerging phenomenon of In-store global, online local shopping among tourists shows how connecting the physical and digital ecommerce experiences is becoming more meaningful. These shoppers visit a retailer’s physical location while on an international trip. Their interest piqued, they return to their home country and shop more on those foreign retailers’ websites. It’s an especially popular habit for buyers from Hong Kong (74 percent), China (65 percent) and Singapore (64 percent), revealing an opportunity to capitalize on the tourist demographic and convert these consumers into loyal cross-border shoppers when they return home.
Frustration with Holiday Shopping Experiences
Whether it’s Diwali, Single's Day, Chanukah, Christmas or Boxing Day, shoppers go online to purchase gifts. However, many across the globe are still underwhelmed by their holiday shopping experiences. When asked, 42 percent of consumers said they experienced holiday shopping challenges last year, which could include tracking inaccuracies, non-transparent return policies, duty and tax miscalculations, and shipping mistakes.
The urgency of the holiday shopping season puts extra pressure on merchants to get the logistics right, but a year-round focus on the purchasing and shipping experience can pay off in every season.
Respondents stated that shipping costs (60 percent) and return policies (40 percent) were major year-round deterrents for cross-border shoppers. On domestic purchases, 57 percent of consumers admit to confusion around store return policies, which deterred them from seeking a return.
Retailers need to work to create clear, consistent experiences for shipping and returns throughout the year, whether they sell domestically, internationally or both. Early attention to these issues will pay off during seasonal rushes, giving you ample runway to build loyal customers during the busiest shopping time of the year.
To learn more about the buying preferences of global buyers, download the 2016 Pitney Bowes Global Online Shopping Study report.