The question being asked on Zoom calls across the ecommerce world: How will online sales fare as people settle into new normals that are neither pre-COVID nor peak COVID? (Also: if you own Zoom stock…we’re sorry.)
The conventional wisdom is that Q1 numbers weren’t great for overall retail or ecommerce, and consumer demand for goods softened in response to continued inflation and more interest in services as COVID concerns recede. Cue gloom and doom.
But there are hints of a silver lining. As the Federal Reserve continues raising interest rates to try to tame inflation, demand may dip in the short-term. But as Moody’s Chief Economist Mark Zandi points out, consumers remain in a strong position. American families currently dedicate the smallest share of their income to debt payment in more than 40 years, and most families saved much more during the pandemic than they would have in normal times (read: extra cash to prop up spending through economic thick and thin.)
Meanwhile, consumer attitudes toward ecommerce have evolved. When we asked BOXpoll respondents why they choose to shop online instead of in-store, we found that some—but not all—pre-COVID ecommerce attitudes have returned.
What has remained from the COVID-era is the idea of “I don’t need this item right now, and I’d rather buy it online and wait for the shipping than drive to a store and get it today.” It’s the number one reason BOXpoll respondents selected for shopping online.
While COVID is now at the bottom of shoppers’ reasons to buy from home, more than half (56%) said their motivations for buying online have changed since the peak periods of the pandemic.
Like we saw with the responses to our previous question, some have gotten used to shopping online and find it more convenient, and others cited current market factors: gas prices, in-store product availability, and finding better deals online.
Because we work with many digitally-native mid-market retailers, we also asked respondents in which scenarios they shop with a smaller online brand instead of a brick-and-mortar store or larger online retailer. We won’t lie; most respondents admitted they don’t really do this, and you can guess which major marketplace was mentioned the most.
However, those who do shop with smaller brands said they do so when they are looking for niche or unique items that may not be sold anywhere else, if the price/value is better, when free delivery is offered, or if somebody has recommended a brand to them.
Some have been prompted to look online at smaller brands due to supply chain and availability concerns at larger stores. Also important was the desire to support local/small businesses when they can, rather than large corporations (said the large corporation).
Minimal love for the upgrade
Given that we are, well, a shipping company, we closed out our spending survey with a few questions about shipping decisions.
Given that the most common reasons for shopping online involved not being in a hurry for delivery and wanting to hunt for better deals, it makes sense that two-thirds (67%) of consumers are no more likely than three months ago to pay for faster shipping.
However, one-third (33%) of both Gen Z and those who are shopping online more than they were three months ago say they are more likely to upgrade than before. Parents and Millennials also represent a significant minority (23% and 22%) willing to pay for speed.
The reprisal of the mosquito-lion pain scale
By popular demand, our mosquito-lion pain scale makes a comeback! Our latest data reveals that shoppers are generally used to standard shipping costs and minimum thresholds for free shipping, even amidst inflation sensitivity.
Consumers—who are extra budget-conscious right now—find express shipping costs especially painful compared to three months ago (with the average ranking just over “fire ant bite,” and almost a quarter of respondents calling it “akin to a lion eating your leg.”) The COVID-era expansion of curbside/in-store pickup (an express speed option, at no cost to the consumer except driving time and gas) may have made express shipping seem like a luxury in comparison.
Out of all the shipping costs, consumers are least likely to be upset by minimum free shipping thresholds. Retailers trying to find the most effective way to protect margins on shipping can find some wiggle room here without losing the entire purchase from these consumers.