94% shop online; 70% shop cross-border
Retailers racing to keep up with consumer
demand – 47% of online shoppers disappointed last holiday
season
Pitney Bowes (NYSE:PBI), a global technology company providing
innovative products and solutions to power commerce, today released
the 2017 Pitney Bowes Global Ecommerce Study – the first study to
comprehensively analyze the global ecommerce landscape from both a
retailer and consumer perspective. The study is based on survey
results of 1,200 retailers from eight countries and 12,000
consumers from 12 global markets.
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In the lead up to this year's holiday
shopping season, Pitney Bowes analyzes today's online shopper, and
reveals how retailers can keep up with their rapidly evolving
expectations. (Graphic: Business Wire)
As retailers prepare for the upcoming holiday shopping season,
the study offers a detailed portrait of trends impacting online
retailers and consumers around the globe. Some of the study’s most
interesting findings are summarized below:
For many online shoppers, 2016 was a holiday to
forget…
According to the National Retail Federation (NRF), retail sales
in the US alone increased 3.6% year-over-year during the 2016
holiday shopping season and are expected to increase between 3.6%
and 4% this year. But, results of the 2017 Pitney Bowes Global
Ecommerce Study reveal that retailers still have a long way to go
toward meeting consumer expectations, particularly when it comes to
the post-purchase experience for online shoppers.
Nearly half (47%) of online shoppers globally reported
frustration with everything from shipping, to returns, to lost
products and miscalculated duties and taxes during the 2016 holiday
shopping season. What’s worse is that the number of unhappy online
holiday shoppers rose six percentage points (pp) over the previous
year and increased year-over-year in every single one of the 12
major markets surveyed. Shoppers in Asia Pacific – particularly
India (73%), Hong Kong (69%) China (64%) and South Korea (58%) –
reported the most challenges. In the US, 36% of online shoppers
experienced problems, up five pp from the previous year.
“As consumers become more experienced with online shopping,
they’re shifting more of their holiday spend online and expecting
better and better service from retailers,” said Lila Snyder,
Executive Vice President and President, Global Ecommerce and
Presort Services, Pitney Bowes. “Online shoppers have an entire
global marketplace at their fingertips. They expect that there is
always a way to get the product they want, shipped where they want,
when they want it. This creates both opportunities and challenges
for retailers.”
Snyder continued, “With even more purchases expected to be
online this year, retailers need to double-down on the elements of
the consumer experience that matter most – delivery, returns,
tracking and world-class customer care.”
A more experienced, demanding, frequent and global online
shopper
- Online shopping is ubiquitous in major
global markets. 94% of consumers have made a domestic online
purchase – flat year-over-year.
- Consumers are shopping online more
frequently. More than one-third of global consumers make online
purchases at least once per week (up 4 pp from the prior
year).
- 70% of online shoppers have made a
cross-border purchase (up 6 pp from the previous year). Asia
Pacific saw the biggest year-over-year increases, led by India (18
pp), China (12 pp) and South Korea (8 pp).
- Online shoppers are exercising a wider
range of options when it comes to shipping, collecting, or
returning their items:
This includes in-store pickups
(“click-and-collect”), shipping to locations other than the buyer’s
home, returning unwanted purchases in-store, and returning unwanted
purchases using pre-paid shipping labels.
“Click-and-collect” – purchasing online and
picking up in store – is now common practice for 40% of global
online shoppers, up from 28% the previous year. In the US alone,
this option is exercised by 46% of online shoppers versus 27% in
the previous year. The practice is most common in Hong Kong where
69% “click-and-collect.”
- Consumers prefer free shipping with
longer delivery times (75%) over paying for expedited parcel
shipments (25%).
Online shoppers increasingly prefer online marketplaces over
retailer websites
- 67% of online shoppers turn to
marketplaces like Amazon, eBay, Flipkart, Rakuten, Tmall and JD.com
to search for products. This compares with search engines (46%),
retail websites (40%), social media (24%), and mobile apps
(23%).
- Online shoppers report that 62% of
their cross-border purchases and 59% of their domestic purchases
take place on online marketplaces, versus retailer websites. These
trends have increased year-over-year and are most prevalent in
China, Germany, India and Japan.
- Product assortment, better deals and
easy checkout are the top three reasons consumers choose online
marketplaces.
Retailers are beginning to recognize the growth opportunity
in cross-border ecommerce. Business plans reveal a tipping point
may be on the horizon.
- 62% of retailers have a cross-border
ecommerce business today, and the vast majority of retailers who
don’t offer cross-border, plan to in the next 12 months. If all of
these retailers execute against their business plans, 93% will
offer cross-border shopping by this time next year – that equates
to a 50% increase in cross-border retailers in just one year.
- One-third of retailers rate
“international selling” as a top growth lever for their business –
equal to the value ascribed to domestic ecommerce growth.
- The average order value (AOV) of a
cross-border purchase is 17% higher than a domestic AOV. But,
cross-border retailers must balance the opportunity for higher AOV
against consumer demand for lower prices. 50% of consumers who shop
cross-border do so because of price.
Credit cards versus e-wallets – a dead heat…
- Credit cards (like Visa and MasterCard)
and e-wallets (like PayPal and Alipay) have been locked in a battle
for payment option supremacy for several years. When asked what
type of payment option they prefer when making a purchase outside
of their home country, 41% of consumers chose e-wallets and 39%
chose credit cards – the exact inverse of the results from the year
prior.
- Preferred payment options vary by
market. For example, US consumers prefer credit cards (40%) over
e-wallets (32%), while German and Australian shoppers prefer
e-wallets (Germany 61%:26%; Australia 64%:23%). Credit cards are
most popular in Japan (74%) and South Korea (65%).
“It is important that cross-border retailers focus on the
consumers they are trying to reach; not necessarily the consumers
they are most used to dealing with,” said Snyder. “That goes for
developing their strategies around payment options and just about
every aspect of their global ecommerce business.”
Three strategies for online retailers:
1. Take a cue (or two) from marketplaces.
a. Learn to love shipping. Low cost, fast,
flexible and accurate shipping is key to attracting and retaining
customers.
b. Personalize to convert: Implement customer
information management solutions that aggregate a single view of
the customer.
c. Expand your product assortment, offer
timely promotions, and simplify checkout.
2. Go cross-border, but don’t rely on brand
alone.
a. Localized marketing is essential because
marketing channel preferences among consumers vary significantly by
country.
b. Operational prowess separates the winners
from the losers. This is particularly true in neighboring
countries. The expectation is low cost and high visibility of
delivery, localized customer care, and minimized duties and
taxes.
3. Have the courage to go where the customers
are.
a. When retailers implement cross-border
strategies, they tend to start where the transition is easiest –
neighboring countries with similar regulatory environments where
people speak the same language. But, more often than not, the
greatest opportunity for cross-border growth and success is further
from home. Pitney Bowes’ analysis has found that the prioritization
of near-border markets has come at the expense of underserving
consumers in countries more apt to shop cross-border. Entering new
markets with different cultures, languages and laws is complex, but
the rewards can far outweigh the investment and challenges.
The 2017 Global Ecommerce Study is the latest industry research
report from Pitney Bowes. Earlier this year, Pitney Bowes released
its annual Parcel Shipping Index, which tracks international growth
rates of parcel shipping volumes and related expenditures. The
index forecasts a 20% increase in global parcel volumes in
2018.
About Pitney Bowes
Pitney Bowes (NYSE:PBI) is a global technology company powering
billions of transactions – physical and digital – in the connected
and borderless world of commerce. Clients around the world,
including 90 percent of the Fortune 500, rely on products,
solutions, services and data from Pitney Bowes in the areas of
customer information management, location intelligence, customer
engagement, shipping, mailing, and global ecommerce. And with the
innovative Pitney Bowes Commerce Cloud, clients can access the
broad range of Pitney Bowes solutions, analytics, and APIs to drive
commerce. For additional information visit Pitney Bowes, the
Craftsmen of Commerce, at www.pitneybowes.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20171012005443/en/
Pitney Bowes Global EcommerceBrett Cody, 203-351-6079Director of
CommunicationsBrett.Cody@pb.com
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