Views: 0 Author: Site Editor Publish Time: 2021-12-03 Origin: Site
Produced by Houlang Compilation Team
Author丨Daivd Dawei
Overview
Over the past year, the retail market has been undergoing constant changes. Whether it is the shift in consumption habits brought about by the epidemic or the subsequent reform of logistics fulfillment strategies, it is clear that the era of global e-commerce is coming.
Power Retail launched an online survey of 3,513 Australian consumers.Respondents were selected from Power Retail's exclusive panel and all had made an online purchase in the past six months.
This report focuses on three key themes: retail benchmarks, growth levers and customer-first user experience, providing constructive survey results and feasible suggestions for domestic sellers.Dig into the delicate balance between these three dimensions and consumers, use real data to analyze market information, explore consumers' deep needs, and ultimately help merchants build advantages.
Today, Australian online consumers are more aware of their needs and purchasing channels.The number of retailers that support multiple payment methods is also gradually increasing, and the 'buy now, pay later (BNPL)' service has become a value-added and marketing tool for merchants, rather than just a functional existence.
Merchants in the e-commerce field will find that delivery and returns are still critical.But unexpectedly, under the epidemic, consumers have become more patient with delivery times.Is ultra-fast shipping something retailers really need to invest in?Will Australian consumers pay for it?Although profit margins are flat, express shipping still has a huge competitive advantage. Should retailers focus more on free shipping or fast shipping?
At the same time, the abandonment rate is another problem faced by retailers. How can merchants recover missed business opportunities?
From basic customer service expectations to click and collect, the data analysis involved reflects the true needs of consumers.Retailers need to have an in-depth understanding of specific customer groups and target markets, accurately target customers, and use customer value as one of the indicators; at the same time, cutting-edge technologies can still provide potential market opportunities; data security issues involved in personalized services and information login, etc. It is still an issue that consumers pay attention to.
1. Retail industry benchmarks
There is no doubt that the globalization and normalization of the epidemic have become one of the main driving factors for the development of contemporary online businesses.
If we put aside the existing technical framework, it is almost impossible for the market to reach the sales level shown last year. The seamless cooperation of data security, payment services, marketing and logistics has jointly contributed to the online retail boom.
Technology is advancing rapidly and continues to sink.Both retailers and service providers should remain flexible and form mutually beneficial relationships.For example, order delivery is regarded as a 'boost' for sales - the epidemic has stimulated online consumption, but without a complete distribution infrastructure, retailers will be unable to fulfill orders.The three elements of merchant scalability, readiness and agility constitute the 'retail industry benchmark'.
deep insights
• Consumer demand for multiple payment methods is gradually increasing.On average, retailers offer more than six payment options.Among them, PayPal is still relatively popular.
• Online consumers prefer 'buy now, pay later (BNPL)' services, but 'buy now, pay later' as a payment option is still in a transitional stage and needs to be strengthened.
• Debit card payments are more popular among younger consumers, while credit card payments are more popular among older customers.
• Free shipping is the first choice for online consumers, and it is recommended that merchants should provide this service as much as possible.
• The best delivery time is between 1~5 days.
• Delivery time may affect consumers' next shopping choice.31% of consumers looked elsewhere due to delivery delays.
• Retailers need to ensure that their products cater to customers' preferences and needs.
• Excessively high shipping costs actively drive away consumers.
• Most people (59%) prefer merchants that offer same-day or next-day delivery.
1. Payment options
The demand for different payment methods has increased significantly.
Compared with 2020, the number of payment options offered by merchants increased from 4.7 to 6.8 in 2021, including credit cards and PayPal.
'BNPL' services, Apple Pay, Google Pay, EFT and gift cards are becoming more popular as payment options.The diversification of payment methods has not reached saturation point yet.
Although the number of merchants supporting BNPL services continues to grow, PayPal remains the mainstream payment method for online shopping.Overall, so far in 2021, BNPL services account for 13% of online transaction methods.
In the past two years, about 13% of online transactions covered BNPL services.This year compared with 2020, the number of merchants supporting this payment option increased by 0.2 points.
The consumption patterns using BNPL, Debit, Credit and PayPal are relatively consistent.
People aged 25 to 34 are more reliant on BNPL services, meaning retailers need to ensure they focus on this group of people.As a new payment method (compared to payment methods such as PayPal, Credit and Debit), BNPL services are expected to enter a younger market as the model and its audience mature.
The number of people over 65 years old using BNPL services has dropped by half year-on-year.This number is expected to continue to rise as the payment method enters mainstream consumer groups and becomes more popular.For other age groups, BNPL service selection rates have also remained fairly consistent.Compared with the same period last year, the usage rate of online consumers aged 25 to 34 reached a peak (17%) and continues to decline with age.
Surprisingly, among the shopping payment methods in January this year, 17% of the people who often choose BNPL to purchase fashion categories.
In the past, people thought BNPL was more suitable for larger purchases, but the data shows that people actually show a strong desire for discretionary spending.
Annual household income also affects how people choose to pay.Compared with low-income households, high-income households are twice as likely to use credit cards and half as likely to use BNPL services.
Another factor is the points credit cards offer high-income households and indirectly influence their purchasing behavior.
Only 6% of consumers plan to increase the number of credit card purchases (compared to 10% in the same period last year).
And BNPL services are becoming polarized.18% of people plan to increase their BNPL spending, and a high proportion of consumers (28%) plan to reduce their use.Most consumers said that their original payment habits of using bank cards, credit cards and PayPal will remain unchanged.
2. Delivery time
For consumers, free shipping is more important than fast shipping.An overwhelming majority (71%) prefer merchants with free shipping when ordering.
And only 19% of people prioritize fast delivery.Only 1% of consumers care about whether the transportation process is environmentally friendly.
In 2020, 62% of consumers switched to merchants that support delivery within five days.Now, only 55% make the same choice.31% of consumers said that long delivery times do not bother them (this group increased from 24% to 31%).
Fast shipping is still the 'fuel' for sales, but in fact, today's consumers are more understanding of the occasional unavoidable delay in delivery - they are gradually becoming more patient and more loyal to brands.
Compared to this time last year, most retailers are already offering next-day delivery.Compared to retailers outside the top 100 (10%), 20% of top retailers also offer the same service.
We can clearly see the impact of the pandemic on delivery times: there has been a significant increase in the number of retailers with delays of more than five days.
Last year, only 4% of the top 100 retailers took more than 5 working days to deliver, while this proportion rose to 13% in 2021, an increase of more than three times.Although the shorter the fast delivery time, the stronger the appeal to consumers.But data from the past 12 months shows that the pace of deliveries has not always been as manageable as expected.
Average delivery charges have also increased over the past 12 months.One of the reasons is that the number of retailers providing free services has significantly decreased, resulting in higher overall costs in the industry.Whether the need for free shipping is feasible for retailers remains a big question.
Retailers need to pay attention to logistics factors that can generate competitive advantages, such as building logistics infrastructure that transfers construction costs to consumers by meeting consumer expectations.
Despite the challenges of 2020, the majority of people (57%) said they were still unwilling to pay for special services - such as same-day or next-day delivery - which was little changed from this time last year.
The age indicator in the target market is still an important reference dimension.In the past two years, people aged 25 to 34 have been more likely to pay the $20 shipping fee for online delivery.
There is an overall year-over-year decline in the number of people willing to pay high delivery fees.Taking Millennials as an example, the proportion of this group dropped from 52% to 44%.The willingness of people over 65 years old to pay high shipping costs dropped from 26% to 14%, almost halving.
For those willing to pay for shipping, most choose same-day or next-day shipping.59% of people choose fast delivery, and 37% choose a designated delivery time period.
Although some consumers are unwilling to pay for environmentally friendly express delivery materials, 28% of people are still willing to pay for sustainable packaging.
Speed and convenience are, as always, the key indicators when people choose to pay for shipping.
2. Growth Leverage
While last year was challenging, meeting consumer expectations was less difficult.Many of the issues retailers face are not difficult to overcome – product inspections, diverse delivery services and seamless checkout options – which are critical to the consumer experience.
While consumers are more tolerant of high shipping costs or delivery delays, a less convenient checkout process may lead to higher abandonment rates.This means that retailers must develop corresponding strategies to achieve long-term benefits, such as simplifying processes or providing a variety of services such as 'click and collect'.
deep insights
• Daily cart abandonment rates are increasing, and retailers need to focus on the key factors driving this phenomenon.
• 79% of consumers choose to abandon a purchase due to poor checkout experience.
• High shipping costs make 63% of consumers abandon their purchases.
• Door-to-door delivery is still the main express service choice for consumers, while the demand for click-and-collect is also gradually increasing.
• Brands and retailers that do not provide product reviews will lose the 'hearts and minds' of consumers.
• Merchants need to properly treat product reviews and merchant reviews.Compared with blindly displaying good reviews and reviews purely to make up for the numbers, recent reviews and comprehensive reviews are actually more conducive to sales growth.
1. Shopping cart abandonment rate
The number of people who almost never abandon shopping dropped from 11% to 5%, a decrease of about half, while the number of people who daily abandon shopping
It rose from 28% to 33%.
Although overall the abandonment rate has not increased significantly with the surge in shopping volume, it is expected that more people will shop online in the future, and the abandonment rate will therefore fluctuate.
This indeed reflects that purchase abandonment has become a part of consumer behavior, and merchants are therefore in urgent need of providing corresponding solutions.
Young consumers are more likely to choose online shopping.
People aged between 25 and 34 are more likely to abandon purchases on the last day before placing an order, and are less likely to abandon purchases on a daily basis.It is suggested that retailers need to shift their attention to people aged 35 to 54 and develop strategies to guide consumers in this age group to make payments.
Consumers seek to simplify the process, and as many as 79% of people choose to abandon purchases because they are tired of the trivial checkout process.This also means that merchants should understand the needs of their target market and try to eliminate obstacles such as too many pages, long loading times, not providing preferred payment methods, too many detailed requirements, or unexpected fees.
For 63% of online consumers, the main reason is that the delivery cost is too high and they choose to abandon the purchase.
What consumers always value is the cost of their time and money, not the speed of delivery.
Consumers are also put off by entering personal data, such as login information (48%), credit card details (44%) and shipping information (39%).
2. Free returns
Free returns are less important to consumers this year compared to the same time last year.
Compared with men, women prefer free returns (58% VS 48%); compared with younger groups, older groups are also more likely to choose merchants that support free returns (54% VS 58%).
In essence, although free returns service is not a necessary business model, it is worth a try for merchants to gain more consumers' favor.
3. Click to collect the goods
Home delivery services are essentially unchanged and remain by far the most popular delivery location (82.9%).
Retailers need to note that click and collect has increased from 4.1% to 5%.
Post office collection services declined, from 6.6% to 5%.People prefer fast, contactless delivery services to waiting in line at the post office.
As part of the total click-and-collect volume, the share contributed by the beauty and fashion categories increased by 54%, with fashion being the most popular e-commerce category, achieving a 37% growth.
This may seem like a slight increase in proportion, but it actually accounts for a considerable proportion. The number of people who choose click-and-collect service when placing orders has increased significantly overall.
The click-and-collect share of the fitness category increased by 67%, and its proportion in total orders increased from 3.09% to 5.15%.
Meanwhile, click-and-collect services now account for 12% of all food and beverage orders, up from 9.2% in 2020, an increase of more than 30%.
Public concerns about health issues and travel restrictions due to the epidemic have largely driven the growth in demand for click and collect - users who have never or rarely used click and collect may now have a change of attitude; for those who often use click and collect The appeal of click-and-collect is also growing for consumers using the service.
The share of retailers offering click-and-collect services is roughly the same compared to this time last year, so there's plenty of room to add this type of service and capitalize on growing consumer demand.To remain competitive in the current climate, retailers are advised to implement pick-up point style construction such as collection lockers and collection boxes.
4. Product evaluation
Although some merchants offer product reviews to a limited extent, this strategy is still underutilized.In addition, merchants should continue to provide other required services to customers to increase order conversion rates.
People are paying more and more attention to product reviews.According to data from 2019 to 2020, the number of consumers who read more than 5 reviews has shown exponential growth: the number of people who view retailer reviews also increased from 8% to 22%; the number of people who view product reviews increased from 12% to 32%.
Compared with the importance of product evaluation and merchant evaluation, there is a large gap in attitudes among young people under the age of 25, 83% and 65% respectively.The remaining age gaps are smaller.
Compared to the same period last year, consumers placed more weight on both types of reviews.Perhaps brands and retailers will use other 'credentials of trust' to convince consumers, but in fact, substantive reviews of the product itself are more important.Consumer demand will always exist, especially among digital natives. Their shopping habits will gradually change in the future, paying more attention to the quality of online products themselves and other consumer reviews.
Recently updated reviews can increase consumers’ trust and stickiness to the brand.It is also critical for merchants to maintain their websites in a timely manner and attract reviews from consumers who have recently placed orders in a timely manner, which is also key to traffic conversion.
Objectively speaking, product reviews of 4 to 5 stars seem to be more likely to stimulate consumers’ impulse to place an order.The vast majority of people (58%) trust 5-star reviews more; 42% of people choose to trust 4-star reviews.Merchants should also invest in infrastructure to improve rating levels.
Savvy consumers are more likely to read a large number of reviews (the proportion of objective reviews may be higher).That’s why brands and retailers should reach out to consumers through email leads, social media strategies or other channels to get a certain amount of objective feedback.
For 39% of consumers, they do not value absolutely positive reviews, but prefer objective comprehensive reviews.Therefore, genuine product reviews are more likely to convince hesitant customers to place an order.Consumers want product reviews to be verified (60%) and recent (56%).
Trust is a key factor affecting product evaluation and conversion rate growth. If a merchant can gain consumer trust through product quality, it will be able to obtain a certain degree of conversion.
3. User experience: customers first
While retailers are under pressure to advance technology and keep up with the times, research shows that efficient, personalized customer service remains a major factor in solidifying consumer loyalty.
AI chat assistants and virtual reality can provide corresponding solutions, but what customers really want is for merchants to provide personalized responses to their different questions and solve them in a timely manner.
Therefore, we always emphasize the importance of reaching specific target markets.For example, for consumers, a brand's reputation and reliability are far more important than sustainability.Email is still a more effective marketing method.Although email marketing is not new, it is indeed the main method that cannot be ignored.
deep insights
• Retailers are increasingly focusing on customer service chat interactions.
• The shipping information notification channel is changed from email to SMS.
• If merchants can solve the problems raised by online consumers in a timely manner, the repurchase rate will be greatly increased.
• Virtual reality functions are gradually reaching the mass market, and merchants can better provide customer services, such as quick page jumps and timely provision of personalized solutions.
• Data security continues to be a common concern among consumers, with 85% being potentially uneasy when it comes to entering personal information when registering for an account.As consumers age, so do their concerns about data use.
1. Customer support
If consumers have specific purchasing intentions, they are less likely to switch to competing merchants.
Page loading time is still the key factor that attracts retailers, accounting for 39%, followed by customer service chat interaction.
83% of the respondents said that they have recently communicated with customer service to seek merchant advice or follow up on order status.
Online consumers of different ages match different website features.The most noteworthy of these is the provision of auto-reply functionality.
Among consumers aged 25 to 34, 8% find this a valuable feature.For consumers over 65, this rises to 26%.
At the same time, among those aged 25 to 34 (44%) and those over 65 (34%), these consumers believe that page loading speed is more important.And this key factor remains high across all age groups.
When measuring the importance of website functionality, the dimension of product category is also worthy of in-depth analysis.
For consumers, fast page loading is important across all categories, holding steady at around 40% (ranging from 38% to 42%).
Among health products, 28% of people believe that online customer service interaction is more important, while only 14% of people in sporting goods hold the same view.This reflects the need for merchants to provide personalized customer support for products that can be tailored to the individual, such as in the health industry.
Among consumers with an annual household income of less than $50,000, 39% value fast page load times, while this proportion drops to 30% among respondents with the highest incomes.Overall, the service is highly valued by consumers.As internet speeds get faster, so do consumer expectations.
Although people have become more patient and understanding in 2020, it remains to be seen whether this situation will continue in the long term.
What matters is how quickly a retailer responds when an issue surfaces.
As many as 99% of the respondents said that if their problems were dealt with in a timely manner, they would repurchase again.Retailers need to build corresponding services to handle customer complaints in a timely manner. Customer retention is the key.
2. Logistics update
In terms of logistics information update notifications, SMS has replaced email as the preferred channel. SMS now accounts for 46% and has become the preferred method. Consumer preference is obvious.At the same time, these two channels accounted for 83%.
The proportion of real-time tracking applications dropped from 21% to 12%.
While email and text updates are both popular, it can be seen that text messages (52%) are more popular among 45-year-olds.
The opposite is true for those under 25 years old (41%) who prefer to receive notifications via email rather than text messages (34%).
For the statistics of other age groups, the gap between the selected preferences is smaller.
3. Automatic personalized customization
Although services such as virtual fitting rooms have become less attractive than in the past, consumers are still concerned about whether businesses can provide such virtual reality services.
Supporting single sign-on functionality among multiple retailers is still very attractive, accounting for 23% of the consumer population.
The appeal of product recommendations pushed by artificial intelligence has dropped to only 10%.
While broad-based, VR's appeal does vary by gender and product category.
When it comes to electronics, there is less demand for VR functionality and more demand for aesthetic categories such as home and garden.Despite its significance, virtual reality continues to experience year-over-year declines in appeal.
Acceptance of single sign-on across multiple retailers is high across all age groups, rising as the population ages and peaks among those aged 55 to 64.
The popularity of AI product recommendations declines with age.
4. Customer value
Nearly one-third of respondents under the age of 25 said they would choose products from a store because the store supports charities.But for people over the age of 25, the appeal of businesses supporting charity has dropped sharply.
Given the financial pressures this year, which have been faced primarily by people over the age of 25, it’s clear that most people
The reasons consumers choose to go online have little to do with charity.
From specific social content marketing to WhatsApp SMS marketing - we have seen marketing continue to evolve in recent years, but email is still the most important business marketing channel, which means retailers need to invest a lot of effort in building a strong EDM strategy.Although it may not necessarily lead to higher sales, it is also an effective window that can help merchants understand a specific target market.
The lower the data in the above figure is, the more the corresponding factors influence consumer choice.
The reliability of merchants affects consumers’ online purchasing decisions.This is closely followed by other consumer reviews.
Although there is a lot of talk about sustainable development, it is the smallest factor that affects consumer purchasing behavior, which also means that environmental protection in the eyes of consumers may be due to moral considerations rather than to make real changes.
5. Consumer concerns
Uploading personal data can be a potential threat to online users, and anxiety about data security increases with age.
Among people aged 18 to 24, 74% do not choose to register a platform account; among people over 65 years old, this proportion rises to 92%.Retailers need to be able to ensure the security of data involved in users' checkout or registration processes and avoid leaking users' personal data to alleviate consumer concerns.
At the same time, transparency is also a key factor, clearly communicating to users how personal data will be used and stored, increasing user trust.