The world of online shopping is in a constant state of change. Over the past decade, more and more retailers have opened digital stores, and shoppers have become increasingly comfortable with purchasing products online.
The 2017 eCommerce Consumer Survey Report by WooCommerce.com looks at trends and changes in the industry over the past year. Key findings cover the use of online stores along with brick and mortar shops, consumers’ increasing use of mobile devices, competition from international retailers, and the popularity of personalised shopping experiences.
These findings can help retailers in New Zealand better tailor their online and in-store options to the consumer.
Consumers hold the key
In the past, retailers held all the cards; they set prices, knew where stock was located and how much was left, and could choose where to send it. Customers were forced to go from shop to shop asking for information, comparing products, and looking at prices.
Now, that power dynamic has shifted. Online shopping gives consumers all the information about pricing, stock, and product details. They can shop around without leaving their homes – or couches – and can choose to buy from a huge range of retailers, both international and local.
This means retailers, whether online or offline, need to work harder to refine their offerings, attract customers, and make their brand memorable.
Emma Clarke at The Selective, puts it like this: “It’s about differentiating from your competitors. You need to stand out in some way – by having better products and services, by having a loyal customer base and a memorable brand, by having a fantastic online user experience or a better experience in-store.”
Integrating online and offline shopping
Online and real-world shopping are no longer distinct entities. The report shows that many consumers use a mix of the two for a single purchase. In fact, 51% of respondents said they use a combination of online and offline shopping before making a purchase.
“New Zealanders like to browse online before making a purchase – especially given how price sensitive we are,” says Emma.
The eCommerce report calls it a “fluid, pretzel-shaped shopping journey rather than a linear one.” This is a reference to the back and forth nature of many consumers’ shopping journeys – a consumer might do some research online, then go into a store to look at options, then hop back online to make the final purchase decision.
This insight means retailers need to link their in-store and online offerings. Some retailers already do this by offering services like click and collect or ‘endless aisle’ options, which allow consumers to browse and purchase from their online store from inside the physical shop. Apps and other digital technology that engage with customers while in-store will also have an impact on brand loyalty and sales.
Emma agrees: “Companies are already responding to this change by making sure the in-store shopping experience is more interactive, providing product sampling, cooking displays, and displays where customers can interact with products. eCommerce websites are also starting to be more interactive – for example using tagging in videos to allow customers to purchase direct from the video.”
It’s about connecting online and real life, rather than competing. Bricks and mortar stores can offer unique experiences that online stores can’t provide and vice versa.
Buying from international online retailers is becoming more common. The survey showed that 56% of shoppers had purchased a product from an international store, with a further 31% saying they are willing to try.
For New Zealand retailers, this can be seen as a negative – New Zealand consumers have more options, which means increased competition and lower prices. But New Zealand companies can still compete by offering fantastic customer service, quick and free delivery and no-hassle returns. For New Zealand-based customers, this is significant – international retailers may be able to offer better prices, but if the purchase and return policy is complicated and difficult, it will put customers off.
In a wider sense, the growing acceptance of international shopping means that New Zealand retailers can access new markets all over the world. This means a huge increase in the number of potential customers. However, according to the eCommerce report, retailers need to be thoughtful when tapping into these markets. Without a country-specific marketing strategy and website, many online retailers fail in new markets.
Customising for the customer
The online shopping experience is increasingly targeted. Many, if not most, online retailers offer personalisation features such as product suggestions based on browsing history.
However, whether these personalised features actually work is debatable. Only 36% of buyers surveyed said they were more likely to buy if a website showed them products based on their browsing. The remainder said they were indifferent or unlikely to purchase based on suggestions.
As technology adapts, personalisation will become more complex. Some retailers already offer sophisticated personalisation, including dynamic pricing based on browsing history. In the future, according to the Woo Commerce report, AI will be used to create online personal shoppers to suggest products through one-to-one conversations.
Mobile is the future
eCommerce is no longer about sitting at a computer, with 47% of survey respondents saying they use their mobile to shop online. Customers using mobiles for shopping tend to want a simpler experience – it’s more difficult to type shipping details or click to view options on a tiny screen.
Many retailers are responding to this change by streamlining their websites for mobile, or by creating entirely new mobile versions. Payment options are becoming simpler, with one or two click payment proving popular.
If your website is too fiddly and complex, customers using a mobile device are likely to click away rather than purchasing from you.
Emma explains that mobile optimisation is no longer a nice-to-have, it’s essential: “The user experience has to be easy on mobile. Websites must be built in a mobile friendly way, not just for user experience but also because of how we search for and find products using Google. Google no longer returns search results for websites that are not responsive.”
Information and opinions
One of the most interesting findings in the eCommerce survey relates to reviews. It turns out that reviews are key to the purchasing decision for many consumers. 54% of respondents said that they read almost all the reviews, and that reviews are very important in their buying decision. A further 37% said they were somewhat important, and that they read at least some of the reviews.
For retailers, this means getting and highlighting reviews is essential. If you don’t already give customers the option to review products or services on your website, you could be missing out.
Emma says: “Positive feedback is crucial to a successful online business. It means that sellers have to up their game, keep innovating and stay competitive or die.”
Failing at the final step
By the time the customer gets to the online checkout, you would think that their purchase is assured. In fact, many online retailers lose customers at the checkout stage, for a number of reasons. If the checkout process is too complex, involving filling in detailed forms, it can turn customers off. 36% of customers considered filling in the same information twice as the most frustrating part of a purchase.
Lack of transparency around shipping can also be an issue. 42% of participants said that unexpected shipping charges were the most common reason for abandoning a purchase.
For retailers, this means taking a good, hard look at your checkout process and shipping charges. Streamlining the checkout process and either reducing shipping charges or making them obvious earlier in the process could mean more of your customer purchases get through to the final stage.
The future of eCommerce
The world of online retail is a rapidly changing complex beast. The power is truly in the hands of consumers, and in many ways, New Zealand retailers are scrambling to keep up. It’s essential that eCommerce retailers continue to adapt and respond to customer demands – or they’ll be left behind.
For advice about how you can optimise your ecommerce website and compete in the world of online retail get touch with the team at The Selective.