Cracking the code: New study reveals what online shoppers value most
Data shows that consumers increasingly value savings over speed, ease of returns
A new survey has confirmed continuing trends in the retail industry towards lower expected cost of delivery from the consumer and a growing importance in returns.
While 35.1% of Americans expect their goods to arrive in two days or less, only 24.3% would be willing to pay up to $10 for delivery. Going a step further, an enormous 64% of U.S. shoppers expect free delivery for all online purchases, clearly indicating an increased importance on savings over speed.
Return processes also play a major role in the way consumers purchase online goods. Specifically, the findings showed that:
- 51% of Americans and 49.3% of Canadians avoid purchasing goods from online retailers who do not offer free returns, meaning that these brands have lost half of all prospective customers before the shopping experience even begins.
- Roughly half of all consumers (49.1% of Americans and 50.9% of Canadians) reported that physically shipping their returns was the single greatest challenge when returning online goods.
- Clothing and accessories is the largest product category that consumers reported they are hesitant to purchase online in anticipation of returns, with 41.4% of Americans and 50.9% of Canadians opting not to purchase. Customers were relatively cautious with jewelry and luxury items as well, with 30.7% of Americans and 32.7% of Canadians avoiding such purchases online.
- For both Americans and Canadians, using pre-paid return labels and packaging is the preferred method for returning goods (51% and 39.4%, respectively). However, another quarter of American (24.6%) and Canadian (25.4%) shoppers prefer to manage their returns online and ship items back on their own, and yet another 15.5% of Americans and 20.7% of Canadians prefer to return items at brick and mortar locations. This indicates that while consumers do have clear preferences with regard to returns, there is still no universal solution, indicating the need for options that allow customers to select their own journey.
The results come from a new survey by Radial, of more than 2,000 consumers across the United States and Canada.
Retailers will need to take notice as e-commerce is soaring with total U.S. sales predicted to surpass $604.2 billion by the end of the year. Fueling much of this growth is consumers' increasing their online spending, with the number of U.S. and Canadian consumers who reported purchasing at least $100 of goods per month online jumping from 57.8 to 59.8% and from 56 to 62.9% respectively. While marketplaces like Amazon, Alibaba, and eBay have always been popular, loyalty to these platforms also skyrocketed year-over-year in 2018, with 78% of Americans (+5.4%) and 66.7% of Canadians (+8%) maintaining a membership to an online marketplace. What's more, membership to these platforms remains consistent across age groups, indicating the ageless appeal of the channel.
"While there is a lot of exciting innovation taking place in eCommerce today, some of the most impactful efforts are taking place behind the scenes," said Tim Hinckley, Chief Commercial Officer for Radial. "Our data shows that consumers place the most value in inexpensive shipping and easy returns. Brands that focus their resources on delivering these seemingly-obvious but often overlooked, or challenging to execute, aspects of the consumer journey are the ones who will stand out from the pack."