The past year or so has changed how we shop and how we think. As the world changes and as consumer behaviour changes with it, as merchants we must start to ask ourselves, very seriously, will our ecommerce strategy, tactics and technology be ready for 2021 and beyond?
As online merchants, Canadian businesses saw significantly more new-to-online customers in 2020, as well as an increase in sales from existing customers. This led to a very good year not just here, for most companies, but around the world and in North America in particular. eMarketer estimates that ecommerce sales reached a whopping $3.914 trillion in 2020.
What the ecommerce industry needs to know about how consumer attitudes and behaviour are evolving is a crucial element to future success. But as new demographics of online shoppers emerge, this sets the stage for difficult, interesting and important questions. While as merchants we may know to varying degrees our customers, do we now know what those customers think? Where do consumer attitudes stand right now? And how do these attitudes and spending patterns vary between countries, ages, and genders?
One of the most extensive and revealing in-depth studies has been conducted by the ecommerce systems provider ClearSale, which partnered with Sapio Research to answer these questions and more. Whether your target buyer is here at home, or a 60-year old American women or millennials in Mexico, this research gives us new information on topics like:
• Why people shop online
• How important security is to your market
• What your customers think about ecommerce fraud
This report, along with insights from ClearSale partners, provides deep insights on consumer behaviours and attitudes on how to build a better, more secure online shopping experience that delivers precisely what customers want.
Key Takeaways
2021 Global Report on Consumer Behaviours
• The shift to online shopping will last beyond 2020 for 20 percent or more of global consumers
• Merchants should worry more about false declines than fraud; for every $1 in losses due to credit card fraud, merchants lose $13 to false declines.
• High frequency/high spending shoppers are more likely to shop with overseas merchants – 69 percent+
• Only 40 percent of ecommerce shoppers have their credit card within easy reach while shopping, so merchants should welcome mobile wallets and other payment options.
In everything from openness to mobile shopping to the likelihood of boycotting a site after a false decline, there are distinct differences between each country’s shoppers that merchants should know and reflect in their online store.
Age and sex influence risk aversion in online shopping. In pursuit of a good deal on an item, 35 percent of men are willing take more fraud risk. The cut-off age for a high level of concern about fraud in online shopping is 55. And that’s just a small nugget from the bigger (and deeper) picture.
1. The Big Picture of Consumer Behaviours
The research revealed there are overarching trends and noteworthy items that apply to online consumers in general. Here’s what was learned by zooming out to look at overall consumer attitudes and behaviours with online shopping. Fifty-nine percent of respondents who shop online once or twice a week say they have been shopping more frequently in the last six months. Even infrequent shoppers are going online more often; among shoppers who only buy online once a month, almost 30 percent said they have shopped more frequently in the last six months. Only 14 percent of consumers are shopping online less often.
What are some of the reasons for these shifts? For those shopping online more often, people were staying out of stores and shopping from home during lockdown periods.
“In many ways, retail has been reinvented,” says Neil McHugh, Senior Principal Product Manager at Oracle CX (right, a ClearSale partner). “In the last six months, multiple studies have indicated five to seven years’ worth of growth in just the last four months in the ecommerce space.”
But what of those who are shopping less? Financial anxiety and soaring unemployment figures are a likely explanation for the 14 percent of respondents who are putting fewer items in their carts. Are these changes here to stay?
“These changes will shift back to some degree,” says ClearSale’s Senior Director of Marketing, Sarah Elizabeth (left), “But certain segments will find themselves with a permanent increase in ecommerce volume.”
Consumers have learned to love the convenience of online shopping – and delivery – for heavy and bulky items, as well as for non-emotional, everyday purchases such as cleaning products and beverages for example. This concurs with the results of a survey by McKinsey that showed projected growth in online sales of items like groceries, household supplies, over-the-counter medicine, snacks, personal care products, and tobacco.
Not all industries will see the same level of consumer behaviour in 2021. To gain some extra insight, we spoke with McHugh for deeper, industry-specific insights and predictions.
Consumer electronics is experiencing a huge explosion. “For a while, we were seeing some market saturation,” says McHugh. “People weren’t as worried about buying the latest or newest. But with the pandemic’s drive to ecommerce combined with everybody being home more, there’s an uptick in consumer electronics.”
Fashion and luxury are industries where consumers will expect more and more personalization. “But that means they’ll have to give more data,” adds McHugh. “So there has to be a certain confidence level there. But that can also help in areas like inventory and returns.”
Automotive is going to see a huge increase in B2B, according to McHugh: “There’s an incredible amount of green space in automotive B2B, and we anticipate it will grow exponentially over the next three years. So how do we ensure that B2B ecommerce clients are protected as well?”
Travel and airlines have been heavily impacted by COVID, but this ecommerce segment may see people deciding to use their loyalty points for other purchases. “People are looking to use their incentive points in non-travel ways,” adds McHugh. “So, there is some level of opportunity there for an ecommerce boost.”
How Consumers Are Shopping Today
Does your website suit how customers browse and buy from your store? Fifty percent of consumers are most likely to use a tablet or mobile phone when visiting your online store, so a bad mobile experience immediately impacts half your potential market. Can your customers pay the way they want to? Only 40 percent of ecommerce shoppers have their credit card within easy reach while shopping, so accepting payments via e-wallets and other methods can help keep more of those customers in the checkout flow.
In fact, alternative payment options have seen a boost in usage during the pandemic and may help speed up the transformation of some shopping experiences.
For example, the Halifax Wanderers, the Canadian professional team, is working with payment processing company Sona to develop an app with a rechargeable mobile wallet for in-stadium ordering. Ryan O’Leary, CEO of Sona explains, “Instead of waiting in line at halftime with everybody else, fans can grab their device, go to the mobile app, and order right from the stands. Then the food is brought out to them – no cash, no credit, no waiting in line.”
McHugh adds, “One of the big trends we’ve seen in ecommerce over the last couple of years is people want payment options. Just offering PayPal is fine for some, but not for everybody. So flexibility is important, while still being tight on security and fraud prevention.”
Easy, one-touch payment experiences are especially appealing to younger demographics, which is why it is important for ecommerce merchants to put themselves in customers’ shoes when developing their storefronts and identifying the right payment options to offer. However, with the increase in mobile wallets and m-commerce can come an increase in fraud risk, according to McHugh.
“People are conscious of security on their home PCs and laptops,” he notes, “but there isn’t the same mentality with mobile. And yet, people have their banking apps on there, their insurance app on there, their Amazon account – all these things that are tied together. And they’re not thinking about their data security.”
Fraud and the Consumer Experience
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