US online shoppers increasingly looking abroad
US online shoppers are increasingly using their smartphones to shop, making more purchases from international retailers as they look for better prices and unique products with more choice, control and convenience, a new report shows.
Around 47% of shoppers made purchases from an international retailer in 2016, according to the 2017 UPS 'Pulse of the Online Shopper' study, with 61% of those consumers purchasing from a retailer in China. Around 43% said the reason for this was price, while 36% said they wanted something unique. Around 34% said the brands or products they liked were not available in the US.
The study, however, which was fielded in the first quarter of 2017, based on a comScore survey of more than 5,000 US online shoppers, found consumers are continuing to cross-channel shop. Around 36% of online shoppers are searching on one channel and purchasing via another, highlighting the importance of both the online and in-store experience.
Areas of the retail experience that remain important year-over-year and influence purchase behaviours are pricing and convenience, shipping and logistics and multi-channel shopping.
Of those surveyed, 74% said free-shipping options were the most important options when checking out online, while 53% said providing shipping costs early in the process, and ease of applying a promo code to an order, were important. Further, 79% of online shoppers rate free shipping on returns as important when selecting an online retailer (up two points from 2016).
Newer areas of retail that may play a role in the shopping experience of the future, meanwhile, include technologies such as robots, chatbots and virtual reality solutions.
While technology is playing a larger role in retail, when asked about the appeal of robots in retail stores, consumers are not convinced, with 58% saying that they prefer interacting with a person, underscoring the importance of the store associate in the overall retail experience.
Shoppers, however, appear more open to the use of virtual reality, with about two-thirds (65%) finding appeal in VR in some capacity, particularly when shopping for items that require visualisation, making this a promising technology for retailers to explore.
The survey says US retailers can protect their margins with domestic customers and grow their businesses by competing with a global mindset and strategy, while proactively counteracting pricing pressures from international retailers by providing a more meaningful customer experience. This could involve apps and mobile-ready websites offering information such as store inventory visibility, high-quality product photos, rewards/loyalty programmes, mobile coupons, ship-to-store options, and superior customer service.
Increase operational efficiencies to improve customer service and profitability is also key, the study shows. It offers an example - by increasing its warehouses from two to three, one company improved its customer service by 40% and decreased its transportation costs by 6% - proving modern supply chain strategies enhance a company's profitability and customer experience.
"Understanding today's avid online shopper and evolving to meet their new demands are critical for retailer success," study authors explain. "By focusing on key areas, retailers have the opportunity to help shape the future of retail while simultaneously increasing customer satisfaction and sales."