Research reveals key driver for online shopping
The study, which reviewed the behaviour of more than 10,000 consumers during March and April of this year and included over 25 focus groups, reveals just how sophisticated shoppers are becoming.
“For example, people talked about doing online price comparisons on their mobiles while looking at products in stores,” observed Paul Fanthorpe, Australia Post’s head of market research.
“One of the biggest take-outs from the research was that value for money and getting the best price was the pivotal driver of online shopping, particularly for apparel. Another was just how promiscuous people are in shopping online. The research shows that online retailers cannot rest on their laurels because customers have little loyalty in this space.”
Speaking to Inside Retail PREMIUM this week, Fanthorpe said online retailers had to be realistic as to why people visited their sites.
The main “top of mind” driver for online shopping was value for money, followed by ease and convenience and then variety.
As a result, he said special offers were vital because value for money is so important to shoppers.
“But retailers have to be very clever in how they target their inventory and special offers through electronic direct marketing,” he said. “It’s also vital that they have the mobile and online experience absolutely alike. A lot of online retailers maybe do mobile later, or may not realise how similar mobile should be to the full screen experience.”
Fanthorpe said that bricks and mortar stores with commodity products must understand that if people can get that same product cheaper somewhere else, they will. It is therefore important that retailers ensure that their price match online is the same in store. He added that the need for speed in delivery is a misnomer.
“Australians are not prepared to pay for express shipping in the vast majority of cases,” he said. “Cost is equally split between free shipping and value for money. Consumers would rather have free shipping and slower delivery than express freight. The challenge we have in Australia is that overseas organisations come in from countries where speed is important, like the US, UK and Europe. But we believe that retailers do need to offer it as an option because people want choice, but they don’t need to push it.”
Fanthorpe also believed that returns had been poorly managed by online retailers in Australia, even by the big players.
“For every one company that does it really well, there are another five companies that do it really badly. There is no consistency and the inconsistency is actually undermining Australian’s confidence in returning products,” he said.
The study revealed that only around 40 per cent of shoppers return products and Fanthorpe said many survey participants reported that the shop assistant had no idea what to do with the return when they took something back.
“I was shocked just how prevalent that was,” he said. “Retailers need to be a lot more consistent, clearer and more open to the idea of returns because it’s holding the industry back.
“The best online stores have a clear returns policy that reassures customers and encourages repeat business.”
According to the study’s report, Australians spent $18.7 billion online in the year to end March 2015, of which $4.1 billion was on apparel, the largest and fastest growing category, having expanded by 11.8 per cent in two years.
The top four favourite online shopping websites in Australia emerged as Target, Myer, Big W and Asos, because of their size and volume.
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