Five key overseas shopping trends to watch
Images and information travel at the speed of light today, criss-crossing the globe to influence consumers and retailers in every market, thanks to the ubiquity of smartphones and social media.
Trends are no different, and it’s more important than ever for Australian retailers to look overseas and learn from the experience of their European counterparts, according to JDA Software.
JDA’s new Consumer Pulse Report, which examines the latest trends in online shopping in Europe, has revealed five key ways to help increase footfall, drive in-store and online purchases and secure customers for repeat purchases in the future.
“Given that online sales in Australia are expected to exceed $32 billion in 2017 and with new players such as Amazon entering the market, it’s time for Australian retailers to gain consumers’ trust to be able to compete within a more sophisticated retail environment,” said Patrick Viney, JDA software’s vice president or retail industry strategy for APAC.
The five trends are outlined below:
1. Problems with online orders
Consumers across Europe remain intolerant of poor online experiences, with 63 per cent likely to switch to an alternative retailer the next time they shop as a result.
When things do go wrong, European consumers expect that they can rely on retailers to resolve problems. If retailers don’t, 73 per cent of European consumers would switch to another retailer in the future. In particular, 81 per cent of shoppers in the UK and 77 per cent in France are likely to switch if they feel a retailer has failed to resolve a problem to their liking.
Overall, 65 per cent of European consumers would switch to an alternative retailer as a result of a poor home delivery experience and 68 per cent due to a poor returns experience.
“We know from our recent research with Centiro that a huge 62 per cent of Aussies also have problems with online orders and 70 per cent would switch to another retailer if they experienced a problem. Retailers need to ensure their home delivery and returns process is quick, easy and problem-free,” Viney said.
2. ‘Click and Collect’ is driving in-store sales
Click & Collect remains popular as a fulfillment channel, with 42% of people having used it in the last 12 months. Recent research with retail CEOs conducted by JDA Software and PwC revealed that more than half are investing in Click & Collect, underlining the fact that retailers see it as a strategically important fulfillment method.
Cost remains the most important factor in why people choose to use Click & Collect with 43 per cent of Europeans using this fulfillment method in a bid to avoid delivery charges. UK consumers also ranked high in the ‘more convenient than home delivery’ category, with 49 per cent selecting this option (against the European figure of 36 per cent). This could be due to the maturity of the UK market, meaning consumers are likely to be more familiar with Click & Collect, and more aware of the benefits it brings as a result.
“Our results are a clear indication that an effective Click & Collect operation can bring additional benefits for retailers; 15 per cent of European Click & Collect shoppers stated they had made a planned purchase of an additional item, and 12% made an impulse purchase of an additional item,” Viney said.
“In Australia, we know that 47 per cent of people used Click and Collect in the last year but that 68% experienced issues. In order to optimise potential upsell opportunities, Australian retailers should give careful consideration to the location and staffing of Click & Collect areas in-store, especially in the run up to peak sales periods such as Christmas.”
3. Returns levels will not diminish
The returns process has a big part to play in omni-channel retail. Across Europe, 70 per cent of shoppers say the ease of being able to return items factors into which retailer they choose to shop online with. This rises to 77 per cent in Germany, illustrating the strong returns culture consumers in this country have.
Items are not always paid for straight away in Germany due to a traditional invoice-based system, which leaves customers a window where it is possible to return an item before the funds used to pay for it have even left their bank accounts.
Looking further afield, in China where online retail is forecast to reach 25 per cent of total retail sales by 2020, 85 per cent of shoppers select retailers based on the ability to easily return items. As European online retail sales continue at double digit rates of growth it is expected that European attitudes towards returns will mirror Chinese attitudes.
“Given that 57 per cent of Australians returned items bought online and 25% returned three or more items, this is should be an area of focus for retailers here as returns clearly play a big role in the purchase decision for customers,” Viney said.
4. Delivery preferences are evolving
Over one third (37 per cent) of European consumers say that cost is the most important thing they take into consideration when thinking about deliveries. However, the motivations behind delivery selection are evolving. More than a fifth (21 per cent) said convenience mattered the most; 17 per cent said a good returns policy, and 16 per cent place the biggest focus on speed.
When it comes to delivery options, 70 per cent of people said they typically choose standard delivery. This option is particularly popular in Sweden (76 per cent) and Germany (75 per cent), although not as popular in France, where only 61 per cent of people typically choose standard delivery.
UK consumers are more likely than the rest of Europe to choose next day Click & Collect (9 per cent) and standard Click & Collect (20 per cent), reflecting the fact that this market is more developed, with more Click & Collect options available to consumers.
“In Australia cost of delivery is also the most important factor in deliveries at 40%, speed and convenience were less important to Aussies at 17% but almost a fifth (19%) said a good returns policy was the next most important factor,” Viney said.
5. Using mobile to build a better brand experience
Mobile devices are already commonly used as part of in-store retail experiences across Europe: 56 per cent of shoppers use their mobile devices in stores.
Looking at results across all countries, there is a fairly even spread between the reasons people are using mobile devices in-store. In-store mobile usage covers each stage of the
shopping journey; from researching items by reading reviews and comparing prices, to checking for any offers, through to waiting in the queue and making a purchase.
“Australian retailers should be comfortable interacting with shoppers all the way through the customer journey to build a better brand experience, and identify ways in which to better compete for customer attention in-store by offering improved loyalty programs and experiential experiences,” Viney said.