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Study: Almost half of online shoppers were disappointed last holiday season

Retailers must keep up with online shoppers’ rapidly evolving expectations if they want to succeed this holiday season.

This was according to the “2017 Pitney Bowes Global E-commerce Study.” The global technology company’s study surveyed 1,200 retailers from eight countries, and 12,000 consumers from 12 global markets.

Nearly half (47%) of online shoppers globally reported frustration with everything from shipping, to returns, to lost products and miscalculated duties and taxes during the 2016 holiday shopping season. Worse, the number of unhappy online holiday shoppers rose six percentage points over the previous year, and increased year-over-year in each of the 12 major markets surveyed.

Shoppers in Asia Pacific – particularly India (73%), Hong Kong (69%) China (64%) and South Korea (58%) – reported the most challenges. In the United States, 36% of online shoppers experienced problems, up five percentage points from the previous year.

“As consumers become more experienced with online shopping, they’re shifting more of their holiday spend online, and expect better and better service from retailers,” said Lila Snyder, executive VP and president, Global Ecommerce and Presort Services, Pitney Bowes.

“Online shoppers have an entire global marketplace at their fingertips,” she added. “They expect that there is always a way to get the product they want, shipped where they want, when they want it. This creates both opportunities and challenges for retailers.”

Online shoppers are becoming more experienced, demanding, frequent and global. Online shopping is so ubiquitous in major global markets that 94% of consumers have made a domestic online purchase.

Consumers are also shopping online more frequently. More than one-third of global consumers make online purchases at least once per week (up 4 percentage points from the prior year).

Meanwhile, 70% of online shoppers have made a cross-border purchase (up 6 percentage points from the previous year). Asia Pacific saw the biggest year-over-year increases, led by India (18 percentage points), China (12 percentage points) and South Korea (8 percentage points).

Increasingly savvy online shoppers are exercising a wider range of options when it comes to shipping, collecting, or returning their items. This includes in-store pickups, shipping to locations other than the buyer’s home, returning unwanted purchases in-store, and returning unwanted purchases using pre-paid shipping labels.

“Click-and-collect” – purchasing online and picking up in store – is now common practice for 40% of global online shoppers, up from 28% the previous year. In the U.S. alone, 46% of online shoppers use the service versus 27% last year. The practice is most common in Hong Kong where 69% “click-and-collect.” Consumers also prefer free shipping with longer delivery times (75%) over paying for expedited parcel shipments (25%).

“With even more purchases expected to be online this year, retailers need to double-down on the elements of the consumer experience that matter most – delivery, returns, tracking and world-class customer care,” Snyder added.

Another growing trend is that shoppers increasingly prefer online marketplaces over retailer websites. In fact, 67% of online shoppers turn to marketplaces like Amazon, eBay, Flipkart, Rakuten, Tmall and to search for products. This compares with search engines (46%), retail websites (40%), social media (24%), and mobile apps (23%).

These marketplaces are also spurring growth in cross-border e-commerce. Currently 62% of retailers have a cross-border e-commerce business, and the vast majority of retailers who don’t offer cross-border, plan to in the next 12 months. If all of these retailers execute against their business plans, 93% will offer cross-border shopping by this time next year – that equates to a 50% increase in cross-border retailers in just one year.

When making a purchase outside of their home country, 41% of consumers chose e-wallets and 39% chose credit cards – the exact inverse of the results from the year prior. However, preferred payment options vary by market. For example, U.S. consumers prefer credit cards (40%) over e-wallets (32%), while German and Australian shoppers prefer e-wallets (Germany 61%, 26%; Australia 64%, 23%). Credit cards are most popular in Japan (74%) and South Korea (65%).
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