By Matthew Robertson – Co-CEO at NetDespatch
Last year we saw 24-hour supermarket shopping slump, with many supermarkets stopping around-the-clock opening hours in stores. Most of the supermarkets were quick to say that this move was not a cost-cutting exercise, but down to customer shopping habit shifts, as now, more customers than ever are ordering their essentials online and having them delivered, rather than visiting stores.
This doesn’t surprise me at all. We have seen this trend evolving throughout 2016 and in particular over the holidays we saw a massive increase in customers opting to shop online instead of on the High Street. In the final week before Christmas, online retail sales surged to 51.1 percent%.
In fact, the UK is one of the largest ecommerce countries globally. According to the Ofcom International Communications Market Report we experienced the highest ecommerce turnover in 2015, more than any other country, with an average online spend of £1,800 per person. This statistic was 50% higher than the US and £600 greater than the next highest valued market at £1,200. And I imagine this statistic will be higher again for 2016.
There are more reasons than one why online retail trends are developing and changing. But as we move forward into the coming year, it’s time we take a look at what exactly these developments are, what this means for the sector, and furthermore, the ways in which retailers and carriers can adapt to meet these changes.
So how are online retail habits changing? Here are five things we expect in 2017.
1. AI, AR and VR will impact the home and the consumer
CES 2017, one of the largest global home electronics and home technology tradeshows, announced that augmented reality, virtual reality and artificial intelligence will be the primary disruptive home technologies for the next 20 years.
Additionally, last year research company Mintel foresaw virtual and augmented reality technologies entering our homes and stated that this will have an impact on how we shop, the brands we choose, and so on. You only have to think about the potential of drone deliveries, instead of receiving your goods via the good old parcel delivery driver, to start to see the impact that technology can have on shopping habits.
2. Seamless spending
Thanks to the simplicity and convenience they offer, shoppers are embracing new payment methods such as contactless cards, smartphones and wearables in record numbers. This is largely down to the fact that shoppers are increasingly embracing mobile. Therefore from coupons to receipt processing to promotions, retailers will increasingly adopt mobile as the platform of choice for their marketing efforts.
According to the DMA, today 80% of millennials use their phones in-store as part of their purchase process, providing retailers with plenty of opportunities to appropriately target these shoppers and affect real-world purchases.
In addition to this, the most successful retailers have developed apps to engage with customers and drive transactions. Findings last year by Criteo, found that for retailers who have prioritised the mobile experience, mobile apps accounted for 54% of all mobile transactions in the retail industry, and shoppers using mobile apps browsed 286% more products than mobile web shoppers, contributing to an add-to-basket rate 90% higher than those shopping on mobile browsers.
3. Right here, right now
Likewise brands and retailers are utilising platforms like Snapchat, Whatsapp and Facebook Messenger to instantly connect with online shoppers and offer superior levels of customer service. Retailers and brands are also using new technology to help shoppers decide what to buy, watch, do or eat, based upon pending timeframes from the next 30 minutes to the next 48 hours.
4. Ease is the new loyalty
We have seen such a huge rise in mobile usage because it makes life easier. You can now get anything you want with the tap of a button. We are becoming loyal to the brands that are smartly using technology to simplify every aspect of our lives. The brands that do it best will create experiences that have you asking how you ever lived without them.
We recently commissioned research that looked into online retail shopper habits and expectations around their shopping and delivery experiences. We asked shoppers what they love and conversely what they hate about online retail. Convenience and ease, unsurprisingly, featured highly. 82% of respondents said they love the convenience of online shopping, 90% love the ease of shopping, and 82% love that they can get what they want when they want it.
5. Shoppers want to be in control
Our research also showed that online shoppers want complete flexibility and control over when and how their parcel will be delivered. It also showed that shoppers have strong views around delivery price, services and timeframes. We know that the majority of online shoppers now want delivery options that extend beyond the home, such as click & collect and lockers.
They also want more efficient services and the ability to be able to track their online orders and parcels every step of the delivery journey. That said, they appreciate and are quite prepared to wait for what they deem as non-urgent parcels. But they still want total visibility so that they know when their parcel will arrive, whether that is same day, next day or within a number of days.
Clearly, online shopping habits are changing and evolving all the time. Retailers are struggling to keep pace and to predict the shopper’s next move, as is evident from the supermarket example that I shared at the start of the article. Technology, and in particular mobile, is fuelling this change.
This evolution is set to explode in 2017 because 2016 data shows that the number of people accessing the internet through mobile devices worldwide surpassed those using desktops. Shoppers are fickle and switch from one retailer to another at the click of a button.
Online retailers must truly understand the ever-changing face of the shopper and must constantly evolve their strategies in order keep pace and survive in a world where the competition is tough and the stakes are high.