As more people shop online, their level of dissatisfaction with their experience has increased, and retailers that don’t improve stand to lose customers.
Among the key findings from the 2018 Pitney Bowes Global E-commerce Study, 61 percent of consumers around the world felt let down by their online shopping experience during the last holiday season. This compared to 47 percent of those surveyed feeling that way about their e-commerce experience the prior year, and 41 percent who expressed the sentiment 2016. In the U.S., the rate of dissatisfied online shoppers accelerated faster, with 56 percent dissatisfied compared with 36 percent a year ago.
In the study from Pitney Bowes, a global technology company in the areas of e-commerce, shipping, mailing and data, consumers cited post-purchase experiences, such as items arriving late, expensive shipping, tracking inaccuracies, confusing returns policies and lost or incorrect items as reasons for their dissatisfaction.
The study was based on surveys of more than 13,000 consumers in 12 markets, combined with surveys of 650 retailers in Australia, the U.K. and U.S. Pitney Bowes said the report is intended to help guide retailers and marketplaces in their investment decisions and go-to-market strategies.
“More and more, consumers are telling us that the post-purchase experience—what happens after the order—is every bit as important, if not more, than the shopping experience that occurs before the order,” said Lila Snyder, president of commerce services at Pitney Bowes. “The silver lining for retailers: Consumers are giving you the blueprint for how to get it right, and those who get it right will be rewarded with customer loyalty and revenue growth.”
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These frustrations aren’t stopping consumers from shopping online more frequently, however. Roughly 94 percent of consumers globally, unchanged year-over-year, purchased goods through e-commerce last year, per the study.
But the frequency of online shopping is accelerating, with 35 percent of online shoppers globally saying they make an online purchase at least weekly. In the U.S., 30 percent buy online at least once a week, up from just 19 percent a year ago. In the U.K., the rate of weekly online shoppers rose to 46 percent from 38 percent last year.
Snyder said while the uptick in shopping frequency is positive for retailers, it’s also contributing to the rise in consumer dissatisfaction.
“Individual consumers are spending more time shopping online and waiting on products, creating a greater probability for a bad experience,” she said. “As volumes rise, retailers are struggling to keep up with the demand in terms of physical infrastructure and the technology to manage it effectively.”
The study shows consumers begin to judge the post-purchase experience even before placing their orders, with 91 percent of online shoppers in the U.S. saying they will leave a retail website if critical services like “fast and free shipping” are not available. At the same time, consumers are becoming more demanding in their expectations for “fast and free,” as less than half (47 percent) consider two-day free shipping as “fast.”
“If there is one finding for retailers to pay attention to, it’s this one: Fast and free shipping is a must,” Snyder said. “Retailers invest millions of dollars in marketing to drive consumers to their e-commerce sites, but all of that expense and effort is for naught if they don’t also invest in attractive fast and free shipping offers that meet consumer expectations.”
Consumers still rank “free shipping” as more important than “fast shipping.” But in the U.S., the trend is starting to reverse, with 79 percent preferring “free” over “fast,” down from 86 percent the prior year. This development is mainly driven by millennials, with 35 percent willing to pay for fast shipping compared to 20 percent last year saying they were willing to do so.
In the U.S., online shoppers list free shipping and fast shipping as the two most important criteria in deciding where to shop online. And about two-thirds of online shoppers in the U.S. felt it was acceptable for retailers to have a minimum purchase requirement, such as $25 or higher, to trigger free shipping.
In the competition for consumer dollars, the study found marketplaces continue to account for 60 percent of online purchases, but it also found there is opportunity for merchants that invest in their brand and please consumers throughout the shopping and post-purchase experience. Online shopping occurs 61 percent of the time when consumers know specifically what brand they want to buy and, in these cases, 54 percent said they preferred to buy from a retailer’s website over an online marketplace.