Nearly half of avid U.S. online shoppers bought items from international retailers, demonstrating the need for merchants to offer more personalized services to better compete against lower prices, according to the sixth annual UPS “Pulse of the Online Shopper” study.
The UPS study found that 97 percent of U.S. online shoppers made purchases on marketplaces, up 12 points from 2016, and that 81 percent cite price as the most important factor when searching for and selecting products online.
According to the study, the number one reason online shoppers shop at a marketplace instead of going directly to a retailer is better prices (65 percent), followed by free and discounted shipping (55 percent), the total cost of the order including shipping costs and/or taxes (45 percent) and speed of delivery (44 percent).
The study found that 47 percent of avid online shoppers in the U.S. shop from international retailers in 2017, up from 43 percent in 2016. According to respondents who purchased from an international retailer, 43 percent were driven by lower prices on U.S. marketplaces and 36 percent wanted products not found from U.S. retailers.
“Online shoppers are able to shop the world’s boutiques and bazaars with ease,” said Gershenhorn. “We’re witnessing a glimpse of the future, when retailers and their customers will be defined less by geographic location and more by how they connect with each other. The challenge is to best provide shoppers with the choice, control and convenience they desire.”
The top considerations that online shoppers make when purchasing from international retailers include clearly stating the total cost of the order including duties and fees (77 percent), stating all prices in the shopper’s native currency (76 percent), the retailer being reputable (74 percent) and reasonable speed of delivery (66 percent).
Of the 47 percent of U.S. consumers who purchased from an international retailer on a U.S. online marketplace, the majority are based in China (61 percent), the U.K. (23 percent), Canada (15 percent) and Japan (14 percent).
UPS recently announced a joint venture with S.F. Holding, the parent company of China’s express delivery company SF Express. The two companies will develop shipping products designed to help Chinese companies gain greater access to the U.S. market.
China is now the biggest e-commerce market in the world with about $900 billion in 2016 sales, accounting for nearly half of all digital retail sales worldwide.
“The lines that separate domestic and international retailers continue to disappear,” said Alan Gershenhorn, chief commercial officer for UPS. “Retailers are now competing across the globe. In order to win, retailers can distinguish themselves by providing value through personalized experiences.”
Personalized experiences include the physical store. Many online shoppers find stores important to touch and feel products (59 percent), solve immediate problems (54 percent), receive superior customer service (52 percent) and participate in rewards and loyalty programs (52 percent). Half of shoppers have used ship-to-store this year, with 44 percent making additional purchases in store and 41 percent planning to use ship-to-store more often in the next year.
The use of smartphones continues to be an increasingly important part of the shopping experience online and in physical stores, with 80 percent of online shoppers using retailer apps, often preferring them to web sites due to faster speed and a better user experience.
Providing personalized experiences at stores includes adapting with new technologies and offers. The average percentage of purchases made in physical stores by avid online shoppers decreased to 48 percent in 2017 from 53 percent in 2014, while online sales increased to 52 percent in 2017 from 47 percent in 2014.
“Technology continues to drive change in the retail industry, but the physical store is still very important. Pure play online retailers are expanding with physical stores and multichannel retailers are using their local storefronts as e-commerce fulfillment centers,” said Gershenhorn. “Online shoppers are indicating they want technology that enables rewarding, personalized experiences both online and in store.”
The study evaluates consumer shopping habits from pre-purchase to post-delivery. The 2017 study is based on a comScore survey of more than 5,000 U.S. online shoppers.