The e-commerce industry moves quicker than any other industry in the world- and this could be argued for any industry that deals in new technology and the internet. As an online retailer, it can be hard to keep up with all of the new developments, as tactics become obsolete quicker and quicker. This speed leaves large retailers struggling to be reactive enough, which then leaves the smaller, more agile retailers space in this ever-saturated market.
Every year KPMG studies consumer behavior worldwide and releases the results in an annual report. The 2017 Global Online Consumer Report revealed that consumers are increasingly willing to purchase more products across all categories online and to spend more money per online transaction. What’s more, this appears to be the case in all regions of the globe. Let’s drill down into some of the specifics now of this year’s online consumer report.
Current Trends in the E-Commerce Industry Worldwide
The Most Frequent E-commerce Shoppers
Members of Generation X averaged 18.6 online purchases last year. That’s 20% more than the average of 15.6 online purchases made by Millennials last year and the most of any generation surveyed. Baby Boomers averaged 15.1 online purchases over the year. The primary factors motivating generational purchasing decisions are believed to be income level and life stage.
The Biggest Spenders
Baby Boomers may have shopped less frequently online than Generation Xers and the same amount as Millenials. But Baby Boomers spend the most per online transaction than either of the other two generations studied. Baby Boomers spent an average of $203 online while Gen Xers spent $190 and Millennials spent $173. Of the various product categories, Baby Boomers were also more likely to buy the following products online: healthcare products, household goods and appliances and wine.
Regardless of generation, men and women shopping online with approximately equal frequency. However men spent more money in those transactions than women, a difference between $220 and $152 on average. Of the product categories, men were more likely to purchase electronics and luxury goods online whereas women were more likely to purchase food and cosmetics online.
The Geographic Region that Shops Online the Most
The geographic region with most number of online purchases processed per person per year is Asia, with 22.1. In North America the number 19 while it’s 18.4 in western Europe and 16.1 in Australia and New Zealand. The fewest number of online transactions per individual per year are in Latin America, with 9.2, Africa and the Middle East, with 11, and Eastern Europe and Russia, with 11.9.
The Rising Trend of Online Shopping
Regardless of region or generation, consumers are more likely year over year to shop for products online instead of in traditional “brick and mortar” stores. This appears to be due in part to improved shipping and delivery options.
Trends in Product Categories
The 5 product categories most often purchased online across geographic regions includes (in no particular order) apparel, media and electronics. Among the categories with the highest growth potential according to the survey are sporting goods, home decor, furniture and household goods and appliances. Approximately 3-5% of respondents claim that they expect to purchase items in these categories online over the next year. One category where online purchases seem at risk of declining in the coming years is books and music. This is because fewer Millennials shop online for these items. Instead Millennials prefer to stream their media.
International Online Trade is on the Rise
More people worldwide are shopping across borders online. North America had the smallest proportion of cross-border online purchases, with 14%, whereas Africa and the Middle East had the highest, with 50 percent. The numbers in this part of the study seem to show that shoppers in regions with largely mature commercial economies feel less motivated to shop across borders whereas those living in less commercially mature regions are more motivated to search for products outside their borders.
Trends in Device Preferences
Over half of online shoppers still make their purchases using a traditional laptop computer or desktop PC. Only 17% reported a preference for making purchases on mobile devices. Another 27% said they had no preference. Within these figures are some interesting regional data. For example, the global average percentage of online consumers who preferred to use their smartphone for these purchases was 8, but the percentage in Asia is twice that.
Generationally, Millennials were the most likely to use their smartphones for online purchases, with 11% of their most recent purchases made that way. Yet despite that, 54% said most of their online purchases were still made on a standard computer or laptop. That said, over two-thirds of respondents said they used their smartphone while in a physical store to conduct online research on a particular product. Price comparison was the main criterion being researched in these instances.
The Customer Journey to Purchasing
The four common stages on the pathway to making any purchase are, in this order: awareness, consideration, conversion and evaluation. The KPMG study examined consumer behavior during each of these stages.
1. Awareness
In terms of where consumers first discovered a product they later purchased 52% reported first being made aware of it through an offline channel. By contrast, 59% were first made aware of products purchased through an online channel. Millennials were the most likely to be influenced by both online and offline sources.
2. Consideration
Online sources were also the most relied upon while deciding whether or not to make said purchases. The channels most used for product research were company websites and product reviews. However, offline research mattered too, with 29% reporting visiting a physical store to examine a product before purchasing it and 23% reporting asking family and friends for feedback.
3. Conversion
When deciding where to make a product purchase and whether to make it online off, 36% of respondents said price was the greatest factor. Another 30% said the company website mattered most. Least influential was peer advice, at 2%, and returns policy, at 1%.
4. Evaluation
While reviews are among the most commonly sought forms of product research, only 30% of consumers actually leave product reviews or ratings online. What’s more 92% of the feedback shared online is positive.
In conclusion, as this online consumer report reveals, e-commerce is clearly on the rise across the world, particularly among the younger generations. What’s more, the growth prospects for more expensive and physical larger products accelerates as shipping and delivery options improve. As smartphones proliferate into less commercially mature regions, the global spread of online shopping in contrast to in-store shopping will continue.
Is there any figure in this report that you find surprising? Tell us below or tweet us!