Understanding and keeping pace with what drives people to shop and buy online is critical to succeeding in the digital world. A new report by KPMG International analyses the online shopping preferences and behaviours of more than 18 000 consumers in 51 countries by geography, generation, and product category.
What do online shoppers really want?
“Today’s consumer no longer goes shopping but is shopping, all the time and everywhere. And in a truly global online marketplace, competition is no longer limited to local shops during regular business hours. Consumers can easily buy from retailers and manufacturers located anywhere in the world — or from those with no physical retail locations at all,” says Dean Wallace, industry leader for consumer markets and technology at KPMG in South Africa.
“Increased competition, combined with consumer demand for richer experiences, means that retailers need to rethink their online strategy. For many retailers, creating an online shopping experience enhanced by technology, such as augmented and virtual reality or 3D, is becoming at least as important as providing convenient and personalised ordering, payment and delivery options.”
Behaviour basics
The number of online transactions made by survey respondents averaged 17 purchases per year. Generation X consumers (born between 1966 and 1981), averaged nearly 19 transactions per person per year, and they made more online purchases in the past 12 months than any other age group. Generation X consumers made 20 percent more purchases than the ‘tech-savvy’ Millennials (born between 1982 and 2001).
Wallace says, “Stage of life and income levels are certainly primary factors driving both online and offline shopping, and Generation X consumers, many of whom are more established in their careers and may be building homes and families, are likely buying more consumer goods than the younger Millennials overall. As Millennials continue to enter the workforce and adulthood, however, their online shopping activity is expected to surge and even far surpass the levels currently exhibited by older generations.”
Online or offline?
When comparing the impact of online versus offline touch-points that create the first trigger moment, 52 percent of consumers cited at least one offline channel as a source of initial awareness, and 59 percent cited one or more online channels.
Retail websites or online shops were the most common source of initial awareness, cited by nearly a third of consumers, and online advertisements were cited by 15 percent. At the same time, physical shops were the second most popular source of awareness, cited by 22 percent of consumers.
Millennials were not only more likely than the older generations to be influenced by online sources such as social media or peer reviews — they were also more likely to be influenced by offline channels. Millennials were 25 percent more likely than Baby Boomers to have seen their most recent online purchase in a shop, nearly 50 percent more likely to have talked to a friend about it, and more than twice as likely to have seen someone with it.
Why and where they shop online
The number one reason that consumers said they shop online is for the convenience of shopping at any hour on any day (cited by 58 percent). This is followed by having the ability to compare prices (54 percent), or to find online sales or better deals (46 percent). All age groups reported the same top three drivers. However, when it came to locating harder to find items, Baby Boomers reported having a higher motivation for shopping online.
When asked what is most important when deciding where to buy an item online, consumers were most likely to buy from the website with the lowest price they could find (57 percent) followed by websites with enhanced delivery options (43 percent), or easy return policies (40 percent). There was a notable difference between generations when it came to the importance of being able to see online whether a product is in stock. Millennials were the least concerned about being able to see real-time product availability (cited as important by 28 percent) versus 36 percent of Generation X and 37 percent of Baby Boomers.
Earning trust
When it came to earning trust, consumers said that protecting their data and information was most important (63 percent). Millennials were the generation least concerned about data protection, it still ranked high as a priority for earning their trust (cited by 56 percent of Millennials, 66 percent of Generation X, and 71 percent of Baby Boomers).
Keeping consumers loyal
Excellent customer support was the number one loyalty-earning attribute, cited by 65 percent of the respondents. The second-most successful loyalty strategy was providing exclusive promotions and offers (cited by 45 percent) followed by loyalty or membership programmes (37 percent). These top three loyalty drivers were consistently effective across all generations, with Baby Boomers placing a higher importance on customer support (74 percent) than Generation X (66 percent) or Millennials (59 percent).
Rise of sharing feedback online
Overall, 31 percent of the consumers responding to the KPMG survey said they shared a product review online. The Millennials were the most likely to post a review (34 percent) followed by Generation X (29 percent), and Baby boomers (28 percent). Furthermore, nearly all (92 percent) reported reviews were positive.
Consumers responding to the survey said they were most likely to post feedback directly to sellers’ websites (47 percent) followed by posts on Facebook (31 percent), then on a manufacturer's or the brand's websites (18 percent). This was consistent across all age groups, with Millennials also frequently posting on WhatsApp, Instagram, and Twitter.
“Today’s consumer no longer goes shopping but is shopping, all the time and everywhere. And in a truly global online marketplace, competition is no longer limited to local shops during regular business hours. Consumers can easily buy from retailers and manufacturers located anywhere in the world — or from those with no physical retail locations at all,” says Dean Wallace, industry leader for consumer markets and technology at KPMG in South Africa.
“Increased competition, combined with consumer demand for richer experiences, means that retailers need to rethink their online strategy. For many retailers, creating an online shopping experience enhanced by technology, such as augmented and virtual reality or 3D, is becoming at least as important as providing convenient and personalised ordering, payment and delivery options.”
Behaviour basics
The number of online transactions made by survey respondents averaged 17 purchases per year. Generation X consumers (born between 1966 and 1981), averaged nearly 19 transactions per person per year, and they made more online purchases in the past 12 months than any other age group. Generation X consumers made 20 percent more purchases than the ‘tech-savvy’ Millennials (born between 1982 and 2001).
Wallace says, “Stage of life and income levels are certainly primary factors driving both online and offline shopping, and Generation X consumers, many of whom are more established in their careers and may be building homes and families, are likely buying more consumer goods than the younger Millennials overall. As Millennials continue to enter the workforce and adulthood, however, their online shopping activity is expected to surge and even far surpass the levels currently exhibited by older generations.”
When comparing the impact of online versus offline touch-points that create the first trigger moment, 52 percent of consumers cited at least one offline channel as a source of initial awareness, and 59 percent cited one or more online channels.
Retail websites or online shops were the most common source of initial awareness, cited by nearly a third of consumers, and online advertisements were cited by 15 percent. At the same time, physical shops were the second most popular source of awareness, cited by 22 percent of consumers.
Millennials were not only more likely than the older generations to be influenced by online sources such as social media or peer reviews — they were also more likely to be influenced by offline channels. Millennials were 25 percent more likely than Baby Boomers to have seen their most recent online purchase in a shop, nearly 50 percent more likely to have talked to a friend about it, and more than twice as likely to have seen someone with it.
Why and where they shop online
The number one reason that consumers said they shop online is for the convenience of shopping at any hour on any day (cited by 58 percent). This is followed by having the ability to compare prices (54 percent), or to find online sales or better deals (46 percent). All age groups reported the same top three drivers. However, when it came to locating harder to find items, Baby Boomers reported having a higher motivation for shopping online.
When asked what is most important when deciding where to buy an item online, consumers were most likely to buy from the website with the lowest price they could find (57 percent) followed by websites with enhanced delivery options (43 percent), or easy return policies (40 percent). There was a notable difference between generations when it came to the importance of being able to see online whether a product is in stock. Millennials were the least concerned about being able to see real-time product availability (cited as important by 28 percent) versus 36 percent of Generation X and 37 percent of Baby Boomers.
Earning trust
When it came to earning trust, consumers said that protecting their data and information was most important (63 percent). Millennials were the generation least concerned about data protection, it still ranked high as a priority for earning their trust (cited by 56 percent of Millennials, 66 percent of Generation X, and 71 percent of Baby Boomers).
Keeping consumers loyal
Excellent customer support was the number one loyalty-earning attribute, cited by 65 percent of the respondents. The second-most successful loyalty strategy was providing exclusive promotions and offers (cited by 45 percent) followed by loyalty or membership programmes (37 percent). These top three loyalty drivers were consistently effective across all generations, with Baby Boomers placing a higher importance on customer support (74 percent) than Generation X (66 percent) or Millennials (59 percent).
Rise of sharing feedback online
Overall, 31 percent of the consumers responding to the KPMG survey said they shared a product review online. The Millennials were the most likely to post a review (34 percent) followed by Generation X (29 percent), and Baby boomers (28 percent). Furthermore, nearly all (92 percent) reported reviews were positive.
Consumers responding to the survey said they were most likely to post feedback directly to sellers’ websites (47 percent) followed by posts on Facebook (31 percent), then on a manufacturer's or the brand's websites (18 percent). This was consistent across all age groups, with Millennials also frequently posting on WhatsApp, Instagram, and Twitter.
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