Online Shoppers and Buyers – White Paper

Online Shoppers and Buyers ? White Paper

February 2013

DK12826

1. Introduction

Retailers need to provide an outstanding online shopping experience. For most Canadians, online purchasing is no longer mysterious and, for many, it is the preferred way to shop. A detailed survey sponsored by Canada Post and conducted by J.C. Williams Group demonstrates that Canadian online shoppers' confidence when buying online has increased, and their expectations for a seamless and enjoyable customer experience are higher than ever. The study distinguishes between online shoppers (people who research online only) and online buyers (those who also make purchases), and identifies barriers to online purchasing. Although the percentage of e-commerce as a proportion of total retail sales in Canada (3.7 per cent) still trails that of the United States (four per cent)1 ? and some estimates go as high as nine per cent2 ? online sales are growing rapidly in both countries. A study by eMarketer estimates that 13.3 million consumers in Canada aged 14 and older made at least one online purchase in 2011.3 It is estimated that these online buyers will have spent $21.45 billion in 2012, including on travel, digital downloads and event tickets. This number will reach almost $35 billion by 2016. While the most popular categories for online purchases are still relatively low-impact purchases (packaged goods, apparel and clothing, computers, electronics and books account for about 70 per cent of online product spending in 2011),4 e-commerce is quickly spreading to all retail categories. Although e-commerce offers some challenges to retailers (such as easy comparison shopping driving, down margins), it also offers fantastic opportunities to firms that can provide an exceptional customer experience. The most successful retailers will deliver excellence throughout the entire shopping journey. Delivering an excellent shopping experience entails providing proper messaging and support to make customers aware of a product, offering information that is organized in a compelling fashion to help with research and consideration, and creating a seamless purchase process. After the sale is made, the work is not done. The most successful retailers ensure that the delivery process is efficient and reliable, and that customers receive an outstanding post-purchase experience, including follow-up with relevant and compelling sales offers and coupons.

1 Breininger & Associates, Inc., Canadian eCommerce Shipping Opportunity Final Report, May 16, 2012. 2 Darrell Rigby, "The Future of Shopping," Harvard Business Review, December 2011. 3 eMarketer, Canada Ecommerce: Vendors Compete and Innovate to Deliver Better Ecommerce Experiences, October 2012. 4 Breininger & Associates, Inc., Canadian eCommerce Shipping Opportunity Final Report, May 16, 2012.

2

2. Profile of Canadian Online Shoppers and Buyers

Ten years ago, the majority of Canadian consumers said they were uncomfortable using credit cards online. Today, online shopping is commonplace. More than 88 per cent of Canadians use the internet and, of those, 78 per cent have made an online purchase.5 While this trend extends across all demographic groups, several cohorts, including Canadians who are young, college or university-educated, employed full-time and in the middle household income category, are over-represented.6 Because Canadian consumers use the internet throughout the purchase cycle, retailers must ensure they provide enough product information along with a user-friendly interface and a customer-centric attitude. Even if the final purchase is made at a physical retail location, the internet still plays an important role in moving the customer through the purchasing cycle ? more than 78 per cent of Canadian internet users (and 91 per cent of 18-34 year olds) researched online before making a purchase. While smartphones and tablets are becoming more popular, desktops (87 per cent) and laptops (78 per cent) are still the most common internet access point for Canadians. Since many Canadians use multiple devices, retailers absolutely must ensure online retail applications function properly on all browsers and mobile computers, including smartphones. The purchase process may be distributed across different devices, even if the final purchase is made on a computer with a traditional screen and keyboard. Access, research and purchases by device

Canadians of all income levels and employment statuses are shopping and buying online. Those who only shopped online trended toward mid-lower household incomes (under $50,000 per year), while recent online buyers trended toward middle-income households (between $30,000 and $70,000 per year).

5 Unless otherwise stated, all statistics come from the 2012 research study conducted by J.C. Williams Group. 6 Question: Have you made an online purchase in the past three months?

3

Online buyers and shoppers by income

Online buyers and shoppers by age

Online shoppers Online buyers > P3M Online buyers < P3M

Online shoppers Online buyers > P3M Online buyers < P3M

Percentage of respondents

Percentage of respondents

P3M: past three months.

While online shoppers were over-represented by young Canadians (18-24 years of age) and those with a high school or lower education. Recent online buyers were most likely to be 25-34 years of age and college or university graduates.

Online buyers and shoppers by education

High school or less

Some college/university

College/university Professional/

postgraduate degree Prefer not to say

Online shoppers Online buyers > P3M Online buyers < P3M

Percentage of respondents

P3M: past three months.

Generally, Canadians are more likely to buy products online that can be accurately described on a website and that are easy to ship. More than one-third of recent online buyers bought apparel (37 per cent) and books, music and movies (35 per cent) in the past three months. Of those surveyed, the categories named least frequently were sporting goods, telecommunications, quick service restaurants, financial services products and automobile vendors.

4

Category of purchases in past three months

Apparel Books, music and movies Health and beauty products

Consumer electronics Computer hardware Toys and hobbies

Downloaded products Other general merchandise Tourism, travel and leisure Home hardware, furnishing and decoration

Sporting goods Telecommunications suppliers

Quick service restaurants Automobiles

Financial services products

Percentage of respondents

While the United States is the most popular international destination for Canadian online shoppers (of those who purchased online during the past three months, 66 per cent made some of their purchases outside of Canada), the United States accounted for 43 per cent of total purchases, followed by Canada (40 per cent), Asia (11 per cent) and Europe (four per cent).7 Forces such as globalization, increased comfort with ordering online (even from foreign countries), the changing demographics of the Canadian population and improved search technology that makes retailers easier to find online suggest that international purchasing will continue to increase.

7 Question: Indicate approximately what percentage of your online purchases during the past three months was from the regions listed. Asked only of respondents who bought internationally during that time period.

5

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download