Now that Black Friday, Small Business Saturday, Cyber Monday and Giving Tuesday are all behind us, the holiday season is in full swing. Retailers expected an uptick in sales in Q4 and the countdown to year’s end has started in earnest. So, have our online shopping habits drastically changed now that nearly everything is available at our fingertips 24/7? Yes! And the numbers are now irrefutable.
From Catalogs to Cyber Buying
In the past, the buildup to the Holiday meant our mailboxes were full of catalogs and direct mailers. Gone are the days of flipping through pages for the perfect gift idea. For those hard-to-get items, we hunted in multiple stores to stand in long lines. For those too young to recall this bygone era, Arnold Schwarzenegger made a (bad) movie about it in 1996. Now twenty years later, our online shopping habits are finely tuned, our fingers expertly poised over keyboards and smartphones.
Studying Our Online Shopping Behaviors
PriceWaterhouseCooper completes an annual study on shopping behavior. They surveyed almost 23,000 shoppers located over 5 continents about their online shopping habits, how social media influences their purchasing decisions, as well has their changing attitudes toward traditional in-store experiences. Specifically, U.S. buyers are:
- Heavily influenced by reviews. 40% of us are swayed by what others say (reviews, comments, feedback) about a product or service. A quarter (26%) of U.S. consumers write reviews, comments and provide online feedback.
- Comparing prices on our mobile devices while inside a store. Nearly one-third (29%) are looking for value. And 36% of us are likely to buy from an offshore online retailer if we can get a better price.
- Buying more on our smartphones. 22% of U.S. shoppers shop on their phones at least monthly.
Other notable takeaways from the Global Total Retail 2016 survey:
- Social media is a major driver of consumer purchasing decisions and retail transactions.
- Millenials have higher expectations than previous generations. They look for value, transparency, favor convenience over price, and are the heaviest shoppers via mobile devices.
- It’s harder to get in-store purchases due to the convenience factor. We’re used to finding exactly what we want with online searches and getting items shipped directly to us (often for free). However, once in the store, consumers want exceptional service from smart, friendly and knowledgeable sales associates. Sadly, consumers find very few retailers who qualify as “leading innovators.”
- Price is still king. Affordability is important to every income bracket in every country in every age group.
- Consumers want deeper relationships (sense of community) with membership perks. 70% respondents said that member-only discounts/offers were a top benefit. 58% want free shipping.
Other Influencing Factors
An online shopping survey conducted by Luth Research and Google showed that 50% of customers will consider purchasing from a store they have never heard of before (something we echoed in a recent post about the decline in brand loyalty). For brands struggling to keep their consumer base, be aware that:
- With all the information available now to consumers online, there’s a new phenomenon Fear of Missing Out (FOMO). FOMO is especially strong in those hooked on social media. As a result, our online shopping habits are changing; we’re more willing to try something new, better, faster, cheaper because others are talking about it or using it. Hence why repeat purchases from some brands are declining.
- First contact — either website, social media, in-store — needs improvement. Many brands haven’t transitioned their sales approach to the new model: be a source of information rather than use pushy persuasion tactics. 49% of consumers don’t tell a retailer about a bad experience, yet they share that experience with others. Yikes, that’s quite a wake-up call for those brands dragging their feet into the new sales paradigm!
- Online shopping habits are changing across all generations. While Millenials may lead the pack on online purchases, Baby Boomers are getting into the game too. 66% of people over 50 routinely make online purchases from retailers. They also love coupons and loyalty discounts.
Consumer Spending So Far This Holiday Season
In the PwC survey, 103 million Americans shopped online and accounted for 29% of total sales — up from 12% in 2014. This number is expected to increase again for 2016.
Reuter’s recently reported that “U.S. online sales for Cyber Monday surpassed initial expectations by hitting a record “$3.39 billion.” Yet Black Friday saw more deals compared to Cyber Monday.
The National Retail Foundation expected 137.4 million Americas to shop over the Thanksgiving weekend. Local news reports indicated that retail stores are feeling the pinch, not seeing as much foot traffic as in years past. As our online shopping habits mature, Americans are looking and getting convenience and price by ordering gifts online where they get discounts and free shipping.
AdWeek reported that Amazon is dominating the online retail space this holiday shopping season. According to Verto Analytics, Amazon is #1 in seven out of 11 categories (such as stickiness, reach, sessions/month, etc.).
Other Online Shopping Habit Takeaways
- Shoppers start their online searches with broad terms (keyword phrases). As their search progresses, more narrow search terms are used (longer tail keywords). Often customer searches are more product or service focused rather than store or location based.
- Over recent years companies have tried to influence loyalty with shopping apps. According to Gartner, people are now more choosy over the number of applications they have on their smartphones; 20% of users delete apps that they don’t use regularly. Just because a customer downloaded an app to get a deal doesn’t mean they’ll return. If anything, this hurdle will be seen as an inconvenience, thus putting a negative light on the overall experience.
- 68% of smartphone shoppers will look for advice on YouTube. Don’t overlook the second most popular search engine: YouTube. Find social media influencers to share your content; video provides a channel to cleverly showcase your products/services. Remember the 2013 Volvo truck commercial that went viral?
What other changes to our online shopping habits are you seeing in your business?
How can we help?
Do you know how and when your customers shop? Are you worried you can’t keep up with the latest online shopping habits?
We are Spectrum Group Online, and we offer strategic and tactical consulting so you can monetize your online presence. Call us for a complimentary 30-minute consultation to discuss your website’s user experience and translate that into sales.