Consumer Spending Snapshot
Facts & Figures About How Consumers Shop Online & Off
Consumer Spending Snapshot This consumer report provides insights into today’s consumer and reveals what stores and brands that sell direct need to know to adapt their business practices. You’ll learn what shoppers prefer about in-store visits versus online purchases, their expectations when it comes to promotions, and how they feel about the brands they shop. From this, merchants will be better able to cater to their demands through inspiring product and services, figure out how to mimic the benefits of online offline and make shopping more enjoyable—and profitable.
One-Size-Fits-All Caters to None at Retail by Genevieve Scarano
Memorable shopping experiences go a long way when it comes to buying apparel. A study out by omnichannel retail solutions firm Kibo Commerce demonstrated how the need for personalization is only increasing for consumers. Today, as consumers pursue both in-store and e-commerce destinations, many are looking for personalized promotions, seamless omnichannel services, affordable pricing and retailer engagement on social media platforms. If consumers are not at the core of a retailers’ market presence, they are less likely to buy products and pursue a relationship with the brand or retailer in the future. “In order to satisfy consumers with high expectations of a cohesive experience no matter the touchpoint, merchants need to do a holistic evaluation of their commerce programs,” Kibo CMO
Tushar Patel said. “Knowing where to focus efforts will allow them to make changes that provide the biggest impact to customer satisfaction, loyalty and ultimately the bottom line.” With the development of new personalization technologies, merchants today are able to deliver one-on-one experiences for consumers’ buying journey. New personalization software enables retailers to provide tailored product recommendations and promotions for each consumer and not just a broader group, which is helpful as 92 percent of consumers said personalized shopping cart recommendations influenced them to buy an item. Eighty-five percent of consumers also indicated they are more likely to purchase items when retailers offer customized home page promotions. With a combination of personalized shopping cart recommendations, customized home page promotions and exclusive loyalty discounts, retailers can tap into each consumers’ style needs. Consumers’ omnichannel engagement has
also taken a more individualized approach. When consumers shop between brick-andmortar and e-tailers, they expect retailers to cater to their lifestyles instantly and provide convenient options for shopping and buying. Over the past six months, 78 percent of consumers said they have bought online and picked up products in-store. In the study, 94 percent of consumers said they conduct research online before going to stores, which was up from 86 percent in 2015. A total 80 percent of consumers are less likely to visit a store if the website does not provide updated product availability, compared to 56 percent of consumers in 2015. With this in mind, retailers could digitize their store operations to ensure inventory is stocked and consumers are accounted for at their stores and on their websites. Consumers’ purchase decisions don’t terminate at the product. Retailers’ social media presence is key as well for personalized shopping experiences. Ninety-two percent of consumers are more likely buy products if retailers post interactive content on Facebook, Instagram and Twitter. More than 80 percent of consumers also preferred online product reviews and were more likely to buy a product if the retailer was transparent about design and fit details. If the consumer fits into the retailers’ branding, dialogue and product offering, they will not only enjoy their products, but the fact they were acknowledged in the retail sector.
have tried in-store pick-up for online orders†
But fewer than 30% described the processes as “smooth”
research online before heading into a store†
Personalization Could Add 30 Percent to Profits by 2018 by Tara Donaldson
In one year, retailers that are all in with personalization will outsell companies that aren’t by more than 30 percent. That single Gartner Research stat should be enough to make retailers realize personalization isn’t just a cool thing they could do—it’s necessary for today’s consumer. “Personalized shopping experiences have drastically changed the way consumers want to shop and engage with retailers,” a new whitepaper by personalized experience management firm Certona noted. “Consumers now expect individualized experiences at each phase of their shopping journey, which is why you now need to rethink your
online spending to reach $440B in 2017* †Kibo Commerce *Certona
Sourcing Journal • Winter 2017
For those who don’t the number drops* Shoppers who make a purchase with sales help
Shoppers who shopped bricks over clicks in the last 3 months*
in-store shoppers who found it easy to find what they were looking for**
**Market Force Information
approach to digital commerce.” Shoppers are expected to spend as much as 12 percent more, or $440 billion, on online retail buys this year, and personalization will further fuel that growth. According to Certona, there are six levels of personalization capabilities companies should be considering: collaborative filtering, customer segmentation, rules based, real-time profiling, predictive modeling and data integration. Collaborative filtering Not so much focused on the individual shopper, collaborative filtering records behaviors and preferences from a group of shoppers and then drives recommendations based on how the crowd interacts with certain items. “Although collaborative filtering does not personalize at the individual level, it is a useful approach for unknown or first time visitors,” Certona said. “It allows you to immediately provide a more relevant shopping experience by leveraging contextual data and blending it with the ‘wisdom of the crowd’ to present relevant content and products versus having no personalization at all.” Customer segmentation With customer segmentation, shoppers are split by subsets based on perceived common behaviors and interests. They can be divided into subsets by demographics, geographics, active lifestyles or the fact that they buy sneakers. Segmentation then allows the retailer to target those subsets based on specific demand and attributes. “Segmentation on its own can be very targeted, but when combined with individualized behavioral profiling and predictive modeling, it takes the shopping experience to a whole new level,” Certona said. Rules based Shopping experiences can also be influenced based on business objectives, like showcasing products from a related category or cross-selling high-margin items. “This gives you extended functionality to meet the standards of shoppers but also internal business strategies,” Certona noted. “This flexibility in functionality allows for an art and science approach that enables business goals while still delivering a 1:1 personalized shopping experience.” Real-time profiling
If brands can collect behavioral information as it happens and accommodate what could be inthe-moment needs, personalization can happen in real-time. “Real-time profiling allows you to profile anonymous and known shoppers by observing shopper behaviors and identifying contextual information within 3-4 clicks on a site,” according to Certona. “This information enables better predictions of the shopper’s intent and allows the personalization engine to serve up the most relevant experience in real time during the active browsing session.”
tive advantage retailers will need at a time that bankruptcies are almost as common as the cold. “Personalization is more than just product recommendations,” Certona reiterated. “It creates a completely individualized, in-the-moment shopping experience.”
With or Without Ivanka Trump, Nordstrom Still Consumers’ Favorite by Tara Donaldson
Ivanka Trump ruckus or not, Nordstrom is still U.S. Predictive modeling consumers’ favorite retailer. With predictive modeling, brands can collect For the fifth time in a row, consumers surbehavioral data on shoppers, using techniques like veyed in Market Force Information’s annual retail data mining and artificial intelligence, and use it to sector study ranked Nordstrom above all when it predict their next moves. comes to fashion retail. “By leveraging preService ranked second “Consumers now expect indictive modeling, you as the biggest influencer dividualized experiences at can become extremely to purchasing after value, targeted when it comes each phase of their shopping and Nordstrom has run its to presenting what your business on providing sushoppers are looking for,” journey, which is why you perior service. As a result, according to Certona. now need to rethink your ap- consumers said Nordstrom “From increasing engagethe best experiproach to digital commerce.” delivers ment and loyalty to more ence, and loyalty is highest —Certona among the luxury retailer’s strategic promotions and offers, predictive modeling shoppers. allows you to deliver the most relevant, in-the-moment shopping experience What’s Nordstrom doing right? to a segment of one, across the different digital For one, according to the study, Nordstrom’s retail channels.” sales associates assist customers more often than Data integration Data integration pulls information from multiple sources, like points of sale, personal account preferences and product reviews, to create a well-rounded picture of the consumer and enable deeper targeting. And doing so could allow retailers to provide their customers with richer, more relevant engagement. “Data is the fuel for personalization,” Certona said. “The more information you can incorporate about each shopper, the more individualized the experience will be.”
What’s next for personalization? The transformation of digital retail won’t slow anytime soon, and personalization is the competi-
most other major retailers, and that has been key. “Sales associates are the front-line representatives for retailers, and how they engage with customers can make or break the shopping experience and impact sales,” Market Force chief strategy officer Cheryl Flink said. The study showed that 90 percent of customers who got help from a sales associate bought something, compared to 82 percent of those that didn’t get help. “That 8 percent difference in conversion rate is a key reason why fashion retailers need to invest in their sales staff.” Nordstrom fell in a quadrant nearly all its own when it came to overall shopper satisfaction and loyalty. TJ Maxx, Kohl’s and Dillard’s were the only other retailers relatively near to Nordstrom in those rankings. Many brands are actually losing ground in terms of loyalty—like American Eagle
Sourcing Journal • Winter 2017
Outfitters, Old Navy, Lane Bryant and Macy’s—as consumers grow increasingly disappointed in their offerings.
spired by retail today. “Consumers gave generally fairly low ratings to all aspects of their fashion shopping experience.” Market Force said. When asked to think about how their favorite retailer stacks up on certain aspects, only 43 percent of consumers felt that retailer offered good value for money, just 39 percent said they were satisfied with the overall atmosphere in the store, and a low 30 percent said they were pleased with the ease of being able to find what they were looking for. “About one third of customers said their favorite retailer performed poorly on all drivers,” according to Market Force. When it came to merchandise selection, TJ Maxx took the top spot, followed by Ross Stores and Old Navy. Nordstrom took the lead for store atmosphere and value for money, with Ann Taylor and Dillards coming second and third in both categories.
What about e-commerce? Forty-two percent of consumers said they shopped their favorite retailer’s website in the last 90 days, and 68 percent of those said they bought something. Clothing took up the lion’s share of their purchases, with 60 percent indicating they bought gear to wear, followed by shoes at 21 percent and accessories at 17 percent. In terms of retailers doing the best to drive e-commerce sales, Market Force said, “Nordstrom leads on website visits and online satisfaction; but American Eagle Outfitters converts more purchases.” Fifty-two percent of shoppers said they shopped American Eagle online in the last 90 days and 80 percent said they made a purchase. H&M followed as second for converting e-commerce sales, with 39 percent indicating they shopped at the store online recently and 76 percent made a purchase. Nordstrom, by comparison, had 64 percent of consumers surveyed visit their e-tail site and 70 percent made a purchase, landing the retailer in sixth place on the metric.
Reversing Consumers’ Bias for Online Shopping
How are brick-and-mortar businesses faring in general? Consumers are still shopping in brick-andmortar stores, they’re just not getting what they want when they go there. Nearly 80 percent of consumers surveyed said they shopped in a physical store in the last 90 days, and of those who had, nearly one-fifth said they’d visited a store six times or more. The problem is, nearly one in five consumers said they were dissatisfied with their most recent shopping experience and that they would not recommend that retailer to a friend or family member. “It’s not OK just to be OK,” Market Force said, pointing to the finding that customers who are “delighted” with their shopping experience are two times more likely to recommend a retailer than those who are just “satisfied.”
Consumers are lukewarm on retail right now Regardless of which retailers are ahead and which are falling behind, consumers are just unin-
by Caletha Crawford
It’s official. We’re all cross-shoppers. No consumer is brand, store, tier or even channel-loyal anymore. As if it’s not enough for retailers to compete against each other, these days, their battle is internal, as they struggle to reverse the trend leading shoppers online rather than in store. In a recent survey by iVend Retail, only 13.2% of respondents say it’s more convenient to shop in brick-and-mortar stores. That dismal figure explains the equally paltry in-store sales numbers retailers have been posting lately.
Perks plus Beyond convenience, shoppers are also lured online by the promise of discounts and other perks that aren’t available in stores. Nearly half (47.8%) of the 1,000 consumers surveyed across the U.S. and Canada report scoring deals online only, with no similar offers once they cross the retailer’s threshold. But to be eligible for these offers, consumers must relinquish some personal information. For most, that’s a fair trade off. More than 68 percent
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are fine with stores tracking their purchase histories. Forty-one percent don’t have problem with stores monitoring their browser history. Roughly 30 percent are OK with stores knowing how much they’ve spent. Shoppers are less willing to provide their cell numbers (8 percent) or allow stores to track their locations using their phones (13.9%). Meanwhile, more than 11 percent said there’s no carrot big enough to justify any sort of data collection.
The Markdown Virus is Worse Than Retailers Think by Tara Donaldson
What can retailers and brands do to stop the race to the bottom when it comes to markdowns? First, they need to realize how bad the problem really is. At a session titled “Markdowns: The Hidden Virus” at NRF’s Big Show Monday, Greg Petro, CEO of predictive analytics platform First Insight, said, in so many words, that the markdown problem is Omnichannel options really bad. Increasingly, retailers are looking for ways to In highlighting some First Insight research drive traffic from clicks to bricks. One bridge befindings, Petro said over this last holiday season, 70 tween the two is the buy percent of consumers exonline, pick up in store pected to see markdowns “We’re in a cycle right now option of 31 percent or more where it’s a race to the bottom when they walked into a The survey revealed 57.5% of shoppers have and nobody is going to win.” store or visited a retailer’s tried this service, and the website. —Alex Del Cielo, CEO, Camuto Group bulk of them (65.3%) have What’s more, onedone so to skirt shipping third of all shoppers viscosts. Convenience and the iting retail channels are ability to return items immediately, were also cited looking for 100 percent of their purchases to be as motivating factors at 29.2% and 23.5%, respecmade on sale. tively. “The expectation of consumers overall durHiccups in the process might hinder its adoping the holiday is that they want better deals, and tion though. Less than a third of respondents had a we’re educating them that way,” Petro said. “We’re “smooth” experience. That’s compared to 66 perconditioning our consumers, and this challenge is cent who would characterized online shopping as becoming very systemic.” easy. The percentage of goods sold at full-price— not surprisingly, considering the promotional retail In-store incentives landscape—is dropping. According to Petro, 45 Once they’re in stores, retailers clearly have percent of women want an offer of 41 percent or some work to do to make consumers more willing more off just to get them into a store. For womensto hang out—and return. wear overall, consumers are only willing to pay 76 Shoppers’ No. 1 request is free Wi-Fi. Fortypercent of the item’s asking price. six percent said that change alone would improve Consumers also know they are more likely to their overall experience. At 36.9% of respondents, get better promotions online, which won’t do much in-store kiosks or digital help tools was another top to help already suffering stores as they watch their request. Both of these appeals highlight a consumsales increasingly flee into the arms of the web. er who—thanks to the internet—is used to having Sixty percent of consumers said they expect to get product information at his/her fingertips. more deals online than in store. Finally, they say ditch the paper. Customers And with global overstocks and returns toare growing tired of coupons they have to clip and taling $165 trillion of what essentially amounts save. More than 33 percent of shoppers would pre- to missed opportunity, retail needs to check this fer a mobile app that delivers discounts. markdown virus before it spreads and wipes more of them out. “As an industry, we are at a transformational
point in the supply chain,” Petro said. The problem is that, more often than not, the price isn’t right. Retailers will have to figure out how to assess the shoppers’ perceived value and what they’ll be willing to pay for a product. The other problem is that, conditioning shoppers to buy on sale makes them even less likely to pay full price. Especially when store associates are quick to offer up the date of a next sale—which these days seems to happen every other day. “We’re in a cycle right now where it’s a race to the bottom and nobody is going to win…because there’s really no place to go to get cheaper product,” Alex Del Cielo, CEO of the Camuto Group, the parent company of Vince Camuto said. “So the only way is to figure out how to reduce markdowns.” The supply chain has moved out over the years, according to Del Cielo. The consumer has more information about the product than they ever have, but lead times have gotten longer with manufacturing chasing the cheapest countries, which aren’t necessarily close to the consumer. And retailers are struggling to react to all of that. “In the world today, if you walk into most stores, it’s over sku’d. And it’s over sku’d because nobody really knows where the consumer is going,” Del Cielo said. Lending some data to that comment, Petro said citing recent research, that there’s 49 square feet of retail space per capita in the U.S., and the country that ranks next, the U.K., has just 9 square feet per capita. Chiming in on the valuation perspective, William Susman, managing director for retail consultancy Threadstone Advisors, said with companies typically valued on scale growth, margins don’t often enter the equation. “Very rarely is one of the first diligence questions ‘how are the markdowns?’,” Susman said. “But that is changing. Markdowns are a critical component to the ultimate valuation.” What does the consumer want anyway? Today’s customer isn’t shy about voicing what she wants, nor is she shy about bailing when a brand doesn’t give it to her. “Until the manufacturing base moves closer to demand signals, you have to be able to predict better,” Petro said.
Shoppers who are ok with stores tracking their purchases
Shoppers will pay 76% of asking price for women’s wear∑
Sourcing Journal • Winter 2017
Percentage of shoppers who expect more deals online
And beyond just the right predictions, retailers will have to exhibit the right training. “The consumer is trained depending on how you treat your brand. If a brand is never on sale, then they’re not ever looking for a deal on day one,” Del Cielo said. It’s about what the consumer perceives as value. “If it’s constantly marked down and the goods are always offered at a promotional price, it’s not viewed as valuable.” Ever the example, Zara has trained its shoppers not to expect random-day discounts because that just isn’t what they do. And because of how often Zara changes its floor sets, is hasn’t only trained its shopper to buy at full price, but to buy immediately. With markdowns becoming are more important part of a company’s valuation, Del Cielo said those who don’t get out of this vicious promotional cycle simply won’t last. “It’s not a long-term proposition if you’re a promotional player,” he said. From a financial perspective, Susman acknowledged the difficulty in un-training the consumer from expectations of a sale, but said it won’t necessarily mean the failure of the brand—at least at first. “It’s not necessarily the demise of the brand that’s perpetually on sale,” Susman said, “It’s the demise of that company can’t make a profit.” So what’s a brand to do? For HSN it’s been all about data. Especially because of the company’s unique model. “Getting the product right and setting that initial price is so critically important to us because we do live in a sell out model,” Karen Etzkorn, EVP and CEO of HSN, Inc, said. Data is the holy grail, Etzkorn said, but all the data in the world won’t always provide retailers the right answer, so it’s going to be about marrying that data with really great merchant capability. Design teams will also play a role in pushing the envelope as innovation can elevate perceived value. “It doesn’t always need to be at the lowest price,” Del Cielo said. “If it’s the right price that she [the consumer] views as having a value, she’ll pay you for it.” In this market, brands should be focused on being really good at what they’re really good at—
whether it’s being known for a price point or a channel or a product—rather than trying to be OK at many things for many consumers. “I just think laying core core capabilities is key,” Susman said. Retailers have to challenge the price/value proposition and ask themselves whether they can sell a product at full price to their consumer. If not, some reevaluation will be necessary. “Product needs to be given a chance,” Susman said. “When you put winter coats in stores in July and in October they go 40 percent off, you didn’t give that product a chance.” That’s where taking insight from the stacks of data most retailers are sitting on is going to be vital, as Etzkorn explained. Merchants and planners will have to really focus on that insight rather than sitting on scores of data and not really knowing what to do with it “What worked last year doesn’t work anymore. The consumer has too much information at their fingertips,” Del Cielo said. “You better be prepared to offer them what they want, otherwise those markdown statistics are just going to keep growing.”
Survey Says 60 Percent of Consumers Would Boycott Dishonest, Unethical Brands by Genevieve Scarano
If a brand is tied to faulty product claims or child labor, American consumers will neglect it. According to recent Applied DNA Sciences survey conducted by Harris Poll, 30 percent of consumers said they would stop buying from a brand that lies about their product material. And if unethical work practices were involved in manufacturing, three out of five consumers would no longer purchase from that brand. “Consumers want authentic products and want to trust in what they are buying,” Applied DNA Sciences CEO Dr. James Hayward said. “Our primary aim is to cleanse the cotton supply chain and by that, I mean eliminating any diversion, any mislabeling, any counterfeiting that can take place throughout the cotton supply chain. As a tracking solutions provider, Applied DNA Sciences works with brands to minimize this issue
Value of cross-border e-commerce by 2020¥
¥DHL ∆Applied DNA Sciences
in cotton supply chains. One of the company’s solutions, SigNature DNA, is a molecular tag that resists industrial treatment baths and marks material authenticity from harvesting to final product. “An ideal way to ascertain the true identity of a natural commodity is to use the DNA that nature gave that commodity or to mark it with a manufactured DNA,” Hayward said. “This enables the cotton to be traced to where it was picked before it went into the ginning process that cleans away seed and other debris for packaging into bails to ship around the world for spinning, dyeing and to make into clothes.” Although many companies, including Applied DNA Sciences, are fighting against faulty cotton products, consumers are still unaware about product manufacturing history. Seventy-six percent of American consumers said they believed product claims that indicated a cotton product was 100 percent organic or 100 percent Pima cotton. However, if brand claims were false, one quarter of American consumers said they would have a negative perspective of the brand and 30 percent also said they’d completely stop buying products from the brand. If a cotton product claimed to be 100 percent organic or 100 percent Pima cotton and was found to have a hybrid blend, 32 percent of American consumers said they would purchase less of the brand’s products. Despite the existence of negatively-linked cotton brands, the industry and consumers are growing their authenticity awareness. Seventy-eight percent of American consumers said they would be likely to buy cotton products from a brand that scientifically proved their material’s ethical and organic history.
DHL: How Asos Cracked the CrossBorder E-Commerce Code by Tara Donaldson
Heads up retailers: if you want to win at e-commerce like U.K. fashion e-tailer Asos—which generates 40 percent of its online sales internationally— you may want to give cross-border shipping a tad more attention. In 2015, the cross-border e-commerce market was worth $300 billion, roughly 15 percent of overall e-commerce, according to a new report by DHL.
And that market is expected to grow by roughly 25 percent every year at least until 2020, outpacing domestic e-commerce by double. By 2020, cross-border e-commerce will be worth $900 billion, accounting for 22 percent of the global e-commerce market, and $1 of every $5 spent on e-commerce will come from cross-border transactions. “This growth momentum yields unrivaled opportunity for retailers and manufacturers,” according to DHL. “Even beyond 2020, all evidence shows that demand for products from abroad is not going to recede.”
where retailers need to focus for their cross-border efforts. Those transactions already represent between 10 percent and 20 percent of all cross-border transactions for a market valued at $30 billion. “This represents a higher share of high-basket-value sales than in any domestic e-commerce market,” according to DHL. “Converting such highprofit opportunities should be a priority for etailers and can justify—or even require—the use of premium shipping options.”
What are premium shipping options? Standard, or deferred shipping, won’t be what helps retailers benefit from cross-border shipping How retailers can capitalize on the cross-borgrowth. Consumers aren’t interested in companies der opportunity postponing the shipment of their goods for three to With demand for shorter delivery times and five days until there’s more room on the airplane or increasing cost pressures, it would seem that more until the airplane is adequately full. companies will opt for With premium shipping, localized fulfillment as processing in the warehouse “Cross-border is not a passing phase e-commerce giants like is expedited and then carriAmazon and Alibaba do. or trend, but rather a significant ers are selected to meet the staple in the e-commerce market But having SKUs sitting promised delivery. in inventory all over the that requires premium shipping.” Many cross-border place—especially if its purchases are linked to oc—DHL slow turning—could be casions, like Christmas or more costly than shipbirthdays, and are therefore ping a share of those orders cross-border. time-sensitive. In these cases, consumers will be “In order to fulfill consumers’ wishes for faster willing to spend more to get their goods on time. delivery, many e-tailers offer premium interna“For those smaller retailers and manufacturers tional shipping options to their customers, e.g., for occasionally receiving overseas demand and having a surcharge,” the report noted. “This is testimony no experience in international shipping, a premium that cross-border is not a passing phase or trend, door-to-door shipping solution is not only the most but rather a significant staple in the e-commerce simple way to satisfy customers, but also a twofold market that requires premium shipping.” driver for growth,” DHL said. For one, it lets the Electronics and fashion are the main categoretailer uncover and take advantage of untapped ries that consumers want to purchase from abroad. pockets of demand growth, and it also enforces allAcross the U.S., U.K., China, India, Brazil and Russia, important customer loyalty. the share of consumers purchasing apparel was DHL’s report, which surveyed 1,800 e-tailers higher than in any other category. Consumers livaround the world, found that retailers and manuing in mature markets opt for cross-border e-comfacturers offering a premium shipping solution merce for broader selection and those living in less grow 1.6 times as fast as retailers that aren’t. mature markets do it for higher quality. For retailers not yet into the cross-border Watch out for manufacturers e-commerce market, they’re likely missing out on One thing an already stressed retail market an almost immediate 10 percent boost to sales, may want to watch out for is the rise of the manuaccording to the report. But potential growth from facturer, thanks to this potential for growth and the cross-border sales has no limit for the retailer that trend toward skipping the middleman. positions itself well. “Manufacturers who sell directly to consumers High value transactions (those over $200) are are the rising stars of cross-border selling,” DHL Sourcing Journal • Winter 2017
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noted. “They are on the fastest growth path of all surveyed e-tailer types and report growth 1.3 times as fast as the average e-tailer types who responded to our survey.” Seventy-six percent of manufacturers said they expect the cross-border share of their business will increase further, so expect many more to be selling goods through their own web shops. “If they offer a unique product or an aspirational brand, chances are that they can tap into latent demand from foreign consumers or create it easily,” according to DHL. “Retailers will need to find a distinct value proposition in order to compete with the increasing international direct-toconsumer sales of manufacturers.” What’s it going to take to tap into the sales growth potential? In order to compete, or simply benefit from more of this coming growth, retailers will need to eliminate consumers’ reservations related to logistics, trust, price and experience. They will have to use a shipper that’s reliable enough to deliver on what’s been promised to the consumer, and prices will have to be transparent too. “As far as price goes, 15 percent of consumers think that shopping from an e-tailer abroad is basically more expensive,” according to DHL. “However providing price transparency for international consumers, which means stating the fully landed costs including potential surcharges for shipping and customs taxes, serves as a good first step in addressing this hurdle.” There are five key things retailers need to become “international champions,” according to DHL: clarity on their specific cross-border opportunity, an understanding of local tastes and rules, a way to let the world shop like locals, warehousing and fulfillment with the best company fit, and the ability to use delivery choices as a tool for conversion. “With long delivery times as the one thing that is probably keeping both buyers and sellers awake at night, premium shipping is the necessary gold standard in some product categories. In medium- to high-priced fashion, for instance, it is common for e-tailers to only offer time-definite shipping,” according to DHL. “Their margin easily pays for the extra cost, especially when it comes to cross-border, in which average order values can be significantly higher than domestic ones.”
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Published on Mar 12, 2017
This consumer report provides insights into today’s consumer and reveals what stores and brands that sell direct need to know to adapt their...