The Nielsen Global Connected Commerce Report released this year details the findings of the Nielsen Global Connected Commerce Survey that was conducted from October 31 to November 18, 2016, and polled more than 30,000 online consumers in 63 countries.
The report harnesses and analyses worldwide e-commerce trends and reveals that in today’s world, ‘staying connected’ is the buzzword. Online choices are defining behavioral patterns across the globe, be it in the personal, social or commercial fields.
Highlighting the fact that 3.5 billion people using the Internet, 7.4 billion mobile-phone subscriptions and 1.79 billion active Facebook users, the report points out that ‘connected’ might not even adequately describe the current marketplace. This has given a huge fillip to digital retailing, as it gives consumers more ways to shop and more access to products and services than ever before.
93% say they’ve ever shopped online
These changing choices are changing market trends worldwide. Tech-savvy and digitally-intelligent consumers are increasingly choosing e-commerce options to run their lives, even as producers introduce new and innovative strategies to attract this ever-growing market.
According to the survey, globally, more than 93% of respondents say they’ve ever shopped online—not surprising, given that the findings are based on internet-connected consumers. This shows how pervasive online shopping is among the growing online population. The report provides an insight into purchase behaviors that will only accelerate as internet penetration continues to grow and category dynamics continue to be fluid and evolving.
E-commerce trending worldwide
The report research findings reveal that China is the most powerful e-commerce market today. Furthermore, considering that the country is home to 1.4 billion people and has online penetration of only 52%, there is significant room to grow. Here, online sales of all consumer packaged goods categories measured by Nielsen totaled $23.2 billion between September 2015 and August 2016, up 25.4% over the previous year.
In Great Britain, online accounted for an average of 12.5% of all retail spending through the first 10 months of 2016, and in the U.S., an average 8.1% of total retail sales through the first three-quarters of 2016, a rate that Nielsen projects will grow at a compound annual growth rate of 12.2% through 2020.
Bricks and clicks future reality
Lines between online and off line channels continue to blur. Traditional brick-and-mortar retailers are expanding their digital presence, while pure-play retailers are opening physical stores. Thinking in terms of bricks versus clicks is outdated; bricks-and-clicks is the current and future retail reality.
The report reveals that durable and service-oriented categories continue to lead the way in self-reported online purchasing. 55% say they have purchased fashion products or travel products/services online, and half say they’ve purchased books, music or stationery.
Consumable categories, in contrast, have been slower to gain popularity, but that is changing. About 40% in China, 39% in South Korea and 35% in India say they have purchased fresh groceries online but in Europe (9%), North America (9%), Africa/Middle East (7%) and Latin America (7%), this is less than one-tenth of the respondents.
“As shoppers increasingly move seamlessly between offline and online channels, purchase habits are changing. Simply adapting to keep pace is no longer sufficient,” said Kristen Cocco, vice president, global e-commerce measurement, Nielsen. “Savvy marketers know that using digital tools in new and innovative ways to engage with shoppers and influence shopping decisions must be a part of their growth plan for the future.”
Innovative fulfillment catalyst for growth
The survey aimed to understand the underlying factors that influence the evolving digital purchase path, the pain points and barriers associated with buying fresh and other consumable products online, the activation strategies that can help overcome these obstacles, the digital technologies consumers are using in stores today and the ones that hold promise for tomorrow, and, finally, the biggest disruptive trends that will fuel the growth of connected commerce in the years to come.
In this context, the report stresses that innovative fulfillment options could be a catalyst for growth. Ordering online for home delivery has been the traditional model, and still the most preferred. Buying consumables online has room to grow. To overcome these barriers, retailers are experimenting with new models like refrigerated lockers, instant delivery services within a time window and “to go” models where consumers pick up the order at the retailer at a specified time slot.
Once online, often online
In several durable or service-related categories, survey findings suggest that once a consumer makes an online purchase, the online channel remains the favorite shopping destination. 69% respondents say they travel shop more often online than in store, 62% for event tickets and 58% for video-game-related products.
The story is mixed when it comes to consumable categories, where the biggest obstacles are the inability to inspect goods and uncertainty about product quality and freshness. Household cleaning and paper products stood at 41%, one-third for beauty and personal care, while 41% said they buy online and in store with the same frequency.
Money-back guarantee wins confidence
By far the most effective activation strategy is a money-back guarantee. However, this is more influential in developing markets than advanced markets. Activation strategies that address quality concerns are most impactful for fresh categories.
The report argues that though traditional information sources, visits to a physical store, and word of mouth are most effective, store websites influence top purchasing decisions in fashion products (49%) and consumer electronics (42%). Younger respondents are most receptive to such strategies.
Larger picture reveals competitive and disruptive trends
According to the report, e-commerce is only part of the digital picture. Increasingly, stores are going digital and incorporate a variety of tools like digital coupons, smart shelves and virtual stores. These bridge online and physical worlds, bringing the ease, convenience and personalization of online into brick-and-mortar stores.
The report also stresses that even as online marketing strategies and technologies continue to evolve, disruptive trends like business model innovations, rising connectivity, digital-payment disruptions, rising economic prosperity and consumption-led growth and urban living patterns will continue to drive connected commerce growth.
The survey methodology, though on a tremendous scale and with global reach, assesses habits of only existing internet users, not total populations. In developing markets where online penetration is still growing, respondents may be younger and more affluent than the general population of that country. In addition, survey responses are based on claimed behavior, rather than actual metered data. Cultural differences are likely and the results do not attempt to control or correct them.