US Online Shoppers Turning To International Retailers
Nearly half of avid US online shoppers bought items from international retailers, demonstrating the need for retailers to offer more personalized services as a way to compete against lower prices, according to the sixth annual UPS Pulse of the Online Shopper study.
The UPS study found that almost all avid US online shoppers (97 percent), made purchases on marketplaces, up 12 points from 2016, and that 81 percent cite price as the most important factor when searching for and selecting products online. According to respondents who purchased from an international retailer (47 percent), 43 percent were driven by lower prices on US marketplaces and 36 percent wanted unique products not found from US retailers.
“The lines that separate domestic and international retailers continue to disappear,” said Alan Gershenhorn, Chief Commercial Officer for UPS. “Retailers are now competing across the globe. In order to win, retailers can distinguish themselves by providing value through personalized experiences.”
Personalized experiences includes the physical store. Many online shoppers find stores important to touch and feel products (59 percent), solve immediate problems (54 percent), receive superior customer service (52 percent), and participate in rewards/loyalty programs (52 percent). Half of shoppers (50 percent) have used ship-to-store this year, of whom 44 percent made additional purchases in store, and 41 percent plan to use ship to store more often in the next year.
The use of smartphones continues to be an increasingly important part of the shopping experience online and in physical stores. Eight in ten online shoppers use retailer apps, often preferring apps to websites because of faster speed and a better user experience. The convenience factor is key as “on the go” mobile shoppers seek efficiency at every turn. Mobile coupons (50 percent) and high-quality product images (50 percent) are two of the most important app features.
“Online shoppers are able to shop the world’s boutiques and bazaars with ease,” said Gershenhorn. “We’re witnessing a glimpse of the future, when retailers and their customers will be defined less by geographic location and more by how they connect with each other. The challenge is to best provide shoppers with the choice, control and convenience they desire.”
According to eMarketer, global cross-border ecommerce is projected to grow at an average of 22 percent from 2015 to 2020 compared to 15 percent for US ecommerce during the same time period.
The top considerations that online shoppers make when purchasing from international retailers include clearly stating the total cost of the order including duties and fees (77 percent), stating all prices in the shopper’s native currency (76 percent), the retailer being reputable (74 percent), and reasonable speed of delivery (66 percent).
According to the study, avid online shoppers start their searches at marketplaces more than any other channel (38 percent). In the next year, 29 percent of online shoppers plan to research more frequently using marketplaces and 30 percent plan to purchase more on marketplaces.
The number one reason online shoppers shop at a marketplace instead of going directly to a retailer is better prices (65 percent), followed by free and discounted shipping (55 percent), the total cost of the order including shipping costs and/or taxes (45 percent), and speed of delivery (44 percent).
“Technology continues to drive change in the retail industry, but the physical store is still very important,” said Gershenhorn. “Pure play online retailers are expanding with physical stores and multichannel retailers are using their local storefronts as ecommerce fulfillment centers. Online shoppers are indicating they want technology that enables rewarding, personalized experiences both online and in store.”
Of the 47 percent of US consumers who purchased from an international retailer on a US online marketplace, the majority of these retailers are based in China (61 percent), the UK (23 percent), Canada (15 percent), and Japan (14 percent).