Some 39 percent of consumers globally have abandoned a purchase due to slow or inflexible delivery options, according to “The Future of Shopping Has Come Early,” a report from Facebook IQ’s new Industry Perspective series, which taps a mix of internal and external experts.
When deciding whether to buy online or in-store, new factors have emerged for shoppers, fundamentally changing the consumer value equation. Price is still king, with 74 percent of consumers saying they’re focused on getting the best price for everyday items.
However, safety, reliability and proximity have emerged as key influencers. For example, 71 percent of consumers globally say it’s very important that a retailer create a safe environment to shop in-store. More than 70 percent of young shoppers globally say delivery time is very important in determining where to buy online, compared with 66 percent of Gen Xers. And for 32 percent of Gen Z respondents, the option of next-day delivery increases their likelihood of making an online purchase.
As a result of these shifts, a seamless return policy and excellent customer service are becoming major differentiators for brick-and-mortar retailers. Sixty-eight percent of Gen Z and millennial shoppers globally say good customer service is very important in influencing where to shop in-store, compared with 53 percent of baby boomers.
Another key differentiator for brick-and-mortar retailers is selling local products, as Facebook research shows that clicks on searches for local businesses increased by 23 percent from February to May. Similarly, 38 percent of consumers globally made a special effort to purchase from a local/small business.
With activism playing a bigger role in consumers’ lives, a brand should tend to its reputation and corporate social responsibility. Each of these shopping factors increased by six percentage points in the US from May to July this year.
Brand values are also influencing where consumers shop, with 56 percent of consumers globally saying it’s important that the brands they buy from support the same values they believe in. This is true for 65 percent of US millennials. Additionally, more than half of consumers globally consider sustainability important in determining where to shop both online and in-store.
For marketers, addressing new consumer expectations will require the creation of a safe in-store shopping environment and a reliable online experience. Marketers should consider offering a range of promotions, as well as communicate how their brand and business practices are helping the environment, its employees or society at large.
Brands must also seek ways to reduce friction points in-store and online as COVID-19 has heightened financial risks and psychological risks in consumers’ minds. Eighty-nine percent of consumers say they are at least somewhat concerned about visiting a physical retail store to shop because of the pandemic, and 36 percent of grocery shoppers have stocked up on products to limit trips to the store.
Interestingly, some 41 percent of respondents say they’d like to receive messaging from brands and retailers about the steps they’re taking to ensure consumer safety, while 37 percent would like more contactless payment options.
The pandemic has added nearly 145 million new digital buyers globally this year. When it comes to deciding where to shop online, 70 percent of respondents say they prioritize reliability and 68 percent prioritize convenience. Thirty-nine percent of consumers globally say they’ve abandoned a purchase due too low or inflexible delivery options. Thirty-two percent say they chose not to complete a transaction due to a poor returns process.
“Cart abandonment accounts for at least 50% of attrition from your purchase funnel, costing e-marketers about $2–4 trillion a year,” said Ian Simons, head of industry for ecommerce at Facebook.
As new shoppers pivot to online, marketers must address this confidence curve by communicating efficient product fulfillment and a smooth return policy.
For 79 percent of shoppers worldwide, the internet makes it easier to compare products by price. And for 67 percent, the internet makes buying products less risky. Still, 30 percent of consumers say the inability to touch/see a product in-person is a barrier while online shopping.
Over half (63 percent) agree that they want to virtually try on products from the comfort of their own home. Among those who’ve tried augmented reality (AR) and virtual reality (VR), 46 percent say they’ve done so for the first time since the pandemic started.
Another nascent format that consumers are growing comfortable with is live commerce, with 49 percent of online shoppers agreeing that they’d buy products directly from live videos where brands, celebrities or influencers they follow are launching new products.
Social media remains crucial for adding experiential elements and convenience to the online shopping experience, with 66 percent of consumers saying social media has become as important as other information sources when deciding what to buy.
As 58 percent of consumers have shopped on at least one new digital shopping platform since the start of the pandemic, brands must work harder to attract loyal customers. This will entail the evolution of loyalty programs beyond just discounts. The loyalty perks consumers globally want brands to offer include free delivery (55 percent), special price promotions (54 percent), free returns (42 percent) and points that can be redeemed (26 percent).