The future shopper is already here: many customers are more familiar with digital technology than most retailers. Note: we are not only selling to people, but also to their avatars and even to consumers who are no longer there… Are you ready?
In-depth research
“The future of shopping is already here“: this is apparent from the new edition of the Future Shopper Report 2022 by Wunderman Thompson, the fifth edition of the in-depth report. The market research company questioned no fewer than 31,040 consumers who shop online at least once a month, in 18 countries on 5 continents. We plough through the slides and present ten striking conclusions.
1. Decline? No, online just keeps on growing
Even though several e-tailers are now seeing a temporary decline in online consumption, online spending will continue to grow, the survey shows. Consumers are familiar with technology and demand digital products and services. Already, 57% of consumer spending occurs online. The figures vary from market to market, but not as much as one would expect: in China, the percentage is the highest, at 66%, and in Japan the lowest, at still a solid 48%. Moreover, the respondents say that their spending will continue to shift towards online in a post-Covid world.
2. Online delivers better experience across (almost) the board
Consumers have no doubts about why online growth is continuing: online offers a better customer experience. And that in almost all areas: choice, reviews, accessibility, price, speed but also pleasure and freshness, for example. Physical shopping is only better when you want personal advice and when you want to try on products.
But reality is more nuanced than the figures sometimes suggest. Online will not supplant the physical shop: there is a role for physical and digital channels side by side. 60% of shoppers worldwide prefer to shop with brands or retailers that have both digital and physical shops. They want a seamlessly integrated experience between offline and online. Consumers shift easily from one channel to another: not only do they prepare their shopping trip online, but also 60% check online reviews when they are already in the shop.
3. The pandemic is not over yet
The fear of physical shopping is declining now that the pandemic has subsided. Last year, 41% of respondents admitted they were afraid to visit shops, this year that percentage drops to 36%. However, the percentage varies enormously per country. The Dutch are no cowards: only 19% are afraid to shop. In India, this is still 73%.
4. And the winner is… the marketplace
Where does the customer journey begin? No longer at Google, it seems, but at marketplaces. They deliver the best experience for consumers across three essential stages of the buying process: inspiration, search and purchase. Of course, Amazon is dominant in the US and Europe, but elsewhere there are strong local players.
One of the success factors of marketplaces is the fact that consumers want to move from inspiration to purchase faster than ever. Wunderman Thompson calls this “Compressed Commerce“. And nowhere is this easier than on a marketplace. Worldwide, marketplaces account for 35% of all online purchases.
5. Consumers are “extremely intolerant”
What drives purchase decisions? Price is number one, which is no surprise. But service and convenience also play a big role. The second decision factor – and a rising one at that – is availability: is the item I want in stock? Anyone who wants to be successful online must have their affairs in order. The ultimate benchmark? 70% of consumers want brands and retailers to offer a service comparable to Amazon Prime.
Consumers are becoming extremely intolerant of bad experiences online. They expect lightning-fast delivery, easy returns and guaranteed availability. Smaller players in particular are struggling, as marketplaces are setting the bar very high in this area. According to 74% of those surveyed, the shopping experience has to improve. 62% want online shopping to be more fun. 58% do not want to buy from a retailer, brand or marketplace that does not meet their high standards. In short: brands and retailers still have a lot of work to do when it comes to customer experience.
Another remarkable statistic: 23% of everything shoppers order online is returned. 39% of shoppers admit that they sometimes over-order with the intention of returning the items they don’t want to keep…
6. We lie awake over false reviews and counterfeit products
Yet marketplaces are not untouchable. 47% of consumers are concerned about the dominant market position of marketplaces. One demand, for example, is that Amazon & co should pay more taxes. And there are more issues. 21% say they have seen a review that looked fake to them. 19% have encountered a product that may be a counterfeit.
So how can you beat marketplaces? Consumers are willingly seduced by lower prices, more convenient delivery options, the existence of physical shops (!) and a better or more specialised product range.
7. Social shopping: the West is lagging behind
Social commerce is on the rise: 65% of consumers have already made purchases via social media platforms. One year ago, this was only 44%. A high figure, especially considering the fact that social shopping is still in its infancy in most regions. There are large differences: in Thailand, the Arab Emirates, India, China and Colombia, more than 80% of shoppers buy via social media. In the Netherlands, it is 56%, in France 41%.
Reasons for engaging in social shopping are mainly deals and exclusive offers. Important: consumers want to be able to buy ‘on’ the platform; they prefer not to leave the platform to complete the transaction. Facebook, Instagram and TikTok are the most popular channels, but here too, the differences are large: in China, TikTok is already number one.
46% of consumers worldwide have already made purchases via livestream. Once again, it is the Asian and Arabic countries that lead the way with penetration figures of over 70%. In the Netherlands, the figure is 23%, in the United Kingdom 21%.
8. Sustainability as a competitive advantage?
What role does sustainability play in the whole story? 61% of consumers worldwide say they like to shop with brands that have a purpose beyond just selling services and products. 60% actively seek out retailers and brands that care about the environment.
So sustainability is vital, but not at the expense of service. Consumers are not open to compromise and show contradictory behaviour, given their demands for fast delivery and free returns… Yet, when given the choice, more and more consumers go for the greener option. Brands and retailers offering such options can build a competitive advantage.
9. Make it easy
Consumers are open to innovation in retail. More than that: it’s what they expect. 64% expect retailers to improve the buying experience with digital technology. Think cashless payment, new shop formats, voice…
Payment is and remains a bottleneck. So, good points for any innovation that makes the payment process run smoother: no queues, no cash, no debit cards but biometric identification… Almost half of online shoppers also want to be able to pay with crypto currencies for online purchases.
Interest is also growing in smart assistants, voice ordering, automatic re-ordering (also called “programmatic commerce”), subscriptions (57% already have at least one). And what about the NFT-hype? 47% of those questioned know what it is about and 70% of them are prepared to spend money on it. Especially in India and China.
10. Shop ’till you drop: shopping from the grave…
We wrote it last year: gaming is the new shopping. Games are becoming sales channels. 86% of consumers play games at some point and 62% of them also spend money in these games. Shoppers buy for their avatar, but games also inspire them to make physical purchases. The line between our physical and online selves (our avatar) is blurring.
We therefore need to redefine what a consumer actually is, says Wunderman Thompson: we don’t just sell to people but also to their avatars, in games, in the metaverse, and even to consumers who are no longer alive. Indeed, with the help of AI linked to a bank account and big data, deceased people could continue to buy birthday presents for their loved ones, for example. Shopping from the grave: 47% of consumers say they are interested…
