How much do retailers know about the Global Market? Have we been generalizing? Have we been guessing? I know I've made assumptions about what the customer wants, who holds dominance in the global market, how many retailers a consumer can deal with at one time, and whether showrooming is dead? And, perhaps most important, are consumer needs the same across the line, globally? A study by PwC (PriceWaterhouseCoopers) has shown some conventional wisdom to be at odds with how online shoppers are actually behaving and what they value in the multichannel experience. Take a look at this true/false test that I made up based on the PwC 2012 Global Multichannel Consumer survey. The answers may surprise you, but will surely help you in your planning, marketing, pricing, merchandising -- and quest for profit in global eCommerce online retail competition.
What's important to global customers?
QUESTIONS: (See answers below).
1. True or False: Low price is one of the main drivers of customer spend at favorite retailers'.
2. True or False: Consumers are becoming more alike across the globe.
3. True or False: Stores will become mainly showrooms in the future.
4. True or False: China is the leader to follow in online retail trends.
5. True or False: A consumer can deal with about 2-5 retailers at one time regularly.
1. Low price is one of the main drivers of customer spend at favorite retailers. (False)
"Cheap/reasonably priced" doesn't even make it into the main group of items that increase spending greater than 10% -- or even 1-10%!
Customers indicate that they are, however, willing to pay more for: Fast and reliable, delivery, innovative products, innovative marketing, exclusive access to products, the fact that the website (and b&m store) stores their information, and if they can return items to the store.
According to the respondents, factors that had "no impact" on spend were "cheap/reasonably priced, I like the products, always items in stock, I trust them, easy to use website, I like the store, I like the staff, Loyalty program, Good return policy, Free returns, and Click & collect." The factor that had the most negative impact on increase in spending was "advice on products."
WORDS OF WISDOM: Cheap prices might help a company to enter the inner circle of favorite retailers, but it won't make customers spend more on a consistent basis.
2. Consumers are becoming more alike across the globe (False)
PWC says data from this year's study suggests that consumers in different countries are still much more dissimilar than they are alike. Different customers in different countries have different reasons for shopping: in China nearly half of our respondents enjoy shopping in a physical store as a pleasure; in Turkey just 16% like to shop for enjoyment.
-- For Brazil it is lower prices/better deals. (Switzerland cares the least).
-- For the Netherlands, it's convenience, i.e. fast checkout, 24/7 service, while Brazil cares least.
-- Easier to compare and research products and offers is important to Switzerland, but not to Turkey. Switzerland also favors home delivery, but consumers in the USA don't. -- Wanting a wider variety of products is the USA, with the lowest coming from Hong Kong.
-- Russia likes customer reviews of products available, while this ranks lowest for Brazil.
-- China likes the fact that it's "easier to find my favorite brands online," but Germany doesn't care.
-- Russia prefers better product information, while this doesn't matter much in the UK.
3. Stores will become mainly showrooms in the future. (False).
17% of (global) online users don't buy online at all -- they simply prefer to shop in stores. Many multichannel shoppers say they research online, but more still prefer to buy products at a physical store. In fact, 23% of respondents said they research consumer electronics online and then go to a store to buy the product, compared to only 2% who do it the other way around.
The physical store remains the centerpiece of the purchase journey for many shoppers. In nine out of the 11 product categories in the survey, the majority of consumers use physical stores for both researching and purchasing. The ability to touch and see a product, and get it immediately are main draws for physical store shopping.
Even in a category in which our respondents prefer to research and buy online -- consumer electronics -- a healthy 26% still prefer to research and shop in-store
When asked to rank the most important factors that attract them to shopping in a physical store, 73% of our survey sample chose "Ability to see, touch and try merchandise" -- an attribute that an online store will never be able to match
4. China is the leader to follow in online retail trends. (True OR False would be ok here).
Far more Chinese online consumers have already shopped via smartphone and tablet than other those in other countries, and far more are also using social media platforms to make purchases. For example, 56% of Chinese online consumers have already been shopping via a social media platform, versus a global average of 24%.
Demographically, China's online shoppers are the youngest and most employed, a set of characteristics that might be at the root of different consumer behaviors. The study suggests that China's leapfrogging of traditional landline and other infrastructure may be forcing consumers' hands to adopt technology at a much quicker pace. But that doesn't yet mean that everyone has to follow suit.
5. A consumer can comfortably deal with about 2-5 retailers at one time regularly. (True).
The majority of respondents (56%), said "2-5"; 19%, "only 1 retailer"; 8%, 6-10; 4%, more than 10; while 14% said "none".
Bottom Line For Your Bottom Line:
Even experts in pricing intelligence, marketing, international business, analytics, research, and behavioral economics, to name a few, have to be careful of what we think we know about the global consumer. It would seem wise to be attentive to the needs of specific countries rather than generalize, and celebrate the differences. More quiz questions next time…
Based on 10 myths of multichannel retailing by PWC, based on 2012 Global multichannel consumer survey. http://www.pwc.com/gx/en/retail-consumer/retail-consumer-publications/global-multi-channel-consumer-survey/index.jhtml