Elle Nadal, Director of Marketing, EMEA at Iterable.
Heavily impacted by the pandemic in the last two years, Spain now seems to be on the road to recovery. In fact, The Bank of Spain estimates that the economy will return to pre-pandemic levels by the end of 2022.
As the Spanish economy rebounds, businesses have an incredible opportunity to capitalize on a substantial boost in consumer economic and social morale, and forge new cross-channel connections with Spanish consumers. To do so, however, businesses need to first embrace a customer-first mentality, and invest the necessary time it will take to learn what makes Spanish consumers tick.
One such consumer characteristic that is key in cracking the code for customer connection: online shopping. Spain’s uptake of ecommerce is rapidly accelerating; the country is set to reach the shopping averages of the EU. This trend will only continue, even as pandemic forces wane and people return to in-store shopping norms. Regardless, the key to success in the Spanish economy is knowing the Spanish customer.
Price savvy consumers
The pandemic has seen consumers become acutely conscious of how much they are spending on goods. A recent consumer survey conducted by Statista showed that convenience (a classically core preference for Spanish consumers) was secondary in importance when compared to cost. This preference for cheap prices superseded product variety, home delivery, and expedited and immediacy in ordering!
But with low cost comes high expectations. Stay at home orders and social distancing propelled delivery into the priority space for consumers. And Spanish consumers took issue with delivery prices. In fact, high delivery prices are an enormous concern for Spanish consumers; 44% of Spanish consumers saw delivery pricing as a major impediment to the positive ecommerce experience in 2020. These facts and figures go to show that, to be competitive, businesses need to be careful about cost-gauging consumers. Spanish consumers have become increasingly cost conscious, and they prioritize price above all else when selecting a brand to do business with.
As Spain’s economy continues to recover from the effects of COVID-19, mobile is impossible to ignore. It’s an important channel when communicating with family, friends, and retailers. Sure, desktop is currently the predominant method for purchasing goods online, but it’s far from popular; desktop has decreased 13% in usage for ecommerce purchases since 2017. It’s likely that mobile shopping is filling this 13% gap, as the mobile ecommerce channel has increased 18% in usage since 2017 across all age groups.
Interestingly, demographics is not a differentiator in the world of online shopping. Brands operating under the archaic assumption that younger demographics shop online more than older consumers would be wrong. To truly understand the Spanish consumer, businesses need to dive deeper into the consumer psyche, and embrace nuances and niche characteristics, to put together a fully formed picture of the preferences and traits of Spanish shoppers.
Diving into the mind of the Spanish customer
Tradeinn is a great example of a brand that has taken advice on Spanish consumer psychology to heart. The Spanish sports retailer has especially capitalized on the Spanish consumer’s appetite for online shopping. Compared to 2019, its online cycling shop witnessed a 140% increase in purchases, while its running store sales grew only by 70%.
When product preference is split up by age group, a more in-depth idea of the shopping trends of Spaniards emerges. Last year, fashion was the focal interest of Gen Z and millennials, while 35-44 year-olds bought mainly bulky household appliances. This is in contrast to older age groups, who we can see were more interested in DIY, gardening and pet products. Brands that thrive in the Spanish market will take the time to really engage and understand their customers’ individual needs. This in turn will help them appeal to the discerning modern customer and ultimately help increase customer retention.
The rise of the e-wallet
Once a business identifies the preferences of their Spanish target audience, the next question is how to reach them. In this arena, an omnichannel approach is recognised as the way forward in the Spanish ecommerce market across the spectrum of retail. Those who use channels only prevalent in the 20th century risk losing new audiences if they do not heed an omnichannel approach and become more digitally innovative.
Recent data from Statista indicates a reduction in card usage, paving the way for digital payment methods such as e-wallets. Card payments are expected to decrease to 48% from 57% between the years 2017 and 2025 – a significant drop and a real concern for any brand that does not stay in tune with these shifting habits.
The businesses that resonate most with Spanish consumers will embrace this new technology landscape. 2020 proved to be a year of growth for e-wallet usage, accounting for approximately 20% of purchases in the market, with this expected to rise to 33% in 2025. The main e-wallet chosen by Spanish consumers is PayPal, making up 90% of purchases.
Opportunities in the Spanish marketplace
It’s important to note that the Spanish economy embraces global businesses. In fact, international retailers in Spain equate to approximately 20% of ecommerce purchases.
Globally, the USA dominates the ecommerce international market, making up 29% of purchases. China is the next in line for global ecommerce market domination.
Spain has also found an opportunity as a hub for foreign investment. China’s AliExpress (which recently received backing from Alibaba) utilises Spain as its EU headquarters for increasing its online presence in the region. This, as well as Alibaba’s partnership with El Corte Ingles, the chain of department stores, has been a boon for the Spanish economy. Another major source of international investment has been Amazon, who since 2019 have doubled the number of workers it employs in Spain. This meets the national consumer’s need for affordable goods and free delivery.
Businesses can plan their marketing strategies by embracing growing developments in the Spanish ecommerce market such as price-conscious consumers, increase in mobile purchasing and the growing use of e-wallets. Although success in this market is never certain, consumer trends are invaluable ways for businesses to take advantage of the numerous opportunities in Spain’s economy.