by Samuel Cane, Managing Director of Astound Commerce UK
The current cost-of-living crisis will impact UK and European consumers’ shopping habits this peak trading season. So how should brands and retailers prepare so they are ready to capitalise on the Golden Quarter in a period when customer cautiousness and pricing sensitivity is on the rise?
There is no dispute over the hard facts – consumers in the UK and Europe have less disposable income as they watch inflation and high energy prices eat into their household budgets. In our 2022 Global Consumer Behaviour Report, which surveyed over 1,000 global shoppers, nearly 3 in 4 feel the economy is headed in the wrong direction. As a result, about 2 in 5 consumers will spend about the same in 2022 for holiday gifts as they did in 2021, while one-third will spend less.
In looking at the pattern of shopping, there is some good news; in contrast to when shops were closed during the pandemic and even afterwards when safety concerns remained high, giving online commerce a longer boost, consumers clearly prefer omnichannel shopping. Around one-third of global shoppers adopted BOPIS (buy online, pick up in-store) and kerbside pickup during the height of the pandemic and continue to use these shopping methods today.
As a result, brands will need to make transacting as easy and seamless as possible, inspiring confidence in the consumer that they are making the right choice. The online experience is everything—now more than ever.
To prepare brands for Peak 2022, it is important to look at what drives shopper behaviour and what factors they consider of greatest importance.
Where brand loyalty came in at number 1 in the 2021 research on factors determining which brands consumers will shop with, in 2022 it is all about price, particularly in Europe, which stands out against US and Middle East consumers who now rank price at 2 and 3 respectively.
While brand loyalty goes deep with US and Middle East consumers, this is not so in Europe where this reason for shopping during Peak fell from number 1 in 2021 to number 4 in 2022. Other dissimilarities include convenience – Europeans rank this at number 3 on their list. Looking at the remaining factors, consumers across all regions are roughly aligned – Europeans scored quality/selection of products at number 2 while a sense of alignment with brand values came in at 5.
Of lowest importance to European consumers in 2022 are supporting local small business at number 6 and in-stock products/fastest shipping at number 7. It is worth noting that these two factors appear to be of much greater importance based on how much coverage they are given in the news and social media, and are a consideration, but are clearly not as important when it comes to the reasons to buy.
While this insight will help brands to prepare better for Peak, the research also ranks digital site features in order of importance, enabling brands to start optimising right away.
European consumers, when asked about these features, emphasised the importance of fulfilment and returns, so it is essential that brands not only have good policies, but that they are visible, explicit and easy to understand. Speed of delivery and free returns both scored top with 73%, followed by flexible return policy at 72% and online returns processing at 71%. Free and/or conditional free shipping came in at 70%.
Brands also need to understand the importance of a whole long list of checkout measures, to ensure that carts don’t become abandoned. Consumers will be more sensitised than ever to anything they regard as difficult or inconvenient, so a hard look at these measures should be converted to further optimisation onsite.
Topping the list of factors that would cause shoppers to abandon a digital site was uncertainty that personal information is secure, slow site loading times and a poor site experience, both at 63%. Being unable to find an item via search (61%), a lack of preferred payment options (59%) and concerns a product won’t be delivered on time (59%) also indexed highly.
Getting this right can be further enhanced through an understanding of how different cohorts act. For instance, women are more likely to abandon a site than men. Men on the other hand are more likely to abandon a site if it loads too slowly or offers an overall poor site experience (57% women versus 51% men). Women will leave if there are not enough product images available (55% women versus 49% men).
There is no doubt that acquiring new customers will be challenging in Q4. Excess discounting is always a race to the bottom so retailers must win shoppers on brand value, staying true to who they are and competing on their differentiators. And that relies on delivering the consistent, high-quality shopping and customer service experiences consumers expect.