Are you giving your customers what they really, really want?

Are you giving your customers what they really, really want? A global research project exploring consumer attitudes towards online shopping

Are you giving your customers what they really, really want?

Introduction ONLINE SHOPPING IS ON A PATH FROM REVOLUTION TO EVOLUTION. When eCommerce arrived on the scene in the mid Nineties, it changed everything. Business models that had been established at the turn of the 20th Century rapidly became obsolete. Retailers around the world quickly found themselves needing to adapt to a world in which customers could come from anywhere, shopping all through the day and night. Fast-forward some 17 years and the world of eCommerce remains in constant flux. If technology was the catalyst behind the original online shopping revolution, today we see any number of factors driving the next stage of evolution. In the wider global economy for instance, the rapid growth of the BRIC nations is creating a new generation of enthusiastic and innovative shoppers. Quantum leaps in mobile technology have given rise to a generation of ‘always-on’ shoppers. Faster internet speeds and greater accessibility have given retailers an expanded audience. Social media makes it easier for us to share and rate our purchases and buying experience than ever before. While eCommerce and the ‘way’ we shop may continue to change however, one thing that stays the same is the vital importance of the payment experience. As a defining point in a consumer’s buying experience, a poorlyhandled payment process can be a major turn-off. The product may be right, the price may be perfect, but if we’re unable to complete the transaction simply and quickly, the overall experience can quickly turn sour. For eCommerce retailers, it has never been more important to get this right. While technology may have given their business access to a wider audience than could ever have been possible before, it has also created fierce competition. Another online store is rarely more than a click away, and keeping shoppers loyal means more than giving them a cutting edge web store or unbeatable price - it means making it as easy as possible to pay, when and how they like. In this report, we take the views of more than 19,000 online shoppers across the globe and compare and contrast them with insights from over 150 large online retailers. As we’ll come to see, many retailers are missing the mark when it comes to giving customers what they really, really want.

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Methodology

Contents During January and February 2012, an independent research agency surveyed 19,000 global consumers and 153 online merchants on behalf of WorldPay. Consumer sample: 19,000 consumers who had shopped online within the past six months completed an online survey. These shoppers were drawn from a wide geographic spread, ensuring that the globe’s major eCommerce markets were adequately represented: China Germany USA Spain Finland France Japan Russia Brazil UK Mexico Australia Canada Argentina India Total

- 2,000 respondents - 1,000 respondents - 2,000 respondents - 1,000 respondents - 1,000 respondents - 1,000 respondents - 1,000 respondents - 1,000 respondents - 2,000 respondents - 1,000 respondents - 1,000 respondents - 1,000 respondents - 1,000 respondents - 1,000 respondents - 2,000 respondents - 19,000 respondents

Merchant sample: To support the insights from the consumer sample, we also questioned 153 senior decision makers within retail organisations with responsibility for the online payment process. All respondents came from organisations that turn over $8m or more. This sample was made up as follows: MRC members Online panel WorldPay customers Total

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- 40 respondents - 98 respondents - 15 respondents - 153 respondents

How the world buys online today A global picture Broken links Kings of the web A world of opportunity

6 12 12 19 21

Regional Focus 26 Argentina 28 Australia 30 Brazil 32 Canada 34 China 36 Finland 38 France 40 Germany 42 India 44 Japan 46 Mexico 48 Russia 50 Spain 52 United Kingdom 54 United States of America 56



How the world buys online today In the next chapter, we’ll look at whether online retailers are meeting customer expectations and highlight areas in which they might be missing the mark. Before we get to that point, we need to look at how consumers behave outside of a retailer’s direct sphere of influence. Knowing how much customers spend, when, where and how can help online retailers get closer to their audience, enhancing their understanding and opening up a greater opportunity to engage and sell. In this chapter, we consider some of the global trends (and key regional differences) when it comes to the way that today’s online shoppers behave. Which countries spend most online today? Later, we’ll consider the change in online spending since the start of the global recession and the potential for future online growth. To set that in context and gain a snapshot of online spending on a country-by-country basis, we asked our consumer respondents to tell us what percentage of their total disposable income is spent online now. Globally, just under a quarter of disposable income is spent online, with shoppers spending an average of 22% via the web. 33% 31%

Annual online spend as a percentage of disposable income 23% 17%

17%

17%

Japan

Spain

Canada

18%

18%

19%

21%

21%

25%

That figure rises dramatically in the fast-growth economies of India, Brazil and China, with shoppers in these countries spending almost a third of their annual outgoings online. For shoppers in many countries this spending is made during a concentrated period of time. On average, our respondents spent just five hours per month shopping online, and this includes the whole ‘buying journey’ - from browsing and researching products to making a purchase. Again, regional differences make for interesting reading here. Chinese and Indian shoppers spend by far the longest time shopping online - around eight hours a month. At the other end of the scale, respondents in Finland, Japan, Spain and France are likely to spend less than four hours per month shopping online. As we’ll see later on, major variations in mobile ownership and use are having a big impact on these behaviours, with high smartphone penetration amongst AsiaPac shoppers giving them more opportunity to shop online. Regardless of regional differences, it’s clear that online retailers have a limited window of opportunity to appeal to customers. With even the heaviest shoppers spending just a couple of hours per week shopping online, successfully targeting, attracting and satisfying customers is essential.

27% 22%

21%

13%

Finland

Russia Australia France

Mexico Argentina Germany

USA

UK

Brazil

China

India

Total

% of disposable income

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Shoppers in the US and India are early risers. Their online shopping activity peaks at

10am


When, where and how do we spend? Across the world, we uniformly spend more during the second half of the day. 74% of global online spending takes place between the hours of midday to midnight, with most (44%) done during the evening.

Location is another key factor when it comes to buying online. While the proliferation of mobile devices is having a major impact on our spending habits, it’s worth noting that 95% of online spending across the globe is still made in the home. That fact goes some way to explaining why some 64% of us continue to use our home PC to make online purchases, despite the multitude of devices available to shop online.

Cumulatively, this helps to create an international ‘spending peak’ of 8.40pm the time at which most customers are shopping online at a purely global level. This should serve as a useful indicator for any retailer planning the launch of campaigns (such as discounts, special offers or exclusives). Where do consumers say that they shop online when at home?

What time does the world shop online?

12pm 6am - 12pm 16%

12pm - 6pm 30%

6am

12am - 6am 10%

8

6pm

12am

Global Online Peak 8:40pm

Living Room 54% Bedroom 43% Study 35% Dining Room 14% Kitchen 10% Garden 5% Bathroom 3% Garage / Shed 2%

6pm - 12am 44%

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At the same time, increased mobility is having a clear influence on the purchasing habits of global consumers. 29% of global shoppers now buy online when at work, 6% at college or university, in a car or in a physical retail store, 7% make online purchases when out at a café, bar, restaurant or pub, and 8% whilst on holiday. For retailers, a multi-channel approach that captures all of these possibilities is of growing importance.

29% of global shoppers now buy online when at work

Many online shoppers buy whilst doing something else. 46% of our respondents told us that they watch TV while they shop online, with 42% listening to music, 21% the radio, 29% chatting to family or friends whilst buying and 31% using social networking sites during the purchasing process. With so many distractions creating potential drop-out points, retailers need to focus on grabbing and keeping the attention of their shoppers. In the next chapter of this report, we’ll consider some of the differences between ‘heavy’, ‘medium’ and ‘light’ online shoppers, and how their online retailers should react to their needs.

46% of our respondents told us that they watch TV while they shop online

As a first insight into that though, it’s worth noting here that ‘heavy’ shoppers are much more likely to be ‘device-enabled’ than their counterparts. 36% of heavy shoppers have purchased online using a smartphone, compared to 17% of medium shoppers and just 7% of light. Similarly 23% have bought using a tablet, against an average of 9% for medium shoppers and only 3% in the light shopper category. There’s a clear opportunity here to engage this keen audience segment with a mobile-friendly, enriched shopping environment.

33% of ‘heavy’ shoppers paid using alternative payment methods in the past six months

The way we pay today When it comes to the payment preferences of global online shoppers, many of the ‘big players’ are present and correct. In the past six months, 69% of our survey respondents had paid by credit card, 40% through PayPal, 37% using a debit card and around 19% via bank transfer. At the same time, there is a strong undercurrent of choice. During the same time period, a significant number of global shoppers had also used everything from gift vouchers (14%) to Alipay (8%), mPayments (7%) and cash vouchers (5%) as a way of buying online. Catering to this selection of payment methods is important - 61% of online shoppers have greater faith in a website that offers them a choice of payment methods. Vitally, payment choice is particularly important to keeping the ‘heavy’ online shopper engaged, with 30%+ of higher spenders using local payment methods, store cards, cash vouchers, mobile payments or charge cards to pay for online goods in the last six months.

As an interesting aside, internet-ready or ‘Smart’ TVs - despite being relatively new - are already making their presence felt with online shoppers. In total, 5% of global shoppers have purchased online using a next generation television, pointing to a possible growing opportunity for online retailers. 36% of heavy shoppers have purchased online using a smartphone

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A global picture The 19,000 survey respondents have given us insights into their online shopping habits and the relationship that consumers have with technology. While different cultures interact with the web in different ways (we’ll come to that more specifically later), there are some major global themes that emerged, some of which you may find surprising.

Have online retailers and their customers got the same things in mind when it comes to shopping priorities?

BROKEN LINKS? Truly understanding customers and what they want has to be a priority for online retailers big and small. Forearmed with better knowledge of what customers are looking for when they visit an online store, merchants should be able to make better decisions about what they offer - and improve retention and loyalty as a result. In this section, we take a look at how well online retailers understand what customers want. Missing the mark on repeat business As an online retailer, you’ll want your customers to come back to you again and again. You’ll be spending time, effort and money to attract them, whether that’s through advertising, PR, social media, or good old-fashioned word of mouth. Whatever it is you do to attract new customers, recent studies suggest that a five percent increase in customer loyalty can positively impact the bottom line by between 25 and 125 percent. And it’s well accepted that it costs a lot less to retain an existing customer than attract a new one. However, our research showed that there is often a significant gap in what retailers think promotes repeat custom, and what shoppers say actually brings them back for more. We asked our consumer panel to reveal what takes them back to a site to repeat purchase. Surprisingly, though factors like cheapest prices (51 percent) and how wellknown the brand or retailer is (39 percent) are clearly important, they weren’t the highest priorities.

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*That’s Customer Focus!: The Overworked and Underappreciated Manager’s Guide - F. Ray Miller, Laura E. Miller



Some estimates suggest that a five percent increase in customer loyalty can positively impact the bottom line by between 25 and 125% What do customers care most about?

However, that’s where the similarities end. Over half of our shoppers reaffirmed their need for payment security and protection of their personal details, while merchants see a faster payment process as the primary way to get people spending more online. Delving deeper into the data, we see some very interesting variations between countries and types of shopper. We’ll talk more about this later in the report.

Customers listed their actual priorities as follows: • the security of personal or financial information - 75 percent • payment security checks - 66 percent • guarantees and warranties provided for products or services - 57 percent We asked our merchant respondents what they thought brought customers back again and again and here’s what they said – a completely different top three:

The security of personal or financial information - 75%

• the design and layout of their website - 67 percent • quality of website navigation - 62 percent • the overall speed of the buying experience - 62 percent It goes without saying that, as an online business, your real estate is your website. If it’s uninviting or difficult to navigate, then your potential customers won’t be back. It’ll have the same effect as a rude shop assistant. But while shoppers see the navigation and website as a given and expect a certain standard, what’s really of heightened importance to them is the risk of fraud, particularly when it comes to their identity.

Payment security checks - 66%

Guarantees and warranties provided for products or services - 57%

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“Can I trust you”? Consumers are actively looking for evidence that the site they are buying from takes the security of their personal information seriously and that merchants will provide them with the guarantees and warranties that will underwrite their purchase. Merchants need to focus on reassuring shoppers that they’re dealing with a dependable, legitimate retailer. Hey, big spender: maximizing the spending opportunity When it comes to getting shoppers to spend more online, retailers and consumers are more aligned in their thinking. When we asked our two groups of respondents, they both agreed that a greater variety of payment methods and customised special offers were among their top five drivers to spend more.

*The Fireclick Index - http://index.fireclick.com/ ◊ Forrester, Understanding Shopping Cart Abandonment - http://www.forrester.com/Understand ing+Shopping+Cart+Abandonment/fulltext/-/E-RES56827?objectid=RES56827

What prompts customers to spend more? Merchant

55%

A faster payment process More customised offers A more engaging shopping experience Greater variety of payment methods More personalisation of shopping experience

37% 36% 33% 27%

Consumer Better payment security Better protection of my personal details Accurate delivery dates Greater variety of payment methods More customised offers

36%

43% 42%

53% 49%

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One of the main reasons given by online retailers on cart abandonment was actually the lowest response from our consumer panel Surprise costs send shoppers running Shopping cart abandonment is still a huge issue for online retailers. Industry statistics show that average card abandonment today could be as high as 75 percent, a figure that could be costing online retailers as much as $18 billion every year. Over half of our consumer panel admitted to regularly dropping out of the checkout process. Obviously, by minimising shopping cart abandonment, retailers can improve their bottom line. But in order to do that, they need to understand why customers are dropping out of the payment process.

Why do online shoppers leave without paying?

We asked our consumer panel why they drop out at check-out and our merchant respondents why they thought potential customers dropped out – here’s what we found:

Found a better price elsewhere Overall price too expensive Decided against buying Website navigation too complicated Website crashed Process was taking too long Excessive payment security checks Concerns about payment security Delivery options were unsuitable Website time out Price presented in a foreign currency My payment was declined

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56% of customers drop out of payment due to unexpected costs

56%

Presented with unexpected costs I was just browsing

Almost two thirds of our internet shoppers listed value as a prime reason for shopping online so it’s unsurprising that these figures show a keen willingness to shop around. Though you may not be willing to compete on price, what you can do is be upfront about what you charge. A huge 56% of our ‘abandoners’ were prepared to navigate straight to one of your competitors when faced with unexpected costs such as duty, shipping or delivery. These consumers don’t like surprises - they want to know early on how much they’ll be spending.

37% 36% 32% 26% 25% 24% 21% 18% 17% 16% 15% 13% 11%

1. Just browsing (45% merchants)

36% of merchants think that declined payments cause shoppers to leave

3. Decided against it (27% merchants)

If you don’t ask, you don’t get: the feedback cycle The feedback cycle is a fundamental part of any business model – for unless you ask your customers what they want, how can you know? Proactively seeking out customer views, analysing trends within feedback and making relevant changes can help a business to develop and evolve in tune with what’s right for the customer. There is, of course, a certain art to that process. Knowing which customers to listen to and sifting out those who are basing their views on a single poor experience can be tricky, and drawing a line between the two involves no small amount of effort.

But only 11% of shoppers say this is actually the case Consumer 2. Payment declined (36% merchants)

Here’s where it starts to get interesting. 36% of our merchant panel thought declined payments caused the most drop-outs, but this didn’t correlate to the consumer insights. Perhaps surprisingly, a declined payment was least important, with only 11% of our shoppers citing it as a reason for abandoning a purchase. So why are merchant and consumer perceptions so different?

Top 3 merchant responses

But are online retailers listening at all when it comes to the payment process? And do they act on what they discover? To find out, we asked our merchant audience a simple question: “do you request feedback from your customers regarding the online payment process?” While less than a third (31 percent) of online retailers currently prompt customers for feedback after every transaction, 41 percent do so ‘periodically’.

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Combined, these results point to a relatively healthy appreciation of customer feedback and - at the very least - an appetite to gain more of it.

KINGS OF THE WEB: TUNING IN TO SPENDING FREQUENCIES

On the other hand, around a quarter (24 percent) say they never seek feedback, with a smaller four percent unsure whether they do or don’t. When we consider that merchants believe that some 37 percent of improvements to their online service are made as a result of customer feedback, this suggests a major missed opportunity to learn and adapt for many.

When you start to delve more deeply into consumer shopping habits across the globe, interesting patterns emerge. On a local level, cultural differences play a huge role in the way buyers interact with online stores and what they expect from online retailers. However when we look at the frequency and level of spending online, a shopping elite starts to emerge - and no matter what their nationality, they have very similar shopping profiles.

Get proactive If the main point of contact between some online retailers and their customers is when the shopper calls to complain about something, this could lead to a skewed perception of the importance of this factor. For example, if customers frequently call to report a declined payment, it is not hard to see why so many merchants rank this so highly as a reason for cart abandonment. In lieu of proactively seeking feedback, many are likely to simply take their lead from what customers are ‘going out of their way’ to highlight. This is a great start to understanding what customers want, but tracking feedback that isn’t necessarily associated to a bad experience is just as useful and shouldn’t be ignored. Shoppers are much less likely to proactively approach you with feedback about ‘softer’ aspects of their shopping experience, but they are no less important.

Key drivers for increased spend by shopper type

Better payments security / Protection of personal details

More integration with offline store

Online chat assistance

More payment methods

18

Customised offers and promotions

More engaging shopping experience

Accurate delivery dates

Choice of delivery dates

Light Shoppers

Medium Shoppers

Heavy Shoppers

19


What are the differences between heavy, medium and light shoppers when it comes to cart abandonment?

23% of heavy shoppers drop out of payment due to excessive security checks

17% of medium shoppers drop out of payment due to excessive security checks

13%

of light shoppers drop out of payment due to excessive security checks

We asked our consumer panel to tell us what percentage of their disposable income had been spent online in the past 12 months, then grouped shoppers into one of three categories: • Heavy spenders - those who spent 30 percent or more of their disposable income online in the past year • Medium spenders - shoppers who spent between 10 and 30 percent of their disposable income online in the same period • Light spenders - the remainder, who spent less than 10 percent of disposable income online


A WORLD OF OPPORTUNITY: EXPLORING THE REGIONAL DIFFERENCES

How has online spending changed since the start of the global recession?

63%

-10% Japan

-16%

-25% -32% -40%

12%

26%

Spain

24%

Argentina

24%

US

22%

Mexico

21%

1% -10% -1% -10% -19%

Canada 19%

-22% -12%

-3%

Germany 18%

6%

France 16%

-31% -15%

-15%

Finland 15%

Consumers spending less 20

11%

28%

UK

-34%

24%

31%

Russia

-25%

20%

34%

Australia

58% 30%

39%

Brazil

-20%

NET growth/decline

45%

India

-19%

The lighter spenders are driven by simple factors such as accurate delivery dates and customized offers. But heavy spenders (and to some extent, medium spenders) show clear preferences for value-added services such as crosschannel integration and online chat assistance. As we’ll come to see, the preferences of ‘spender types’ differ between countries too, but even at the global level, it’s clear that bigger spenders have higher expectations when it comes to the online shopping experience.

Maximising spend and minimising cart abandonment is about more than a ‘onesize fits all’ approach. Understanding, segmenting and accurately targeting your customers with the service they want will bring huge rewards.

-5% China

-15%

While payment security and data protection apply across the board as key drivers for spending more online, the other motivating factors differ significantly amongst light, medium and heavy shoppers.

How much shoppers spend online also has an impact on what drives them to drop out of the payment process. Unexpected costs - while a universal pain point - are more likely to put off light (62 percent) and medium (57 percent) spenders than they are heavy (49 percent). And while heavier spenders may be more tolerant of additional costs, they’ll baulk at the idea of excessive security checks, with 23 percent dropping out of payment for this reason (compared to 13 percent of light and 17 percent of medium shoppers).

A well-defined overseas expansion plan can create access to thousands, if not millions of new customers. But doing that successfully can mean appealing to the most prolific spenders. We asked our consumer panel to state whether they had spent more or less via eCommerce since the start of the global economic downturn.

0% Consumers spending more 21


While the idea that shoppers in some nations are spending more than they were three years ago doesn’t necessarily mean they have a higher disposable income - factors like spread of technology, better payment options and many other drivers will also have an impact - it does at least provide a useful guide for where online retailers can expect to see the greatest growth on the global stage. Market maturity and the developing opportunity Analysing the local markets by spender profile, it’s clear that there is a much higher percentage of ‘heavy spenders’ in the developing online economies. Mature online economies such as the USA and UK have a much more even distribution of heavy, medium and light spenders. Conversely, most eCommerce customers in China and India are ‘heavy spenders’, with 48 and 54 percent respectively parting with more than 30 percent of their disposable income online. Only 18 percent of Chinese shoppers and 16 percent of Indian online shoppers spend less than 10 percent of their total disposable income via the internet.

Which nations have the greatest appetite for online spending?

All India China

Mexico Argentina Russia

7% 9% 8% 9% 10% 13% 8% 7%

Spain

8% 6%

France

8%

US

8%

UK Australia Canada Germany

11% 6% 4% 6%

Japan Finland

Strong appetite

21% 29%

5%

Brazil

36%

30% 32% 43% 49%

Tempered appetite

In fast growth economies like China and India, we don’t just see a higher number of current heavy spenders, but a much higher percentage of shoppers willing to spend a large portion of their income online in future. We asked all of our shoppers at what point in the future they’d be willing to spend more than 50 percent of their disposable income online*. The results were staggering. Only 9 percent of Indian and Chinese respondents say they would ‘never’ spend more than 50 percent of their disposable income online – compared to a huge 72 percent of Finns who say they wouldn’t.


50% 50% 54% 56%

8%

65%

3%

72%

I don’t think I’ll ever spend more than 50% of my dispossable income online Already spend more than 50% of my dispossable income online

22

*If retailers were seen to make changes based on customer demands

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So it’s not just that the developing economies are already spending more of their disposable income online – there is a much greater willingness to spend even more, if retailers meet their needs. Analysing eCommerce trends by country reveals much more about how shoppers across the world behave, what deters them and what encourages them to spend more. There are many other intriguing differences between regions – from their willingness to shop by mobile, to their attitude towards cross-border purchasing. In the next section, we take a detailed look at some of the world’s biggest eCommerce markets.

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Regional Focus Analysing eCommerce trends by country reveals much more about how shoppers across the world behave, what deters them and what encourages them to spend more. In the next section, we take a detailed look at some of the world’s biggest eCommerce markets.

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ARGENTINA OVERALL SPENDING BEHAVIOUR TOP SPENDING CATEGORIES Electronics (36%) Ticket retailers (27%) Food (25%)

Argentina Argentina has high levels of internet penetration in in relation to other Latin American regions in the research. At 66%, the region is close to Canada and the United States in terms of population percentage shopping online. Consistent with more mature internet shopping markets, the percentage of disposable income spent online is lower than average, 21% in Argentina against 23% globally. While Argentina expresses concerns about security when shopping online slightly above average at 66%, it has the lowest experience of respondents having been victims of online fraud, 7% in the region against 14% globally.

Credit card Cash Debit card

HIGHEST SPENDER PROFILE Most Prevalent Spender: Most Purchased: Payment Preference:

(85%) (33%) (32%)

21%

66%

OF DISPOSABLE INCOME SPENT ONLINE

Purchase drivers and differentials Argentina offers a somewhat different picture of purchase drivers against typical global averages and its regional neighbours. The average age of prevalent spenders (34yrs) is higher than Brazil and Mexico and drivers for online spending across heavy, medium and light use also differ. Online chat is considered a driver for increasing spend with light shoppers and, similarly, medium shoppers are also enthusiastic about ‘communication’, with options to speak to the retailer by phone a driver for increased spend. Heavy shoppers are motivated by choice of delivery dates and payment flexibility. Unlike other regions, the quality of online environment itself plays less of a role.

MOST POPULAR PAYMENT METHODS

OF POPULATION HAS ACCESS TO THE INTERNET

34 Year old female Photography, footwear Credit card

7%

66%

HAVE EXPERIENCED ONLINE FRAUD

HAVE CONCERNS ABOUT SECURITY

THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR ARGENTINE SHOPPERS

1.

46%

2.

TRAVEL

44%

3.

EVENT TICKETS

BOOKS

Argentinian online shoppers are more likely to see unexpected costs as a reason for shopping card abandonment, 64% against a global average of 56%. Complex website navigation is also cited as a key reason (44%). Mobile appetite Smartphone ownership in Argentina is lower than other Latin American regions (33%). This has an effect on mobile purchasing, as only 8% of Argentinian respondents shop via smartphone. Encouragingly, 48% of online shoppers intend on using a smartphone or tablet to purchase online over the next 12 months (global average 40%).

33%

11%

8%

• Conventional shopping drivers (offers, customer service and delivery) are important for light, medium and heavy shoppers when shopping online • Clear pricing of goods and addition costs is important to avoid shopping cart abandonment

29% don’t intend to shop with a smartphone or tablet device because…

3%

1. No need to use device 2. Security concerns 3. Website not optimised

OWN SMARTPHONES

OWN TABLETS

BUY ONLINE WITH THEIR SMARTPHONE

In Summary Argentina is an advanced internet region, although notably smaller in economic terms than Mexico and Brazil. An interesting aspect of behaviour in Argentina is the appetite for mobile against a relatively low level of current mobile online shopping spend in the region. Key points to consider in delivering services to Argentinian online shoppers:

34%

40% prefer a mobile optimised website compared to 26% who prefer a shopping app

48% intend to use their smartphone or tablet device in the next 12 months

BUY ONLINE WITH THEIR TABLET

Average number of shopping apps 1.6

FOCUS AREAS FOR RETAILERS

• Electronics and entertainment (tickets) are popular spend categories online • Online shopping via mobile presents a significant future opportunity

RELATIVE DRIVERS TO SPEND MORE

• ‘Experience-based spending’, such as travel and events, are relatively high in the region and should provide a gateway to further mobile adoption

• Overall:

Protection of personal details

• Light shoppers:

On-line chat assistance

• Medium shoppers:

Provide option to speak retailer by phone

• Heavy shoppers:

More choice of delivery dates

REASONS FOR SHOPPING CART ABANDONMENT Top 3 reasons

28

• Unexpected cost

(64%)

• Navigation too complicated

(44%)

• Better price elsewhere

(41%)

CONCERNS ABOUT OVERSEAS SHOPPING 38% of Argentinians shop on overseas websites, but they do have concerns: 1. Concerns about shipping / delivery (64%) 2. Cost of shopping / delivery (56%) 3. Concerns about fraud / protecting my identity (55%) 4. Additional taxes (54%)


AUSTRALIA OVERALL SPENDING BEHAVIOUR TOP SPENDING CATEGORIES Music (27%) Department stores (27%) Clothes (27%)

Australia Australia has the highest internet penetration of the countries surveyed, with 9 in 10 Australians having some form of access to the World Wide Web. Yet such accessibility hasn’t transpired into a large percentage of disposable income being spent on the internet, with just 18% of Australians’ outgoings accounting for online spend. Despite this, Australia has a strong desire for shopping overseas, with 3 in 4 online shoppers (76%) claiming to have made purchases abroad. Considering the country’s geographic position and its reliability of imports from Asia and America, this high percentage is perhaps not surprising. However their concerns surrounding overseas purchases remain parallel to the global trends, namely the cost and concerns of shipping.

MOST POPULAR PAYMENT METHODS Credit card Debit card PayPal

As a country, Australian shoppers would be relatively more inclined to spend more online if they weren’t required to register on the site beforehand. Whereas light shoppers are likely to increase their purchases if their personal details were guaranteed to be better protected, heavier shoppers are more attracted by a greater variety of payment methods. Two-thirds (67%) of Australian shoppers are likely to switch off and drop out if they are presented with unexpected or hidden costs.

Most Prevalent Spender: Most Purchased: Payment Preference:

(82%) (31%) (30%)

18%

90%


Purchase drivers and differentials A wide range of categories are purchased by online shoppers in Australia, with clothes (27%) and music downloads (27%) being the most popular. Credit cards are the most popular type of payment used by online shoppers, with 82% using this method in last 6 months. Both debit cards (31%) and PayPal (30%) are also popular. Younger shoppers, most notably in their late twenties, are the highest spenders in Australia and have a relative desire to purchase either groceries or books online. Such items are bought either by using a credit card or with PayPal.

HIGHEST SPENDER PROFILE


28 Year old female Food retailer, books Credit card, PayPal

15%

58%



THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR AUSTRALIAN SHOPPERS

1.

44%

2.

CLOTHES

48%

19%

42%

16%

3.

TRAVEL

EVENT TICKETS


8%

1. Security concerns 2. No need to use device

Mobile appetite Smartphone (48%) and tablet ownership (19%) is moderately in line with the global average, with 2% of Australians’ entire online spend made through smartphone and tablet purchases. However as a country, online purchasing made through mobile devices is relatively low, with security concerns being the main worry – 58% of Australians expressed some form on concern when shopping online. As a result desire for mobile use over the next year is limited with only 27% intending to use their smartphone or tablet device to make online purchases. In Summary Australia sits in an interesting position. It has the capacity to engage online shoppers, with 90% of the population having access to the internet. Despite this, online spend as a percentage of disposable income is relatively low compared to the global average. However, shoppers in Australia are open to international stores and are willing to explore these sites overseas.

3. Virus / spyware OWN SMARTPHONES

OWN TABLETS






FOCUS AREAS FOR RETAILERS RELATIVE DRIVERS TO SPEND MORE

CONCERNS ABOUT OVERSEAS SHOPPING

Key points to consider in delivering services to Australian online shoppers:

• Overall:

Purchasing without having to register on site

• A strong infrastructure exists in Australia, with the vast majority of the population open and accessible to the internet

• Light shoppers:

Better protection of personal details


Provide option to speak retailer by phone

76% of Australians shop on overseas websites, but they do have concerns:

• Heavy shoppers:

Greater variety of payment methods

1. Cost of shipping / delivery (52%)

• Making websites ‘internationally friendly’ with languages and pricing localised is important, but so too are dedicated shopping apps. Furthermore, accepting preferred payment types is critically important • A greater variety and availability of payment types is an important driver – particularly amongst heavy Australian shoppers 30

38%


2. Concerns about shipping / delivery (50%)

• Unexpected cost

(67%)

3. Concerns about fraud / protecting my identity (49%)

• Just browsing

(50%)

4. Payment security (37%)

• Decided against pruchase

(33%)


BRAZIL OVERALL SPENDING BEHAVIOUR

Brazil

TOP SPENDING CATEGORIES


Department stores Electronics Books

Credit card Debit card PayPal

(57%) (45%) (33%)

Brazil is the fastest growing online shopping region outside of Asia, with a predicted CAGR of 18% over the next three years (Forrester). Online shoppers generally spend a higher proportion of disposable income over the internet than the global average, 27% against a global average of 23% although internet penetration sits at just above a third of the population (37%). In contrast to more established regions, particularly in Europe, Brazilian online shoppers have experienced less online fraud (11%), yet express slightly higher levels of concern regarding security (67%).

Shopping cart abandonment drivers are consistent with global average, unexpected costs (59%) and better prices found elsewhere (44%). However, complex navigation is also cited (34%) in the top three issues, consistent only with a selection of developing economies. Mobile appetite Website functionality also plays a part in how Brazilian respondents view the mobile web. While smartphone penetration is high (50%) and intention to use smartphones and tablets for online purchases is consistent with global averages (46%), mobile optimisation of shopping websites is cited in the top three reasons for not shopping via mobile online.


(82%) (31%) (30%)

27%

37%


Purchase drivers and differentials While the faster-growth economies in the research tend to have prevalent shoppers better represented in the higher age groups (35yrs and above), Brazil’s heavy spenders (as a proportion of disposable income) are more likely to be under 25yrs. Popular goods purchased in this group are music downloads and personal disposables, such as toiletries. Consistent with global average trends, light and medium shoppers are attracted by more conventional shopping needs, such as customised offers and flexible delivery dates. However, heavy shoppers identify faster payment processes and better website navigation as drivers for increasing internet spending. Globally, heavy shoppers are more likely to favour choice of payment over speed.



21 Year old female iTunes, toiletries Credit card, PayPal

11%

67%



THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR BRAZILIAN SHOPPERS

1.

41%

2.

BOOKS

50%

19%

36%

3.

MOBILE PHONES

12%

34% TRAVEL


6%

1. Security reasons 2. No need to use device 3. Website not optimised

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In Summary Brazil is getting online at a rapid rate and views online shopping with considerable enthusiasm. Growth in Brazil is going to be driven by internet adoption rates in the first instance, but there are characteristics within the region that should be taken into account: • Heavy spending online shoppers are sensitive to payment speed and web navigation, even though they are more likely to spend more time browsing online than other regions - focus on fulfilling their needs with slick design, a smooth checkout process and speed through eWallet and tokenisation solutions




• Concentrate on providing fast, reliable delivery options at a competitive price. Offer choice and reassurance - especially for cross-border customers

RELATIVE DRIVERS TO SPEND MORE • Overall:

Accurate delivery dates, merchant reliability

• Security assurances should be provided at all stages of the online experience

• Light shoppers:

Online chat assistance, customized offers

• Mobile functionality improvements should be considered as a means of increasing spend via mobile devices


Choice of delivery dates

• Heavy shoppers:

Faster payment processes


32


• Unexpected costs

(59%)


(44%)


(34%)

CONCERNS ABOUT OVERSEAS SHOPPING 43% of Brazilians shop on overseas websites, but they do have concerns: 1. Concerns about shipping / delivery (59%) 2. Concerns about additional taxes (55%) 3. Cost of shipping / delivery (48%) 4. Concerns about fraud / protecting my identity (47%)


CANADA OVERALL SPENDING BEHAVIOUR TOP SPENDING CATEGORIES Books (26%) Department stores (26%) Clothes (25%)

Canada Canada is a mature market for internet use and penetration (79%). However, levels of spend online are considerably lower than other developed markets and the global average. Canadian online shoppers only spend 17% of disposable income online against a global average of 23%. The percentage of internet users that have experienced fraud is marginally below the global average (13%). Canada shows high levels of maturity regarding security concerns, with only 57% of respondents expressing a concern about security when shopping online (global average 63%). However, this may be attributed to the relatively lower levels of disposable income spend.

Web functionality issues do not feature in the top three Canadian drivers for shopping cart abandonment. Unexpected costs (68%), ‘just browsing’ (49%) and goods being too expensive (35%) are the reasons to most likely interrupt Canadian online purchases. Mobile appetite Smartphone ownership (45%) and levels of online purchasing via smartphones (11%) sit marginally below global averages for Canada. However, Canadian online shoppers show a considerably lower level of enthusiasm for future smartphone purchases, 26% of mobile device owners intending to use a smartphone or tablet device over the next 12 months against a global average of 40%.

Credit card PayPal Debit card


(86%) (69%) (15%)

17%

79%


Purchase drivers and differentials Prevalent online spenders in Canada are more likely to be older (35yrs and over) than in other parts of the Americas, although consistent with younger age groups, books and entertainment are the most popular items purchased. Light, medium and heavy shoppers in Canada are consistent in general preference regarding aspects of online shopping that encourage extra spending. Light shoppers are engaged by conventional shopping needs (flexible returns policy), medium shoppers look to avoid registering in order to purchase and heavy shoppers are driven by a more engaging online experience. Regarding payment preference, PayPal has considerable presence in Canada with 69% of shoppers having used PayPal in the past 6 months (global average 40%).



38 Year old female DVD CD, Books PayPal, Credit card

13%

57%



THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR CANADIAN SHOPPERS

1.

42%

2.

TRAVEL

45%

19%

40%

3.

EVENT TICKETS

11%

37% BOOKS


7%


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In Summary Canada has a high penetration of internet users, but this does not equate to online retail enthusiasm in the same way as it does in other similar markets, such as the United States. Canadian online shoppers are reserved, but this also translates to a balanced sentiment towards security. • Attracting heavy shoppers to spend more can be enhanced by the quality of online experience • Encouraging lighter online shopper to increase spend can be achieved by more conventional means, such as flexible returns policies • Whist an established market, Canadian online shoppers are more comfortable with fixed rather than mobile access to retail • Clear and consistent pricing information at all stages of the online purchase experience is critical to avoid shopping cart abandonment •P ayment choice should be a sustained consideration as alternative payment methods (PayPal) are popular in Canada





• Overall:


• Light shoppers:

More flexible returns policy



54% of Canadians shop on overseas websites, but they do have concerns:

• Heavy shoppers:




34


• Unexpected cost

(68%)

• Just browsing

(49%)

• Too expensive

(35%)

2. Concerns about shipping / delivery (53%) 3. Concerns about fraud / protecting my identity (48%) 4. Concerns about additional taxes (41%)


CHINA OVERALL SPENDING BEHAVIOUR

China



Clothes (40%) Food retailers (39%) Footwear (34%)

AliPay Credit Card Debit Card

While China’s 38% internet penetration might not sound impressive on the surface, applied to its fast growing population of more than 1.3 billion, the huge eCommerce potential looms large in the mind. This golden opportunity is amplified further when we look at disposable income spent online, with Chinese shoppers demonstrating some of the loosest spending habits in our entire survey base (31% of respondents’ disposable income goes online). Experience of fraud is higher (19% against a global average of 14%) but not significantly pronounced, although consumer concern over online security (75%) is elevated.

Chinese shoppers are less likely to drop out of the payment process because of unexpected costs (just 33% against a global average of 56%), but they are shrewder too - 42% leaving to find better prices elsewhere. Website navigation issues could also lose retailers more than a third of their potential customers (38%). Mobile appetite The mobile opportunity amongst Chinese shoppers is considerable. Smartphone ownership is soaring (75%) with shopping on these devices a highly popular pursuit (46%). More are expected to follow, with 48% intending to spend online using a smartphone or tablet over the year ahead. This hunger for mobile shopping goes a long way to explaining China’s high average of 5.7 shopping apps per respondent.


(65%) (51%) (45%)

31%

38%


Purchase drivers and differentials eCommerce in China is driven by a relatively broad spread of individuals, though women in their late 40s are the dominant force here. 26-32 year olds also play a key role, representative of a booming economy in which clothing (40%) and food (39%) are the most popular online purchases. These shoppers are primarily concerned with the protection of their personal details, though many heavy shoppers are prompted to spend more by retailers offering a range of payment choices. Medium shoppers tend to be motivated by accurate delivery dates and details, so too lighter shoppers - who also show an interest in customised offers.



47 Year old female Department stores, jewellery, photography AliPay

19%

75%



THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR CHINESE SHOPPERS

1.

56%

2.

FOOTWEAR

75%

56%

52%

46%

3.

CLOTHES

48% GROCERIES


41%

1. No need to use device 2. Process too tricky 3. Security concerns

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In Summary The eCommerce market in China is thriving, and is only likely to get bigger as the economy aggressively expands. Mobile technology has a clear role to pay, and is likely to help online retailers appeal to a broad spectrum of device-owning shoppers. Key points to consider in delivering services to Chinese online shoppers: • Ensure that the wildly popular Alipay and China UnionPay are standard payment offerings




• Promote and deliver on security standards and data protection. Use advanced Risk Management solutions and communicate your security standards to customers. Consider tokenisation and eWallets to reassure them further


• Make the most of custom offers to attract lighter shoppers

• Overall:


• Light shoppers:

More customized offers, accurate delivery details


Accurate delivery details

• Heavy shoppers:

Variety of payment methods

• In a land of massive mobile opportunity, make sure you’re prepared - optimise your website, simplify mobile payments and consider developing a dedicated app if it’s right for your business


36



(42%)


(38%)

• Presented with unexpected costs

(33%)

CONCERNS ABOUT OVERSEAS SHOPPING 44% of Chinese shop on overseas websites, but do have concerns: 1. Concerns about fraud / protecting my identity (54%) 2. Concerns about currency exchange fluctuations (52%) 3. Language issues (50%) 4. Concerns about shipping / delivery (47%)


FINLAND OVERALL SPENDING BEHAVIOUR TOP SPENDING CATEGORIES Clothes (40%) Department stores (39%) DVDs, CDs (30%)

Finland

MOST POPULAR PAYMENT METHODS Credit card Invoice Online bank transfer

Despite a high percentage of internet users (85%), a relatively small amount is spent online by Finnish shoppers. With shoppers spending just 13% of their disposable income over the internet, Finns are some of the world’s most reticent eCommerce customers. This is actually the global study’s lowest result, far below the average of 22%.


(63%) (63%) (30%)

13%

85%

22 Year old female Clothes, DVDs/CDs Invoice

9%

52%



Purchase drivers and differentials Within that 13%, the majority of spending is made on clothes (40%) and entertainment products such as CDs, DVDs and games (30%) dominating spending patterns here. Credit cards are highly popular, 63% of shoppers using them to purchase online although around a third (30%) also use online bank transfers for the same purpose. The most prolific spenders amongst Finnish respondents tend to be 20-30 year old women, purchasing mainly in the categories above. Men in their late 30s also have presence here, buying consumer electronics and entertainment products. Heavy shoppers are likely to spend more with online retailers that provide variety in payment methods, while light and medium shoppers are, unusually, influenced more by integration of the off and online experience. Finnish shoppers tend to demonstrate an extreme reaction to hidden costs during the purchase process. 73% say that unexpected costs are good cause to abandon a potential purchase, supported by 48% who decide against the purchase and the 47% who confess to only browsing. Even though overall Finnish eCommerce spending may be quite low, many do buy from overseas websites. Nearly two-thirds purchase from overseas retailers, but many have concerns about security (56%) and the cost of shipping (41%).



THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR FINNISH SHOPPERS

1.

53%

2.

CLOTHES

46%

8%

32%

12%

3.

FOOTWEAR

BOOKS


3%

1. No need to use device 2. Website not optimised for smartphones

Mobile appetite In total, just 1% of online spend in Finland is made via mobile device. 20% intend to use a smartphone or tablet to purchase goods in the next 12 months, even though only 12% do so via smartphones, and just 3% via tablets today. 49% say that they don’t see mobile commerce as appealing, with website optimisiation - or lack of it - and difficulty with the payment process being the main barriers. In Summary Finland gives all the indications of being a tough eCommerce market to break. Its shoppers tend not to spend heavily online, and can react more negatively than those in other regions to issues like hidden costs. As a result, targeting and optimisation of offering is essential in order to access what spend does take place. Key points to consider in delivering services to Finnish online shoppers:

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• Integration of the offline and online shopping experience can help retailers appeal to light and medium spend customers

• Overall:


• Light shoppers:

More integration of on-line with stores



• Heavy shoppers:



38


• As with all territories, retailers need to demonstrate a secure approach to protecting customer data

• The mobile opportunity in Finland will improve, but is unlikely to be a rewarding focus area at present

27%

CONCERNS ABOUT OVERSEAS SHOPPING 64% of Finns shop on overseas websites, but they do have concerns: 1. Concerns about fraud / protecting my identity (56%) 2. Payment security (50%)


(73%)


• Decided against purchasing

(48%)


• Just browsing

(47%)


FRANCE OVERALL SPENDING BEHAVIOUR TOP SPENDING CATEGORIES Clothes (46%) Consumer electronics (24%) Toiletries (22%)

France With almost a fifth (19%) of their disposable income spent online, France’s internet shoppers sit slightly below the global average. Overall internet usage lies at 70%, presenting retailers with a healthy - if not spectacular - opportunity to attract some of the nation’s 64.8million people. Experience of fraud is below the global average, 9% compared to the worldwide 14%. Concerns around security are subsequently lower - 46% against a global average of 63%.

Clothing is the most popular purchase choice overall in France, with 46% buying them online. 24% purchase consumer electronics over the internet, with a similar 22% buying toiletries. Credit cards are used to fund many of these purchases (76%), with PayPal (42%) and debit cards (22%) also popular in terms of payment preference.


(76%) (42%) (22%)

70%



26 Year old female Clothes, DVD/CD Credit card

9%

46%



THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR FRENCH SHOPPERS

1.

53%

2.

CLOTHES

Overall, prompting French shoppers to spend more is less about demonstrating the security of their personal information, and more about providing them with customised offers. This is particularly true of those who fall into the light-spending category. Medium shoppers tend to look for choice on delivery dates, while heavy shoppers are more concerned with being able to purchase from a site without registering first. 38% of the French buy from overseas websites, though around half note concerns about shipping and delivery (49%) and the risk of fraud (47%).



19%

Purchase drivers and differentials Online shopping in France is driven by a broad demographic spread across a few common categories. The three highest spend profiles are women in their early 40s, men in their mid-30s and women in their mid-20s. The last of these groups is statistically the most prolific, spending mainly on clothes and entertainment products.


40%

12%

32%

3.

FOOTWEAR

7%

BOOKS


3%

1. No need to use device

Mobile appetite Ownership of mobile devices in France sits below the global average, with just 40% of shoppers using smartphones and 12% tablets. Spending on these devices is equivalently low, 7% spent via smartphones, 3% via tablets and just 1% of total online spending done via mobile. Around a third (28%) of shoppers express their intention to spend using this platform in the coming year. In Summary The French attitude to online shopping is relatively aligned to the global average. The country behaves ‘normally’ in regard to everything from fraud to percentage of income spent. At the same time, a 15% contraction in online spend makes it essential for retailers to capitalise on every opportunity. Key points to consider in delivering services to French online shoppers: • Know the shopper and deliver customised offers where possible. Consider a facility for some users to spend without registering • Be clear on cost. 62% of shoppers cite hidden costs as a cause for cart abandonment • Optimise websites for mobile use - 30% of French shoppers prefer this over a dedicated app

2. Security concerns 3. Virus / spyware OWN SMARTPHONES

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FOCUS AREAS FOR RETAILERS RELATIVE DRIVERS TO SPEND MORE • Overall:

More customised offers

• Light shoppers:

More customised offers


More delivery dates choice

• Heavy shoppers:



40

27%

CONCERNS ABOUT OVERSEAS SHOPPING 38% of the French shop on overseas websites, but they do have concerns: 1. Concerns about shipping / delivery (49%) 2. Concerns about fraud / protecting my identity (47%)


(62%)

3. Payment security (44%)

• Just browsing

(38%)


• Too expensive

(31%)


GERMANY OVERALL SPENDING BEHAVIOUR TOP SPENDING CATEGORIES Clothes retailer (29%) Healthcare (28%) Department stores (27%)

Germany

MOST POPULAR PAYMENT METHODS PayPal Invoice Credit Card

Long seen as a dependable stalwart of the central-European economies, Germany’s eCommerce market performs broadly in line with global averages. 80% of the population is currently online, with around 21% of respondents’ disposable income spent over the internet. 14% of the German population have at some point fallen victim to online fraud, matching the global average exactly. Levels of concern around fraud in Germany are considerably lower than the global average, with just 31% of the population significantly worried by fraud.


(67%) (65%) (43%)

21%

80%


Purchase drivers and differentials The younger generations fuel the online economy in Germany, with 25-36 year olds the primary online spenders. Entertainment and clothing are the main buying choices amongst these high spenders, though healthcare (28%) and department store (27%) spend are popular with the wider eCommerce audience. Additional spending amongst both the general shopping population and lighter spenders can most effectively be generated by providing accuracy over delivery dates. Medium shoppers tend to like retailers that offer a range of payment methods and heavy spenders those that deliver a better integration between their on and offline shopping experience.



36 Year old female iTunes, toiletries PayPal, invoice

14%

31%



THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR GERMAN SHOPPERS

1.

45%

2.

CLOTHES

36%

3.

BOOKS

MUSIC CDS

Additional costs cause many German shoppers to walk away from a purchase before paying, but not significantly more than the global average (58% compared to 56%). Overall, shoppers are relatively pragmatic, only abandoning a purchase if it is too expensive (39%) or because they decide against purchasing altogether (34%). Mobile appetite Smartphone (45%) and tablet (11%) ownership in Germany is neither high nor low enough when compared to other nations to have a significant impact on purchasing. Currently, 12% of shoppers there buy online using their smartphone, with 6% doing the same on tablet. We do see expected growth for mobile purchasing, but this growth is unlikely to be dramatic - 23% planning to purhase by mobile in the next year.

45%

11%

12%

28% 55% don’t intend to shop with a smartphone or tablet device because…

6%

1. No need to use device 2. Security concern 3. Website not optimised

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In Summary While the German eCommerce market may not demonstrate any exceptional opportunities or threats, a growing mobile opportunity and solid statistics around disposable income spend from an 80 million strong population help maintain its significance. Key points to consider in delivering services to German online shoppers:




• Accuracy is key - from delivery dates to presentation of costs • Prepare for a growing mobile opportunity, albeit a slow and steady one • Address the heavy shopper market with an integrated on and offline shopping experience



• Light shoppers:




• Heavy shoppers:



42


(58%)

• Too expensive

(39%)

• Decided against purchase

(34%)

CONCERNS ABOUT OVERSEAS SHOPPING 32% of Germans shop on overseas websites, but they do have concerns: 1. Concerns about fraud / protecting my identity (48%) 2. Concerns about additional taxes (46%) 3. Cost of shipping / delivery (45%) 4. Concerns about shipping / delivery (43%)


INDIA OVERALL SPENDING BEHAVIOUR

India



Mobile phones (36%) Clothes (33%) Tickets (31%)

Credit card Debit card Cash on delivery

As a fast-growing, developing economy India shows considerable appetite for shopping online against other regions in the survey. While internet penetration is low (10%), the percentage of disposable income spend per user in the region is one of the highest in the survey (36%). In terms of security concerns and prevalence of fraud in the region, India is, again, a more extreme case. Online shoppers that have experienced fraud are at 22%, against a global average of 14%. Despite this, their security concerns are consistent with the global average (63%).


(67%) (57%) (36%)

36%

10%


Purchase drivers and differentials Prevalent shoppers are more likely to be older in India, ranging from 32-44yrs. Shopping online for the Indian respondents is dominated by security sensitivities. Consistent with the rest of the world, security assurances (protection of personal details) are a key driver for Indian shoppers to spend more. However, when looking at light, medium and heavy shoppers across the region, influences on greater levels of spend differ. Light shoppers are engaged by delivery date assurances (a conventional shopping need). Medium shoppers are swayed by the quality of the online experience in general and integration of online/offline experience, and heavy shoppers by payment method variety.



42 Year old female iTunes, electronics Credit card, Direct Debit, e-payment

22%

79%



THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR INDIAN SHOPPERS

1.

47%

2.

CLOTHES

40%

3.

FOOTWEAR

TRAVEL

Consistent with many other regions, price sensitivities, or unexpected costs in the shopping cart process (delivery etc.) are the main reasons why Indian shoppers will abandon payment processes. Mobile appetite Mobile use in India is considerably higher than global averages. Indian respondents have high levels of smartphone ownership (72%) and are also keen to use smartphones to purchase goods online, 40% having done so against an average of 19%. 54% of Indian respondents express an intention to purchase via smartphones over the next 12 months, and Indian respondents have an average of 5.5 dedicated shopping apps each. Overall, the mobile opportunity in India is growing rapidly from an already elevated position.

72%

28%

40%


19%

1. Security reasons 2. Virus concerns 3. Process too tricky

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In Summary While still a relatively small economy in terms of online spending, the momentum behind the Indian market will see dramatic change in both behaviours and volume of spend over the next 3-5 years. Key points to consider in delivering services to Indian online shoppers: • Security assurances are needed to encourage spend, especially for mobile purchasing. Implement an advanced Risk Management solution and make sure that the same fraud controls can be applied to mobile • Cost clarity may improve the rates of shopping cart abandonment • Mobile optimisation will be critical to Indian online retail. Make sure your mobile payment process is as simple as possible, and consider development of a dedicated app if appropriate • Make the most of the cross-border opportunity here. Localise your website languages. display pricing in local currency and provide reassurances on security and clarity over pricing





• Light shoppers:



Integration of online with store, clearer returns policy, engaging shopping experience

• Heavy shoppers:



44



(44%)

• Too expensive

(40%)


(39%)

CONCERNS ABOUT OVERSEAS SHOPPING 56% of Indians shop on overseas websites but they do have concerns: 1. Concerns about fraud / protecting my identity (50%) 2. Concerns about shipping / delivery (48%) 3. Concerns about currency exchange fluctuations (46%) 4. Concerns about additional taxes (45%)


JAPAN OVERALL SPENDING BEHAVIOUR TOP SPENDING CATEGORIES Food (28%) Clothes (27%) Electronics (24%)

Japan

MOST POPULAR PAYMENT METHODS Credit card Cash on delivery Bank transfer

With the internet readily available to many Japanese shoppers - 80% have online access - spending online has grown by 24% since the start of the global economic downturn. Although overall spending has grown however, Japanese shoppers still spend less than the global average in terms of disposable income - 17% compared to a global norm of 23%. Experience of fraud here is notably lower, with just 6% having fallen prey, significantly less than the global average of 14%. Despite this, more than half (52%) express concerns about security when shopping online.

While credit cards are used as the preferred way to pay for these high spenders and by Japanese online shoppers in general (83%), other alternative payment methods also see widespread adoption. Cash on delivery is used by 29%, online bank transfers by 17%. 30% of Japanese shoppers use overseas websites for their online purchases, though 55% note that they find language issues to be a barrier when doing so. Payment security is also a concern for 53%, with an identical number worried about fraud and identity theft. Overall, Japanese shoppers are more likely to be motivated to spend more if they are comfortable about the protection of their personal details, but light spending shoppers also look for clear returns policies and assurances that the retailer is legitimate. Medium spenders tend to be swayed by a greater choice of payment methods, and heavy spenders focus on an engaging or entertaining shopping experience.

(29%) (17%)

80%


In Summary Japan’s growing eCommerce spend makes it a strong proposition for online retailers, but one that needs specific attention in order for them to capitalise on that opportunity. Key points to consider in delivering services to online shoppers in Japan:

6%

52%



TOP 3 MOBILE PURCHASES FOR JAPANESE SHOPPERS

1.

32%

2.

CLOTHES

23%

9%

30%

3.

BOOKS

9%

28% FOOD


3%

1. No need to use device 2. Website not optimized for smartphones

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• Be sure to offer a wide selection of local payment methods to attract the largest possible audience


• 42% of online shoppers in Japan cite hidden costs as a possible cause for cart abandonment. As always, clarity of pricing is vital

• Overall:


• Light shoppers:

Clearer returns policy, assurances around retailer



30% of Japanese people shop on overseas websites, but they do have concerns:

• Heavy shoppers:

Engaging / entertaining shopping experience

1. Language issues (55%)

• Overseas retailers targeting Japan need to be prepared for potential language barriers - consider having a local language website and payment pages


46


28 Year old female iTunes, Books Credit card

THE MOBILE OPPORTUNITY

Mobile appetite While Japan boasts one of the world’s most advanced mobile broadband infrastructures, smartphone and tablet device ownership is generally low. Just 23% of respondents own a smartphone, 9% a tablet. Spending is comparably tiny on these devices, with just 1% of total online spend made via mobile.


(83%)

17%

Purchase drivers and differentials The eCommerce market in Japan is fragmented both by the demographics of its heaviest spenders and the way that they choose to pay for goods and services. Women in their late 20s are Japan’s heaviest spending online shoppers, using mainly credit cards to purchase books and downloads from iTunes. Men in their mid-20s spend heavily on the same products, with women in their early 40s also amongst the heaviest online spenders, with clothes and food being their most popular purchase choices.



(46%)

• Unexpected cost

(42%)


(39%)


2. Payment security (53%) 3. Concerns about fraud / protecting my identity (53%) 4. Cost of shipping / delivery (47%)


MEXICO OVERALL SPENDING BEHAVIOUR TOP SPENDING CATEGORIES Music (33%) 3rd party travel (30%) Department (27%) stores

Mexico Mexico is the smallest of the Latin American counties in the survey, but growth of online spend in the region is predicted to be slightly higher than Brazil at 19% (Forrester). Internet penetration sits at 31% and disposable income spent online is just below the global average at 21%, identical to that of Argentina. While experience of online fraud is 14%, in line with the global survey average, concerns around security are very high. 76% of Mexican online shoppers are concerned about security issues, one of the highest levels of concern in the survey. In line with this concern, Mexican shoppers cite protection of personal details as the key driver for encouraging online spending.



(67%) (52%) (51%)

21%

31%


Purchase drivers and differentials Mexico is the only region in the survey where light shoppers consider a greater variety of payment options to be a driver for increased online spending. Conversely, medium and heavy shoppers are aligned to more conventional shopping priorities, such as clear returns policies and a choice of delivery dates. PayPal, while second to credit card payments as a payment choice, goes some way to informing this view as it is a notably more popular payment choice in the region, 52% of Mexican respondents use PayPal against a global average of 40%.



29 Year old female Software download, consumer electronics Debit card

14%

76%



THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR MEXICAN SHOPPERS

50%

1.

2.

TRAVEL

38%

3.

CLOTHES

BOOKS

Shopping cart abandonment drivers are consistent with global averages, with unexpected costs (54%) being the primary reason. In line with Brazil and Argentina, Mexico is more likely to cite complex website navigation as a reason for failing to complete a purchase (36%). Mobile appetite Smartphone ownership and propensity for online spend via mobile devices is consistent with global averages. Future intention so shop online using a smart device is slightly higher than the average trend, 47% in Mexico against 40% globally. Set against current levels of mobile activity, this is the highest intention for future (mobile) spend in the region.

57%

22%

20%


10%


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In Summary Mexico has the growth potential, but not the scale, of its Latin American neighbours. Goods purchased in Mexico are more likely to be technology (software, or consumer electronics) than other items. Combined with the appetite for using smartphones to purchase online and a heavy spending group represented by mostly under 30yrs age group, Mexico suggest a respectable level of tech literacy within the online shopper base. Key points to consider in delivering services to Mexican online shoppers: • Market growth in relation to current online penetration suggests Mexican online shoppers will grow by scale, rather than increased complexity or spend-per-shopper • Payment choice is important to Mexican shoppers with PayPal a popular payment option • Technology is an important category of spend for prevalent (heavy) shoppers • Mobile purchasing intention is high for the region, making optimisation important for future needs • Security sensitivity requires continuity and assurances from merchants to encourage increased levels of spend

48






• Light shoppers:



Clearer returns policy

• Heavy shoppers:

More choice of delivery dates


CONCERNS ABOUT OVERSEAS SHOPPING 50% of Mexicans shop on overseas websites, but they do have concerns: 1. Concerns about shipping / delivery (56%) 2. Concerns about fraud / protecting my identity (56%)

• Unexpected cost

(54%)



(36%)


(36%)

4. Concerns about additional taxes (45%)


RUSSIA OVERALL SPENDING BEHAVIOUR TOP SPENDING CATEGORIES Electronics (35%) Clothes (30%) Books (28%)

Russia

MOST POPULAR PAYMENT METHODS Credit card Cash on delivery Debit card

Russia only has a 48% internet penetration, relatively low in comparison to other nations but with signs of rapid growth. While this isn’t holding eCommerce back - the market has actually grown by 12% since the start of the global recession - disposable income spent online continues to track below the global average (18% in comparison to 23%).


(51%) (43%) (30%)

18%

48%

25 Year old female Consumer electronics, Jewellery Credit card, Debit card

12%

74%



Experience of fraud is marginally lower (12% against a global average of 14%), but around three quarters of consumers have concerns about the security risks of shopping online. OF DISPOSABLE INCOME SPENT ONLINE

Purchase drivers and differentials eCommerce in Russia is driven by a varied selection of individuals, though its predominantly the younger generation parting with their cash online. 25-year old females fit the highest spender profile, purchasing electronics and jewellery, supported by an undercurrent of early 20s males buying electronics and clothes. Overall, the top goods purchased by Russian nationals are electronics (35%), clothes (30%) and books (28%). Responses on what would drive shoppers to spend more online are varied. Amongst heavy shoppers, most are concerned with a fast payment process. Medium and light shoppers are looking for greater clarity over delivery dates and guarantees of reliability from retailers respectively to get them increasing their online expenditure. Shoppers in Russia are generally less tolerant of unexpected costs (63% to the 56% global average) when it comes to cart abandonment. 44% are also swayed away from a purchase by better prices elsewhere, with 38% deciding against completing their online orders altogether. Mobile appetite In Russia, mobile penetration closely echoes the average of the global percentages (50% smartphone ownership, 17% tablet ownership within Russia versus the 51% and 21% global average). Shopping with these devices is less popular however, as only 13% purchase with smartphones and 7% with tablets. Positively though, 57% of Russians intend to use smartphone and tablet technology to purchase goods in the next year.


THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR RUSSIAN SHOPPERS

1.

31%

2.

BOOKS

50%

17%

31%

13%

3.

CLOTHES

28% TOILETRIES


7%

1. No need to use devise 2. Security concerns 3. Unsure of how to buy

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In summary With a growing economy and a surge in eCommerce, Russia presents a solid opportunity for online retail. Mobile technology ownership is on par with the global norm, and the appetite for growth is high, creating a clear path for online retailers to appeal to a broader online market. Key points to consider when delivering services to Russian online shoppers: • Be upfront and clear with pricing to counter cart abandonment




• Focus on proving you are a legitimate, trustworthy business - consumers will not shop with you unless they trust you


• Make the payments process as fast and flawless as possible for the heavy spenders

• Overall:


• Light shoppers:

Assurances around retailer reliability



• Heavy shoppers:

Faster payment process

• Prepare now for a growing mobile opportunity


50


• Unexpected cost

(63%)


(44%)

• Decided against purchase

(38%)

CONCERNS ABOUT OVERSEAS SHOPPING 39% of Russians shop on overseas websites, but they do have concerns: 1. Concerns about shipping / delivery (52%) 2. Cost of delivery / shipping (50%) 3. Language issues (48%) 4. Concerns about fraud / protecting my identity (47%)


SPAIN OVERALL SPENDING BEHAVIOUR TOP SPENDING CATEGORIES Department stores (34%) 3rd party travel (33%) Ticket retailers (31%)

Spain

MOST POPULAR PAYMENT METHODS Credit card PayPal Debit card

In Spain, a total of 17% of disposable income is spent online, with credit cards (67%), PayPal (59%) and debit cards (32%) serving as the most popular ways to pay for goods and services over the internet. Concerns over fraud in Spain are out of sync with actual experience, only 9% having been a victim of fraud but 71% concerned about it - one of the highest responses in this survey.


(67%) (59%) (32%)

17%

62%

24 Year old female Clothes, footwear PayPal

9%

71%



Purchase drivers and differentials Online spend amongst Spain’s 62% of internet users goes mainly to department stores (34%), travel companies (33%) and ticket retailers. Spanish shoppers align to a range of drivers when it comes to prompting additional spend. While overall they indicate that they are more comfortable spending with sites that offer better protection of their personal details, light shoppers are more heavily influenced by the presence of a clear and flexible returns policy. Greater variety of payment methods can influence those in the medium spend bracket, while heavy online shoppers tend to be swayed by a more engaging shopping experience. Many Spaniards are keen overseas shoppers, more than half (55%) noting that they buy goods from international online retailers. But the shadow of fraud is felt here too, with 41% concerned about the possible security consequences of purchasing from overseas sites. Spanish shoppers demonstrate the same qualities as many of their global counterparts when it comes to leaving the purchase process before completion, with 65% walking away due to hidden costs, 40% just browsing and 27% deciding against the purchase altogether. Mobile appetite The mobile opportunity in Spain is again tempered by security concerns. Smartphone and tablet ownership is going strong, with 53% and 17% in possession of those devices respectively. 12% currently spend online using their smartphone, and 6% their tablet, with 36% intending on doing so in the next year. 41% say that they aren’t compelled to spend using these devices, with many citing security concerns and the threat of viruses and malware as the cause. In Summary While Spain behaves broadly in line with global averages, specific attention to key purchasing drivers and security concerns can help to promote spend and reassure shoppers that they are dealing with a legitimate site.



THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR SPAINISH SHOPPERS

1.

48%

2.

TRAVEL

53%

17%

41%

12%

3.

CLOTHES

36% EVENT TICKETS


6%

1. No need to use device 2. Security concerns 3. Virus / spyware

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Key points to consider in delivering services to Spain’s online shoppers: • Because the eCommerce market in Spain is comparatively subdued, getting the basics right is essential • A big part of meeting that challenge involves reassuring Spanish shoppers on their security fears. Demonstrating safe shopping accreditations and other protective measures can be key • Focus on the distinct drivers by customer segment - a clear returns policy for light shoppers, variety of payment methods for medium spenders and more engaging experience for big spending customers



• Light shoppers:

Clear/flexible returns policy



55% of Spaniards shop on overseas websites, but they do have concerns:

• Heavy shoppers:




52


2. Concerns about fraud / protecting my identity (41%)


(65%)


• Just browsing

(40%)

4. Language issues (34%)


(27%)


UNITED KINGDOM OVERALL SPENDING BEHAVIOUR

United Kingdom

TOP SPENDING CATEGORIES Clothes (36%) Food (33%) Department stores (33%)

MOST POPULAR PAYMENT METHODS Debit card PayPal Credit card


(72%) (64%) (61%)

20 Year old female Clothes Debit Cards

With high internet penetration (82%), a quarter of respondents’ disposable income spent online and healthy mobile appetite, the United Kingdom is Europe’s eCommerce leader.

25%

Although eCommerce in the UK mirrors the German market in many ways, fraud is one area of divergence. Even though experience of online fraud tracks directly with the global average (16%), UK shoppers demonstrate significantly heightened awareness and concern over this threat when compared to their German counterparts, with 53% expressing concerns over online security.


Purchase drivers and differentials Younger shoppers - primarily in their early 20s - buying clothes, sports gear and software downloads drive much of the online economy in the UK, supported by a secondary typology of women in their mid-40s, spending mainly on financial products and in online department stores. Amongst these heavier spenders, further purchases are likely to be prompted by delivering a more interactive online experience, and one in which they can trial or gain better understanding of the products in question. Medium shoppers are more likely to see the value in a faster, smoother checkout process with a selection of payment choices, while light shoppers may be motivated to spend more if given the opportunity to speak directly to the retailer by phone. Overall, online retailers that demonstrate an ability to protect and safely manage customer details are likely to see higher spending. Online shoppers in the UK are likely to shun stores that present hidden charges at the checkout, slightly more so than average (61% compared to the global average of 56%). Beyond that, cart abandonment is fuelled mainly by a savvy attitude to online shopping, with 37% confessing to ‘just browsing’ when loading up their basket, and 30% that they find a better price elsewhere. Mobile appetite While almost half of online shoppers in the UK own a smartphone (48%) and 13% own a tablet device - some of the highest penetration amongst European consumers purchasing on these platforms remains broadly in line with the global average. Only 14% of UK consumers currently buy using their smartphone, 6% their tablet. Around 29% say that they are likely to use those devices to purchase online in the next 12 months. In Summary Making the most of the eCommerce opportunity in the United Kingdom revolves mainly around refining and expanding the overall online shopping experience. UK shoppers are looking for baseline security of personal details combined with ‘value-add’ services.

82% OF POPULATION HAS ACCESS TO THE INTERNET

16%

53%



THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR BRITISH SHOPPERS

1.

50%

2.

CLOTHES

48%

13%

43%

14%

3.

BOOKS

40% MUSIC CDS


6%

1. Security concerns 2. No need to use device 3. Website not optimised

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Key points to consider in delivering services to online shoppers in the UK: • Concerns over security threats are elevated amongst UK shoppers, so providing a safe online experience is key

RELATIVE DRIVERS TO SPEND MORE • Overall:

Greater protection of details

• As with all regions, be up front and accurate with costs, or risk losing custom

• Light shoppers:

Option to speak to retailer by phone


Faster payment process, variety of payment methods

• Heavy shoppers:

Greater interaction with products

• Be prepared for a certain degree of consumer attrition, as they shop around for better prices • Capitalise on the specific ‘wants’ of heavy, medium and light shoppers - product interaction, a faster payment process and the option to speak by phone


54


(61%)

• Just browsing

(37%)


(30%)

CONCERNS ABOUT OVERSEAS SHOPPING 37% of UK citizens shop on overseas websites, but they do have concerns: 1. Cost of shipping / delivery (54%) 2. Concerns about fraud / protecting my identity (49%) 3. Concerns about shipping / delivery (48%) 4. Payment security (42%)


USA OVERALL SPENDING BEHAVIOUR TOP SPENDING CATEGORIES Department stores (42%) Clothes (32%) Books (22%)

USA The United States is the pioneer of online shopping. While growth in the market is estimated as sub 10% over the next 3 years (Forrester) the region is the largest online shopping market in the World. Internet penetration sits at 78% in this mature and established market. Levels of disposable income spent online are consistent with global averages at 23%. As the largest market in the world, the US is particularly exposed to instances of fraud, with 18% of users having experienced online fraud and the highest incidence in the Americas, against an average of 14%. However, online shoppers are generally less concerned about security threats (59%), reflecting the maturity of the market and the stability of consumer governance of the region. It is also noteworthy that the appetite for spending via overseas websites (22%) is half that of the global average (45%) with concerns about fraud cited as the greatest concern in this area (60%). Purchase drivers and differentials As with other mature economies, the average age of heavy spending internet shoppers in the United States is under 25 years old. As a national average, heavy shoppers are more likely to identify an engaging and entertaining shopping experience as a reason for increasing spend online, while medium shoppers are more aligned to customised offers and light shoppers focused on practical logistics (accurate delivery dates). This reflects global behaviour against different shopper types – lighter shoppers prioritising more conventional offline shopping needs with online preferences, heavier shoppers more supportive of the quality of the online experience itself. Respondents in the United States cite unexpected costs (62%) and ‘just browsing’ (47%) as the main reasons for shopping cart abandonment, these are more prevalent in the US than global averages, 56% and 37% respectively.

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(76%) (54%) (50%)

23%

78%



26 Year old female DVDs/CDs, clothes Debit card, PayPal

18%

59%



THE MOBILE OPPORTUNITY TOP 3 MOBILE PURCHASES FOR AMERICAN SHOPPERS

1.

53%

2.

CLOTHES

41%

19%

46%

15%

3.

BOOKS

DVDS/VIDEO GAMES


9%

1. No need to use device 2. Security concerns

Mobile appetite Mobile use is somewhat below the global averages in the survey. Smartphone ownership is at 41% and the intentions to use smartphone or tablet devices over the next 12 months (27%) are lower than global averages, 51% and 40% respectively. US respondents state lack of need and security concerns as reason for avoiding smartphone purchases as well as virus and spyware issues. However, the national average of online spending via a smartphone is slightly higher than the global average, with US respondents making 3% of their online purchases via mobile, against a global average of 2.5%.

42%

3. Virus / spyware OWN SMARTPHONES

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In Summary The United States reflects the characteristics of a wealthy and mature online shopper market with a generally conservative view of innovation (mobile), an informed sense of security issues and high expectation of the online shopping experience itself. Key points to consider in delivering services to American online shoppers:


• Quality of experience drives heavy spending online shoppers to spend more

• Overall:

Purchase without registering, protection of details

• Light shoppers:



Customized offers, variety of payment methods

• Heavy shoppers:

Engaging/entertaining shopping experience

• Light and medium shoppers consider customisation of offers and logistics important • Security should be communicated in an informed way to this internet literate audience • Mobile optimisation and its advantages need amplification to encourage take-up • Market maturity increases price sensitivity and customer service expectations

56


REASONS FOR SHOPPING CART ABANDONMENT Top 3 reasons • Unexpected costs

(62%)

• Just browsing

(47%)


(34%)

CONCERNS ABOUT OVERSEAS SHOPPING 22% of Americans shop on overseas websites, but they do have concerns: 1. Concerns about fraud / protecting my identity (60%) 2. Cost of shipping / delivery (58%) 3. Concerns about shipping /delivery (57%) 4. Payment security (50%)

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