How much terrain is there still to win for merchants? What are they key drivers and barriers for New Online Shoppers (consumers who have entered e-commerce in the past year) to shop online (more) in 2022? And do these differ for Existing Online Shoppers? How satisfied are New Online Shoppers with their first e-commerce experiences? A positive experience is essential as this is a big factor in New Online Shoppers’ future purchasing behavior – a positive experience increases the likelihood of a New Online Shopper coming back, ultimately becoming a loyal Existing Online Shopper in the longer run.
However, our results indicate that New Online Shoppers are actually much less satisfied than Existing Online Shoppers. This is probably due to the fact that New Online Shoppers have ‘offline’ expectations of the online experience – this is a clear mismatch that merchants need to be aware of. Which aspects do merchants need to improve to bind New Online Shoppers to them, and how can they keep Existing Online Shoppers’ loyalty and retention rates high? Keep reading to find out!
Based on our analytics of the general populations in the Netherlands, Germany, Norway and the UK, aged 18 and above, we have divided consumers into 5 distinct segments based on being an experienced, new or potential online shopper. We see that around ~94% of consumers in all four countries have shopped online, with the global pandemic most likely being a key contributing factor in the in the past two years.
These numbers also indicate that there is still potential for the online shopper base to grow: 2 to 3% of consumers, regardless of country, has not yet started buying online but they can consider doing so. Adding up the Existing, New and Potential Online Shoppers, this sums up to a maximum online reach of 97% of consumers in the Netherlands and Germany. In Norway the corresponding share of max online reach is 95%. The UK tops the four markets with 98%.
To get a clear view on what drives New Online Shoppers and Existing Online Shoppers to online channels, we focus our analysis on the differences and similarities between New Online Shoppers (started buying online within the past year) and Existing Online Shoppers (have shopped online more than a year). And we find a similar pattern in the Netherlands, Germany, Norway and UK: as a consumer buys more online, convenience becomes an increasingly important driver to shop online even more. As we can assume that the majority of New Online Shoppers have been ‘pushed’ to switch consumption from brick-and-mortar stores to online during the past year, this finding is to be expected. Besides the convenience aspects of online shopping, the fact that lower prices are accessible online is also an important driver for both New and Existing Online Shoppers to shop online.
Our results indicate that – for New Online Shoppers - concerns around the online purchase process/security and delivery are the main aspects holding consumers back from increasing online purchases. Being new to the online shopping experience, new shoppers find the purchase process to be complicated and have security concerns both related to payment and product delivery. This is the case in the Netherlands, Germany, Norway and UK.
This aspect is the main differentiating factor for New Online Shoppers, when compared to Existing Online Shoppers. New Online shoppers also state that ‘physical stores have better prices/assortment and service’ hold them back compared to Existing Online Shoppers, and both groups attach approximately the same amount of value to the barriers ‘concerns about products not living up to expectations’. A barrier that is of similarly low importance is the concern about overconsumption.
When it comes to how satisfied New and Existing Online Shoppers are with merchants’ performance, we see big differences between the two groups, which are visualized in below graph. The overall satisfaction is 55% for New online shoppers, and 77% for Existing online shoppers. Comparing the numbers to last year tells us that the overall satisfaction grew a little bit for the existing shoppers (75% in 2021) but decreased for New shoppers (58% 2021).
A first obvious conclusion is that New Online Shoppers are significantly less satisfied than Existing Online Shoppers – likely due to the fact that they enter the online shopping experience with ‘offline expectations’. It is more difficult for merchants to live up to these very different expectations, hence the lower satisfaction rates for New Online Shoppers. For New Online Shoppers to become more satisfied, and make repeat purchases, merchants need to improve the accessibility of products and delivery speed. In addition, merchants should better manage New Online Shoppers’ expectations with regards to the online purchase process, security and delivery.
The Payment dimension is where we see a slightly larger gap this year. But the differences are quite small, with a maximum 3 percentage point difference compared to 2021. The share satisfied with the payment process has decreased from 18% to 15% among New online shoppers, and it has increased from 33% to 36% among Existing online shoppers. Since the differences are small, it is safe to say the satisfaction levels are quite stable over time.
Behind the scenes we are busy with designing our new quarterly ”Make it Happen Times”. A tabloid format newsletter. The Make it Happen Times contains our best blogs from the previous Quarter, cool graphs, interviews and much more. This fun and insightful read will be live early April. So stay tuned!