Free de­liv­ery mat­ters to on­line shop­pers

The Star Malaysia - StarBiz - - Star Sme biz -

RE­TAIL­ERS in Asia have an op­por­tu­nity to grow their on­line sales as they en­hance cus­tomer ex­pe­ri­ence to meet a grow­ing de­mand for im­proved ser­vices.

Ac­cord­ing to the UPS Pulse of the On­line Shop­perTM Study, rising ex­pec­ta­tions by on­line shop­pers is driv­ing in­creased de­mand for free ship­ping, ex­pe­dited de­liv­er­ies and cus­tomer-cen­tric re­turn poli­cies amidst a fiercely com­pet­i­tive re­tail land­scape.

The re­search, cur­rently in its sixth year, notes that only 57% of shop­pers in Asia are sat­is­fied with the on­line shop­ping ex­pe­ri­ence. This is the low­est per­cent­age com­pared to other re­gions sur­veyed, and an im­prove­ment of only 11-per­cent­age points since 2015 (46%), demon­strat­ing the slow pace of change in ad­dress­ing cus­tomer sat­is­fac­tion.

On av­er­age, Asian on­line shop­pers en­joyed free ship­ping for 85% of their or­ders, il­lus­trat­ing the com­pet­i­tive ad­van­tage that free ship­ping gives to re­tail­ers that of­fer it. Nearly two-thirds of re­spon­dents in Asia in­di­cated that free ship­ping is an im­por­tant fac­tor in the check­out process, with 46% of shop­pers adding items to their cart to qual­ify for it.

Ad­di­tion­ally, about half of Asia’s on­line shop­pers have aban­doned a cart due to no de­liv­ery date be­ing given or de­liv­ery time be­ing too long, with the av­er­age de­liv­ery wait be­ing 11 days.

Mean­while, a con­ve­nient and trans­par­ent re­turn pol­icy in­creases sales and cus­tomer sat­is­fac­tion, with 67% of shop­pers in Asia in­di­cat­ing that free ship­ping on re­turns is im­por­tant when se­lect­ing on­line re­tail­ers. This is an area for re­tail­ers in Asia to im­prove as only 47% of shop­pers are sat­is­fied with the ease of mak­ing re­turns, even though only four in 10 have ac­tu­ally re­turned an on­line pur­chase in the past year.

The study re­veals that 79% of shop­pers re­turned only 10% or less of their or­ders. Among these, 69% made new pur­chases when re­turn­ing an on­line or­der in-store, and 67% bought new items when re­turn­ing on­line, demon­strat­ing a strong busi­ness case for of­fer­ing a fuss-free re­turn ser­vice.

“Analysing the mind­sets and mo­ti­va­tions of thou­sands of shop­pers around the world re­veals that, far from be­ing a sunk cost, clever ship­ping and re­turns so­lu­tions are ac­tu­ally an area where re­tail­ers can win and re­tain cus­tomers, drive re­peat pa­tron­age, and en­cour­age shop­pers to add more items to their carts – both on­line and in-store,” says Sylvie Van den Kerkhof, vice pres­i­dent of mar­ket­ing for UPS Asia Pa­cific.

In re­cent years, con­sumers in Asia have be­come in­creas­ingly com­fort­able with shop­ping on smart­phones, se­lect­ing ship-to­store, and buy­ing from in­ter­na­tional re­tail­ers and small busi­nesses.

Smart­phone pur­chases have be­come the norm with 77% of shop­pers plac­ing their or­ders through their phones. This per­cent­age, up from 55% in 2015, is the high­est glob­ally. In com­par­i­son, only 48% of Amer­i­can smart­phone users made on­line pur­chases on their de­vice.

Ship-to-store is also grow­ing pop­u­lar with 37% of shop­pers us­ing it in the past year and 59% of those plan­ning to use it even more this year. Notably, it can be a lu­cra­tive of­fer­ing for re­tail­ers, as 60% of Asian shop­pers who used ship-to­store in the past year made ad­di­tional pur­chases while in store. The per­cent­age is even higher in China at 74%.

“One re­veal­ing find­ing is that Asia’s on­line shop­pers are now buy­ing from a more di­verse set of re­tail­ers, rang­ing from ma­jor mar­ket­places to bou­tique shops, from do­mes­tic and for­eign stores.

“What this tells us is that there is a vi­able op­por­tu­nity and cus­tomer base for small busi­nesses in Asia to ex­pand in­ter­na­tion­ally, and it is only set to grow larger,” says Van den Kerkhof.

The re­search found that 55% of on­line shop­pers in Asia are em­brac­ing in­ter­na­tional re­tail­ers. Among those, 49% of buy­ers ven­tured to over­seas re­tail­ers be­cause the brand or prod­uct was not avail­able do­mes­ti­cally, or the qual­ity (39%) or price (38%) was bet­ter in­ter­na­tion­ally.

Note­wor­thy for Asian busi­nesses is that there is a strong pref­er­ence for buy­ing from re­tail­ers within Asia as 77% of those who made an in­ter­na­tional pur­chase made one from a re­tailer within the re­gion. About 31% have or­dered from re­tail­ers in the US. Mean­while, Hong Kong had the high­est per­cent­age of on­line shop­pers mak­ing in­ter­na­tional pur­chases at 82%, fol­lowed by China at 64%.

On the con­trary, only 21% of Ja­panese shop­pers did so, in­di­cat­ing their strong pref­er­ence for do­mes­tic goods.

“An in­creased ap­petite for mak­ing pur­chases from in­ter­na­tional re­tail­ers demon­strate a strong po­ten­tial for busi­nesses in Malaysia to ex­pand their pres­ence glob­ally. Lo­cal small and medium en­ter­prises must cre­ate a more dy­namic on­line shop­ping ex­pe­ri­ence to meet the fu­ture de­mands of Asian shop­pers,” notes UPS Malaysia man­ag­ing di­rec­tor Mo­hamed Firoz.

The study also in­di­cates newer ar­eas of re­tail that may play a big­ger role in the fu­ture such as al­ter­nate de­liv­ery lo­ca­tions.

Al­ter­nate de­liv­ery lo­ca­tions are most pop­u­lar in Asia com­pared to other re­gions, with 71% of con­sumers, par­tic­u­larly mil­len­ni­als and ur­ban shop­pers, in­ter­ested in ship­ping pack­ages to these lo­ca­tions with ex­tended hours for re­duced fees. Shop­pers’ pref­er­ence for al­ter­nate de­liv­ery lo­ca­tions has grown con­sid­er­ably from 46% in 2015 to 59% of or­ders in 2018.

Asian shop­pers also love their mar­ket­places with 98% hav­ing pur­chased from one, and more than a third say­ing they will use them even more in the next year. Bet­ter prices (64%) and free or dis­counted ship­ping (42%) are the top rea­sons for buy­ing from a mar­ket­place in­stead of di­rect from a re­tailer.

“The UPS Pulse of the On­line Shop­per re­search shows time and again that as on­line shop­pers gain the ben­e­fit of greater choice, they are in­creas­ingly dic­tat­ing the terms of their buy­ing ex­pe­ri­ence and it is vi­tal that re­tail­ers know how to cater to and adapt to their chang­ing needs,” Van den Kerkhof adds.

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