Consumers Indicate Growing Confidence in E-Commerce

Retailers put more emphasis on improved customer service via e-commerce.
February 07, 2019

ALEXANDRIA, Va. – Rolling into 2019, American households are enjoying strong financial health and spending accordingly, including purchases via e-commerce, according to the latest IRI Consumer Connect survey results.

According to the market research company, early 55% of consumers report their households were in good financial shape in Q4 2018, up 4% from Q3 2018 and 2% from Q4 2017. At the same time, 2018’s e-commerce sales jumped 35.4%.

Consumers are growing increasingly comfortable with online shopping, and retailers are upping their online offerings, while working to improve the shopper’s experience with simple navigation, assortment, value and delivery options.

“Millennial and Gen X consumers are more at ease with online purchases than older generations, and as e-commerce becomes more of a routine, those shoppers are migrating offline efforts to save money to their online practices,” said Joan Driggs, vice president of content and thought leadership for IRI. “Online offers a lot of additional outlets for smart shopping, including easy comparison shopping and keyword search for more informed purchases.”

E-commerce sales for the 52 weeks ending Dec. 30, 2018, were $58.9 billion, which accounted for only 11% of total retail sales for consumer-packaged goods. However, e-commerce accounts for 64% of total omnichannel growth.

Non-food items, particularly personal-care and home-care products, are tops in online purchases. IRI reports that vitamins, pet food and supplies, and skin-care products are top sellers.

Recognizing consumers’ growing confidence in e-commerce, 67% of retailers say omnichannel retailing is a priority this year, according to a report from Shopgate, a Texas-based consumer solutions company.

Shopgate’s 2019 omnichannel survey evaluated retailer’s attitudes and interests in emerging commerce trends across different channels. Based on currently available technology, Shopgate developed the following five “power plays” for omnichannel retailing:

Power Play #1: Bridge the Online and Offline Experience Gap Through Mobile
Of the retailers that Shopgate surveyed, 50% listed a mobile shopping app as a top priority in their omnichannel plans, and 45% listed mobile points of sale as another important factor in future omnichannel plans.

Power Play #2: Create Upselling Opportunities Through BOPIS and BORIS
Shoppers can’t get enough of convenience, which is why many retailers are adopting the buy online, pick up in-store (BOPIS) and the buy online, return in-store models (BORIS), which compete against Amazon and effectively utilize physical stores as hubs for fulfillment and upselling opportunities. The survey found that 61% of retailers say BOPIS and BORIS are at the top of their omnichannel plans and investments.

Power Play #3: Create a Single, Cohesive View of Each Customer with Clienteling
The survey found that 46% of retailers said that a preferred technology is clienteling, which establishes long-term relationships with key customers based on data about their preferences, behaviors and purchases. They also indicated they were open to considering the merits of tablets, smartphones, and computers for clienteling apps and programs.

Power Play #4: Create Better Efficiency Through Omnichannel Fulfillment
Shoppers today demand faster, more efficient order fulfillment, and retailers, specifically store associates, need to move fast enough to have some orders shipped directly to a customer’s door and other orders ready for in-store pick up. The survey indicated a big opportunity for retailers to invest in capabilities that can turn stores into fulfillment centers just by giving store associates full control over the order fulfillment process via a mobile device. In addition, 33.8% of respondents said they would like to have access to data on all devices, whether it be on a tablet, smartphone, desktop or tablet.

Power Play #5: Target Customers Better at the Right Time and Place Through Geofencing
Consumers are constantly bombarded by messages, and there’s extreme value in breaking through the clutter with geofencing, which uses GPS or RFID technology to create a virtual geographic boundary that allows software to trigger a response when a mobile device enters or leaves a designated area. Geofencing helps market to the on-the-go mobile user.

“Shoppers do not think in terms of individual channels, and they certainly don’t care if it takes multiple channels to make a single purchase,” said Casey Gannon, vice president of Marketing, Shopgate. “All they care about, and expect, is for their favorite retailers to be capable of accommodating how they want to complete a purchase.”