Decrease in cross-border purchases due to slow and expensive shipping, claims report

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Pitney Bowes, a technology developer in the areas of e-commerce, shipping, mailing and big data, has published key findings from its 2018 Global Ecommerce Study.

As online retailers and marketplaces prepare for record volumes of e-commerce orders this holiday season, the study found that 61% of consumers globally felt let down by their online shopping experience during the last holiday season. This figure is up significantly from 47% in 2017, and 41% in 2016. In the USA, the number of of dissatisfied online shoppers has grown even more with 56% dissatisfied, up from just 36% a year ago.

Consumers pointed to post-purchase experiences, including items arriving late, expensive shipping, tracking inaccuracies, confusing returns policies, and lost or incorrect items as reasons for their dissatisfaction.

Lila Snyder, president of commerce services at Pitney Bowes, commented, “More and more, consumers are telling us that the post-purchase experience – what happens after the order – is every bit as important, if not more, than the shopping experience that occurs before the order.

“The silver lining for retailers: consumers are giving you the blueprint for how to get it right, and those who get it right will be rewarded with customer loyalty and revenue growth.”

Greater opportunity for failure
According to the survey, 94% of consumers globally shop online, a figure that is unchanged year-on-year. However, the frequency with which consumers shop online is growing, with 35% of shoppers making an online purchase at least once a week.

In the USA, 30% make an online purchase at least weekly, up from just 19% a year ago. The UK saw its rate of weekly online shoppers rise to 46%, up from 38% the year prior.

“Individual consumers are spending more time shopping online and waiting on products, creating a greater probability for a bad experience,” explained Snyder.

“As volumes rise, retailers are struggling to keep up with the demand in terms of physical infrastructure and the technology to manage it effectively.”

The study shows that consumers start to make judgements on the post-purchase experience even before placing their orders. In fact, 91% of online shoppers in the USA said they would leave a retail website if critical services like ‘fast and free shipping’ are not available.

At the same time, consumers are becoming more demanding in their expectations for fast and free – only 47% consider two-day free shipping fast.

“If there is one finding for retailers to pay attention to, it’s this one: fast and free shipping is a must,” said Snyder. “Retailers invest millions of dollars in marketing to drive consumers to their e-commerce sites, but all of that expense and effort is for naught if they don’t also invest in attractive fast and free shipping offers that meet consumer expectations.”

Consumers still rank ‘free shipping’ as more important than ‘fast shipping.’ Globally, 76% of consumers prefer free over fast. In the USA, however, the trend is starting to reverse, with 79% preferring free over fast, down from 86% the year prior. This reversal is mostly driven by millennials, with 35% willing to pay for fast shipping, up from 20% the year prior.

In the USA, online shoppers list free shipping (80%) and fast shipping (66%) as the two most important criteria in determining where to shop online. Two-thirds of online shoppers in the USA think it is acceptable to have a minimum purchase requirement of US$25 or higher to trigger free shipping.

Decline in cross-border shopping
Results from the survey demonstrate how the cross-border e-commerce market continues to mature. For the first time, fewer consumers said they were shopping cross-border, dropping from 70% in 2017 to 64% in 2018.

The USA, China and Japan were the only countries where the number of cross-border shoppers increased in 2018. Still, the market continues to grow, because those who are shopping cross-border are doing so more frequently. This was true in nearly every country surveyed, and 12% of consumers globally are now shopping cross-border at least weekly, up from 10% in 2017.

Consistent with the results of the study, frustrations with shopping cross-border can be attributed primarily to shipping that is too slow, or too expensive. Other frustrations include the inconvenience of returning unwanted items and poor customer service.

The 2018 Pitney Bowes Global Ecommerce Study is based on surveys of more than 13,000 consumers in 12 markets, combined with surveys of 650 retailers in the USA, UK and Australia.

To watch a video looking at the results of the 2018 Pitney Bowes Global Ecommerce Study, click here.

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Dan originally joined Parcel and Postal Technology International in 2014 having spent the early years of his career in the recruitment industry. As online editor, he now produces daily content for the website and supports the editor with the publication of each exciting new issue. When he’s not reporting on the latest technological developments, Dan can be found on the golf course or apprehensively planning his next DIY project.

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