Knowledge, authenticity and social influences are ranking higher globally as factors that influence purchase decision and conversion.
A PWC study on global e-commerce released February 2016 asked nearly 23,000 online shoppers around the world on issues ranging from mobile shopping to social media influence.
The findings reflect an upward trend of e-commerce as the next major retail sector, replacing traditional brick-and-mortar stores.
The E-commerce vs Brick-and-Mortar Price War
In China, 65% of respondents said that “they shop online via their mobile at least once monthly”, and 19.6% are found to shop online daily. Global shoppers are also shopping online daily more often, up by 1.1% to 7.1% this year.
Prices play a very important part for shoppers as 60% of global respondents said that they shop at their favorite retailer because their prices are competitive.
In Singapore, 55% of respondents agreed that they shop online because it is cheaper, reflecting the popular wisdom of how e-commerce websites, which run at a lower cost than brick-and-mortar stores, are able to be more competitive by pricing their products at a cheaper price.
Personally, I bought a Razer DeathAdder Chroma off Amazon for only 76 SGD with shipping, significantly lower than the retail price of 119.90 SGD in Singapore.
Less Tangible Factors Matter More
Brand trust ranked second at 32% alongside the more practical item stock availability, a surprising statistic which reflects the idea that customers are valuing the quality and reliability of products a brand produces in the wake of counterfeit goods, horse meat steaks and melamine-laced milk powder.
Brand trust, which is about how the business delivers quality products, is not to be confused with sustainable practices and engaging in conservation initiatives, which only 7% of respondents felt was the reason why they liked the retailer.
Although price-competition is a major selling factor for e-commerce, brick-and-mortar stores are still perceived by a majority of respondents to be a superior avenue to make purchases in.
This correlates with how 40% of respondents agree that staff with deep knowledge of their product range would improve the shopping experience. I imagine that the recommendations that retail staff can make will help the shopper make a better purchase decision.
With some e-commerce stores offering live online customer services, e-commerce will be catching up to the competitive advantages of brick-and-mortar stores.
Furthermore, “ease of checkout” and the “ability to check another store or online stock quickly” ranked right behind at 35% and 32% respectively, which coincide with the features that e-commerce stores provide.
Global Rise of Mobile Shopping
The rise of e-commerce is obvious enough, but the steady increase in mobile shopping means that the future of connectivity is also about accessibility. In 2012 only 30% of respondents purchased on mobile at least once at year, but in 2015 the number is now 54%, with 16% using it monthly.
Apps like Carousell, Shopee, Zalora, Qoo10 and Lazada are encouraging people to shop online with their low prices and accessible interfaces, but what will make online shopping boom in Singapore is our mobile network coverage which we all take for granted.
With over 98% national coverage from 3 major providers: Singtel, Starhub and M1, you can basically shop on mobile anywhere in Singapore. I used over 1GB of data on Qoo10 last month, and I can’t imagine how much data people who shop daily use in order to load all the pictures and product descriptions.
Mobile shopping has to be enabled by infrastructure, thus placing Singapore in a great position. Apps like Shopee which aim to lower barriers to entry for e-commerce entrepreneurs will only rise in popularity and gain more product diversity as more and more businesses flock towards such benefits.
Global Growth of the Mobile E-commerce Community
The growing community of bloggers, youtube personalities and star reviewers in Singapore is reflective of the global trend of opinion leaders influencing huge followings of people in their decisions. The community built around a product has never been so important, and we look to loyalty programs as the first step into maintaining communities.
Facebook reviews or product reviews on online stores rank first (45%) amongst influences on shoppers, supporting the idea of brand authenticity as people endorse and being credibility to the product.
Promotional offerings like discounts and early bird deals lower the cost-entry of customers trying new products, emphasising the importance of price in a buyer’s decision.
Businesses can now grow themselves by managing their community well and thus creating their own network of influencers, as shown by successful e-commerce stores like Lazyfruits.
With 91% of respondents involved in loyalty programs, customers are definitely responding to the perks of being in a community built around a brand.
With this study, business owners should turn towards mobile e-commerce in order to capitalise on the growing market of mobile shoppers. Mobile, however, doesn’t mean disconnected; community management and growth will play a huge role in growing brands due to the Internet of Things.
Feature Image Credit: socialbrandwatch.com