2021 the year of retention for retailers - report
Transparent delivery, flexible payment options and website speed are key factors driving online shoppers in Australia and New Zealand to leave a retailer's website, according to a new report.
Open SaaS ecommerce platform BigCommerce has announced the release of its inaugural Customer Centricity Report, a localised study designed to give retailers insight into shopper behaviour to help address issues to improve customer retention and experience.
"If 2020 was the year the pandemic pushed people online, then 2021 has been the year of retention," says Shannon Ingrey, vice president & general manager, APAC at BigCommerce.
"With so many now shopping online and with a broadening range of options, retailers are fighting on multiple fronts to hold onto their share of the market," she says.
"Price is no longer the only factor consumers take into account, with delivery costs, flexibility of payment option and convenience all influencing their decision making. As a result, its not enough to simply meet changing consumer expectations, retailers must anticipate and exceed them."
The report surveyed more than 3900 Australian and New Zealand shoppers to give retailers and brands a true understanding of shoppers behaviour and the key factors that drive them to cart abandonment.
Key insights from the survey revealed:
- 80% of shoppers will leave a site and attempt to purchase from a competitor if the website is too slow
- Communicating delivery cost late in the checkout process is a key driver of cart abandonment for 86% of shoppers
- 71% of shoppers have left a purchase because delivery is too slow or too expensive.
- 14% of shoppers plan to increase their level of spending using BNPL in the next month, while 62% plan to stay the same.
Communication and cost transparency around delivery is key
Communicating delivery costs late in the checkout process is a key driver of cart abandonment for 86% of shoppers. While slow delivery is an issue for the majority (69%), the cost of delivery and communication around the cost is a far bigger issue for shoppers.
The report notes that shoppers aren't unreasonable when it comes to delivery and delivery fees. For small items, anything over $9 would likely cause cart abandonment and for large items, delivery fees of $97 or more would lead to the same fate. Here, retailers need to ensure their pricing matches the product they are selling and consumer expectations.
More than a third of online shoppers used a BNPL option in 2021
Buy Now Pay Later (BNPL) is a relatively new addition to the payments landscape in Australia and New Zealand but shoppers already seem to be at a comfortable level with BNPL as part of their purchase behaviour. More than half of respondents (62%) said they plan for their BNPL spend to stay the same moving forward.
Afterpay is by far the most popular option, with 82% of BNPL users having an Afterpay account. Pay in 4 PayPals BNPL option is only a recent addition to the payments space, but already 15% say that they have a BNPL account (despite it actually being open to all PayPal members at checkout).
For retailers wondering if they need to offer BNPL at checkout, the results are pretty clear. Almost three quarters (72%) of respondents say they will spend more on a single online purchase if a website offers BNPL at checkout. In fact, not only are shoppers more likely to make a purchase, they are also more likely to spend more if BNPL is offered as a payment method. Being able to pay over time means shoppers are more comfortable spending more overall.
2021 has been the year of customer retention
One method retailers have turned to in order to improve customer retention is loyalty rewards. For 78% of respondents, free shipping is a favourite when it comes to reward types for loyalty programs. Interestingly, free shipping ranks even higher than the products themselves when it comes to reasons to buy from a retailer again.
Shipping costs continue to be more of a factor than shipping speed. A whopping 93% of respondents would buy from a retailer again if they offered free shipping compared to 77% who value fast shipping. On the flip side, 93% of respondents felt expensive shipping charges would drive them to cart abandonment.
When it comes to helping customers make decisions, email has shown to be the most helpful channel. An impressive 43% of shoppers sign up to marketing emails simply because they like the brand. This is an important lesson in continuing the conversation and ensuring marketing emails are an exercise in retention that goes beyond just discounts. Shipping costs and how shoppers want to be marketed need to be a key consideration for retailers when looking at retention strategies.
"Our aim in sharing the data from the Customer Centricity Report is to provide Australian and New Zealand merchants with the insight into what's driving shopper behaviour that will help them better navigate their strategies and improve the overall customer experience," says Ingrey.
"At the end of the day, the consumer remains at the core of strategic decision-making for every merchant."