Global Voices Pre-Peak Pulse 2021

EXECUTIVE SUMMARY – THE STATE OF ECOMMERCE, DTC, AND CROSS-BORDER AT THE MID-YEAR

While the retail world has spent the last year and a half adapting to the new normal thrust at them courtesy of the global pandemic, the full impact is, in many ways, still being determined.

An estimated $630 billion shifted from in-store shopping to online during the pandemic, with total ecommerce revenues expected to reach $3.5 trillion by year-end. Yet, there is still a feeling of uncertainty across the minds of many business stakeholders. Heading into peak season 2021, it’s critical to take stock of industry trends and consumer mindsets as they continue to evolve. By examining these behaviours, brands can better determine new opportunities for business growth and development.

In July, ESW conducted the Global Voices: Pre-Peak Pulse 2021 survey, a follow-up to a similar survey from December 2020 that provided deep consumer insights as new cohorts emerged in the cross-border ecommerce space. The latest survey was fielded from nearly 15,000 consumers across 14 countries, looking closely at generational shopping habits, behaviours, and attitudes, specifically related to DTC and the cross-border shopping experience.

COVID’S ONGOING IMPACT

Half of online shoppers increased their online purchasing during the pandemic, including those who shopped less in stores. Nearly 60% of shoppers said that the pandemic opened their eyes to the convenience of online shopping, 35% said they hadn’t missed physical shopping, and 47% said they would continue to shop mostly online.

Of those who purchased more online, 32% had significantly more purchases, with shoppers in China (65%), the UAE (60%), India (59%), and Mexico (57%) leading the charge.

China, India, and the UAE each had over 40% of shoppers registering 11 or more purchases outside their home country.

The survey revealed that those who had the opportunity to work from home during the pandemic also tended to shop more online, with 53% increasing their online shopping compared to just 43% of those who could not work from home.

The pandemic also ushered in many first-time online shoppers, and the UAE (14%), India (10%), Australia (8%), and South Africa (8%) ranked highest in first-time online purchasers.

The online experience is also continuing to change for many shoppers, as 18% of consumers worldwide said they shopped online for a product that had only previously purchased in-store, and 14% replaced in-store browsing with online research. Canada, Mexico, South Africa, and India all accounted for higher levels of new online shopping experiences than other countries.

The opportunity to buy online and pick up at a retail location or other collection point has been growing in adoption and expectation. Consumers with longer restrictions said they were more likely to use in-store or curbside pickup options, with approximately a quarter of the shoppers in Canada, France, and Russia doing so.

PURCHASE ONLINE AND PICKUP IN-STORE OR CURBSIDE

LOCKDOWNS COMPARED TO ONLINE PURCHASE WITH IN-STORE OR CURBSIDE PICKUP

For their part, shoppers in China and Russia were almost twice as likely as other consumers to use official collection points (retail outlet or locker) to pick up an online purchase.

COVID IMPACT – I HAVE PURCHASED ONLINE AND COLLECTED FROM AN OFFICIAL COLLECTION POINT (LOCKER, RETAIL OUTLET ETC)

COVID’S ONGOING IMPACT LOCKDOWN ATTITUDES

The pandemic has been handled differently throughout the world, and personal attitudes towards safety measures have varied widely.

While European and North American countries had extensive lockdowns, 40% of shoppers in South Korea (41%), China (35%), and Russia (32%) reported no impact on the retail buying experience, citing that there were no restrictions imposed. Only Japan (11%) and United Arab Emirates (10%) registered double-digit responses to experiencing no impact from restrictions due to simply ignoring them. Meanwhile, Mexico (37%), Canada (35%), and the UK (33%) noted restrictions of six months to a year.

IMPACT FROM RESTRICTIONS

Shoppers who had shopping restrictions of more than a month had slightly higher increases in online shopping.

For those who increased their online shopping, many noted that they did so to improve their surroundings or mental wellbeing through the lockdowns. Purchases to improve the physical surroundings due to spending more time at home were cited by 39% of respondents, and 33% spent more to alleviate the emotional burden of the pandemic. This was especially true of respondents with children aged 0-11 at home. Shoppers in Asia and Mexico made more purchases specifically to improve their physical surroundings or emotional state compared to other countries or regions.

REASONS FOR INCREASE IN ONLINE SHOPPING

With 29% of shoppers stating that they had more disposable income because of a lockdown, nearly as many (28%) spent more on gifts for friends and family because they could not physically be with them. Another 24% stated they were buying “pick-me-up” items as a reward for getting through a lockdown, and 12% said they saved money during a lockdown but overspent to make up for it when retail reopened.

REASONS FOR INCREASE IN ONLINE SHOPPING

Among the reasons cited for decreases in online shopping habits, saving money and concerns about job and economic security were most common.

Limited occasions to go out and socialise were broadly seen as reasons to spend less in general, and 22% noted that they were saving money to spend it once lockdown and restrictions eased.

REASONS FOR DECREASE IN ONLINE SHOPPING

Consumers in South Africa, Australia, and Russia expressed greater concern for job and economic uncertainty, while shoppers in Europe, Japan, and China had less concern.

COVID’S ONGOING IMPACT A SHOT IN THE ARM: VACCINATIONS AROUND THE WORLD

Vaccine availability has been a major signifier for easing restrictions and returning to normalcy throughout much of the world.

However, widespread availability is still a challenge for many countries, and countries with broader access may still be experiencing hesitancy or contention in certain populations. Worldwide, 58% of online shoppers have been either fully or partially vaccinated, with another 27% waiting on availability or priority. Only 12% said they had no intention of taking the Covid-19 vaccination, while just 3% noted that they had been advised by a medical professional not to get the shot. The widespread availability of the vaccine is still delayed in some regions, and many shoppers in Japan (51%), South Korea (56%), Mexico (46%), and South Africa (55%) are still waiting for their first dose.

VACCINATIONS AMONG ONLINE SHOPPERS

Those who were either fully or partially vaccinated (31%) had slightly higher online shopping increases than others, including 28% who are waiting for their first shot and 24% of respondents who do not intend to take a COVID-19 vaccine at all.

WHO’S SHOPPING AND HOW?  TRENDS BY GENERATION – MILLENNIALS LIGHT THE WAY

Millennials have been the primary drivers of online shopping throughout the pandemic. While already recognised as digital natives with a higher propensity for buying online, 63% still said that the pandemic opened their eyes to the convenience of online shopping, followed by Gen X (57%), Gen Z (56%), and nearly half of Boomers (48%).

With most across all age groups confessing they missed physical shopping, more than half of Millennials said they would continue to shop primarily online. The same was noted for 49% of Gen Z, 45% of Gen X, and 31% of Boomers.

In most countries, it’s the Millennials who are most likely to shop cross-border. Though, perhaps surprisingly, Boomers lead in the UK, the US, Canada, and Japan. Gen X matches or closely follows the Millennials in Germany, South Korea, and South Africa. Meanwhile, 78% of shoppers in India and the UAE are either Millennials or Gen Z.

Millenials are most likely to shop cross-border in most countries, while a full 75% of India and UAE shoppers are either Millennial or Gen Z.

CROSS-BORDER SHOPPING IN GENERATIONS

Less surprising than Boomers cornering certain cross-border markets, Millennials also tend to be the power shoppers of cross-border ecommerce. They represent the highest percentage of those making 11 or more individual purchases. They registered 36% of 11+ purchases, followed by Gen Z with 33%. Together, the two cohorts accounted for two-thirds of shoppers who made 21+ cross-border purchases. Meanwhile, 62% of Baby Boomers made between 1-5 purchases.

NUMBER OF ONLINE PURCHASES OUTSIDE MY COUNTRY OVER THE PAST YEAR

OUTSIDE OF COUNTRY PURCHASE FREQUENCY

In terms of overall spending, 34% of Gen Z respondents noted they spent less during the pandemic – a higher percentage than any other age group. 31% of Millennials and 29% of both Gen X and Boomers spent less than usual in the last 12 months. For those who decreased their online shopping, Gen Z (63%) and Millennials (53%) were more likely to cite saving money as the reason, compared to those who noted job and economic uncertainty (30% and 39%, respectively). Gen X was just as likely to cite saving money as concern about job and economic uncertainty (46%), while Boomers were slightly more concerned about the uncertainties (43%) than saving money (40%).

REASONS FOR REDUCING SPENDING IN GENERATIONS

The influence of social media on retail has continued to grow over recent months, with 47% of online shoppers saying they made a purchase on a social media channel, driven mainly by Millennials (61%) and Gen Z (55%). Still, Gen X and Baby Boomers are flexing their own buying power across social media, with 41% and 25% respectively making purchases through social channels.

Geographically, its shoppers in China, Mexico, India, and the UAE with the strongest social media purchasing prowess, with two-thirds having made such purchases.

When it comes to researching a new product, 30% of Millennials and 29% of Gen X have turned to social media for insight, followed by 25% of Baby Boomers and 22% of Gen Z.

Millennials (11%) have primarily been driving the behavior with the highest use of collection points for purchases, compared to Gen Z and Gen X (8% each) and Baby Boomers (7%).

With many brands putting marketing dollars into the hands of social media influencers, just how much influence do they have? Millennials are the most reliant on influencers, but there’s not much difference when compared with Gen Z (17%), Gen X (16%), or Boomers (13%). Around a quarter of shoppers in India and UAE rely on influencers, while the number is below average in Europe, Mexico, and China.

RELYING ON INFLUENCERS

Expectations also vary by generation. Gen Z is least likely to expect transparency in delivery costs (57%), compared with Millennials (68%), Gen X (73%), and Boomers (79%). Boomers are least likely to want to pay for expedited shipping (34%) compared to Millennials (49%), Gen X (44%), and Gen Z (43%). They are similarly least likely to expect international shipping to take longer than domestic.

When it comes to customer service, Gen Z and Millennials, while still preferring customer service in their own language (61% and 69%, respectively), are more accepting of other languages (50% and 59%). They are also more open to chat and social media channels for customer service interactions. Baby Boomers, by and large, expect customer service in their native language (78%) and are put off by customer service in another language (67%). They are also more averse to customer service via web chat (29%) and are even less interested in social media interactions (19%).

CUSTOMER SERVICE PREFERENCES

WHO’S SHOPPING AND HOW?  WHAT THEY’RE BUYING NOW

Except for apparel, the most popular retail category, Millennials and Gen Z are buying across all categories at three times the rate of Boomers.

Compared to February of this year, cosmetics, fragrances, and luxury goods showed significant gains across age groups. Notably, luxury saw Millennials increase cross-border shopping by 7%, while Gen X and Boomers increased their purchases by 5%. Millennials also increased online purchases of fragrances by 6%, and both they and Gen X increased their domestic online purchases of cosmetics by 6% as well.

WHAT ARE THEY BUYING? – UPDATE JULY 2021

Cosmetics, fragrances and luxury goods showed increased in online purchases during the pandemic.

WHAT ARE THEY BUYING? – DIFFERENCES FROM FEB 2021

WHO’S SHOPPING AND HOW?  NEW BRAND EMERGENCE

One of the added benefits of shopping online is, of course, access to new brands and retailers. Add the convenience and ease of cross-border ecommerce, and a literal whole new world opens for consumers.

The pandemic, then, unsurprisingly brought new brand experiences to the fore for consumers who turned to online shopping in greater numbers. As a result, 11% of shoppers worldwide had experiences with new brands and retailers. The UAE and India saw the most significant gains, each with 17%, followed by Mexico and China (14%) and Australia and Canada (13%). also increased online purchases of fragrances by 6%, and both they and Gen X increased their domestic online purchases of cosmetics by 6% as well.

COVID IMPACT – I HAVE SHOPPED WITH NEW BRANDS AND RETAILERS BECAUSE OF THE PANDEMIC

GREAT EXPECTATIONS  FOR DTC CROSS-BORDER SUCCESS

A significant factor for sustaining the growth of DTC cross-border ecommerce is meeting the exacting expectations of consumers around the world. While variety and availability are primary drivers of cross-border shopping, shipping and delivery and customer service are the factors that will make or break the customer experience.

When it comes to cross-border, 67% expect that an international delivery will take longer than a domestic one, and just as many would like an option for free shipping or to pay only for expedited service.

WHEN PURCHASING FROM AN INTERNATIONAL WEBSITE

A typical delivery time is expected to take up to a week (57%), but a two-week wait is expected by nearly half (47%). Only 32% are prepared to wait 30 days for shipping. Both clear delivery timeframes and delivery tracking are seen as motivators for consumers to make additional purchases.

More import than time is money. Free shipping is a significant boon to the online shopping experience. While consumers have come to expect free shipping on purchases over $50 US, 40% don’t mind paying for shipping up to 5%, and 44% will pay for expedited shipping. Yet, 57% are happy to wait longer if it means getting the delivery free. The most important stat, 76% expect any delivery costs to be transparent before completing the purchase.

WHEN PURCHASING FROM AN INTERNATIONAL WEBSITE

Of course, some of this varies by country. There is no expectation that international items will take longer than domestic shipping in France, Germany, and the UAE. Japan, South Korea, and the UAE are not happy to wait longer for free shipping. France, Canada, Japan, and South Korea do not want to pay extra for expedited shipping. Finding the right balance for a cross-border strategy is more manageable if, again, transparency is maintained, and options are provided.

CONSUMERS SHIPPING AND DELIVERY PREFERENCES (BY COUNTRY)

Customer service is a major factor in both the transactional sense and for establishing long-term customer loyalty. Meeting consumers’ expectations may be challenging, but getting it right can also be the most rewarding.

Cross-border, of course, brings in a new set of considerations. For instance, 62% of consumers expect customer service to be accessible 24 hours a day, seven days per week, but 62% also understand that customer service may not be immediately available. For those accepting of a delayed response, 73% say having a clear indication of the response time is essential.

The overwhelming majority of consumers prefer to interact with customer service in their own language (64%) and prefer as many customer channels as possible (65%). While two-thirds expect to speak with a live person, nearly half are open to email and chat services (See Trends by Generation for how this differs across age segments).

As with shipping and delivery, expectations by country vary greatly. For instance, respondents in Germany, Japan, South Korea, and the UAE care significantly less than others about 24×7 customer service, whether the interaction is in their own tongue or another language, or if they speak to a live representative. Conversely, respondents in India, Russia, China, and Mexico have average or above-average expectations on 24×7 customer service, interactions in their native language, and speaking with a live representative. Options, once again, are the key.

KEY TAKEAWAYS FROM GLOBAL VOICES PRE-PEAK PULSE 2021