A Power Shift in Retail

Online shopping is making the customer king, especially in Europe.

From the Editor: Just this weekend, I saw my first 2015 holiday commercial! With advertising launching this early, it shows how competitive the season’s become for retailers. Data’s the game changer. Using the latest survey results, several of our blogs this week examine the 2015 consumer: What’s impacting their decisions? What creates customer satisfaction? That and more, this week on Longitudes. — James Rowe.

It’s simple: Today’s online shopper wants choices, flexibility and options. You could say they want what they want when they want it.

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The flex shopper is ruthlessly efficient, switching channels and devices to best suit their personal needs.

The not-so-simple part is meeting that demand. But businesses will sink or swim based on how they handle that challenge.

That’s the resounding message from the UPS Pulse of the Online Shopper™ Europe study, a detailed analysis of the state of retail in the age of e-commerce.

Customers are more sophisticated than ever before, harnessing an array of tech platforms to research, review and purchase products. They also want convenient pickup locations and no-questions-asked returns policies.

For retailers, it’s an opportune moment, but one filled with great pressure. They need to ensure their supply chain can handle end-to-end logistics – and do so profitably.

The UPS study, conducted by comScore, provides a 360-degree perspective on the behavior of European online shoppers.

The findings show that today’s online shopper has morphed into the flex shopper, looking for the ultimate convenience in choice, delivery and returns options.

The flex shopper is ruthlessly efficient, switching channels and devices to best suit their personal needs. And they won’t hesitate to buy from a foreign country if the price is better.

The study looks at the behavior of the online shopper through the entire customer journey, from pre-purchase research, to the buying process and post-purchase expectations.

It’s clear: Convenience often drives decisions, while relevant and transparent information seals the purchase – whether that’s delivery options, shipping costs, estimated delivery time or ease of returning a product.

[Also on Longitudes: The Rise of the “Flex Shopper”]

Get them early

Click Here to Download Study

Click Here to Download Study

We all know that shoppers look at detailed product information and photos and scan reviews to learn more about an item and the reputation of the retailer. But they now look at logistical details, such as delivery options and returns policies, when deciding whether to make a purchase, the UPS study shows.

According to the survey, 81 percent of shoppers across Europe would complete a purchase if the returns policy allows the product to be returned for free either to the store or using a pre-paid label for shipping. If those options were unavailable, just 16 percent of European shoppers said they would complete the purchase.

Consumers consider delivery speed the fourth-most important factor when selecting where to shop, survey respondents said. What they want, however, is clear communication on when their products will arrive.

Two out of three people said they want an estimated or guaranteed delivery date – and more than 60 percent said the delivery date and shipping costs should be outlined early. Nearly just as many shoppers said they would not go through with a purchase if the delivery time was lengthy or no arrival date was given online.

Free trumps all

Want to know how e-commerce has changed delivery expectations?

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Retailers must deliver the choice the customer wants and ensure they have the right logistics channels to deal with it.

Nearly 75 percent of European shoppers rate free shipping as important when making a purchase online and roughly the same number of people will take some action to qualify for free shipping, whether adding items to their online cart or searching for promo codes.

Among the lengths shippers will go for free shipping: They’ll select slower delivery, pick up an item in-store or simply go to the brick-and-mortar location for the entire process. Eighteen percent of respondents even said they would purchase a more-expensive item to qualify for free shipping.

Click and collect

Consumers are now increasingly on the move and don’t always have someone at home to receive a package. Hence they seek multiple delivery options and have high expectations from retailers to give them ultimate convenience.

The study reflects this, showing a decline in the preference of parcels being delivered to the home from 81 percent in 2013 to 68 percent in the latest study.

Alternative shipping methods include shipping to a neighbor or the workplace. The preference depends on where consumers live in Europe.

For example, in Germany, 60 percent of online shoppers prefer to request delivery to a neighbor if they aren’t at home to receive it. In Spain, just 20 percent are happy to leave the goods with a neighbor. And in France, 42 percent indicated they would prefer delivery to a retail location from which they could collect the package at their convenience.

One option for online shoppers is click and collect.  In Europe, 47 percent of respondents in the study said they have selected ship to store for a pickup option.

This strategy can lead to additional in-store purchases when customers visit to pick up goods ordered online. In Europe, 30 percent made additional purchases while collecting their goods in store.

[Also on Longitudes: 5 Ways to Battle Retail Goliaths]

Returns – getting it for free and avoiding the hassle

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 Give customers what they want, when they want and how they want it.

As with the buying and shipping experience, online shoppers also expect total convenience when they decide to return a product – free, no-questions-asked returns with automatic refund of everything, including delivery costs and taxes. This is a part of the customer experience that cannot be ignored.

However, returns are quite challenging, especially for international purchases involving like value-added taxes, customs and consolidation of multiple items. Companies like UPS can assist in these areas as they have the widest portfolio of solutions for returns services, helping minimize costs while providing the best customer experience.

Growth in the e-commerce era

The UPS Pulse of the Online Shopper™ Europe study illustrates how customers are more empowered, resulting in more demand on the retailer.

Retailers must deliver the choice the customer wants and ensure they have the right logistics channels to deal with it.

The big takeaway?

Give customers what they want, when they want and how they want it. goldbrown2


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Abhijit Saha is Vice President of Marketing for UPS Europe, based in Brussels.

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Reprinted with permission of Longitudes, the UPS blog devoted to the trends shaping the global economy.