Courting the customer

Steve Jobs once noted in an early TED talk, "You have to start with the customer experience and work backwards." Perhaps now more than ever, that is true for those striving to succeed in e-commerce.

Understanding what makes customers tick can drive success. After all, double-digit growth in both B2C and B2B e-commerce means there's plenty of opportunity. Although competition is keen, retailers who work to meet or exceed customer expectations can win.

"Understanding what makes customers tick can drive success."

The latest research by UPS digs deeply into what today's online shoppers expect and how they behave. In the 2015 UPS Pulse of the Online Shopper^TM study, comScore polled 5,118 online consumers who made two or more online retail purchases in a three-month period.

Empowered shoppers dominate

The study findings reveal that today's empowered shoppers are more connected than ever, don't follow a single path to purchase and want a more flexible, more convenient shopping experience. Day in and day out they will:

• Hunt for digital bargains. Savvy shoppers look for the best prices and values. For example, 29 percent routinely compare prices using their smartphone as a research tool. And 38 percent will redeem coupons on their mobile device. Nearly half (47 percent) of Facebook users are likely to view a retailer's promotional post, and 53 percent say they are likely to take advantage of an e-mailed discount offer.
• Choose small, local and international retailers. 93 percent of shoppers said they shop with small and local retailers and s 61 percent do so to find unique products unavailable elsewhere. The same drivers apply to consumers without borders: Two in five U.S. shoppers purchase internationally, with about half of those doing so for better prices (49 percent) or brands not available in the U.S (43 percent).
• Shift channels as needed. Today's shoppers shift from one channel to another as needed for more than a third of purchases, often based on convenience and channel comfort. For example, 23 percent of shoppers surveyed report researching products on a mobile device before visiting a store, and 22 percent do so during a store visit. Some 39 percent who purchased online did their research in a store because they wanted to touch and feel the product.
• Use brick-and-mortar stores in new ways. Many shoppers find a store visit can actually save them time or money. For example, 38 percent of shoppers say they will choose ship-to-store or pickup-in-store as a way to save shipping costs. And, nearly half of those who've used the ship-to-store option for an online purchase bought something else when they went to the store to pick it up. Return-to-store generates similar revenue potential: 70 percent purchase a new item when making an in-store return.
• Rely on new technologies. Sellers who do not follow customer technology preferences risk falling behind. Online shoppers tend to be early adopters. Some 74 percent of shoppers use smartphones, 56 percent use tablets and 13 percent use wearable technologies like a smart watch or Google Glass. Among those who have purchased via smartphone (41 percent of smartphone owners), 40 percent say it's more convenient because they always have it with them.

At UPS, we've observed that many business-to-business buyers are now expecting the same high-level customer experience as B2C-and Forrester reports B2B buyers are taking a similar "digital first" approach. Forrester predicts B2B e-commerce will reach $780 billion in 2015, more than twice the $304 billion in retail e-commerce banked in 2014 according to Department of Commerce figures.

Digital touch points

In addition to embracing new technologies, consumers now use a broader array of "touch points" before and during shopping. Recent Nielsen research found that the most popular among all consumers (second only to printed circulars) are digital, including e-mails from stores, store websites, money-saving sites/blogs, social media and store apps.

"Three out of four shoppers report using social media, and 43 percent discovered new products as a result."

The UPS study supports those findings as well. Three out of four shoppers report using social media, and 43 percent discovered new products as a result. Nearly half of those using Facebook and Pinterest either liked a retailer or pinned products. And mobile apps can be big for engaged shoppers. Four out of five mobile shoppers have used an app, and 24 percent use a retailer's app weekly.

Against this backdrop it's clear that getting the fundamentals right is critical. While there are excellent opportunities for even the smallest retailer providing buyers with the right information, superior customer service and world-class logistics is more important than ever.