Pitney Bowes, a global technology company that provides commerce solutions in the areas of e-commerce, shipping, mailing, data and financial services, today released the results of its annual Online Shopping Study. Among the Study’s key findings: 60% of online shoppers in the US are dissatisfied with their holiday shopping experiences, up four percentage points from last year, and nearly double the number from just four years ago.
The Study also found that the more often you shop, the more likely you are to be frustrated. Seventy-three percent of frequent online shoppers (those who shop online daily, or weekly) and 74% of millennials said they were disappointed in some aspect of the post-purchase experience last holiday season.
The top three reasons for consumer frustration are: delayed shipments; shipping costs; and inaccurate tracking.
“Despite the significant investments retailers and marketplaces are making in the online shopping experience, consumers continue to be disappointed, especially around the holidays,” said Lila Snyder, EVP and president, commerce services at Pitney Bowes. “As an even larger percentage of consumer spending is expected to shift online this holiday season, retailers need to shift resources and investments to areas like fast and free shipping, accurate tracking and free and easy returns to keep up with consumer expectations.”
Root canals and revenge
This year’s Study included a number of questions asking consumers to associate an online shopping experience with an emotion (“love it! / hate it.”), or a range of universally enjoyable, or unpleasant experiences, such as “taking a vacation” or “having a root canal.”
For example, 86% equated some aspect of a poor post-purchase experience to “having a root canal,” especially these unpleasant events:
- receiving a wrong or damaged item 72%
- taking too long to get a refund after returning an item 64%
- an inconvenient returns process 60%
- having to pay for shipping 47%
When a retailer puts a consumer through one of these unpleasant experiences, they do so to the detriment of their brand. For the second year in a row, nearly nine out of 10 consumers said that they will make a complaint or take an action that could hurt a brand’s reputation and bottom line following a bad post-purchase experience. Among them, nearly one-third said a bad post-purchase experience is cause for never shopping with the offending brand again.
Fast and free shipping, and free and easy returns
On the bright side, online shoppers did offer advice to retailers and marketplaces about how they can improve the post-purchase experience, particularly around fast and free shipping, and free and easy returns.
Free shipping remains the number one loyalty driver an online retailer can offer consumers. In fact, when given the choice between “free” shipping or “fast” shipping” 80% choose “free,” consistent with data collected in each of the past three years. Free shipping was four times more likely to drive consumer loyalty than any other feature that a retailer could offer.
In addition to fast and free shipping, consumers want a free and easy returns process and fast refunds. On average, Amazon refunds consumers 4.5 times faster than other brands.
Returns are on the rise and 51% of all online shoppers, including 66% of millennials, now admit to “bracketing” – purchasing multiple sizes, styles and colors of an item with the intent to return what they don’t want.
Seventy-two percent said they “love” when a return label is included in the package. Seventy percent said they “hate” paying for return shipping even more than missing the returns period and getting stuck with an unwanted item (61%).
“Returns seem to have become an unconscious behavior for some frequent online shoppers,” said Snyder. “In response to our survey, consumers said they return less than 10% of their online purchases, but in reality we know the number is much closer to 25%.”
Sixty-six percent of consumers said they “love” home pick-up for returns. Home pick-up is three times more popular than carrier drop-off and four times more popular than in-store drop-off. When home pick-up of a return is not offered by a retailer, consumers admit to compounding the delays by taking, on average, four more days of what Snyder calls, “trunk time” to transport their item from their home to the carrier, or store.
The number of cross-border shoppers continues to grow in countries like Australia, Canada, China, Mexico and UK. Of the countries we surveyed, only the US saw a year-over-year decline in the number of cross-border shoppers. Forty-six percent of online shoppers in the US say they have made a cross-border purchase in the past year, versus 49% the year prior.
Of the US consumers who do shop cross-border, nine out of 10 have purchased something from China. Expectations among cross-border shoppers are not dissimilar to those of domestic shoppers, but frustrations with late deliveries and inaccurate tracking are higher, especially on items ordered from China.