According to research by Wipro Digital, the digital transformation business of Wipro Ltd (NYSE: WIT), 71% of surveyed consumers in UK and 61% in US, reported doing more than half their 2014 holiday shopping online. This is a significant increase from 2013, when 45% in UK and 36% in US reported doing the majority of their shopping online.
This trend is set to continue with half of the surveyed consumers in US and UK saying that they plan to do more shopping, online in the 2015 holiday season, as compared to just 6% in UK and 4% in US who plan to increase their in-store shopping.
“Consumers continue their steady march online, finding few reasons to shop in-store rather than online for their holiday shopping,” said Avinash Rao, Global Head, Wipro Digital. “But even online, omnichannel retailers are losing customers to internet pure-plays. Bricks and mortar retailers are having difficulty delivering on the benefits of omnichannel retailing.”
The research also found that consumers are spending more online than in-store when it comes to holiday shopping. UK consumers spent an average of £292 online compared to £179 in-store this holiday season. In the US, online purchases averaged $400 and in-store $302.
This trend to shop online is being driven by three factors: greater convenience, better prices and ease of use. Online pure play retailers are the big winners of this shift. 44% of UK and 47% of US shoppers report doing more than half their online shopping on such sites. A quarter of the shoppers are not even considering bricks and mortar retailers’ websites while more than half are not visiting manufacturers’ ‘direct-to-consumer’ websites either.
However, shipping costs associated with online shopping are a concern for consumers, according to the research. Nearly half of the consumers hope not to pay shipping charges next year – the most important change consumers expect in the 2015 holiday season. In addition, 16% of UK and 11% of US online shoppers did not receive their purchases in time for the holiday. “Shipping is the Achilles’ heel of online shopping,” said Rao. “If online pure plays are unable to offer free shipping on every order and consumers worry that they will not receive their purchases in-time, bricks and mortar retailers may be able to regain some of their lost customers next year.”
Even when consumers browse both online and in a store, many choose to go back online to make their purchase. 34% of UK consumers and 33% of US consumers reported this multi-channel experience. ‘There is no doubt consumers are interacting with brands across both the online and in-store channels,” according to Rao. He went on to say “But omnichannel retailers are missing a big opportunity to capture the 1/3 of consumers who say they are researching in store but leave to buy online,” said Rao.
Meanwhile, 39% of UK consumers and 40% of US consumers reported doing part of their shopping from a smartphone or tablet device. Of those who did, 78% of UK and 81% of US consumers used a mobile website, 76% of UK and 74% of US consumers used a full-site version and 50% of both UK and US consumers used a native app. With respect to mobile payments, only 3% of UK and 4% of US consumers reported using any form of mobile payment.
To counter the trend of consumers increasing their shopping with pure play online retailers, bricks and mortar retailers must focus on customer interactions and the benefits of the physical store. “Online pure play retailers are succeeding as they understand customer expectations and are exceptionally good at delivering against them,” said Rao. He further said, “Omnichannel retailers need to invest more in understanding and improving the customer experience journey to entice shoppers to spend more with them in-store. Customer journey engineering as an approach to understanding, designing and delivering relevant and differentiated customer experiences across all channels and touch points will help retailers reverse the trend and avoid a future when consumers are no longer visiting their stores.”
This Post Holiday Consumer Survey is based on 2,023 online respondents in the US (1,006) and UK (1,017) of ages 18-50 polled from January 5-8, 2015. Wipro Digital also conducted a Pre-Holiday Consumer Survey in December 2014 of 2,000 consumers in the US and UK. Comparisons between the before and after holiday experience are drawn from these two surveys.
About Wipro Digital
Wipro Digital collaborates with clients to deliver customer-centered digital transformation. Working at the intersection of strategy, design and technology, we derive insight, shape interaction, drive integration and unlock innovation for our clients. Drawing on 150,000 employees across Wipro, we engineer extraordinary experiences for global brands, businesses and their customers at scale. Learn more at wiprodigital.com or@WiproDigital.
About Wipro Ltd.
Wipro Ltd. (NYSE:WIT) is a leading information technology, consulting and business process services company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of “Business through Technology” – helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, a practitioner’s approach to delivering innovation, and an organization wide commitment to sustainability, Wipro has a workforce of over 150,000, serving clients in 175+ cities across 6 continents. For more information, please visit http://www.wipro.com
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