Demanding Consumers Still in Driver’s Seat, UPS/comScore Study Finds

UPS, comScore, shipping/delivery, operations and fulfillment, returns in store, ecommerce returns, returns policy, IRCE 2015, customer satisfaction, customer experience, ecommerce, mobile commerce, omnichannel, omnichannel fulfillment, multichannelU.S. consumers are continuing to demand convenience, advanced mobile features, flexible shipping options and ease of product returns, according to the fourth annual UPS Pulse of the Online Shopper study. Done in conjunction with comScore, the study surveyed 5,000 U.S. consumers.

“Mobile continues to be the biggest disruption since Al Gore created the Internet,” said Gian Fulgoni, co-founder and executive chairman emeritus of comScore, in announcing the results at IRCE 2015. “137 million people now have phones, which grew 13% since 2014, representing 75% of all Internet users. These devices have changed the nature of online buying.”

Fulgoni said mobile phones were used in 15% of all digital commerce. To put the exploding growth of mobile commerce in perspective, he said discretionary retail spending grew 2% in Q1, desktop ecommerce was up 9%, but mobile commerce rose 53%.

The UPS/comScore study found 41% of consumers use their smartphone to research products, while 30% use them for purchases; respondents said this practice would grow in the next year.

Yet concerns over security and the limitations of screen size are still checks on mobile commerce growth. “Many people are still very nervous buying off open wifi,” Fulgoni said. “Also higher price point items require more research and comparison, which you can’t do easily on a smaller phone (compared to desktop, laptop or tablet). This is a constraint on how big it will grow, but for now there is still significant upside.”

Bala Ganesh, director of retail marketing for UPS, said one difference in this year’s study was how it drilled down to gauge online shopper satisfaction across channels. He said overall satisfaction with online shopping was 83%, but it varied by channel: 84% for desktop transactions, 74% for tablets, 65% for smartphones and 62% for in-store digital purchases.

Ganesh said the study found a lot of interest from U.S. consumers in buying from smaller local retailers (93% of respondents) as well as from international merchants (40%).

“If you’re a smaller business, one way to compete is to figure out how to bring a unique product to market that’s different from the crowd on Amazon,” Ganesh said. “Of those 40% buying from international, while some of it is about brands and products, a lot is about international prices being lower as the dollar has been stronger. We’ve already seen this impact from retailers like Macy’s in their first quarter report, with fewer overseas customers buying from U.S. stores.”

Ganesh said more consumers are looking for alternate delivery locations besides the home. In the survey, 67% listed the home as the preferred location, down from 74% in 2014. Four percent preferred a pickup locker – up from 2% in the prior year – and 4% listed a retail location such as a convenience store. Overall, 33% said they want packages to go somewhere other than the home, up from 26% in 2014.

UPS began testing out merchant pickup sites in Chicago and New York last fall, and has now expanded it to Boston, San Francisco and Washington, DC. The network also includes all 4,400 UPS stores.

“The pickup location program in New York and Chicago has been hugely successful, and we plan to expand to other urban areas,” he said. “In a lot of exit surveys we found people who live in urban areas are willing to buy more online because of the pickup location convenience and security. It’s a huge win-win, because it’s easier for us to deliver to a store than to all those houses.”

Some other findings from the study:

  • When purchasing from a retailer with both an online and physical presence, 39% of those who return an item prefer shipping it back while 61% would rather return it to a store. When making an in-store return, 70% purchase an additional item, compared to 42% of those who process an online return.
  • Forty-three percent of consumers said they discover new products on social media sites. Facebook was found to be the most influential site, while visually oriented channels like Pinterest also proved popular.
  • Free shipping was the most important checkout option, according to 77% of consumers surveyed. Sixty percent said they would add an item to their online cart in order to qualify for the benefit.
  • Only 62% were satisfied with the online returns process. Sixty-seven percent said they review the returns policy before making an online purchase, 66% want free return shipping, 58% want a no questions asked returns policy – a la Zappos – and 47% want an easy-to-print return label.