Online shopping

Balance Needed Between Shoppers’ Demands and Privacy Concerns

Sept. 17, 2018
A majority of consumers in new survey said they’re concerned about their online and in-store shopping history, such as transaction history and online searches, being used to provide better, more personalized service.

As retailers across the globe struggle with demands for both personalization and convenience, balanced with consumer skepticism on data privacy, JDA Software, Inc., and Centiro explored consumer trends in key markets in its  2018 Global Consumer Survey, released on Sept. 12.

Shopping in-store remains the most popular experience overall (preferred by 38%), although online options were preferred in some of the surveyed countries, such as China where online shopping via mobile/tablet (34%) was the preferred option.

Regarding in-store shopping, global respondents said that having the right product in stock is the most important aspect of their shopping experience (34%), followed by having a variety of products to choose from (29%).

Regardless of where transactions ultimately occur, according to the survey, online is the first stop on the shopper journey for clothes (46%), home goods (48%) and electronics (63%).

Younger consumers (ages 18-34) are more likely than average to begin their shopping journeys for each of the categories with recommendations from friends or family; the proportion of those who start their purchase journeys with input from friends or family decreases among older consumers.

“This notion that stores are dying or there is a ‘retail apocalypse’ is exaggerated. Instead, this is a time for a retail rebirth,” said Lee Gill, group vice president, global retail strategy, JDA.. “While the industry may refer to it as ‘omni-channel’ retailing, consumers across the globe no longer strongly distinguish between online and in-store channels. All retailers are struggling with balancing the personalization traditionally offered through e-commerce shopping with the convenience of an in-store experience. We see this time and again as more e-commerce retailers are opening brick-and-mortar shops, and traditional retailers are looking to strengthen their digital and direct-to-home fulfillment.”

Balancing Personalization with Privacy

According to the global survey, 40% of respondents have used voice-controlled devices or services for some aspect of their shopping journey (ex: Siri, Alexa, Google Home, Tmall Genie, etc.), with 23% of those using them to make purchases.

While global consumers continue to embrace new technology for both research and transactions, they are somewhat hesitant about how their personal data is being used.

Overall, 75% of respondents said they’re concerned about their online and in-store shopping history, such as transaction history and online searches, being used to provide better, more personalized service.

“While consumers are looking for personalization from retailers in theory, there are still concerns about how their data is being used for the execution,” said Gill. “Both consumers and retailers are trying out emerging technologies to determine what will work to provide the increased level of personalization, while staying within consumers’ current comfort level.”

Globally, the majority of respondents who shop in physical retail stores have used some form of emerging technology while shopping, whether it’s mobile coupons or discounts (49%) or individual recognition and personalized service based on loyalty programs (26%).

When asked about the potential of augmented reality (AR), 60% of global respondents said they would be more likely to make a purchase if they could use AR to preview products.

Returns and Store Fulfillment Seen as Convenient, Time-Saving

The convenience factor of returning items to the store continues to be the primary driver for consumers. Forty-nine percent of global respondents have used Buy Online Return In-store (BORIS) service with half (50%) saying they’ve returned items bought online to stores because it was easier or faster, or because they would get a refund or store credit faster than by mail. Thirty-six percent of those who have used BORIS in the past 12 months chose this option because the item purchased online was not what they expected, while 27% said that they bought multiple sizes or options for convenience and returned what they didn’t want or need.

“The volume of returns is increasing for a variety of reasons. As well as customers ordering multiple sizes, more than a third said they returned items in-store in the past 12 months because an item they purchased online was not what they expected,” said Gill.  

“This reverse logistics trend continues to cause problems for retailers, who are seeing repeat, serial returners. However, tangible rewards come from a good returns process: The survey showed that 71% of respondents claimed that they frequently or sometimes buy additional items when returning things to stores), meaning returns can actually provide an opportunity to secure a sale by offering alternative items.”

However, the ease of returns doesn’t just apply to retailers that offer brick-and-mortar return services. According to the survey, 81% of those who shop for products online said that following a poor returns service from an online retailer, they were likely to switch to a different vendor for future purchases.

“We’ve now reached the point where people would choose a retailer based on the quality of delivery and returns it offers,” said Niklas Hedin, CEO of Centiro. “Almost nine in 10 (87%) of those in the U.S. who shop for products online said the ability to track orders from checkout to front door would influence who they would shop with. Retailers need to keep pace with evolving consumer habits and provide greater delivery transparency to shoppers, otherwise, they risk losing future customers.”

Sixty-nine percent of those who shop for products online have used a Buy Online Pick-up In-store (BOPIS) option. Respondents used BOPIS in the last 12 months to avoid home delivery charges (42%), get the product sooner than it would be shipped (36%) and for added convenience over home delivery (33%). In addition, 66% of those who used a BOPIS service said they either frequently or sometimes make additional purchases while picking up items in-store, underscoring an opportunity for add-on sales.