Online challenges and opportunities for SMEs.
Which online strategy matches the expectations of the typical
European shopper?
This key question sums up the concerns of countless retailers and independent store owners in Western Europe. For a myriad of retail organisations, e-Commerce is and remains a tough exercise and a delicate process. The reasons for this are well known. On the one hand, every online business ensures crystal-clear and transparent communication with consumers; on the other hand, the slightest mistake is relentlessly punished. And that does not complete the difficulty.
Those who have jumped on the booming online business trade during the pandemic have mostly had a lucrative track record. Just as physical retail has evolved tremendously in terms of technology over the past few years – e.g. self-scanning or electronic labelling, e-Commerce also keeps up with these technological advances, e.g. with mobile commerce.
However, with the challenging economic outlook in Europe, we are facing a pivotal moment as no one can rely on those growth curves anymore. On the contrary, the consumer’s sizable buying behaviour during the lockdowns has ebbed away in the very short term, and not just because of reduced purchasing power.
Every trader is trying, in whatever way possible, to still get a slice of the pie. And that is quite understandable and yet it is a risky venture to plunge into online business now, unprepared. E-commerce is a trade like any other business and by definition requires a well thought out business plan, underpinned by consumer research.
At the request of Mollie, a Dutch payment solution system provider, the British marketing agency Coleman Parkes conducted a survey of 3,000 European consumers during this summer 2022 in the Netherlands, Belgium, Germany, Austria, France and the UK asking about their online shopping behaviour and expectations.
Data and knowledge : indispensable keys to decision-making. Although online shopping behaviour has clearly changed in the post-pandemic era, 35% of all 3,000 respondents (500 surveys per country) – across all living and income categories – reported shopping online more often than before the pandemic.
What is more, 48% of all those surveyed say they will buy as much online in the next 12 months as they do now, generally focusing on the well-known international giants including Amazon, eBay, Zalando, ManoMano or Bol.com. And this while almost 40% confirm that they will shop directly via the brand’s website. A third of Europeans use search engines to find the desired product online and a quarter of them invest the necessary time to consult comparison sites. The key to best respond to the expectations of the online shopper starts with mastering customer behaviour.
What impact will the economic situation have on e-Commerce?
Almost 80% of Europeans surveyed are of the opinion that significant savings have to be made on online purchasing over the next 12 months. It is abundantly clear that consumers show a cautious attitude when spending both their household budgets and those for leisure activities. The impending winter, coupled with the threat of increased energy bills combine to form a sword of Damocles on upcoming or delayed purchase decisions. It may sound ominous, nevertheless there are plenty of opportunities to be seized in e-Commerce and more specifically in click & collect services. Exactly as we saw with our own eyes during the recent HAI study tour in Belgium and the Netherlands, we now live in a ‘phygital’ era (Physical & Digital).
Digital Darwinism
For the average online retailer, the challenges are considerable. What levers can still be pulled to persuade consumers to make purchases, however limited? The research clearly shows that e-Commerce is not limited to offering a wide range of items, regardless of the product category (fashion, sports, electronics, home improvement, cosmetics, medical care). Online business has become a holistic, virtual retail process.
The Mollie survey reveals that European online shoppers still value high technology the most during digital shopping. As many as 78% of them emphasise the need for a smooth and efficient payment method as well as delivery times and free return facilities. However, when technology and consumer behaviour together evolve faster than merchants have the ability to adapt, a lot of investment will be required.
The pitfalls for e-Commerce
For a quarter of Europeans, price remains the decisive factor when buying online. And yet a significant and substantial amount, at €4.5 bn, is left in digital shopping carts. Identical frustrations are distilled from the survey across the continent: 61% of Europeans give up online when extra high shipping costs or taxes suddenly appear, an unsafe payment method is experienced (54%), as well as negative reviews.
Seven action points for a successful online strategy
From this European study, we can conclude the following:
- Provide the online shopper with the necessary symbols that familiarise them with the range of payment methods available early during the customer journey;
- Refine the check-out flow to reduce the steps while maximising the sales process;
- Offer efficient shipping options including drop shipment, click & collect and pick-up points;
- Foresee a benchmark strategy to remain competitive against off-line retailers;
- Communicate the offer of free shipping from the beginning of the customer journey to increase conversions;
- Display security badges on your webshop and work with a reliable payment partner offering advanced payment security;
- Especially for international online sales, propose trusted and local payment methods and explain them in the local language.
Also online, the customer remains king
Customer loyalty is still the strongest binder in the relationship between commerce and the end user, whether in the physical, digital or phygital world. This is precisely why it is essential to constantly share customer experiences. Refer to customer testimonials and experiences and mention these together with the product catalogues. Share your loyalty scores provided by review sites such as Trustpilot.
Last but not least, having the best price, coupled with excellent service, will always be the key issue to get the customer back to your webshop. Constantly monitor the price situation, think, act and remain local in all aspects of communication and ensure great service by using chatbots, fast response times and phone assistance when required.
The key learning from this survey and the action plan are quite simple: Retail remains for ever detail, including online.
Understand customer buying behaviour and foster good relationships with the phygital consumer. Wishing you the very best and season’s greetings.
Thierry Coeman shares with us more than three decades of experience in the international Home Improvement Sector. He was the chairman of the Belgian DIY Association, a unique organisation which brought together retailers, independents and manufacturers much like Hardware Association Ireland. He works with a network of European and Worldwide Stakeholders to share best practice while seeking innovation in the art of facilitating the common interest focussing on customers’ needs. He is the author of the essay Hammertime, a provocative vision on the future of the Home Improvement store.
