When out shopping these days, consumers are ever more likely to turn to their personal computers (PCs), smartphones and tablet PCs to find gifts, check recommendations, compare prices, access online coupons, and ultimately pay for their purchases, according to the results from KPMG International’s 5th Annual Consumers and Convergence survey.
KPMG’s latest survey* reveals both consistencies and anomalies in consumer preferences year over year—in online shopping, content, device use and mobile payments—all of which hint at new directions for the future of digital commerce and those who compete in the space, according to KPMG authors of the report.
Increasing Pace of Adoption
Consumers again showed an increasing appetite to adopt new technologies and business models. In KPMG’s 2008 survey, half of respondents said that they were very uncomfortable with mobile banking and today, that position has completely reversed with 66 percent willing to use their mobile phone as a wallet. Another example is a fivefold increase in respondents who prefer to use their mobile devices for web browsing, news and shopping. Television viewing also saw a decline with 51 percent of respondents now preferring to watch TV and movies online on their computers and 24 percent on their smartphones.
George Pataraya, Head of Consumer Markets, KPMG in Russia and the CIS, noted: “Analyzing the situation on the Russian market, I would comment that consumers in Russia are only now starting to use extensively smartphones and tablet PCs to make purchases. Research on the Russian market has shown that only 22% of the respondents use mobile devices to pay for purchases. At the same time, however, the potential for using these devices is significant. They are the future. Approximately 50% of the respondents have already used smartphones and tablet PCs to study information on products and services.”
Price and Quality of Service still Reign but the Opportunity Lies in Personal Data
While consumers are happy to adopt new technologies, they are increasingly resistant to paying for the associated online content and service. Having grown used to ‘free’ models, 73 percent of people said they would not be willing to pay for access to online content, up from 57 percent last year. Of note is that nearly half of consumers in Asia Pacific (AsPac) were the most likely to pay for access to a website if the information was important and unavailable elsewhere, nearly double those in the Americas and Europe.
A significant opportunity exists however, around personal and usage data as consumers surprisingly show an increasing willingness to allow their data to be tracked.
AsPac consumers are marginally more willing to be monitored, followed second by those in the Americas and then third, Europe. Most consumers from all regions prefer personalized advertising.
For mobile, internet and telecom service providers, the message continues to be very clear: the overriding factors in choosing or switching providers is price (77 percent) and quality of service (78 percent), as opposed to device selection (54 percent) and exclusive content or services (49 percent).
Future of Retail On and Off-line
Across the three regions, online purchases seem to be far outpacing those in retail outlets for certain goods and services.
Seventy-six percent of consumers in the Americas were more likely to purchase CDs, DVDs, books and video games online rather than in a store; AsPac region (67 percent) and Europe (55 percent).
Over 70 percent of consumers in the Americas and Asia Pacific are more likely to purchase flights and vacations online compared to Europeans (61 percent).
Luxury goods were the least likely to be purchased online (28 percent) and 41 percent said they would not purchase groceries online.
George Pataraya adds: “In Russia the flight ticket sales sector has the greatest potential for the development of on-line sales. As a rule, the market for online electronics sales is developing fairly well. Online sales of luxury goods, groceries, furniture and home decoration have the least potential. However, these preferences may change as and when the extent of society's urbanization increases. People will try to save time and the most routine and frequent purchases will gradually migrate to the Internet.”
The rapid adoption of the smartphone is also playing a big role in the changing customer experience in the retail space. Over 38 percent of consumers used their smartphones at retail outlets to access coupons, while 20 percent used one to scan quick response (QR) codes.
Also of note is the role that online information plays in influencing buying decisions. When making purchases, consumers cited being “significantly influenced” by online information sources such as customer feedback/ratings (82 percent), comparison sites (76 percent), online discount vouchers (73 percent) and blogs (64 percent).
The Trust Paradigm Continues
Despite the readiness to adopt new technologies, as well as the surprising willingness by consumers to have their personal data tracked, the survey showed that yet again, the most significant barrier to new digital models continues to be concerns over data privacy and security. The number of people concerned about these issues has increased from 75 percent to 90 percent.
Interestingly, too, the survey showed a notable shift in which companies consumers trust to manage their online payments, suggesting that the ‘trust factor’ plays a much more critical role than ever before for the future of e-commerce and payment transactions.
When asked who they trusted most with their payment data, 56 percent of consumers said their financial services institution, 30 percent trusted secure payment sites such as PayPal, seven percent trusted their retailers and six percent, their mobile/internet service providers (ISPs).
“The potential for using mobile devices to perform bank transactions in Russia is low at present”, notes George Pataraya. “Most survey respondents (approximately 58%) cite their preference for performing banking transactions at a bank branch or at their computers as the reason why they don't use this service, while 38% are not confident about mobile devices and are concerned about security and confidentiality issues.”
© 2017 KPMG Audit LLC, the Mongolian member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.