Understanding and keeping pace with what drives people to shop and buy online is critical to succeeding in the digital world.
In response to demand for greater insights regarding the online customer, a new report by KPMG International analyses the online shopping preferences and behaviors of more than 18,000 consumers in 51 countries, by geography, generation and product category.
“Nowadays, the global online marketplace makes competition no longer limited to nearby local shops,” said Chong Kwang Puay, managing partner and Consumer Markets Lead of KPMG in Vietnam and Cambodia. “Now consumers in Vietnam can easily purchase goods from an online retail shop, in Canada at 1am. They no longer "go shopping", but they "are shopping" all the time and everywhere.”
The number of online transactions made by survey respondents averaged 17 purchases per year, or 1.25 per month. Generation X consumers (born between 1966 and 1981), averaged nearly 19 transactions per person per year, and they made more online purchases in the past 12 months than any other age group. In fact, Generation X consumers made 20 per cent more purchases than the ‘tech-savvy’ Millennials (born between 1982 and 2001).
John Ditty, managing partner, head of Advisory at KPMG in Vietnam and Cambodia, noted: “It is clear that consumer income levels are driving changing purchasing behaviours. Generation X are generally at more senior career/employment levels and their purchasing power is higher than the younger Millennials.”
And while it may be presumed that the more traditional Baby Boomers (born between 1946 and 1965) are less inclined to shop online than younger generations, the survey revealed that in fact they shop online just as frequently as Millennials. Furthermore, Baby Boomers were more likely to spend more per transaction than the younger consumers (average purchase for Baby Boomers was $203, $190 for Generation X and $173 for Millennials).
18 per cent of consumers in Vietnam and Cambodia purchased goods from an online-only retailer (i.e. Amazon, Lazada or Nhommua), 10 per cent purchased from a particular retail shop's website, and only 3 per cent purchased directly from a manufacturer or brand's website.
Overall, consumers tend to trust online information and online reviews. When asked about what is considered when deciding on a purchase, 9.9 per cent of respondents answered online reviews, 9.8 per cent answered the brand, and only 0.2 per cent answered promotional and complimentary benefits attached to the purchase.
The report also reveals that recommendation from friends and relatives is the most important channel (11.5 per cent) when consumers seek information on the product before making the purchase. Other channels for information that organisations and brands should consider include: social media (8.3 per cent), in an online shop (8.2 per cent) and in an online-review (8.0 per cent).
To gain consumer trust, companies and brands are recommended to improve online security and privacy protection. Most respondents (26.5 per cent) consider Customer Data and Information protection to be of the utmost importance, and 20.4 per cent consider Food and Product Safety as the most important attributes.
When comparing the impact of online versus offline touch-points that create the first trigger moment, of note is that 52 per cent of consumers cited at least one offline channel as a source of initial awareness, and 59 per cent cited one or more online channels.
Retail websites or online shops were the most common source of initial awareness, cited by nearly a third of consumers, and online advertisements were cited by 15 per cent. At the same time, physical shops were the second most popular source of awareness, cited by 22 per cent of consumers.
Millennials were not only more likely than the older generations to be influenced by online sources such as social media or peer reviews—they were also more likely to be influenced by offline channels. Millennials were 25 per cent more likely than Baby Boomers to have seen their most recent online purchase in a shop, nearly 50 per cent more likely to have talked to a friend about it, and more than twice as likely to have seen someone with it.
Overall, 31 per cent of the consumers responding to the KPMG survey said they shared a product review online. The Millennials were the most likely to post a review (34 per cent) followed by Gen Xers (29 per cent) and Baby boomers (28 per cent). Furthermore, nearly all (92 per cent) reported reviews were positive.
“The growing trend for consumers to post positive reviews is driven by factors including the rise of social media, where consumers subtly compete with their peers by publicly sharing their latest purchases and experiences, the rise of bloggers, whose business models are based on providing product reviews that drive affiliate clicks, and sellers, who proactively solicit ratings from happy customers,” said Willy Kruh, global chair, Consumer Markets, KPMG International.
Consumers responding to the survey said they were most likely to post feedback directly to sellers’ websites (47 per cent) followed by posts on Facebook (31 per cent) then on a manufacturers or the brands websites (18 per cent). This was consistent across all age groups, with Millennials also frequently posting on WhatsApp, Instagram and Twitter.