ups pulse of the online shopper · pdf fileglobal, mobile and marketplace driven the 2017 ups...

A Mobile MindsetVolume 2

UPS Pulse of the Online Shopper™

START

U.S. StudyJuly 2017

Global, Mobile and Marketplace DrivenThe 2017 UPS Pulse of the Online Shopper™ survey reveals a changing retail landscape where online shoppers purchase more from international retailers, shop more on mobile devices and rely more on marketplaces. These behavioral shifts are driven by the desire for better prices, unique products and increased convenience.

The sixth annual study conducted by UPS and fielded by comScore, Inc. will be presented as a five-volume series. To be notified of future volume releases, visit ups.com/insideretail and sign up. A Mobile Mindset is the second installment in the five-volume series.

1. Digital Evolution E-commerce continues double-digit growth, with online shoppers planning to use all digital devices more in the future.

2. A Mobile Mindset Shoppers have become more comfortable using their mobile devices to research and buy online, leading them to spend more time and money in the m-commerce market.

3. Channel Dynamics Today’s shoppers are empowered with more retail choices for direct-to-consumer purchasing across online and brick-and-mortar channels.

4. The Savvy Shoppers There’s a new crop of shoppers born from technology, who have honed their online shopping skills and learned how to find the best prices from every corner of the world.

5. Retail Fundamentals Delivering a stellar customer experience from point of sale to post-purchase across all channels is required to thrive in the competitive world of retail.

About the StudyThe sixth annual UPS Pulse of the Online Shopper™ study analyzes consumer shopping behaviors from pre-purchase to post-delivery. The study, fielded in Q1, 2017 is based on the input of over 5,189 qualified comScore panelists who made at least two online purchases in a typical three-month period. Here’s the breakdown of respondents based on shopping frequency:

UPS worked with Astound Commerce, Inc., to develop questions, conduct analysis and define retailer recommendations.

20% 2–3 purchases

40% 4–6 purchases

40% 7+ purchases

Smartphone Dynamics

The Utility of Smartphones

The Evolving Store Experience

Key Takeaways

Methodology

UPS Pulse of the Online Shopper™ ©2017 United Parcel Service of America, Inc.

Volume 2A Mobile Mindset

2

Introduction

http://ups.com/insideretail

A Mobile MindsetMobile matters more than ever for consumers and retailers as it’s projected to become a $250 billion market by 2020, with U.S. mobile retail sales accounting for 48.5% of retail e-commerce sales.1 As of November, 2016, more users are accessing the Internet from mobile devices than desktop computers2 which is an unprecedented shift already having a significant impact on shopping.

In terms of discretionary spending, mobile commerce (m-commerce) growth is far outpacing e-commerce & brick-and-mortar.3 Over the past five years shoppers have simply become more comfortable using their mobile devices to research and buy online resulting in more time and money channeled via m-commerce. The projections for continued growth in m-commerce make it essential that retailers of all sizes be properly positioned to provide an optimal experience via mobile devices.

1. Mobile business Insights, Mobile Business Trends: Retail 2017, 2018 and Beyond, 12/6/162. Techcrunch.com, Mobile Internet use passes desktop for the first time, 1/1/163. eMarketer.com, US Retail Mcommerce Sales reporting, 1/1/16

Smartphone Dynamics



Key Takeaways

Methodology



3

Introduction

http://mobilebusinessinsights.com/2016/12/mobile-commerce-trends-retail-in-2017-2018-and-beyond/

https://techcrunch.com/2016/11/01/mobile-internet-use-passes-desktop-for-the-first-time-study-finds/

Smartphone Dynamics

Smartphone DynamicsMobile users realize the value of “always on” devices and are making the most of their capabilities. Preference and usage of smartphones for researching and purchasing are the result of vast improvements in the user experience—rewarding retailers with increased customer satisfaction and loyalty.



Key Takeaways

Methodology


Introduction

Smartphone Dynamics

UPS Pulse of the Online Shopper™ 4©2017 United Parcel Service of America, Inc.

Smartphone Dynamics

Almost Half of Smartphone Users Purchase Online

Smartphone Users Who Have Purchased on Phone

48%

Percentage of Online Purchases Made on Smartphones

17%

42% 10%2014 2014

2017 2017

10%66%Millennials

47%Gen Xers

22%Baby Boomers Seniors

1%29%Millennials

17%Gen Xers


Smartphones continue to drive the ascent of m-commerce and in making an important impact on digital spend. This year’s research reveals that nearly half of smartphone users (48%) are purchasing online with their device. In addition, 17% of online retail purchases are made on smartphones, a seven point increase over 2014. As in 2016, younger generations are driving this change in purchasing

behavior, with two out of three Millennials indicating they have used their smartphone to make a purchase online. Shoppers who use retailer apps are making 25% of their online purchases with their smartphone. Smartphone purchasers made 45% of online purchases via their phones.



Key Takeaways

Methodology



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Introduction

Smartphone Dynamics

Smartphone Dynamics

59%of Smartphone Users

use Smartphone to Research

Smartphone Research and Purchase Behavior

48%of Smartphone Users

use Smartphone to Purchase

of Smartphone Purchasers

Research on Smartphones

91%

76%Millennials

46%Non-Millennials

66%Millennials

34%Non-Millennials

The percentage of smartphone users who research using their smartphones increased to 59%, up 3 points from 2016. Among smartphone purchasers, who exhibit a greater dependency on the phone than general users, the percentage grew to 91%. The convenience factor comes into play for mobile’s “on the go” users who seek efficiency and access at every turn with smartphones

serving as the conduit to a more efficient researching experience. Purchasing via smartphone has also increased, moving four points up among smartphone users. Millennials, as well as the heavy and urban shopper categories, demonstrated the strongest propensity for making purchases with their phones.

Research and Purchasing via Smartphone Increases



Key Takeaways

Methodology



6

Introduction

Smartphone Dynamics

Smartphone Dynamics

The upward trend for smartphone usage remains strong, led by younger generations. However, smartphone satisfaction is higher among Baby Boomers and Generation Xers than their Millennial counterparts. The significant increases in both smartphone usage and satisfaction over the past few years bode well for future growth across the entire population.

Smartphone Usage Outlook Remains Strong

Smartphone Usage(General use)

Smartphone Satisfaction

2014 2017

67%79%

2015*

*Question added to survey in 2015.

2017

65%73%

47%91%Millennials

85%Gen Xers


64%71%Millennials

75%Gen Xers




Key Takeaways

Methodology



7

Introduction

Smartphone Dynamics

Smartphone Dynamics

47%92%Millennials

82%Gen Xers


Top 5 App Features(Based on Importance)

50%Mobile Coupons

50%High-Quality

Product Images 48%Product Search that Provides

Relevant Results

49%Product Reviews

47%Access to Loyalty

Points/Status

Smartphone App Usage

4 in 5 Smartphone Users Shop Using Retail Apps

1 in 3 Smartphone Users O�en/Always Use Retail Apps

It’s insightful that four in five smartphone users have accessed a retailer using a smartphone app instead of a web browser. However, it’s the one in three smartphone users who often/always use these apps that should pique the attention of retailers who may be on the fence about the role apps can play in bolstering their business.

In addition to speed, app users prefer product information, imagery and peer reviews to be available as part of an improved experience. They place a similar value on high-quality images, mobile coupons, product reviews, relevant product search and access to loyalty points within the app.

Smartphone Users Embrace Retail Apps



Key Takeaways

Methodology



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Introduction

Smartphone Dynamics

Smartphone Dynamics

51%53%

35%40%

18%20%

10%11%

It’s faster

Better user experience

I am rewarded for using the app with free shipping / product discounts

The retailer’s website recommends using the app for a better experience

Reasons for Using

Retailers’ Apps

Smartphone Purchasers




Smartphone Users

Smartphone Users

Smartphone Users

Smartphone Users

Retail apps continue to attract the attention of smartphone users for the efficient experiences they deliver. Online shoppers choose to use the app over the website because it’s faster, provides a better user experience and is easy to access via their phone. Retailers should also

note that smartphone app users value saving money and gravitate to apps that offer rewards such as free shipping and product discounts.

Speed and User Experience Drive Apps Usage



Key Takeaways

Methodology



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Introduction

Smartphone Dynamics

Smartphone Dynamics

48%

37%

29%

17%

15%

7%

6%

2%

I like using the website better

I'm concerned about security

Apps take up too much space on my mobile device

I shop with several retailers, do not want to download a separate app for each one

I'm not very comfortable with the technology

I'm concerned the app does not o�er the complete store experience

I tried but it didn't work or it was hard to use

The retailers that I buy from do not have apps

37% of smartphone users who don't use retailer's apps report not doing so because of security concerns, up 6 points from 2016.

Reasons for Not Using

Retailers’ Apps

Almost half of smartphone users who don’t use retailers’ apps say they prefer using websites and 37% indicate they have concerns about security. The percentage of those expressing security concerns rose 6 points since last year. A higher percentage of Non-Millennials say they

prefer using the website (49% vs. 43%), are concerned about security (38% vs. 31%), and are not very comfortable with the technology (16% vs. 7%). Millennials more than any other age group are more concerned about the amount of space an app takes up (38%).

App Security a Rising Concern



Key Takeaways

Methodology



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Introduction

Smartphone Dynamics


The Utility of SmartphonesSmartphones have proven their utility across the entire shopping journey from accessing product information and offers, to purchasing across digital channels and in stores.

Smartphone Dynamics


Key Takeaways

Methodology


Introduction


UPS Pulse of the Online Shopper™ ©2017 United Parcel Service of America, Inc. 11


Online Shoppers are “on the go” and it's more convenient

Reasons to Shop on Smartphones

Online Shoppers have them with them in the store

Retailer apps make it fast and easy to shop


Smartphone Users


Smartphone Users


Smartphone Users

23%

24%

17%

29%

24%

33%

Mobile-ready shoppers cite convenience and immediate access as two important reasons why they choose to use their smartphones versus other devices. Nearly a quarter of smartphone users say their “on the go” lifestyle makes it more convenient to shop via phone. In addition,

the ubiquitous nature of smartphones among shoppers further enables the increase of usage in the physical store.

Shoppers Prefer Convenience of Smartphones

Smartphone Dynamics


Key Takeaways

Methodology



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Introduction



Tracked delivery of an order + 3 points*

Located stores or store-related information

Compared prices among retailers

Used a retailer’s mobile app + 4 points*

Searched for a retail coupon

Researched products prior to visiting a store + 4 points*

Clicked on a retailer’s ad and subsequently visited their online store

Purchased products on your mobile device

+ 8 points*

+ 5 points*

+ 5 points*

Checked store inventory + 4 points*

75%

75%

70%

68%

68%

68%

65%

65%

61%

*Compared to 2016 data

Shopper Mobile Device Usage(% Ever)

Mobile users are open to incorporating their devices into all aspects of shopping and express an interest in many pre- and post-purchase tasks. As a result, mobile device usage throughout the shopping experience has grown over the past year. Tracking an order delivery

and locating stores or store-related information are the top mobile activities reported by shoppers. The latter shows the greatest year-over-year increase at eight points. Purchasing on mobile devices also rose, increasing five points over 2016 to 65%.

Mobile Device Usage is Multidimensional

Smartphone Dynamics


Key Takeaways

Methodology



13

Introduction



The smartphone now plays an unprecedented role in-store as the shopper’s trusted assistant with Millennials leading the charge. Product information, price and promotion are prominent in the minds of mobile users shopping in physical stores, with 70% indicating they use their

phones to access product reviews and compare prices. This behavior is entrenched for these shoppers and that usage should see continued growth in the coming year.

Role of Mobile Devices Growing in Stores

Smartphone In-Store Usage

Look up product reviews

Compare prices

Access coupon sites or apps for in-store redemption

Take advantage of a promotion received on a mobile device while shopping

Search for speci�c products and alternatives

Check retailer loyalty point status

Check in-stock status at another location or online

Place an order to be shipped to you

O�en / Most of the Time Ever Never

28%

26%

27%

25%

22%

22%

20%

24%

20%

20%

Search for a di�erent online retailer

Look for other locations for the same retailer

30%

30%

31%

34%

34%

36%

40%

40%

35%

35%

70%

70%

69%

66%

66%

64%

60%

60%

65%

65%

Smartphone Dynamics


Key Takeaways

Methodology



14

Introduction



Smartphone In-Store Usage Among Millennials

84% 16%

84% 16%

82% 18%

81% 19%

81% 19%

74% 26%

74% 26%

76% 24%

41%

38%

37%

36%

33%

31%

80% 20%

30%

36%

79% 21%

30%

30%

O�en / Most of the Time Ever Never

Look up product reviews

Compare prices

Access coupon sites or apps for in-store redemption

Take advantage of a promotion received on a mobile device while shopping

Search for speci�c products and alternatives

Check retailer loyalty point status

Check in-stock status at another location or online

Place an order to be shipped to you

Search for a di�erent online retailer

Look for other locations for the same retailer

Millennials once again take in-store mobile usage to unprecedented levels. Beyond reviews, their high frequency of usage reveals their shopper-savvy nature with price comparison, coupon consumption and the hunt for promotions key activities for 1 in 3 Millennials often or most of the time.

Millennials Lead the Way

Smartphone Dynamics


Key Takeaways

Methodology



15

Introduction



The Evolving Store ExperienceSmartphone technology is having a significant impact on the in-store experience as more shoppers become aware of trackers and receive text messages while shopping. It’s changing the shopper’s path to purchase and yielding results for retailers who adopt in-store strategies.

Smartphone Dynamics


Key Takeaways

Methodology


Introduction


16©2017 United Parcel Service of America, Inc.UPS Pulse of the Online Shopper™


Online Shoppers

Aware of In-Store Trackers


Smartphone Users

50%

53%51%

SmartphoneUsers

Receptive to In-Store Messaging

3 in 10SmartphonePurchasers

4 in 10

Though usage of mobile marketing may be limited among retailers, there are opportunities to leverage tactics within the technology as there is growing acceptance among shoppers. Half of online shoppers are aware of in-store mobile trackers, and three in ten smartphone

users are receptive to in-store messages. Among smartphone purchasers, even higher receptiveness to in-store mobile messaging suggests a positive outlook for shoppers viewing and responding to targeted messaging.

In-Store Mobile Marketing Opportunities Show Promise

Smartphone Dynamics


Key Takeaways

Methodology



17

Introduction



3 out of 5smartphone purchasers have received a retailer text and responded by either visiting the retailer, purchasing a product or looking for the product in store.

Visited their website

Made a purchase online

Took advantage of advertised promotion

Made a purchase in store

Visited their physical store

Looked for promoted product in the store

22%31%

28%

27%

24%

23%

20%

19%

19%

17%

17%

14%

46%62%Taken an action

from text

Smartphone UsersSmartphone Purchasers

Actions Taken from Retailer Text Messages(Among those who received an alert)

Retailer Texts Impact Shopper BehaviorIt’s clear that retailer text messages to smartphones are effective. In fact, 46% of smartphone users who received a retailer text message responded by taking action. Among smartphone purchasers that number increased to 62%. It’s advisable for retailers of all sizes to

send marketing messages via mobile texts that can drive conversion and keep their brands top of mind.

Smartphone Dynamics


Key Takeaways

Methodology



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Introduction



More Convenient

39%

Reasons for Not Using a Smartphone to Pay in Store

Reasons for Using Smartphone to Pay in Store

Security Concerns

39%

28%of smartphone users have used their device to

make an in-store payment

More Secure than Credit Cards

23%Faster on

the Phone

36%

44%SmartphonePurchasers

14%Smartphone

Non-Purchasers

42%Millennials

19%Non-Millennials

Not Interested

28%Privacy

Concerns

32%

In-store payments are expected to surpass $1 trillion though current findings reveal usage among online shoppers will remain flat, in-line with 2016 levels.1 Among smartphone users who do pay via their phone in-store, convenience and speed are the driving factors.

Usage of in-store payment is highest among Millennials who find greater interest. Millennial non-users have less concern about security (29% vs. 43%) and privacy (26% vs. 35%).

In-Store Smartphone Payments Driven by Convenience and Speed

1. www.statista.com: Global mobile payment revenue 2015–2019

Smartphone Dynamics


Key Takeaways

Methodology



19

Introduction


https://www.statista.com/statistics/226530/mobile-payment-transaction-volume-forecast/

Smartphone Dynamics



Methodology


Introduction

UPS Pulse of the Online Shopper™ ©2017 United Parcel Service of America, Inc. 20

Key Takeaways

Design for the Mobile Format

Embrace responsive design to ensure an optimal customer experience for researching, purchasing, as well as completing pre- and post-purchase tasks on mobile devices.

Streamline Checkout

Create a convenient mobile checkout process with a minimal number of steps including choice of payment options and “buy with confidence” builders along the journey.

Consider a Custom Mobile App

Explore whether apps would be an effective way for your brand to connect with and serve more engaged shoppers.

Deliver a Robust Experience

Offer mobile users an improved experience with product information, imagery, peer reviews, and rewards such as free shipping and product discounts.

Market to Store Visitors

Develop a mobile marketing strategy using targeted messaging to shoppers who visit your store to raise brand awareness and drive sales.

Key TakeawaysThe following insights will help retailers successfully address the dynamic online shopping experience and future shopper demands:

MethodologyOnline panelists were sent emails inviting them to participate in this survey. Each participant completed a custom online survey designed by comScore in conjunction with UPS. Data collection occurred between January 10 and February 28, 2017. A total of 5,189 respondents were surveyed with a gender and age balancing taking place and purchase behavior quotas as defined below.

For more information, please contact:

Andrea Ivory UPS Global Retail Strategy [email protected]

Sarah BarkercomScore Research Lead [email protected]

20% 2–3 purchases in the past 3 months

40% 4–6 purchases in the past 3 months

40% 7+ purchases in the past 3 months

Smartphone Dynamics



Key Takeaways



21

Introduction

Methodology

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ups pulse of the online shopper · pdf fileglobal, mobile and marketplace driven the 2017 ups...

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