Retailers shift their ad spending from TV, radio and print ads to digital ads.
A new global survey credits better branding, loyalty programs and social media for the trend. But the report also shows that fears about the security of personal data shared online prevent some consumers from making online purchases.
Online shoppers around the world want a reason to stick with a particular retailer or a small group of merchants, suggest global survey findings from consultancy PricewaterhouseCoopers LLP, commonly known as PwC.
15% of survey respondents say that over the last year, they have shopped with only one retailer through any channel. That’s up from 8% in 2012. A further 43% report shopping with between two and five retailers over the past year, up from 35% in 2012. 27% of respondents say they shop with six to 10 retailers, down from 35% the year before. 14% shop with 11 to 20, down from 21% in the previous year, while 1% shop with 21 or more, the same as in 2012.
When answering the question, respondents were presented with a list of 30 “well-known domestic retailers from their country,” says the report, which was released today and is titled “Achieving total retail: Consumer expectations driving the next retail business model.”
PwC bases its findings on a survey of 15,080 consumers conducted last year in 15 countries and regions: the United States, Canada, Brazil, the United Kingdom, Netherlands, France, Germany, Switzerland, Turkey, the Middle East, South Africa, India, Russia and China and Hong Kong. The surveys were conducted online in July and August 2013.
Hong Kong shoppers showed the most loyalty among global consumers: 88% of them shopped with five or fewer retailers, PwC says.
The report gives some of the credit for such habits to strong branding. Loyalty programs also play a role, with 71% of survey respondents shopping with their favorite merchants because of loyalty points and similar programs. As well, 51% of respondents interact with favorite retailers via social media, another source of building brand trust. “Whatever is behind this consolidation trend, the new normal in retailing is that shoppers are searching for reasons to consistently visit a small number of retailers,” the report says.
Such loyalty also brings higher consumer expectations, the report suggests. 21% of respondents in the 2013 survey who visit brands’ social media sites did so because they were seeking promotions. That’s up from 9% last year. And 23% of this year’s survey group were drawn to those sites by brand-sponsored contests, up from 16% last year.
Besides promotions and contests, online retailers also need to ensure consumers that transactions are safe, the report suggests. For survey respondents who did not purchase online, 43% cited worries about the security of their personal data, up slightly from 41% in 2012. (The survey was conducted before news broke in late 2013 about data breaches affecting Target Corp. and other U.S. retailers.) The concern was most pronounced in Brazil (60%) and South Africa (61%). “For South Africa, this mistrust of online security could be rooted in the fact that this country had the highest percentage of new online shoppers in our survey,” the reports says, noting that 25% of South African respondents had made their first online purchases less than a year before taking the poll.