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Current State of Online Retail Reinforces High Sensitivity to Shipping Options

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Supply Chain Matters had the opportunity to view a quarterly update webinar highlighting the state of the U.S. online economy, sponsored by comScore, Inc. For those not familiar with comScore, the firm specializes in digital measurement and analytics, delivering insights on web, mobile and TV consumer behavior that many online marketing teams rely on for trends in B2C and B2B online commerce. Their data and insights are meaningful because it is extracted from a domain of over 1 million digital web sites, an online panel that taps 2 million consumers and data extracted from 5 million TV set-top boxes.

The insights shared in this recent Q2-2013 State of Online Retail Economy webinar have significance for online commerce and supply chain professionals, among them:

  • Momentum in Retail e-Commerce (excluding travel sales) continues. Thus far, 2013 is tracking to easily eclipse $200 billion in 2013 with $100 billion in spending reported in the first half of this year.  For 2012, comScore reported $189 billion in retail e-commerce. The shift from traditional to e-commerce channels grew by 16 percent in Q2, marking the 15th consecutive period of positive growth.
  • Average Dollars per Buyer grew 13 percent to $274.10. However, average order value grew a modest 3 percent to $76.40 and overall transactions grew 12 percent, reflecting that consumers are making more frequent online trips but buying selectively.
  • Instead of the classic marketing funnel that spans awareness to action, comScore concludes that today’s online consumers exhibit a ‘flight map’ visiting multiple channels, information sources and web sites before making the actual buying decision.
  • One statistic that was a bit of a surprise was that consumer use of mobile devices in the store is not as prolific as originally forecasted.  In response to queries of what tool helps to save the most money, consumers ranked mobile devices #14.  Asked which tool helps to save the most time, consumers’ ranked use of the mobile device in the store as #11.

An insight that should capture the attention of online retail supply chain teams is that consumers continue to consistently indicate that free shipping is a very important determinant to the buying decision. Data shared by comScore in shopping cart abandonment and total percentage of transactions with free shipping all reinforce the increased weight that consumers continue to place in shipping cost in the online decision to buy.

Another important insight shared was that the ship-to-store or in-store pick-up option varies by the location of the consumer.  Suburban and rural based consumers indicated a far higher option value than urban consumers. However, online consumers continue to express a need for more flexible shipping, delivery and return options.

Same day or ship to secure locker shipping options was reported to be in low awareness. comScore notes that only 8 percent of online consumers have utilized a secure delivery locker.

This latest data continues to indicate that online retail supply chain and operational teams need to pay special attention to transportation and logistics, in addition to inventory availability, since timely inventory availability, flexibility of shipping options and availability of free shipping continue to be of high weighting for the online consumer.  It also a further argument for leveraging both online and in-store logistics capabilities.

Bob Ferrari

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