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Nielsen Study Finds Today’s Online Shopper Driving E-Commerce Momentum

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One of the clear outcomes of changing consumer behaviors amidst COVID-19 this year has been a shift to online grocery shopping. Lockdowns drove many shoppers’ heightened demand for the online channel, but they also drove buyers to shop online. And Nielsen found that those buyers have kept their online habits.

Recent findings from Nielsen’s global e-commerce syndicated study show that 30 percent of surveyed shoppers claim to be new to e-commerce this year, with the other 70 percent saying they shopped online prior to the onset of the pandemic.

As a result, the pool of online buyers continues to grow at a pace much faster than in pre-COVID circumstances. E-commerce measures in the U.S. show that new online buyers of fast-moving consumer goods have emerged across all age cohorts, even among those over the age of 65, who represent between 14-24 percent of new buyers across merchants.

Furthermore, repeat purchase rates among new e-commerce buyers in America have been strong, says Nielsen. In fact, approximately 50 to 60 percent of U.S. shoppers who made their first e-commerce purchase between March and October this year have already made a repeat purchase within the online channel. 

Earlier this year, the Nielsen Intelligence Unit identified four emerging patterns that helped predict the drivers of pandemic purchase decisions: a basket reset; a homebody reset; a rationale reset; and an affordability reset, reporting that these reset patterns have huge implications when applied to the lens of today’s online shoppers.

The pandemic has broadened shoppers’ e-commerce repertoire for many everyday essentials. But measures of shopper sentiment across countries can help to predict which categories will be priorities for purchase retention in 2021.

Across multiple countries, shoppers indicate that COVID-19 was a catalyst to them beginning to purchase various essentials online. Nielsen said the data suggests that pandemic-driven demand for certain categories online may be correlated to relative maturity and local adoption of e-commerce in a given market. In other words, where e-commerce infrastructure is less trusted, COVID-19 factors haven’t yet pushed online shoppers to purchase categories such as fresh foods, where the burden of trust is quite high.

In South Korea, for example, where e-commerce market maturity is relatively high compared to the rest of the world, shoppers are buying consumable products that require a greater degree of trust in the company picking and providing the end goods. In the U.S., 32 percent of shoppers have begun to purchase packaged groceries online because of the pandemic, and 21 percent say they’ve done so for fresh groceries as well.

Meanwhile, in some markets where e-commerce is still maturing, categories aligned to self-care become more of a digital affair. In India, where e-commerce is swiftly growing, but not the traditional trade channels, 43 percent of urban Indian online shoppers say they purchase hair and body care products via e-commerce due to COVID-19. In Italy, more than two in 10 surveyed shoppers now purchase fashion, hair and body care products online because of COVID-19 conditions.

Trust has long been a major barrier to e-commerce adoption, according to Nielsen. Many of the top reasons why surveyed shoppers globally don’t consider purchasing online relate to a lack of trust in product quality (26 percent) or concerns about product expiration (29 percent). But when trust can be earned, it can encourage and build the shopping basket across a multitude of categories.

For example, 50 percent of surveyed shoppers across markets say they are more likely to purchase groceries from online retailers that offer fresh food products. Getting it right with fresh foods sold online could translate into bigger baskets that include other grocery and non-food items.  

“Particularly with the conditions of COVID-19, many physical retail experiences such as self-serve prepared food stations have been shifted out of the safe and desirable spotlight,” said Lauren Fernandes, director of Nielsen’s Intelligence Unit. “There’s an opportunity to infuse trust and credibility into e-commerce, whether that be through tactical features of the payment process or through experiential elements that can enlighten shoppers on their product’s origin or journey.

“It could be as simple as information on how safely their products are packaged or what local establishment may be supported through their purchase.”

Nielsen found that community input can help assert value and build trust when it comes to justifying a product’s price point. Seventy-four percent of shoppers indicate that reviews are important when considering whether or not to buy something, and seven in 10 shoppers say they prefer online retailers that have product reviews.

Currently, one in three global surveyed shoppers claim to purchase fresh food and beverages exclusively online, reported Nielsen. Growing this number, while maintaining trust, will translate into e-commerce opportunities beyond consumables – and potentially across the virtual store.

Nielsen found that the swift pace of e-commerce adoption this year has heightened e-tail competition and encouraged disloyalty among consumers. Therefore, marketing tactics and investments should reflect this shifted shopper mindset.

Online shoppers are playing the field when it comes to the virtual storefronts they purchase from, says Nielsen, so online brands and e-tailers shouldn’t focus efforts on holding or growing loyalty without a clear benefit proposal. Across surveyed markets, the average online shopper has ordered from approximately four different e-tailers in the past three months. In Asian markets, this number has been even higher, with online shoppers claiming to have spread their purchases across as many as five e-tailers in China and six e-tailers in Korea.

Nielsen suggests that online brands embrace this disloyalty and strive to create touch points that boost top-of-mind awareness and brand equity.

“Many companies have doubled down on direct-to-consumer investments in really innovative ways. offering shoppable livestreams is one example from china where the point of purchase has evolved into a memorable and interactive experience,” Fernandes said.

Price matters, but there are a number of other key factors that shoppers consider imperative to their e-commerce decision making, reported Nielsen, suggesting that retailers complement their price strategy with the right mix of unique selling propositions online.

And while price was one of the top reasons why shoppers have switched between different e-tailers, it was not the only top reason, according to Nielsen’s findings.

Across surveyed markets, shoppers were equally likely to switch between e-tailers if products were more expensive (47 percent), if delivery costs have increased (47 percent) or if products were proven faulty (47 percent) or fake (46 percent). In other words, Nielsen’s research concluded that price doesn’t need to be a sole differentiator to an e-commerce offering. 

Nielsen research highlights key areas, beyond price, that contribute to the affordability reset guiding future e-commerce shopping decisions. While it might seem obvious, shoppers continue to indicate they want and need e-tailers to “make it easy” for them. For more than 50 percent of surveyed shoppers, ease of payment and free delivery are highly influential, driving many shoppers to decide to complete their purchases online.

When it comes to offering promotions, aside from price cuts, one of the top-preferred means for online promotion is offering product bundles. In fact, Nielsen found that offering the right product portfolio continues to be critical, as 63 percent choose to shop online seeking a wide selection of brands and products.

Companies that are seeking to maintain and grow their online presence into 2021 and beyond will need to understand these new behavioral patterns. For more on how to future-proof an online business, learn more about Nielsen’s latest Global E-commerce Syndicated Study.

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