At the beginning of 2023, cross-border e-commerce platforms have "fought" in Europe and the United States.
Lower prices, faster delivery, and even free returns and exchanges for no reason... In order to attract overseas consumers, various platforms such as SHEIN, Temu, Tik Tok, and AliExpress have all shown their own skills and launched many policies to enhance consumers' purchase experience.
On the seller side, everyone's sales have fallen sharply, and more sellers' orders have directly cut their waist, falling by as much as 70%. So, in the context of inflation, what are the factors that affect the purchase decisions of foreign consumers?
Recently, US logistics company Ryder System released its ninth annual e-commerce consumer research report, a study of 1,077 U.S. e-commerce shoppers that explores sentiments and behaviors around purchasing decisions, omnichannel fulfillment, packaging, shipping, returns, and sustainability, while also gaining a deeper understanding of e-commerce shoppers. This paper analyzes the key factors affecting the e-commerce purchasing decisions of US consumers after the decrease in inflationary purchasing desire.
Some of the key results show:
64% of respondents said that free shipping plays the most on their purchases;
65% said that no reason to return and refund prompted them to buy certain brands;
64% of shoppers have not yet used Buy Now Pay Later;
If the shipping cost is higher than the price of the item, 80% of shoppers will not place an order.
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1/ What are the shopping trends?
1. Non-essential online shopping is decreasing
Currently, online shopping for non-essential items is decreasing under the influence of inflation. More than half of the study participants (51%) reported fewer purchases, and 49% said they made more comparison purchases.
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2. Consumers expect faster logistics
At the beginning of 2022, 64% of consumers adapted to receiving goods within 3-4 days amid ongoing supply chain disruptions, meaning longer transit times are more tolerated than in 2021 (50%) and 2020 (53%).
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However, data so far in 2023 shows that the number of consumers expecting goods to arrive within 1-2 hours is rising.
2/ What are the factors driving purchases?
Consumers remain cost-conscious and prioritize savings. Nowhere is this more evident than with free shipping. 71% of respondents added more items to their online shopping cart to qualify for free shipping, and 64% believe that free shipping plays a key role in deciding which one to make a purchase from.
Among them, household goods (78%), sporting goods (77%), toys (77%) and vitamins/supplements (74%) are the most commonly used items to scrape for free shipping.
Unlike before, the price of the product is no longer the determining factor.
3/ How to improve customer retention?
Return management and promotional offers can effectively improve consumer retention.
65% of respondents confirm that returnless refunds (policies that allow full refunds without requiring customers to return unwanted items) motivate them to buy again from a brand (up 14% year over year).
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In addition, 44% of respondents said that coupons, discounts or points for future purchases are the factors most likely to motivate them to buy the same brand again in the future (up 9% year-over-year).
4/ How to win brand affinity?
1. Raise environmental awareness
The data shows that more and more consumers are supporting social and environmental issues and see recycling and waste reduction as important sustainable practices.
In 2023, more than half of online shoppers identified eco-friendly packaging as the most likely factor to make them buy a brand in terms of e-commerce's environmental impact; 36% said whether a company treats its employees fairly is the biggest factor in determining who they source from; 45% said they would like to donate unwanted items that were kept through returnless refunds.
2. Packaging and free samples
In addition to eco-friendly packaging, visually appealing packaging and free samples are more likely to facilitate consumer sharing on social media.
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5/ What discourages consumers?
Shipping costs lead to customer churn. In 2023, 80% of consumers said they would not proceed with online orders if shipping costs were higher than the cost of purchase. Similarly, when it comes to consumer tolerance or lack thereof, 81% of consumers (up 2% year-over-year) say they abandon their carts after seeing unexpected shipping costs.
The category consumers with the highest abandonment rate mainly include: sporting goods consumers (89%), beauty/cosmetics consumers (86%), and toy consumers (85%).
"While consumer behaviors, preferences and expectations will continue to change, one thing remains constant – consumer experience is king. This means that for brands to remain relevant, they must keep up with the latest patterns and trends to help them shape the ideal customer experience. Jeff Volpov, senior vice president of e-commerce solutions, said.
This also explains why cross-border e-commerce platforms have opened discounts, free shipping and no reason to return and exchange goods, Amazon even announced that it will cancel FBA packaging, and proposed that sellers should cooperate with supply chain partners to study and adopt more environmentally friendly, economical, and product characteristics packaging solutions.
Future consumer trends are constantly changing, and sellers will need to constantly adjust to better meet consumer needs in terms of logistics timeliness, packaging, and inventory management, thereby promoting sales and customer retention.
Especially such as outdoor garden supplies, fitness equipment, auto parts supplies, home appliances/furniture and other large-volume, heavy-weight, high-value products, the layout of overseas warehouses can provide important logistics support for their own brands, so that the products can be quickly and accurately delivered to overseas consumers, so as to enhance their competitiveness and achieve greater success in the global market.
Overseas warehouses play an important role in brand going overseas, localized services, cross-border e-commerce, independent websites and product display. In the future, cross-border enterprises that want to brand overseas can continuously strengthen the use of overseas warehouses, improve their logistics services and shopping experience, and adapt to the development trend of globalization.