Why do people buy online?

The size of ecommerce is growing and online purchases account for a large share in overall consumer purchases worldwide. Further growth of online transactions is predicted. But why do more and more people buy online?

Several studies have been done to determine the advantages and disadvantages of shopping online versus offline. In the end it is becoming clear that consumers are omnichannel shoppers; they prefer to orient, select, buy and be serviced accross multiple channels. However, each channel has is strenghts and weaknesses. Below an overview:

Strengths of online channels :

South Korean consumers appreciate Tesco's convenient supermarket shopping.
Convenience: online shopping is considered to be easy by many consumers, requiring less effort than buying in a physical store. This is also why delivery needs to be fast. People expect to order now and get it now, in an instant. A nice example is Tesco's virtual subway store in South Korea. Commuters can buy their groceries out of a virtual wall by scanning the QR codes with their smartphones. Products are added to their virtual cart and get delivered to their office or home.
Comparable: it is easy to compare products and services. Due to price transparency prices of products and services can be lower online than offline.
Customer service and personalized offer. Consumers value a personal approach. Being able to chat with a consultant is an important factor to seal the deal. People like to get attention and appreciate personal advice.
Wide product range: presentation of the offerings are improving. This is also a reason why cross-border web shops are blossoming. Overall impression is very important to attract online shoppers, especially if your business is situated in another country.
Reviews: people like to read about experiences from other buyers. This strengthens them in their decision to buy a certain product.

 

Challenges for online channels

Lack of confidence: some consumers are reluctant to buy online and are not sure that their product will be delivered. Some of this mistrust can be fixed when organizations use a trust mark.
Usability and online experience: consumers quit using a web site easily if it does not work or is perceived to be slow.
Online presentation: you cannot touch the product.
Security reasons: you need to be willing to send personal information and trust the company to handle your privacy carefully. Privacy is an important issue regarding online shopping. Online payments are still also mistrusted.
Low perceived quality can be a barrier to shop online, especially for products from another continent.

 

Strengths of physical stores

Service: human advice and information is considered more personal offline. Staff members can explain how to operate a product in person. This is the main reason why the overall impression is rated higher for offline channels (source: GfK).
Touching products: while online visualization of products has improved significantly in the last few years, products cannot (yet) be touched. However, the physical store do provides this experience.
Speed of receiving the product: if the store has your product in stock, you can buy and take it home immediately. When we discuss the importance of the physical store we should also not forget the role of pick up point. People expect to be able to collect their order at a time and place that is convenient for them.
Recommended by people you know: people like to shop at 'local heroes'. Proximity can be an important factor to build trust.
Fun factor: for a lot of people ‘going shopping’ is fun and a nice way to spend your free time.

Burberry uses technology to create new in store experiences.

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