How the Digital Single Market will impact eCommerce

Matt Guffey, marketing director with UPS UK, discusses how the creation of a Digital Single Market will impact the eCommerce industry.

The announcement of the European Commission’s plans to create a Digital Single Market (DSM) paves the way for eCommerce to capture a larger share of retail sales than ever before. The Centre for Retail Research predicts online retail sales in the UK will reach £52.25 billion this year. It’s hard to remember a time when online shopping wasn’t part of our retail experience. Many of us grew up in a world where there were really only two ways to shop: buy in store, or buy from a mail catalogue. Today, that binary world is a distant memory.

Advances in technology have allowed a profound shift from physical retail to digital retail, and now we need to ensure that this digital marketplace is the most effective it can be. In their plans to create a Digital Single Market, the European Commission found that EU consumers could save €11.7 billion each year if they could choose from a full range of EU goods and services when shopping online.

The introduction of the single market is particularly good news for SMEs. A key aim of the initiative is to make cross-border eCommerce easier by providing consumers with greater choice of goods and services, as well as providing SMEs with opportunities to sell across borders more easily. Currently only 7% of SMEs in the EU sell internationally, missing out on a massive opportunity to grow their business.

To ensure SMEs are making the most of the opportunity that the DSM presents, UPS together with comScore asked European shoppers exactly how they are using online and traditional retail channels. With over 6,000 respondents in the six biggest retail markets in Europe, we learned how consumers are using digital opportunities to inform all their buying, both online and in store.

Omnichannel consumers

The omnichannel consumer is armed with technology, and not just one type of technology. Our study shows that most online sales are still made through desktop or laptops, but also that smartphones are now becoming the device of choice for in-store comparisons of products, prices and services.

The pervasiveness of the internet has put an astonishing amount of information into the hands of consumers, and they are using it. In fact, they are becoming more like business customers. In some ways, the old distinction between consumer and business customer is breaking down. Consumers can now make highly informed decisions based on product price, service level, delivery cost and convenience, all at the swipe of a screen.

SMEs can meet this challenge and even profit from it, but only if they know in detail how their customers are behaving in this new world of unlimited information. They need to know how customers are using online channels to research and to compare. Understanding behaviour means understanding what keeps a customer a customer when they are engaged online. We know that customers are easy to lose, for example almost half (46%) of would-be customers choose a computer over a mobile device when shopping because they are not satisfied with the amount of detail they can see via a smartphone. With so much choice so easily available businesses need to understand what keeps a customer engaged through to the final click.

Flexible delivery

SMEs providing an easy and reliable shipping and delivery experience, especially with hassle-free returns, will have an edge over their competitors. Logistics can make a significant difference in driving sales and return customers. We found that nine out of ten of customers using online channels will go to the trouble of reviewing a retailer’s returns policy. There are two lessons here. One, is that businesses have to make critical details easy to find and easy to see, whatever the device, whatever the channel. The other, is that customers are very interested in exactly how retailers deliver: what options are offered, speediness of delivery and how that speed is priced, and how easily a business can process returns.

Customers will use that information. They will use it to select the retailer that offers exactly the delivery service they require, and our study shows that this increasingly means offering multiple delivery options, to home, to another selected location, or to a local store. It means offering the ability to change delivery dates, and to re-route deliveries too. And customers will use that information to make trade-offs between money and time. For example, more than half of customers (61%) will wait up to four extra days (the average acceptable wait time) to get free shipping, and more customers are willing to wait three days.

Word of mouth…and text

What is more, customers will tell others about their experiences. Around a quarter of all shoppers are likely to use social media to pass on good experiences, and even more (one in three) say they are influenced by those recommendations.

These results are another confirmation of what we already believe at UPS: that the ability to choose a truly tailored delivery option and change it if necessary, is now one of the keys to successful eCommerce. This is why we have been expanding our UPS My Choice offering, as well as the UPS Access Point network. We believe the combination of these two offers delivery flexibility, as well as a range of alternative delivery destinations like local stores in many of the markets we work in.

The Digital Single Market could unlock the full potential of eCommerce, but SMEs need to ensure they are equipped with seamless logistics to win customers and keep them. In fact, choice and control are not really options any more, but rather necessities for any SME that aims to survive and prosper in the online marketplace.

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