Nearly one-third of U.S. consumers (31 percent) turn to the Internet at least once a week to shop, according to the third annual Walker Sands Future of Retail Study. Significant technological changes are taking place across the U.S. retail industry even as online shopping approaches a market saturation point, Walker Sands’ study highlights.
¨On the surface, it might feel like the future of retail has stalled. For example, this year’s study shows that e-commerce has reached a saturation point in many ways, and consumer excitement has waned for some of the sexiest emerging tech. And unlike recent years, which brought us plenty of big news like Apple Pay, Amazon Prime Air and Alibaba’s IPO, much of the past year has seemed like the same old story.¨
That belies developments behind the scenes, where retailers are in the midst of a major technological transformation, according to Walker Sands. ¨While e-commerce seems to have reached a saturation point when it comes to the number of consumers who shop online, the Walker Sands Future of Retail study continues to show a steady increase year over-year in the frequency of purchases.¨
Future of Retail
Surveying 1,400 U.S. consumers, Walkers Sands identified four key trends regarding consumers’ views and adoption of emerging e-tail technology:
- Strong consumer interest in the combination of incentives and in-store mobile push notifications and tracking;
- The effectiveness of fast, free shipping as an incentive;
- A big uptick in online purchases of luxury goods; and
- Ongoing hesitance to make use of mobile payments.
Seven in 10 respondents said they would be willing to opt into in-store tracking and mobile push applications if retailers offered the right incentives, highlighting consumers’ growing interest in and use of m-commerce apps while out shopping in stores.
In addition, easy, worry-free shipping, delivery and returns have become more important to consumers and the e-commerce experience during the past three years, Walker Sands points out. Nearly 9 in 10 respondents (88 percent) said free shipping was the top incentive to shop online.
One-day shipping followed at 69 percent, with free returns/exchanges coming in a close third at 68 percent. Nearly 6 in 10 (58 percent) said easier returns was the top incentive for them to shop online.
Consumers are getting more comfortable with and making greater use of mobile devices and connectivity when shopping, but they’re not making greater use of mobile payments when it comes time to check out. Growth in use of mobile payments was essentially flat year-over-year with about one-third of consumers reporting they had used mobile payments apps. Concerns about privacy and security continue to be the main obstacles, according to Walker Sands.
That said, the data show that use of peer-to-peer (P2P) payment apps may be taking off faster than point-of-sale (POS) mobile applications. Forty-four percent of respondents ages 18-25 said they had used a P2P app during the past year.
Summarizing the report’s key findings:
- Nearly a third of consumers (31 percent) now shop online at least once week, an increase of 41 percent from two years ago;
- Only 9 percent of consumers have used same-day shipping in the past year, but almost half (49 percent) say same-day shipping would make them shop more online if it were offered more frequently;
- Forty percent of consumers expect to receive their first drone-delivered package in the next two years or less. Less than a third (31 percent) think it will take more than five years;
- Among consumers who don’t trust drones to deliver packages, theft and damaged packages are the top concerns (72 percent each), but safety (68 percent) and privacy (60 percent) seem less risky than they were a year ago.