Will changes to the way people shop online give an advantage to local businesses? Shopify says it will in its ‘Future of Ecommerce’ Report.
The first prediction of the report is that ‘Young’ online customers will adopt ecommerce more quickly. Shocking!
The second prediction, based on qualitative data from mostly Caucasian markets is that physical retail will transform and proximity to local customers will make a difference.
But the insight is not exactly conclusive. As is the way with these ‘Dashboard’ style reports. The writers believe that 50% is somehow a vital statistic. For example – it is reported that 50% of consumers would like to be able to schedule a time for in-store shopping. This varies by country and is skewed by populations such as Italy where the traditional physical shopping behaviour is influenced by age and online adoption.
New Fulfilment Methods on the Rise.
Most people buying online would still prefer the goods to be delivered to the door (54%). This global number is a bit meaningless without understanding how different markets treated lock-down rules, which stores were open and which stores were able to operate in changed conditions.
Stores that could operate a ‘click and collect, (aka BIOPIS – Buy Online, Pick up in Store or Clickaway), curbside pick-up or pick-up point alternative saw this taken up by 21-23% of customers.
This report by Shopify would have been a lot more useful with some definitions. Consider the following snippet…
“On average, from May to August 2020, when choosing local pickup or delivery, online shoppers: spent 23% more and had a 25% cart size. There was also a 13% higher conversion rate for local pickup and 19% higher conversion rate for local delivery.”
The report includes anyone who has made a purchase of prepared food (including takeout from restaurants) but this category is not broken out from the average.
There is some insight into the use of local delivery by country, but no discussion of why there might be differences. Shopify has never been very good at adapting its product for local markets, preferring to concentrate on easy wins. Understanding of logistical or operational realities in different countries is not something that the SaaS brand really gets.
Local delivery may only be feasible for some merchants in some countries. The cost of labour is a factor, the reliability of the ‘mail’ service and which category of good is being supplied will all make a difference.
Learn more about Fulfilment solutions here.
Local Advantage?
Shopify’s contention is that a local businesses ability to provide curb-side pick-up or local delivery will give them an advantage over the larger, more organised and well funded online stores.
The reality is that that in markets where ecommerce is more mature (and where sites like Amazon has an established presence) consumers are a lot more likely to want orders shipped. 82% of shoppers in the UK do not use local delivery. Even in New Zealand, which has the highest adoption of local delivery, the number is only 50%.
The fact is that if you want your takeaway curry – you want it now, and hot. If you are ordering a new pair of slippers, you can wait a day or two.
Shopify’s 3rd prediction is that shoppers want to shop ‘Independent’. We will investigate whether or not the data backs up that contention in our next post.