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JDA & CentiroCustomer Pulse 2017European Comparison

Voice of the online European shopper

2 JDA & Centiro Customer Pulse Report 2017

Contents

Introduction

Problems with online orders

Click & Collect still needs perfecting

Click & Collect driving in-store sales

Returns levels will not diminish

Delivery preferences are evolving

Using mobile to build a better brand experience

Conclusion

About JDA & Centiro

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In our mobile first age, it is not surprising that more than half (56%) of Europeans use a mobile device in-store; whether for accessing special offers and discounts, for entertainment while queueing at a checkout, or using a smartphone to buy other goods – so retailers should be doing everything they can to integrate mobile interactions into the in-store experience. That’s something some retailers are already working hard to achieve; our PwC survey1 of global retail CEOs revealed that more than three quarters of retailers (76%) are investing in personalised mobile ‘push offers’ and beacons. Moving forward, improved loyalty programmes and a blend of online and in-store experiential engagement experiences will provide exactly what the customer wants.

As the retail world enters a period of enormous transformation, consumers’ shopping habits continue to evolve across an ever-increasing proliferation of retail purchase channels, whether it be online, in-store or a combination of both. While physical footfall has long been an important yardstick with which retail success is measured, our results reveal that 24% of Europeans who used Click & Collect bought another item while picking up their order, showing that footfall is once again rising to prominence in the omni-channel age.

To succeed, retailers must be able to give customers a great blended physical and digital experience when they visit the store. With the rate of change accelerating, various trends (social, technological, environmental, political and economic) are creating disruptive forces that are shaping many consumers’ behaviours and

preferences, including how, when and where they make purchases. To build an understanding of these consumer shopping behaviours and evolving expectations, we surveyed 8,238 consumers across Europe, gathering insights from people of all ages across France, Germany, UK and Sweden. Key findings include:

Introduction

of shoppers who experienced issues received either a faulty or incorrect item over the last 12 months

European shoppers made additional in-store purchases when picking up Click & Collect orders

returned items purchased online over the last 12 months as expectations were not met

45%

24%

43%


an even larger number would look elsewhere if they’re given a poor returns experience: getting the basics of omni-channel retail right is critical to succeed in our mobile-first age.

The in-store experience is becoming an increasingly critical piece of the retail puzzle. As online retail has continued to mature over the last decade, many retailers have been keen to stress that physical stores remain an important part of the mix. Indeed, Amazon’s recent $13.7 billion acquisition of Whole Foods proving a case in point. The ecommerce giant had already been moving in the direction of physical stores with the opening of a physical bookshop in 2015, and the development of checkout-less stores with its Amazon Go model.

At the same time, online order fulfillment, including Click & Collect and ‘Drive’, continues to evolve rapidly as retailers try to keep up with consumer tastes. Yet a poor delivery experience would lead almost two-thirds of European shoppers to switch retailers in the future, and

Surveying 2,124 German adults, 2,014 French adults, 2,070 UK adults and 2,030 Swedish adults, the JDA/Centiro Customer Pulse Report provides a thorough overview of customers’ online shopping experiences during the past 12 months. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 8,238 adults. Fieldwork was undertaken between 29th December 2016 - 5th January 2017. The survey was carried out online. The figures have been weighted and are representative of all adults from France, Germany, Sweden and UK (aged 18+).


Problems with online orders

Consumers across Europe remain intolerant of poor online experiences, with almost two thirds (63%) likely to switch to an alternative retailer the next time they shop as a result.

When things do go wrong, European consumers expect that they can rely on retailers to resolve problems. If not, almost three quarters (73%) would switch to another retailer in the future. In particular, shoppers in the UK (81%) and France (77%) are likely to switch if they feel a retailer has failed to resolve a problem to their liking. Overall, 65% European consumers would switch to an alternative retailer as a result of a poor home delivery experience and 68% due to a poor returns experience. These are also crucial areas for European retailers to get right if they want to keep customers happy.

How likely would you to be switch to an alternative retailer when next shopping for products online, as a result of:

A poor online experience overall

A poor returns experience

Poor problem resolution

A poor home delivery experience

A poor click & collect experience

UK

78% 76%

71%

68%

81%

77%

69%

58%

63%

76%

68%

62%

65%

49%

55%

46%

54%

70%

58%

45%

FR

DE SE


Have you experienced a problem with an online order during the last 12 months?

Unfortunately for retailers, the number of fulfillment issues remains stubbornly high with more than half (55%) of European shoppers experiencing a problem with an online order during the last 12 months, up from 51% a year ago. Those in Germany (58%) and the UK (54%) are particularly likely to come up against problems. Looking at the underlying causes of these problems, German retailers score worst for problems in five of the six categories, while Swedish retailers are the second worst offenders in three categories. With UK/Germany representing the largest European online retail markets and high growth predicted over the next 12 months, retailers must address these issues in order to minimise consumer discontent and potential lost custom.

Yes

45%

55%

No

Research shows an 8% increase in issues relating to online orders over the last 12 months

UK

FR

DE

SE

56%

54%

58%

52%


Which of the following have you experienced with an online order during the last 12 months?

Late delivery

Never received item

Damaged item

Missed delivery

No delivery but retailer/delivery company states delivery was made

Incorrect item

UK FR

DE SE

42% 24%

37%

21%

30%

41%

45%

25%

19%

14%

21%

21%

18%

19%

20%

48%

53%

50% 28%

27%

8%

11%

16%

13%


How would you rate your experience of getting the issue resolved?

Good

Poor

Don’t Know

UK FR DE SE

When it comes to resolving problems, over half (57%) of European consumers said they had received a good experience. However, it is noticeable that consumers in France and Sweden felt they received a poorer experience overall than their counterparts in the UK and Germany. With 30% of European consumers still stating they received a poor experience relating to issue resolution, retailers must recognise and address this area of growing importance to consumers, especially when we reflect on the 77% consumers considering ease of returns when selecting who to shop with (see page 13).

64%

55%

46%

63%

24%

36%

24%

12%

13%

9%

36%

18%


Click & Collect still needs perfecting

Click & Collect remains popular as a fulfillment channel, with 42% of people having used it in the last 12 months. Our recent PwC research1 with retail CEOs revealed that more than half (51%) are investing in Click & Collect, underlining the fact that retailers see it as a strategically important fulfillment method.

Looking at reasons people are using Click & Collect, cost remains the most important factor; 43% of Europeans use this fulfillment method in a bid to avoid delivery charges. UK consumers also ranked high in the ‘more convenient than home delivery’ category, with 49% selecting this option (against the European figure of 36%). This could be due to the maturity of the UK market, meaning consumers are likely to be more familiar with Click & Collect, and more aware of the benefits it brings as a result.

Have you used a Click & Collect service over the last 12 months?

Out of the Yes votes:

Which of the following reasons best describes why you used this service?

Yes No

UK

FR

DE

SE

UK FR

DE SE

More convenient than home delivery

More confident getting items than home delivery

Avoid delivery charges

54%

49%

31%

27%

21%

21%

55%

42%

24%

38%

27%

31%

17%

36%

28%

49%

42%

58%


Although Click & Collect is growing in popularity, the number of people experiencing a problem with it across Europe rose from 54% last year to 56% this year. Unsurprisingly, UK consumers faced the least amount of issues (43%), which is down from 45% last year, reflecting the maturity of Click & Collect in this region. Elsewhere, retailers are still experiencing growing pains, with problems still regularly occurring; France in particular has seen problems increase by 10% since last year (from 55% to 65%).

Looking at specific problem areas, the most commonly experienced issue was long waiting times, which a fifth (20%) of European customers experienced (growing to 26% in the UK). The next most commonly-experienced issue was staff being unable/taking a long time to locate

items in-store (15%); suggesting retailers should focus on making sure they have enough staff in place, and are able to cope with the volume of orders they face, especially in the run up to peak selling periods such as Christmas.

Where the UK needs to focus on staffing issues, the rest of Europe has work to do on the supply chain side. Having items no longer available after an order was placed, wrong items and damaged items are all supply chain visibility and stock management issues. As the number of Click & Collect orders increase over the coming year, these problems are likely to become more frequent unless retailers begin to address the underlying causes – so it’s important that they are fixed sooner rather than later.

Have you experienced an issue with a Click & Collect order during the last 12 months?

Yes No

UK

FR

DE

SE

44%

43%

57%

66%

69%

56%

Out of the Yes votes:


Which of the following problems have you encountered with a Click & Collect order during the last 12 months?

UK FR DE SE

Staff unable/took a long time to locate items in-store

Long waiting times

No dedicated area for C&C

Item out of stock at preferred store

Item no longer available after order was placed

Wrong item

Damaged item

18%

14%

15%

12%

12%

7%

4%

17%

12%

12%

12%

10%

12%

10%

18%

18%

12%

13%

26%

22%

15%

16%

14%

10%

17%

17%

10%

18%

11%


24% European shoppers make additional planned or impulse purchases in-store when picking up Click & Collect orders

Our results are a clear indication that an effective Click & Collect operation can bring additional benefits for retailers; 15% of European Click & Collect shoppers stated they had made a planned purchase of an additional item, and 12% made an impulse purchase of an additional item. In order to optimise potential upsell opportunities, careful consideration must be given to the location and staffing of Click & Collect areas in-store, especially in the run up to peak sales periods.

When making a Click & Collect pick up in-store in the last 12 months:

Click & Collect driving in-store sales

UK FR

DE SE

Made a planned purchase of an additional item(s)

Made an impulse purchase of an additional item(s)

Returned an item in-store

Researched other items in-store

Did not make additional purchases in-store

10%

8%

16%

18%

8%

5%

11%

11%

11%

10%

15%

6%

28%

33%

26%

22%

16%

15%

14%14%


The returns process has a big part to play in omni-channel retail. Across Europe, 70% of shoppers say the ease of being able to return items factors into which retailer they choose to shop online with. This rises to 77% in Germany, illustrating the strong returns culture consumers in this country have. Items are not always paid for straight away in Germany due to a traditional invoice-based system, which leaves customers a window where it could be possible to return an item before the funds used to pay for it have even left their bank accounts. Looking further afield, China has an even higher figure – 85%2 – which points to future attitudes European retailers can expect as European online retail sales continue at double digit rates of growth3 and Chinese online retail forecast to reach 25% of total retail sales by 20204

Returns levels will not diminish

To what extent does the ease of being able to return items factor into which retailers you shop online with?

Regional figures for China:

It factors into my decision

It doesn’t factor into my decision



Don’t Know / n/a

Don’t Know / n/a



UK FR DE SE

70%

85%

11%3%

21%

9%

27%17%

63%

74%

77%

17%

25%

64%


In an average year, approximately how many times do you return items that you have bought online?

As online sales increase, inevitably so will the number of returns. However, this trend is compounded by elevated expectations on the part of many consumers. Almost three quarters of European shoppers (71%) returned at least one item within the last 12 months, up from 66% in 2016. Retailers in Germany are facing particularly high levels of product returns: almost four fifths (79%) returned at least one item in the last 12 months. Of those, 40% returned one or two items, and 33% returned three or more items.

The sheer volume of returns being made are creating a headache for retailers; almost three quarters (74%) of CEOs surveyed in our PwC research1 said the cost of customer returns is impacting profits to at least some extent.

Considering what they can do to mitigate the impact of returns, retailers will notice that there is a fairly even split between the groups of people who don’t return

anything, those who return a few items, and those who return a lot. There is an opportunity to build an understanding of these different groups of people so they can be segmented and interacted with in a more intelligent manner, rather than all being treated in the same way.

I don’t return online items

I return 3 or more items per year

I return up to 2 items per year

UK FR DE SE

32%

21%

33%

40%

26%

33%26%

30%

29%

32%

25%

36%


UK FR

DE SE

The item(s) was not what I was expecting

The item(s) was faulty

I bought the item(s) as an impulse purchase due to a promotion, but I subsequently did not want/need them

I ordered several alternatives with the intention of returning the item(s) I didn’t want

With the tide rising, what action can retailers take in a bid to stem the number of returns? Taking a closer look at the reasons behind returns, the most commonly encountered problem (43%) was that the item delivered did not meet expectations. That said, 51% of German shoppers and 48% of Swedish shoppers experienced this problem – so retailers in these regions should pay particular attention to item description over the coming year.

What were your reasons for returning items you have bought online?

38%

51%

32%

29%

7%

17%

20%10%

7%

13%

5%11%

24%

34%

48%

24%

Most common single reason for returns in Europe: item did not meet expectations... what can retailers do to address this?


Consumers say that cost (37%) is the most important thing they take into consideration when thinking about deliveries. However, the motivations behind delivery selection are evolving. More than a fifth (21%) said convenience mattered the most; 17% said a good returns policy, and 16% place the biggest focus on speed.

Delivery preferences are evolving

Which of the following factors matters most to you when it comes to online home deliveries?

Cost Speed

A good returns policy

Convenience

When it comes to delivery options, almost three quarters of people (70%) said they typically choose standard delivery. This option is particularly popular in Sweden (76%) and Germany (75%), although not as popular in France, where only 61% of people typically choose standard delivery.

UK consumers are more likely than the rest of Europe to choose next day Click & Collect (9%) and standard Click & Collect (20%), reflecting the fact that this market is more developed, with more Click & Collect options available to consumers. Across Europe, we can expect other countries to head in the same direction as they mature, with consumers developing a taste for a wider range of delivery options beyond standard delivery.

UK FR DE SE

40%

14%14%

24%17%

33%

22%

16%

16%20%

18%19%

35%

24%

11%

41%


Which delivery option do you typically choose when shopping online? UK FR DE SE

Same day delivery

Standard Click & Collect (3-5 days)

Standard delivery (3-5 days)

Specific delivery slot (i.e. able to choose day/time of delivery)

Same day Click & Collect

Evening/weekend deliveries

Next day Click & Collect

Next day delivery

2%2%3%

2%

16%14%15%

9%

20%7%

6%7%

8%

7%17%

5%4%

9%5%

3%

2%4%

3%5%

69%61%

76%75%

4%3%

2%2%


Looking at which types of delivery people expect to be free of charge, almost two thirds (63%) of people believe they should not pay for standard delivery. This attitude exists in large part as retailers offered free delivery to compete with Amazon, whose delivery and returns policy shaped the market.

However, as economic reality bites, more retailers are beginning to test different models of charges for deliveries, Click & Collect and returns. As retailers become more realistic about how much delivery costs them, the days of free standard delivery and Click & Collect may be coming to an end.

Which of the following delivery options would you expect to be free without a minimum order value?

UK

FR

DE

SE

Same day delivery


Specific delivery slot


Next day delivery




67%

55%

65%

53%

24%

29%

21%

11%

16%

65%

36%

22%

17%

6%

6%

8%

7%

4%

5%

3%

9%

10%

18%

11%

8%

9%

10%

13%

3%

3%

6%

3%


As it becomes increasingly common for retailers to charge a fee for deliveries, there is a growing acceptance from consumers that retailers need to have a tighter handle on the costs associated with a sale. An emerging trend is for a compromise, with customers exceeding a set minimum order value to be given free delivery of a product; more than a fifth of Europeans (21%) would do so to achieve free standard delivery, up from 15% last year.

Which of the following delivery options would you be happy to exceed a minimum order value if it resulted in a free delivery?


Same day delivery



Next day delivery



Specific delivery slot

UK

FR

DE

SE

7%

11%

10%

11%

19%

14%

18%

12%

15%

8%

18%

14%

30%

16%

26%

23%

7%

5%

6%

8%

12%

5%

8%

9%

24%

26%

17%

24%

16%

18%

27%

25%


Using mobile to build a better brand experience

Mobile devices are already commonly used as part of in-store retail experiences across Europe: more than half (56%) of shoppers use their mobile devices in stores. Swedes are leading the adoption charge, where more than two thirds (69%) of shoppers use mobile devices in-store. As a result, Swedish shoppers register higher than average across all the different types of use outlined in the survey, registering particularly high results in checking/comparing prices (39%, against the 30% European average) and reading product/service reviews (32%, against the European average of 22%). We can therefore expect Swedish retailers to lead the way in engaging with customers through their mobile devices; retailers across Europe should keep a watchful eye on the Swedish market if they want to get an idea of what good application of mobile looks like.

Looking at results across all the countries, there is a fairly even spread between the reasons people are using

mobile devices in-store. In-store mobile usage covers each stage of the shopping journey; from researching items by reading reviews and comparing prices, to checking for any offers, through to waiting in the queue and making a purchase. Retailers must be comfortable interacting with shoppers all the way through the journey, to build a better brand experience, and identify ways in which to turn time spent in-store on potentially competitive websites to instead offering improved loyalty programmes and experiential experiences.

On average, 56% of European shoppers use a mobile device in-store

UKFRDESE

51%51%51%

69%

What percentage of shoppers have used a a mobile device in-store over the past 12 months?


Check/compare prices

Which of the following do you ever use a mobile device for?

For entertainment while queuing

Read product/service reviews

Online purchases in store

Access and redeem mobile offers

Online purchases at another store

UK

FR

DE

SE

30%

21%17%

14%

7%

9%5%

4%9%

6%4%

7%

24%

24%

27%

22%17%17%

15%8%

11%

39%

32%

26%


1 CEO Viewpoint 2017: The Transformation of Retail, Feb 2017: http://now.jda.com/PwC-CEO-Survey-2017-UKEMEA.html

2 JDA/Centiro Customer Pulse 2017 – China

ReferencesDisclaimer

3 http://www.retailresearch.org/onlineretailing.php

4 Total Retail 2017: eCommerce in China - the future is already here: https://www.pwccn.com/en/retail-and-consumer/publications/total-retail-2017-china/total-retail-survey-2017-china-cut.pdf

Copyright © 2017, JDA Software Group, Inc. All rights reserved. JDA is a Registered Trademark of JDA Software Group, Inc. All other company and product names may be Trademarks, Registered Trademarks or Service Marks of the companies with which they are associated. 18.10.17

Omni-channel continues to present both challenges and opportunities to European retailers. They need to be able to balance not only the technologies and options they have at their disposal, but also the wants and needs of customers. In particular, this means they need to tighten up on delivery and ensure any issues are resolved, eradicate any problems they are having with Click & Collect services, provide a great product returns service, and use mobile engagement to provide a great service.

At the same time, we are also seeing the changing role of the store in the customer journey, meaning retailers must be able to provide a completely blended physical and digital shopping experience. Those retailers that are able to deliver this, will put themselves in a great position to keep customers coming back time after time.

Conclusion

http://now.jda.com/PwC-CEO-Survey-2017-UKEMEA.html

http://now.jda.com/PwC-CEO-Survey-2017-UKEMEA.html

https://www.imrg.org/media-and-comment/press-releases/uk-online-sales-in-2016/

http://www.retailresearch.org/onlineretailing.php

https://www.pwccn.com/en/retail-and-consumer/publications/total-retail-2017-china/total-retail-survey-2017-china-cut.pdf




About JDA Software Group, Inc. At JDA, we’re fearless leaders. We’re the leading provider of end-to-end, integrated retail and supply chain planning and execution solutions for more than 4,000 customers worldwide. Our unique solutions empower our clients to achieve more by optimizing costs, increasing revenue and reducing time to value so they can always deliver on their customer promises.

About Centiro Centiro believes in empowering logistics for successful companies. Our cloud-based solution for delivery management is used by finer supply chains in more than 125 countries. With us a retailer can think global, yet offer customers a consistent and personalised experience for first- and last mile delivery and returns to take a brand and shopping experience full circle. It’s a plug-and-play setup offering a world-class portfolio of carrier networks.From straightforward shipping labelling solutions and carrier management, through harmonised tracking, event management and cost control – we offer functional features that extend your existing IT-landscape.

For further information, please visit www.centiro.com

http://www.centiro.com

Using JDA, you can plan to deliver.

jda.com

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Telephone: +44 (0)1344 354500


Visit jda.com

/JDASoftwareGroup

/JDASoftware

/JDA-Software

/JDASoftware






Telephone: +44 (0)1344 354500


Visit jda.com

/JDASoftwareGroup

/JDASoftware

/JDA-Software

/JDASoftware






Telephone: +44 (0)1344 354500


Visit jda.com

/JDASoftwareGroup

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/JDA-Software

/JDASoftware


T: +44 (0)1344 354500

E: [email protected]

More results and in-depth analyses are available in the country-specific Customer Pulse Reports 2017

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JDA & Centiro Customer Pulse 2017now.jda.com/rs/366-TWM-779/images/Customer Pulse 2017 European... · JDA & Centiro Customer Pulse 2017 ... of omni-channel retail right is critical