E-commerce companies have a greater chance of succeeding in an increasingly competitive and cutthroat market when they are clear on value proposition. Consumer retail surged during the coronavirus pandemic as nearly a hundred countries instituted self-isolation orders and locked down one-half the global population, forcing countless consumers to rely solely on online stores for their purchases. Convenience was the key drawing factor for most consumers and remains a big factor in the attractiveness of online commerce.
According to a Catalyst/Kantar study, 66% of consumers used convenience as their main criteria for choosing online stores while 57% valued shoppability, 52% used product assortment as their criteria and 47% cited price. However, with consumers around the world facing significant increases in the cost of living, this year’s Australian E-Commerce Report found that consumers are focusing more and more on loyalty programs and discounts and looking for price comparisons to minimize their online shopping costs.
Years of the coronavirus pandemic, an ongoing energy crisis and the reverberating effects of the Russia-Ukraine war have left the global economy battered, increasing costs almost across the board and forcing consumers to dig deeper into their pockets to survive. Online retailers can attract these cost-conscious online buyers by increasingly investing in value proposition and tailoring the online shopping experience to match current economic conditions.
IAB Australia CEO Gai Le Roy noted that while consumers are leveraging a mix of in-store and online purchases to fulfill their shopping needs, price-sensitive shoppers who want the best value for their money present new challenges for online retailers. He said that while undercutting competing companies and discounting may work in the short-term, it isn’t a feasible long-term strategy.
According to Pureprofile CEO Martin Filz, shifts in consumer behavior caused by the coronavirus pandemic have endured long after lockdown orders ended. Consumers now expect increased shopping convenience and faster deliveries, Filz commented, and they have maintained their purchase frequencies from 2022, albeit with more caution.
The report found that 62% of consumers consider loyalty programs as a key factor when choosing online retailers as they look to maximize the value of their money while improving their shopping experiences. A whopping 9 out of 10 shoppers signed up for royalty programs, and 44% of those who joined the programs had at least four cards. Furthermore, 52% of online shoppers reported paying subscription fees to retain membership in loyalty programs such as eBay Plus, Amazon Plus, Costco Membership, Woolworths Delivery Unlimited and Wesfarmers OnePass.
As more players such as NextPlat Corp. (NASDAQ: NXPL) (NASDAQ: NXPLW) enter specialized segments of e-commerce such as healthcare e-commerce, we could see more targeted forms of value proposition fronted by companies intent on growing market share.
NOTE TO INVESTORS: The latest news and updates relating to NextPlat Corp. (NASDAQ: NXPL) are available in the company’s newsroom at https://ibn.fm/NXPL
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