How is Consumer Behaviour Changing? The Latest Survey Results

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How are consumers shopping online is changing. From search to payments and even returns, we highlight exactly what retailers need to know.

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Each fortnight, Power Retail surveys over 1,000 Australian online shoppers to find out exactly how consumer behaviour is changing.

In one of our latest surveys, we asked shoppers about their intent to spend online in the coming month. While consumer confidence has generally been high, we are starting to see a shift, with slightly more shoppers planning to decrease their online spend (23%) than increase (22%). So what’s driving this? The majority  of shoppers who plan to decrease spend said they were saving money for essential items (59%). In second place, we can see that 20% say they are decreasing spend because they are unemployed and need to save or because their income is reduced. This does speak to the economic uncertainty at the moment and the pressure on consumers. Nineteen percent said they were decreasing spend because not as many retailers are offering bargains or sales items. This tracks with the post-sales event trend we often see. A noticeable amount (14%) did say the decrease is because they are spending more on travel (which makes sense given the timing of school holidays).

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For online shoppers, where does product search actually begin? The majority (58%) started their search for a product on Google. This has been on the rise since March (when it was 53%). In direct correlation to the rise in Google search, we can see a dip in those heading direct to a retailer website as first point of search, 16% in late June, down from 21% in February. Marketplace search has remained fairly steady, now at 24%. We haven’t seen much movement in social, with only a small percentage (2%) heading to a social media platform to look for a particular product online.

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search graph

Source: Power Retail Switched On Trajectory Report #48 June 2022

While shoppers are planning to decrease their online spend, we have seen a slight increase in returns (now 28.7% of those surveyed say they have made a return recently). We do tend to find a spike in returns after high purchase period, and given the sales events such as Click Frenzy Mayhem and EOFY deals that occurred just prior to this survey period, it makes sense that returns rates would increase. The most noticeable spike in returns we see is in January, after the Christmas period (which means retailers should ensure they have a strategy in place to deal with, not just from an inventory perspective but also from a customer enquiry and consumer relations perspective). Change of mind purchases only account for a very small percentage of returns, now at 8%. The main reason for consumers returning products (62%) is that the item purchased doesn’t fit or looks different online. This figure has remained largely unchanged for three years running. It shows that there is still work to be done when it comes to the basics like product descriptions, size guides, product imagery and more.

How are shoppers paying online? Credit Card is the most popular form of online payment, now at 29% of consumers saying this is how they paid for their last online purchase. PayPal almost at an identical 28%. Nineteen percent of consumers said they used BNPL for their last online purchase, up from 17% last month. Afterpay is the most popular BNPL provider, accounting for 12%. The rise in BNPL is in direct correlation to the slight drop in debit. With the pressure on consumers and the rise in petrol prices, fruit and vegetables and the cost of living generally, we may see a continued shift in how consumers pay moving further into 2022.

Want more? Download Trajectory #48, FREE to Power Retail Switched On Members.

PLUS join our fortnightly Market Update, in which we present findings from the most recently published Trajectory Reports. FREE to join (for both Switched On members and non-members), and just 15 minutes! Our next Market Update will take place on Wednesday 27 July at 1 pm. Register here.

The e-commerce landscape is changing. With a Power Retail Switched On membership, you get access to current e-commerce revenue and forecasting, traffic levels, average conversion rate, payment preferences and more!

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