2021 Global Ecommerce Consumer Behavior Analysis

episode Transcript

Podcast Intro

You're listening to Gateway to ecommerce a podcast by ClearSale. In this series, global ecommerce leaders discuss challenges, best practices, new tech, and secrets to success. And now your hosts, Sarah and Denise.

Denise Purtzer

Hi, and welcome back to Gateway to Ecommerce. My name is Denise Purtzer and I'm the (former) VP of Partnerships and Alliances at ClearSale. And your host today. We have a very special episode that highlights commentary from some of the top leaders in ecommerce about consumer attitudes and behaviors.

ClearSale recently partnered with Sapio Research to bring you what is known today as the 2021 Global Ecommerce Consumer Behavior Analysis. We dive into the insights for what the ecommerce industry needs to know about how consumer attitudes and behavior are evolving, especially through the pandemic to get access to the report. Look in the description of this podcast episode and check out the show notes to get started. We've tapped into the brainpower of our partners at Oracle and SONA Payments to talk about free trends that we see evolving with mobile wallet usage, contactless payments, and the reinvention of retail as we know it.

Stick around to hear about the evolution of these trends from founder and CEO, Ryan O'Leary at Sona Payments, which is a payment processing solution, as well as Neil McHugh, who is the (former) senior principal product manager at Oracle, a cloud-based tech company that focuses on automated and secure cloud infrastructure and enterprise business process applications.

We also have familiar voices from the ClearSale leadership team to lend additional insight on consumer behavior trends, country and industry highlights, as well as how fraudsters are adapting in today's age. Sarah, our senior director of ClearSale who led this initiative is going to help me unpack all the information about the 2021 global ecommerce consumer behavior analysis. So let's get started. Welcome Sarah.

Sarah Elizabeth         

Hey guys. Nice to be back.

Denise Purtzer

We have a lot to discuss today, but before we dive in, tell our listeners a little bit about how this research project came about. If you would.

Sarah Elizabeth         

Been in the industry for that many years, I've always seen data about lots of surveys and data that they focus on B2B surveys. So we know a lot of what is going on, on the merchant side, but do we have any research done on the consumer side? So merchants can understand what it's happening with their consumers, what do they want, what they are doing, what the trends are, and also another aspect that we wanted to have more information about is how different countries they compare. And when we do have some different research that are done in each country, it is hard to compare apples to apples. That's why we decided to come up with a questionary to get information from all of these different countries, Australia, the UK, the United States, Canada, and Mexico. So we could get more insights into the differences between them.

Denise Purtzer

So obviously a huge endeavor and it couldn't have come about at a better time with all the changes going on with the pandemic and all. So what was the biggest challenge with managing a project at this level?

Sarah Elizabeth         

I think there are the natural challenges of dealing with surveys and questionnaires, which is, once you have all the data, how you're going to present them or the points of view they want to look at, what correlations you are finding, and stuff like that. And also how we will make sure that the data that we're getting from different countries, were being standard. Like the questions are being positioned in the same way, in case of Mexico had a different language. So we had to make sure that everything was standard. So we could compare the different countries.

Denise Purtzer

I found this to be fascinating as well, even being an employee of ClearSale because we work across so many different countries and talk to merchants and partners every single day in a global aspect, what was the biggest highlight of this project after it was launched?

Sarah Elizabeth         

There're few. Some of the things that we found, for example, there are merchants that Mexicans and Canadians, look more like than Canadians and Americans, for instance, or it was also interesting for us to learn and to remember people that Canada and U.S. are not the same countries because lots of time people just grouped them together and there are differences between them.

But I would say that if you have to say one highlight in terms of statistics is that 39% of the consumers say they will never place an order gain with a merchant if they have a transaction declined by them, which is huge. And it's really important for our industry because we know that lots of companies, simply decline high-risk transactions. And knowing that 40% of those declines, they're never going to come back to your website, it's really big. And it gives the importance for the merchants on how to deal with those high-risk transactions instead of just simply declining

Denise Purtzer

Absolutely. And one of the things that stood out to me, and this is from a merchant's perspective, but taking those consumer behaviors into effect, and I think it was Neil that we talked to about how we're seeing five to seven years of growth in the past four months. And I've heard different numbers around that from different companies, but huge surges in growth right now on the ecommerce side. So keeping our finger on the pulse of what's happening is so very important.

Sarah Elizabeth         

Yes. And nobody knows what it's going to look like once we come back to normal.

Denise Purtzer

Absolutely. Or is this the new normal?

Sarah Elizabeth         

Yeah.

Denise Purtzer

And that was one thing that you mentioned; that it's potentially a permanent increase for many of our merchants and I think that's something to take into consideration as well. So speaking of which Neil and SONA Payments that we had mentioned before heard from these global ecommerce leaders from both Oracle and SONA Payments and we listened to their perspectives on consumer behavior. So let's take a listen first to what Neil McHugh has to say about how ecommerce businesses are reinventing themselves:

Neil McHugh (Pre-Recorded Audio)

Retail in many ways has been reinvented over the last five years. And in the last six months, there've been multiple studies out there that said we've seen five to seven years’ worth of growth in the last four months in the ecommerce space. So how does that translate into meaningful points? So we see the brick and mortar starting to go away with more focus on ecommerce. So people are looking for personalized experiences, but to have a personalized experience, you need to give people your information and people are very concerned about that. So when we talk about fraud and security that ties directly, there's a direct correlation to personalization because the more information you give, the more personalized you get, but there's still less wariness.

And as far as age goes we find millennials, Gen Z, things like that. They don't even like, "Man whatever." They want to take my information. I don't care. But when you start getting older farts like me, who still think about who grew up in the age of privacy, security's a big deal. Correlating back to age there, it's very clear that the older the consumer, the more feedback you get, the more product reviews, more criticisms, things like that. So across age, there's a different perception of ecommerce. But it still all ties back to fraud security. We see big trends in the last five years. We can also talk about AI, AR and bots. ARs had a huge impact on how people buy things, especially in COVID.

If I'm going to buy a sofa, I want to see how it looks. I want to see where it's not good. If I'm buying a forklift, the same thing I want to see if my space, so we're seeing a lot of trends around there and with AI and bots, you're starting to see people accept them now. And I think that's a big trend over the last five years because when they first started becoming relevant in the market space, it was the equivalent of getting, "Hi, you've reached the United customer help service line." Which is digital. People didn't want that at first – they wanted a real person, but what we've seen in the last 12 to 24 months is people are getting over that because convenience is more important.

But again, that ties back into it, it's critical that your fraud and your security are very up to date because if you don't, and all of a sudden someone hacks them off, does whatever. Then that leads to a lot of consumer confidence issues. So I think there's a lot we could say around the personalization of content, airline bots, and how fraud monitor is big. And I worked with some partners like Snapchat out of the UK, but for nominal purposes. They do AR for fashion. So you see this, but it's too expensive. So I want to see something like this, but in orange and this size. So it helps control returns, inventory, and things like that. But again, unless you have some clear security and fraud, then that's going to be an issue. From an Oracle perspective, our big push around that is one platform you want one platform that seals up a lot of holes.

If you're running Oracle CX on OCI, beautiful, we update that. It's always gone. But we also need to invest in the right partners as well, because we have a lot of ISB who provide critical functionality. So if you think about one of the other trends that we see in commerce over the last couple of years too is people want payment options. We use PayPal wallets, that's fine for some of them, not for others. And yet there are regional partners. So flexibility on how we pay for things becomes important. So how we pick our partners and whom we work with around security and fraud is paramount because it needs to be tight, needs to be secure.

(End recorded audio)

Denise Purtzer

Neil gives us a ton to think about there. And I think the thing that stood out most for me was the fact that you think about the millennials and the Gen Z groups of consumers and how they're raised being able to personalize everything that they do. So then you apply that to different segments, such as being able to take a picture of your living room and throw a paint color on the wall and throw a sofa in there and see what it looks like with different pieces of furniture or paint samples or some of the luxury brands right now that are doing things like building that sort of technology into their sites. So you can try on a handbag with a fancy outfit that you have to see what it looks like to go out. All of those things are becoming expected. And then you coupled that with the whole security piece that he brought up and it's almost mind-blowing to think about all the different aspects that come into play and the fact that security becomes more important now than ever. Your thoughts Sarah.

Sarah Elizabeth         

Yes, I agree. And there's an additional challenge here that not only do people want personalization, but they want it now. They want everything to live. That's the way that the new generations have been raised. Everything they want, they're just habits, with auto cell phones and things that we always have in hand. So it's a huge challenge for the retail industry, how to keep pace with that and how to compete with huge corporations that have all of this money to invest in all these different platforms for testing and AI to a personalized experience.

Denise Purtzer

Absolutely.

Sarah Elizabeth         

Fun times, but also challenging.

Denise Purtzer

It is. If only somebody could put us on a virtual vacation right now, I think we'd all take part in that, right?

Sarah Elizabeth         

Yeah.

Denise Purtzer

But life, as we know during this pandemic, has completely shifted our priorities to safety and convenience as you mentioned. Some of the trends that have bubbled up include contactless payments and mobile wallet usage, let's hear what Ryan O'Leary has to say about these trends.

Ryan O'Leary (Pre-Recorded Audio)

So if we understand who our target customer is, our target customers aren't so much consumers. So we work with basically businesses. Small business to medium business, to large corporations, to organizations or nonprofit, to be able to help customize and build a payment solution for them. So our predominant audience is either our partners that we're working with, like ClearSale or those businesses or organizations that are trying to build an ecosystem to be able to accept payments. So we don't really have direct contact so much with the actual consumer that's making the move or making that transaction. It's more directly to the partner or the merchant itself.

Now, that being said, we do get feedback from our partners and merchants to say where they're seeing. And I would say the biggest trend that we're talking and hearing now of where consumer behavior is moving, at least in our space is to contactless payments and looking for solutions to be able to move to contactless. And then being able to shift their businesses from say a traditional bricks and mortar to an online business. This is what consumers are driving merchants and merchants are coming to us to be able to come back with those solutions.

(End recorded audio)

Denise Purtzer

Ryan touched on that whole contactless payments piece, which I think we're all as consumers familiar with, whether it's from the food side of things and being able to buy food online, pay for it and go pick it up curbside, which has happened quite a bit for most people I think these days, even to that bridging the gap between brick and mortar and making that more of an online experience where people can maybe do a virtual tour of a product and a showroom and talk to a sales person over line and then use maybe a virtual terminal solution to go ahead and checkout and make that happen. But there's security involved in that as well. And I know from a partnership's perspective, we've secured some partnerships in the last couple of months that have come about just out of need for this contactless payments.

For instance, we work with one of the largest mattress companies in Canada, and one of their challenges was the fact that their malls were not open so that they could have their stores open, but people were still needing and wanting to buy mattresses. So they created a contactless way of making that purchase happen. They could do it over the phone, they could enter it into a text link, credit card details in and make a purchase that way. So I think the lines, from my perspective, as a consumer, as well as from the partnership's perspective and being in this ecommerce space are just showing that they're being blurred and everything from that consumer experience and all those demands that they want to have face-to-face are becoming more realistic on that contactless side on the ecommerce side. What do you think Sarah?

Sarah Elizabeth         

Yeah, I agree. And I think they're two different aspects here that we have to think about. There is this data security, but also the privacy questions that we have here. For instance, lots of people, they complain that we have devices listening to us all the time, that our cell phone are listening to how we speak. But at the same time, they also want to have that personalized and all of this full experience where they can transition from the brick and mortar to the online channel. And that branch, knowing that you are the same person and things like that. And what it's interesting, it's that the younger generation, they are less concerned about data privacy.

In our survey, for example, we found that almost 60% of the people that are younger than 50 years old, they believe that fraud protection, it's more important to data privacy comparing to only 40% of the people that are 50 plus. So the younger generation, they are being more open and less concerned about data privacy, but of course the same time there's more technology involved and new stuff going on, we don't know exactly how to protect the data. It's the time that we never see. So it's a fine balance here that we have to find as an industry.

Denise Purtzer

It certainly is. And more to come obviously as things unfold. I've mentioned a couple of times that we've got some amazing partners across the industry from payments to ecommerce platforms, technology solutions and alliance partners, and they all help support our fraud prevention and protection solutions. If you're interested in learning more about our partner programs, you can go to our website, clear.sale and check out the partner tab for more information, or just reach out to us directly at partners@clear.sale. And for our third and final club, we hear once again from Ryan, from SONA Payments where he's going to share information with us on the mobile wallet specific to the Canadian market. And as well as shared some information on the changes in the devices used to make such purchases.

Ryan O'Leary (Recorded Audio)

We have been seeing a gradual adaptation or of consumers adopting more going into a mobile wallet. So you have more clients that are moving from just contact us to a card now to be able to say, Hey, why don't I take that card? And now put it into my mobile wallet so I can use my phone or my watch to be able to make those payments. So we've saw that gradually increasing, at least in the Canadian marketplace, I'm not sure about the U.S. but we saw prior to COVID Visa and MasterCard increased the contactless limits from a hundred dollars for on a Visa MasterCard to 250. So that's obviously created more consumer demands for this types of technology. So I would say when COVID hit, I think we saw everything accelerate. So everything accelerated where our merchants were coming to us and saying, "Hey, we want a truly contactless solution."

Where, as an example, the clerk that you go into that when you go to your dentist's office, that clerk, we don't want them passing over that pin pad that they're using and keying something in and passing it over to that patient. We'd like something where we could have one device that the clerk would ring in, something in one that would be customer facing and they don't interact with the same devices as all. So one of the things that we did is we worked alongside with one of our vendors called Clover, to be able to offer two devices for the same of prices one, and then link those devices together so that in essence you have a solution where they're not interacting with the same device.

(End recorded audio)

Sarah Elizabeth         

Very interesting aspect Ryan brought to us. And one other interesting aspect that I've been seeing with COVID is that COVID has been also been excused for many things. So I think not only the worry of people about the contact, it's driving this growth in contactless payment, but also it's much faster. And I think it ties with, we were talking in the beginning that, consumers they want everything now. They want everything fast and the contactless payment is much more efficient on that aspect. You don't have to wait for the chip to process and then put your pin and stuff like that. This also help us to think about what it's going to last once we are back to normal. And once we can have contact again, and most people are not that much worried again about contact. So I think contactless payment is one of the things that came to stay, not only because it's more convenient, but also because much faster. What do you think, Denise?

Denise Purtzer

I totally agree. I think that that contact with piece has once again blurred the lines and is not just present on ecommerce anymore. It's part of what we do in store, even though we're there, it becomes a contactless environment as well. So Ryan touched on some of the different aspects from a merchant's perspective, but I think one of the things we need to consider is that consumer perspective, because that's a lot of what we're unpacking here from this analysis is, and I think one of the things we take for granted is just how easy it is for a mobile wallet to be used because a person simply has to have their device in hand and not a credit card in hand.

So they could be lying down on their sofa at night and see something that they want to purchase and use a mobile wallet to do so. Same as if they're out on a walk and they decide to pop into a coffee shop, they can use a mobile wallet to make a purchase if it's a mobile wallet friendly retailer. So all of those things being said, Sarah, what are some of your thoughts on that from the consumer aspect?

Sarah Elizabeth         

For sure it has to do with convenience. The survey that we did shows that less than 30% of people say that they had the credit card with them when they're placing a purchase online. And not only that, I think the fact that you can use a wallet makes it possible for you to check out as a guest in many websites nowadays. And I think after COVID, people they had to buy in websites that they were not used to buy before. So not only on the big websites and not always, you wanted to create a new account and tie down all of your information and many of the websites nowadays they're offering the option to check out as a guest, as long as you have your mobile wallet account created.

Denise Purtzer

Essentially we're creating the ability for shoppers to be lazy these days, right?

Sarah Elizabeth         

Yes.

Denise Purtzer

Hey if that's what it takes, that's okay.

Sarah Elizabeth         

True.

Denise Purtzer

So 2020 and COVID have certainly changed how we shop and how we think, what stands out to you about how our clients are reinventing themselves, highlighting different industries and countries.

Sarah Elizabeth         

I think it's really interesting to see small companies that they were not able to implement fancy technologies in the past now being able to, because the market's much more open now. So people know that there are many merchants in need of solutions. So many service providers they emerged and decisions are also being made quickly. So this creates a whole new ecosystem of smaller companies being able to purchase services and technologies from other smaller companies and decision processes are very much faster because we had to learn how to react fast after COVID. Technology it's much more accessible for smaller merchants. Technologies like a virtual way to test furniture in your house or virtual way to try clothes, things like that. It's much more accessible to wider variety of merchants nowadays.

Denise Purtzer

It absolutely is. And just even looking at specific verticals, we've spent a huge amount of time and energy supporting certain verticals like jewelry segment, for instance, where they were 100% brick and mortar potentially. And they're transitioning over just out of need due to that whole ecommerce environment. But obviously with that comes their number one concern of, "Hey, can I ship out of $15,000 ring and make sure that it's an okay order. That's not going to result in a charge back." So a lot of these things have happened on a vertical basis as well.

And I think even looking at some of the different verticals that we've worked with in Mexico, as an example with the food industry and grocery stores and the basic needs types of things. Not only are we having seen grocers and health type products going online more and more rapidly, but we're also seeing some of the brands go direct to consumer just out of native getting Clorox wipes as an example into the hands of people, not just being the brand that's wholesaling to other products, but also having a brand of themselves on the ecommerce front. So there's been some interesting movement there for sure.

Sarah Elizabeth         

Yes. That's so true. It's a learning for the whole industry. It's becoming B2C instead of being just B2B.

Denise Purtzer

Absolutely. So what can merchants do to keep up with this? What are some of the things that they can do on their sites to make sure that they're providing these types of experiences that are being demanded?

Sarah Elizabeth         

I think you have to be engaged with your industry community, because you have many peers that are facing the same challenges that you are. So information is key. And also you need the courage to try and react fast if you do something that doesn't work. But I think we have to be willing to try more these days because things are changing. Things are moving fast, there are new merchants emerging and people that they have nothing to lose. So they are going to be much more aggressive on what they're proposing and what they are testing. So you have to be careful not to stay behind.

Denise Purtzer

Absolutely. A lot of the merchants we're talking to are investing in things like creating video and creating a better experience for their consumers on their sites so that they could see that product in a three-dimensional way or see it in movement, see it on, versus being able to go into a room and try it on in a brick and mortar store environment. One of the other things that happens with that, is that virtual showroom, as we talked about, but also just an interactive chat. And it's not just a chat with text, but the ability to actually get online with a salesperson, to a consumer and talk with them in a video chat, show them different products. There's technology out there that show you what has been added to a cart or what types of things they've looked at before they even came to you on that chat environment, which makes it a more personable and intelligent approach when that sales person is able connect with them and still make it very personalized.

So there are lots and lots of opportunities out there and I think that as a merchant, the challenge is to find the ones that fit with your audience and try different things as you said, but not be worried about pivoting and changing gears to continue to meet their needs.

Sarah Elizabeth         

Yeah, we cannot afford [inaudible] anymore. You'll have to take risks.

Denise Purtzer

Thanks to you all for our thought leaders that were involved in this and our team members who made this analysis possible, we hope that we have piqued your interest in this analysis. You can find a link to it in the description of this podcast, in the show notes, or you can go directly to our website page for the full report in the resources section on ClearSale. If you love what you're hearing, please let us know by writing a review and sharing with other colleagues in the ecommerce community, we'd really appreciate it. And if you'd like to know more about how to prevent ecommerce fraud, visit our website, we have a ton of resources as I've mentioned before, dedicated to this topic and all things ecommerce to help you on your journey. If you have any questions or would like to suggest a topic you'd like for us to cover, send us an email at podcast@clear.sale, you can find us on all major social media platforms and wherever you like to listen to podcasts until next time.

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