Jack Keough: UPS Study Shows Growth Of Online Buying

The report has important implications for the industrial marketplace and a warning that distributors should consider increasing their online presence, particularly for mobile websites, and find ways to speed up deliveries to customers.

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A recent retailing study by UPS finds that, for the first time, consumers bought more purchases on the web than in stores, an indication as to the rapidly accelerating adoption of online buying.

The report has important implications for the industrial marketplace and a warning that distributors should consider increasing their online presence, particularly for mobile websites, and find ways to speed up deliveries to customers.

The study, titled UPS Pulse of the Online Shopper, was conducted by UPS and analytics firm comScore Inc. of more than 5000 shoppers. The report reveals that shoppers made 51 percent of their purchases on the web compared with 48 percent in 2015 and 47 percent in 2014.

The results of the survey — now in its fifth year — illustrate the degree to which the adoption of online shopping is growing. This year, 44 percent of smartphone users said they made a purchase from their device, up from 41 percent a year ago.

Looking at online purchases, the study finds free shipping continues to be the most important factor driving customer satisfaction when checking out online (73 percent), although consumers are willing to pay a premium for faster delivery.

It also shows that more than one-third of the respondents start looking for products on an online marketplace.

The respondents said they now select two-day shipping 20 percent of the time, compared with 16 percent last year and 10 percent in 2014. “Amazon Prime is likely driving this increase as members select two-day shipping 31 percent of the time, compared to an average of only 8 percent for nonmembers,” according to the survey.

The importance of fast deliveries can’t be overstated, whether it be for a consumer or a buyer of MRO products. Staples, for example, has just unveiled a program called Staples Rush, allowing customers that place weekday orders for thousands of products on Staples.com by 3 p.m. to opt for delivery by 7 p.m. that evening. Staples, of course, sells office supplies as well as  safety and break room products.

Shoppers, according to the study, will go to varying degrees to secure free shipping, such as adding items to carts with the intention to keep them (52 percent). And 45 percent have abandoned a cart when they don’t qualify for free shipping.

The majority (57 percent) of shoppers say that the decision to pay for shipping is most often driven by the total cost of the order where they have a clear sense of what it’s worth. Alternatively, shoppers will pay for shipping when they absolutely must have a product, require expedited delivery or personal circumstances dictate.

More than 4 in 10 shoppers research and purchase via smartphones. The 60 percent+ penetration for online research via smartphone by heavy and moderate shoppers suggests that retailers should optimize the mobile experience.

For those who have purchased on their mobile devices, 38 percent indicate that the mobile website is their preferred method of viewing when they shop on a smartphone, followed by 36 percent who prefer the full website. Sixty percent of tablet purchasers prefer the full website.

While the study examined the buying habits of shoppers, it is clear that an online presence is critical for industrial distributors as well. Take, for example, the number of millennials and non-millennials who buy industrial products for their companies.

Though millennials make 54 percent of their purchases online, the rate of adoption by older people is growing at a faster rate. Non-millennials made 49 percent of their purchases online, according to the survey, compared with 44 percent in 2014.

Buyers-whether they be consumers or members of procurement teams-are changing as to how they search for products, a desire for easy, seamless transactions, and a need for free or low cost shipping. Distributors are going to have to meet those challenges in order to garner a larger share of online purchases.

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