When choosing a digital payment method, brand reputation is the most important factor and ranks first (index value 100), while other parameters such as “interest on earnings”, “platform fees and costs” and “cashbacks on all transactions” lag behind with 47, 43 and 18 (indexed to brand reputation), respectively, Kantar announced.
The marketing data and analytics company recently released “Uncovering Consumer Decision Making in Digital Commerce,” a comprehensive report that brings together multiple studies from different categories to help marketers develop successful digital commerce strategies.
The study also found that there is a significant difference whether consumers use offers online or offline.
86 percent of online consumers are willing to accept offers, while acceptance of offline offers is 60 percent, it said.
Online shoppers are more price conscious and use more offers than offline shoppers, so it is important for marketers to optimize discount and promotional offers (own and with partners) taking into account channel dynamics and understanding psychological thresholds in pricing.
Other key findings of the report include:
– When choosing the e-commerce platform for online purchases, consumers prioritize meeting basic needs. Therefore, delivery type and delivery cost rank highest (index 100), followed by “discounts” and “delivery time” (61 and 52 respectively – indexed by delivery type and cost). This is a clear indication for brands to consider these fundamentals for customer loyalty and understand consumers’ maximum limits for delivery costs, delivery time and minimum limits for discounts.
– While consumers expect many services and features to be available to them in the app, they are only willing to pay for services and features that meet an unmet need or have a concrete benefit.
Kantar stressed that it is important to assess consumers’ willingness to pay for individual services and features in order to put together subscription packages and enable profitable monetization.
– A key aspect of consumers’ purchasing decisions on digital platforms is the comparison of paid offers and free services/content.
The report highlighted that when composing and pricing subscription packages/bundles and monetising services and features in the digital commerce space, it is important to consider (and not ignore) free services and content on the internet as real competition, as these represent relevant options from the consumers’ perspective and they can easily switch back to them.
The report further explains this, highlighting that many websites already offer discounts on medicines and therefore the willingness to subscribe to them is very low. The same applies to services such as nutrition/diet advice, which are available for free on many health-related websites and platforms.
– Finally, the report pointed out that loyalty program subscribers expect higher material rewards in return. This may vary by category. In one category, the expected conversion rate of reward points to cash for loyalty program subscribers was 1.17 times higher than the conversion rate for regular users, and in another category it was 1.31.
Kantar recommends that to strike a balance between customer loyalty, loyalty program-based reward payouts and profitability, it is important to estimate and optimize the rewards to cash ratio and leverage the different expectations of program subscribers and repeat users (to get them on board) across categories. Commenting on the report, Soumya Mohanty, MD and Chief Client Officer, Insights Division, South Asia, Kantar, said, “According to Invest India, India’s online shopper base is expected to be the second largest globally with nearly 500-600 million shoppers by 2030. To capitalize on this massive growth and be future-ready, listening to what consumers expect from your category, brand and partners will become even more important.”
