Kantar, a marketing data and analytics company, announced a comprehensive report, ‘Uncovering Consumer Decision Making in Digital Commerce’, bringing together several studies from different categories in efforts to help marketers come up with winning strategies for digital commerce.
The research discloses great consumer difference between availing of offers online and offline. As many as 86% of online consumers like to take up offers, while the figure for offline stands at 60%, a large gap. Online buyers are more conscious of prices and take advantage of more offers compared to offline buyers. Thus, it is most imperative for marketers to optimize discount and promotion offers—own and with partners—taking into account channel dynamics and to understand the psychological thresholds to pricing.
Other key findings of the report include:
All things considered in their choice of the digital payment instrument, brand reputation rules as the foremost parameter, standing at the highest with an index of 100, whereas other parameters ‘interest on earning’, ‘platform fee and charges’, and ‘cashbacks on all transactions’ lag behind, indexed to brand reputation, at 47:43:18, respectively.
While choosing the e-commerce platform for online purchases, consumers look for foundational needs to be met; hence, delivery type and delivery charges stand highest at an index of 100, followed by ‘discounts’ and ‘delivery time’ at 61 and 52, respectively, indexed to delivery type and charges. This gives clear indicators to brands of having a strong hold on these basics for customer loyalty and understanding consumers’ maximum thresholds for delivery charges and delivery time, as well as minimum thresholds for discounts.
Although the consumers would anticipate having predominant services and features on the app, they would like to pay only for those parts which are fulfilled with an unmet need or those parts which have a tangible advantage. Kantar stressed that it is crucial to be able to estimate the consumers’ willingness to pay in each case for each of the services and features, in order to build subscription packages and to monetize profitably.
A very important aspect to consider about consumer decision-making on digital platforms is priced offers in comparison to free services/content offers. “It is important to put in writing the argument made in the report that it is urgent not to underestimate free services and content on the web when constructing and pricing subscription packages/offering bundles and when monetizing services and features in the digital commerce space. Instead of actual competition, these are something that is plausible to substitute or something they can easily switch back to in the consumer’s mind.”. Elaborating this further, the report goes on to add that most of the medicines are already discounted on a number of sites, and hence, the willingness to pay for those in the subscription plan is very low. The same can be said for services like nutritional/diet advice which is already free on most health-related sites and platforms.
Finally, the report points out that loyalty program subscribers expect a higher value in terms of tangible rewards in return. This can vary by category. For one category, the expectation from conversion rate for reward points to cash for loyalty program subscribers was 1.17 times that of conversion rate for regular users and for another, it was 1.31. Kantar suggests that estimating the reward/cash ratio and optimizing that to balance consumer loyalty and rewards payout based on loyalty programs and profitability will help benefit from the difference in these expectations across program subscribers and regular users to get them onboard by different categories.
Commenting on the report, Soumya Mohanty, MD and chief client officer, Insights Division, South Asia, Kantar, said: “India’s online shopper base is to be the 2nd largest globally by 2030, with nearly 500-600 Mn shoppers according to Invest India. To capitalise this massive growth and be future-ready, it becomes even more important to listen to what consumers want from your category, brand, and those you partner with”.
Kantar, a marketing data and analytics company, announced a comprehensive report, ‘Uncovering Consumer Decision Making in Digital Commerce’, bringing together several studies from different categories in efforts to help marketers come up with winning strategies for digital commerce.
The research discloses great consumer difference between availing of offers online and offline. As many as 86% of online consumers like to take up offers, while the figure for offline stands at 60%, a large gap. Online buyers are more conscious of prices and take advantage of more offers compared to offline buyers. Thus, it is most imperative for marketers to optimize discount and promotion offers—own and with partners—taking into account channel dynamics and to understand the psychological thresholds to pricing.
Other key findings of the report include:
All things considered in their choice of the digital payment instrument, brand reputation rules as the foremost parameter, standing at the highest with an index of 100, whereas other parameters ‘interest on earning’, ‘platform fee and charges’, and ‘cashbacks on all transactions’ lag behind, indexed to brand reputation, at 47:43:18, respectively.
While choosing the e-commerce platform for online purchases, consumers look for foundational needs to be met; hence, delivery type and delivery charges stand highest at an index of 100, followed by ‘discounts’ and ‘delivery time’ at 61 and 52, respectively, indexed to delivery type and charges. This gives clear indicators to brands of having a strong hold on these basics for customer loyalty and understanding consumers’ maximum thresholds for delivery charges and delivery time, as well as minimum thresholds for discounts.
Although the consumers would anticipate having predominant services and features on the app, they would like to pay only for those parts which are fulfilled with an unmet need or those parts which have a tangible advantage. Kantar stressed that it is crucial to be able to estimate the consumers’ willingness to pay in each case for each of the services and features, in order to build subscription packages and to monetize profitably.
A very important aspect to consider about consumer decision-making on digital platforms is priced offers in comparison to free services/content offers. “It is important to put in writing the argument made in the report that it is urgent not to underestimate free services and content on the web when constructing and pricing subscription packages/offering bundles and when monetizing services and features in the digital commerce space. Instead of actual competition, these are something that is plausible to substitute or something they can easily switch back to in the consumer’s mind.”. Elaborating this further, the report goes on to add that most of the medicines are already discounted on a number of sites, and hence, the willingness to pay for those in the subscription plan is very low. The same can be said for services like nutritional/diet advice which is already free on most health-related sites and platforms.
Finally, the report points out that loyalty program subscribers expect a higher value in terms of tangible rewards in return. This can vary by category. For one category, the expectation from conversion rate for reward points to cash for loyalty program subscribers was 1.17 times that of conversion rate for regular users and for another, it was 1.31. Kantar suggests that estimating the reward/cash ratio and optimizing that to balance consumer loyalty and rewards payout based on loyalty programs and profitability will help benefit from the difference in these expectations across program subscribers and regular users to get them onboard by different categories.
Commenting on the report, Soumya Mohanty, MD and chief client officer, Insights Division, South Asia, Kantar, said: “India’s online shopper base is to be the 2nd largest globally by 2030, with nearly 500-600 Mn shoppers according to Invest India. To capitalise this massive growth and be future-ready, it becomes even more important to listen to what consumers want from your category, brand, and those you partner with”.
