When it comes to selecting a digital payment instrument, brand reputation dominates as the primary factor, standing at the highest (index of 100) while other parameters such as ‘interest on earning’, ‘platform fee and charges’ and ‘cashbacks on all transactions’, lags behind at 47, 43 and 18 (indexed to brand reputation) respectively, revealed Kantar.
The marketing data and analytics company has recently launched ‘Uncovering Consumer Decision Making in Digital Commerce’ a comprehensive report collating multiple studies done across various categories, to help marketers formulate winning strategies for digital commerce.
The research further revealed a significant difference in availing offers online and offline by consumers.
86% of online consumers are willing to take up offers while the offline offer uptake stands at 60%, it said.
Online buyers are more price sensitive and avail more offers compared to offline buyers. Therefore, it is important for marketers to optimise discount and promotion offers (own and with partners) considering channel dynamics and to understand the psychological thresholds to pricing.
Other key findings of the report include:
– While selecting the e-commerce platform for online purchases, consumers look for foundational needs being met and hence delivery type and delivery charges stand highest (index of 100), followed by ‘discounts’ and ‘delivery time’ (61 and 52 respectively- indexed to delivery type andcharges). This gives a clear indication to brands to keep a stronghold on these basics for customer loyalty and understand consumer’s maximum thresholds for delivery charges, delivery time and minimum thresholds for discounts.
– While consumers may expect to have many services and features available on the app, they would be willing to pay only for the services and features which fulfils an unmet need or have a tangible benefit.
Kantar pointed out that it is important to estimate consumer’s willingness to pay for each service and feature, in order to construct subscription packages and to monetize profitably.
– A key aspect of consumer decision making on digital platforms is Priced offers vis- a – vis Free service/content.
The report highlighted that while constructing and pricing subscription packages / offer bundles and monetising services and features in digital commerce space, it is important to consider (and not ignore) free services and content available on the web as real competition because in consumer’s mind, these are relevant options and something they can easily switch back to.
Explaining this further, the report highlighted that discounts on medicines are already available on many sites and thus, willingness to pay for it in a subscription plan is very low. Same is true for services such as nutritional / diet advice which are available for free on many health-related sites and platforms.
– Lastly the report pointed out that loyalty program subscribers expect higher 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 recommended that in order to balance between consumer loyalty, rewards payout based on loyalty programs and profitability, it is important to estimate and optimise the reward to cash ratio and 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 second largest globally by 2030, with nearly 500-600 million shoppers, as per 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.”