General challenges in e-commerce is perceived to be meeting the customer needs in terms of functionality, convenience and availability. The conversion rate in e-commerce is low and the probability of losing customers along the online shopping journey is high if the experience is not perceived to be satisfying. Based on this, it is crucial for online retailers to meet the ever-increasing expectations of the customer.
EY has conducted a mystery shopping study of 103 online retailers in the Nordics to investigate to what degree these meet the expectations of the ever changing and demanding consumer. The online retailers in scope covered the eight sub-sectors Books, Consumer electronics, Fashion, Groceries and Convenience, Home and Interior, Mixed Retail, Pharma, Health and Beauty, and Sports.
Through this study we have found that the overall level of e-commerce in the Nordics is perceived to be not satisfactory, with an average overall score of 15 points out of a maximum total of 30 points. Finland seems to be the country online retailers in the Nordics should look to for best practice, as this country received the highest average score in the region. When it comes to the sub-sectors, Books, and Pharma, Health and Beauty are outperforming the other sub-sectors.
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The retailers tested in Finland by Finnish consumers have a total score average of 15.9 points, which is almost 1 point more than the overall average of 15 points. In comparison, Danish retailers have received an average total score of 13.6 points. The maximum total score possible is 30, meaning that even the country with the highest average score, still scores rather low with 15.9 out of 30 points. Even though Finland shows best overall performance, this country has the largest spread between the retailers’ performance. It is the home of the two retailers that received the highest overall score as well as one of the retailers in the bottom range. The distribution in each country differs, and ranges between a total score of 7 and 23. Denmark has the lowest spread between the retailers, where the minimum score received is 8 and the highest score received is 19. Norway is the country with the most even distribution of total scores, where 13 out of 30 retailers received a total score of 16 points, equivalent to 43% of the Norwegian retailers.
The Shipping process within Books is perceived as leading among the sub-sectors. All of the retailers in the Books sub-sector that have physical stores (83%) provide the option of Click and collect. Five out of six retailers offer their customers to be part of a loyalty program, which is among the highest share of all sub-sectors.
Only 7% of the retailers within Consumer electronics have a mobile application available where the assortment can be viewed. This is the lowest percentage among the sub-sectors compared to the total average (36%). Furthermore, neither of the analyzed retailers in the Consumer electronics sub-sector offer purchasing functionality in their app.
71% of the retailers have a processing time of two days or less, meaning that a few retailers within this sub-sector are performing significantly worse than their competitors.
The Order process within Fashion is perceived easier than for the whole retail sector. Only 12% require the customer to create an account when placing an order, making the order process less complex and time consuming than for those retailers who require this.
More than half of the retailers offer free return, which is better than the total average of 41%.
Only 33% of the retailers with physical stores provide store pick up, making the Fashion sub-sector lagging behind in terms of offering Click and collect as a delivery option.
Groceries and Convenience is the sub-sector with the highest app availability as 86% of the retailers offer apps compared to the total average of 36%. The sub-sector has the shortest processing time, with only one day. 71% of the studied retailers have physical stores and all of them offer Click and collect as a delivery option. The Groceries and Convenience sub-sector has the lowest range of Payment alternatives, and return free of charge is only offered by 14% of the retailers. The sub-sector is considered as having the best Customer relations among all sub-sectors, which could be explained by the fact that 86 % of all retailers have established loyalty programs for their customers.
The Order process within Home and Interior has the lowest score of all the sub-sectors compared. The processing time had a spread between 0.5 to 6 days, but only 11% of the retailers had a lead time exceeding one day. 94% of the studied retailers have physical stores and 94% of them offer Click and collect, placing Home and Interior retailers in the forefront when it comes to offering store pick up as a delivery option.
The sub-sector’s Order process is considered the best among the sub-sectors and has a processing time between 0.5 to 2 days. Average delivery time for the sub-sector is almost three days, which is the second shortest delivery time compared to all sub-sectors. The promised delivery time within the Pharma, Health and Beauty sub-sector varies between two to seven days and 82% of the orders were delivered on time. Retailers in Pharma, Health and Beauty are considered to build strong relations with their customers, as 59% of the retailers offer loyalty programs to customers.. Most of the retailers are supporting their customers by e-mail or phone but only 12% offer a chat function.
E-commerce retailers within the Sports sub-sector are perceived as being in the front when it comes to layout and originality, within the User-friendliness and appearance topic but they lag behind in regards to assortment. Only 27% of the retailers offer an app and none of the apps provide purchasing functionality. Hence, this is an area that could be further developed for the retailers within Sports to facilitate customers’ shopping.