Older people buy more online than the tech-savvy millennials according to a new report released this week, which offers one of the biggest insights ever on the way people shop on the web.

'The Truth About Online Consumers' was commissioned from Intuit Research by KPMG International to gain a new insight into behaviour and motivation of those who spend an estimated $1.9 trillion last year.

More than 18,000 people in 51 countries who buy online, have offered a unique comparison of markets worldwide. Each made an average of 17 purchases a year - but what is clear is that there are fewer borders with online purchases.

"Enabled by technology, the continued year over year growth in online shopping hasbeen fulled by a new generation of consumers who want greater convenience,value and options," says Willy KruhGlobal Chair, Consumer MarketsKPMG International. "For consumer businesses, this trend poses both challenges andsignificant opportunities."

Advances in technology, logistics, payments andtrust — coupled with increasing internet and mobileaccess and consumer demand for convenience —have created a US$1.9 trillion global online shoppingarena, where millions of consumers no longer ‘go’shopping, but literally ‘are’ shopping — at everymoment and everywhere.

The report poses key questions:

  • How do companies targetMillennials who no longertrust traditional advertising?
  • How many people sees something in store - but then buys online? (And who are they?)
  • How important are paymentoptions in India?
  • Whichcountries are most likely tobuy from foreign websites?
  • Where are consumerswilling to buy groceriesonline?

"In this report weanswer these and otherquestions that can helpinform an online strategythat is more targeted,effective and customercentric," says Kruth.

The sample consisted of consumers aged 15 to 70 years old that made at least one online purchase in the past 12 months and who were within the top 65 percent of income earners in their country.




The survey was conducted using an online questionnaire. A total of 18,430 qualified responses were received from 51 different countries. Within each country, the sample was weighted to the same age distribution to ensure that country comparisons showed behavioural differences rather than those caused by differences in demographic make-up of the population surveyed in each country.


Dean Wallace, Industry Leader for Consumer Markets and Technology at KPMG in South Africa, told CNBC Africa: “Today’s consumer no longer goes shopping, but is shopping, all the time and everywhere. And in a truly global online marketplace, competition is no longer limited to local shops during regular business hours. Consumers can easily buy from retailers and manufacturers located anywhere in the world—or from those with no physical retail locations at all."

“Increased competition, combined with consumer demand for richer experiences, means that retailers need to rethink their online strategy. For many retailers, creating an online shopping experience enhanced by technology such as augmented and virtual reality or 3D is becoming at least as important as providing convenient and personalised ordering, payment and delivery options.”

The number of online transactions made by survey respondents averaged 17 purchases per year, or 1.25 per month. Generation X consumers (born between 1966 and 1981), averaged nearly 19 transactions per person per year, and they made more online purchases in the past 12 months than any other age group. In fact, Generation X consumers made 20 percent more purchases than the ‘tech-savvy’ Millennials (born between 1982 and 2001).

Baby Boomers (born between 1946 and 1965) shop online just as frequently as Millennials and
they spend more than the younger consumers (average purchase for Baby Boomers was $203, $190 for Generation X and $173 for Millennials).

Retail websites or online shops were the most common source of initial awareness, cited by nearly a third of consumers, and online advertisements were cited by 15 per cent. At the same time, physical shops were the second most popular source of awareness, cited by 22 per cent of consumers.

Millennials were not only more likely than the older generations to be influenced by online sources such as social media or peer reviews - they were also more likely to be influenced by offline channels. Millennials were 25 per cent more likely than Baby Boomers to have seen their most recent online purchase in a shop, nearly 50 percent more likely to have talked to a friend about it, and more than twice as likely to have seen someone with it.

All age groups reported the same top three reasons for shopping online:

1. For the convenience of shopping at any hour on any day (58 per cent )
2. To compare prices (54 per cent).
3. Find online sales or better deals (46 per cent).


However, when it came to locating harder to find items, Baby Boomers reported having a higher motivation for shopping online (26 percent of Baby Boomers versus 20 percent for Gen X, 17 percent for Millennials, and 20 percent overall).

Consumers were most likely to buy from the website with the lowest price they could find (57 per cent) followed by websites with enhanced delivery options (43 per cent) or easy return policies (40 percent).

When it came to earning trust, consumers said that protecting their data and information was most important (63 per cent). Although Millennials were the generation least concerned about data protection, it still ranked high as a priority for earning their trust (cited by 56 per cent of Millennials, 66 per cent of Gen Xers and 71 per cent of Baby Boomers).

Taking a deeper look at the differences by generation, younger consumers tend to be more loyal to companies that offer personalised interactions.

Overall, 31 per cent of the consumers responding to the KPMG survey said they shared a product review online. The Millennials were the most likely to post a review (34 per cent) followed by Gen Xers (29 per cent) and Baby boomers (28 per cent). Furthermore, nearly all (92 per cent) reported their own reviews were positive.

The full report can be found at www.kpmg.com/onlineconsumers.

YOU CAN READ CNBC Africa's ANALYSIS OF THE REPORT HERE

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