We live in a world where technology runs most of our activities. Using digital connectivity, it showed entrepreneurs a unique way of doing business, and that is by connecting an e-commerce store with its broader audience. Online shopping is one of the most popular online activities with global e-retail sales, reaching 4.5 Trillion US Dollars in 2019. E-commerce share of total global retail sales will reach 15.5% of all sales in 2021 and 95% by 2040! The growth of E-commerce is not a trend anymore; it’s the present and the future. Shops that don’t invest in it will disappear (e.g. JC Penney and Neiman Markus). With over 20 Mio online shops already today, customers get lost when looking for the best shops. Will all these shops survive in the future? Well, they all need to attract and keep customers. How do they do it? Most of the shops are betting on social media advertising. While ad spending in Social Media has projected to reach US$43 Billion in 2020 only in the USA with a growth rate of 20% in 2020 nobody is talking about a significant differentiator that could save a lot of small (and large!) shops from disappearing: Services
Shop Services as a key differentiator
Services have become a key differentiator for some well-known shops. One of the most famous examples is Zalando.com, the online fashion retailer. According to a study made by Zalando, 57% of customers abandon their cart because they don’t want to pay shipping costs. That’s why Zalando introduced free shipping with 2-4 day of delivery time. 30% of the products bought online are returned. Moreover, 71% of digital customers look for return policies before making their first purchases. Zalando accommodated this factor by offering free-return with a 100-day return guarantee. Today the company has over 30 Mio active customers that make almost 150 Million yearly orders. Zalando has proven that by providing additional services that customers want, an online shop can create a huge advantage compared to its competitors.
Shop Services in Switzerland compared to leading economies
Following study made by the new Swiss search tool Gala10.com shows the actual service offerings of Swiss online shops com pared to German, US and Japanese shops. The study compares a universe of 181 shops in Switzerland, 147 in the US, 187 in Germany and 121 in Japan. The reviewed services of these shops are grouped in Product, Order, Delivery, Payment method, After-sales services and Client segment.
On the Product level, Germany is the leader when it comes to sending a gift with a professional greeting card. 13% of German online shops offer to deliver products with a professional greeting card compared to only 7% of Swiss, 3% US and 2% Japanese shops. When it comes to sending a gift in a wrapping paper, Japan is the leader with 40% of shops offering the service com pared to 12% in Switzerland, 14% in the USA and 16% in Germany. There is a significant lag on customization (meaning individualization of a product by adding additional products) by Swiss shops. Only 3% of selected Swiss shops offer customization possibilities compared to 13% in US, 10% in German and 15% in Japanese shops.
In the delivery services, there are also huge gaps between countries. While 57% of Japanese shops can deliver on a specific day, only 1% of Swiss, 14% of US and 11% of German shops offer this possibility. This service is essential when a customer wants to send a gift for a birthday or a special occasion. In terms of same-day delivery US shops are leaders with 14% of shops offering this service compared to 3% of Swiss, 6% Japanese and 1% of German shops. Also in terms of providing a free greeting card, the US is leading the market with 34% of shops offering this service compared to 12% of Swiss and German shops and 21% of Japanese shops. Probably the most popular delivery service is free delivery. The differences here are minimal and Swiss shops are leading the way with 19% of shops offering free delivery against 18% US, 13% German and 11% Japanese shops. USA and Germany the way in international delivery with 58% resp. 48% of shops offering the service compared to 23% of Swiss and 11% of Japanese shops providing it.There is an interesting service which is highly relevant when sending gifts: “don’t show product price”. This service is of fered among the analyzed countries only in the USA with only 5% of US shops offering this feature. German shops have a similar service called “anonymous delivery”, which doesn’t show the name of the sender. Also here, only 4% of German shops offer the service. This could be a service with an untapped potential to increase gift-sales.
Every country has a broad range of different payment methods. But the primary payment methods remain overall Visa, Mastercard, American Express and Paypal. Some new payment methods are emerging like Twint in Switzerland which is offered already by one-third of the selected Swiss shops or Amazon pay which is used by 14% of US and interestingly enough by 31% of Japanese shops. Bitcoin hasn’t been able to establish as global payment method with only the US offering it in less than 3% of shops. Payment with an invoice is another payment method that differs significantly in the observed countries. While in 58% of Swiss shops offer payment by invoice, in Germany and Japan it is almost not used, and 36% of US shops offer it. Payment by installments (meaning buy today and pay in parts) has provided by 10% of Swiss shops, 20% of US, 10% of German and 34% of Japanese shops.
Germany is leading the way when it comes to After-sales services. 46% of German shops offer free return compared to 4% of Swiss, 6% US and 2% Japanese shops. Also when it comes to Money Back guarantee 82% of German shops offer this service compared to 72% in the US, 60% in Swit zerland and 36% in Japan.
In the segment of corporate clients, Germany, USA and Japan are pretty much aligned offering between 25% and 27% of all shops, a dedicated corporate dient department. Switzerland is lag ging with only 15% of shops offering such a dedicated department.
Gift cards
Gift cards have won on popularity very quickly. US and Swiss shops are leading the way resp. 32% offering gift cards, whereas only 24% of German shops offer gift cards and an ing 1% of Japanese shops offer gift cards.
Search for shops by services
lf services will be an important differentiator in the future, how shall customers be informed about the services rendered by online shops and more importantly, how can customers find online shops by services?
The new Swiss based search tool www.gala10.com helps to solve this issue. Gala10.com is a search tool to find the best online gift shops in a few clicks. The tool can filter the search for the ideal shop by country, category and services. There are over 5,000 shops listed in almost 50 countries and 18 categories and there are over 20 shop services to select from in each country. This search tool is specially useful for people that want to send a gift to their loved ones or clients living abroad and prefer buying locally rather than sending a gift to another country and exposing the recipient to paying import duties. People usually don’t know which shops abroad are the best and most reliable ones. This is when Gala10.com becomes relevant. Gala10.com has done the search job of shops for the users, they only need to choose a gift. Not only gift seekers that are looking for a shop abroad can benefit from the search tool but also genuine online shoppers that are looking for specific services from online shops in their country. The tool offers a broad range of shops, from the largest brands to the smallest and new boutiques. Gala10.com makes the search for a gift much easier, saves time and money and helps decrease air pollution by buying locally and avoiding high freight costs. Shop owners can promote their services and products on gala10.com by purchasing a a Golden or Premium membership. Gala10.com represents a new promotion channel for shops that want to take advantage of the increasingly number of visitors.
Conclusion
Adding a new or expanding an existing shop service is an option that online shops should consider as an alternative to promoting products in social media. A combination of both is certainly the ideal solution because if you introduce a new service people need to now about it. Swiss online shops have the potential of increasing their sales by improving and adding new services. The most important untapped potential for a lot of Swiss online Shops is creating a dedicated “gifts” segment with gift ideas and providing convenient services for gift occasions such as offering gift wrapping, greeting cards and being able to deliver orders on a specific date.
Gala10.com / July 2020