Consumer’s high expectations for Online FMCG quality

Product quality will be an increasing factor in determining online winners and losers as FMCG sales increase through e-commerce channels. In fact, product quality may be a core predictor of brand equity for FMCG manufacturers whose retailing strategies include digital marketplaces eg. Amazon and eBay. Despite the pervasive benefits of selling online, an e-commerce channel has more points of failure than any traditional sales model and weaknesses can exist at different points of the consumer journey.

These weaknesses create a complex job for the manufacturer in identifying vulnerabilities where they have limited control over the retailer and reduced visibility of the consumer. Understanding the consumer experience across any given platform requires an expansive review of the consumer journey when using an e-commerce channel.

Eolas e-commerce tracks and reports on every aspect of the e-commerce consumer journey, from initial engagement right through to receiving goods. In 2016 Eolas International conducted a study of online FMCG performance in some of the world’s largest growing e-commerce markets across 11 locations in the USA, India, UK, Brazil and China. The study measured consumer perceptions of digital purchase experience, in-hand quality assessment and repeat purchase intent.

The findings

Of the retailers studied, consumers found few issues with website usability, suggesting that the purchase experience in this instance proved satisfactory. The most pressing issues this study found related to post-purchase experience. On qualitative analysis consumers cited “later than stated” or “desired delivery” as a hindrance to their overall experience, with 7.4% of goods not arriving on time. More pressing however, was the finding that 1 in 3 products arriving to the consumer were defective.

Products were assessed in hand by Eolas researchers and photographs were provided to the Eolas quality team to confirm the extent of the defects reported. Our researchers examined both primary and secondary packaging for discrepancies as well as the product itself. Of both primary and secondary packaging analysis, a lack of cleanliness and damage (eg. dents, crushes and tears) were the most prominent issues; with other issues such as label damage, leakage and adhesion problems also presenting. In the case of this study issues were identified with the secondary packaging being used and the transit process, enabling the client to identify new product development requirements specifically for e-commerce channels.

What are the implications?

Finding that only 66% of consumers were receiving “perfect” goods, raises many questions for manufacturers regarding quality and process; namely what are the implications of 1 in 3 goods being defective and what can a manufacturer do about it?

A high prevalence of defective goods appears to do little in deterring consumers from shopping in digital marketplaces, in fact a majority admit they will continue to purchase from an online retailer after receiving damaged goods. Alas, the process of assessing and rectifying e-commerce quality issues relating to specific products lie with the manufacturer, where large grossing retailers will see comparably minimal effects when things go wrong.

Long-term costs for the manufacturer, caused by goods that do not meet consumer expectations, are not isolated to replacement costs, but more largely situated in brand equity. Take for example a customer who has just received a broken product; that consumer must choose to either engage in a returns process or accept a flawed product, two equally disappointing options. At this point a consumer is in a pivotal phase of the decision making process “post-purchase evaluation”, where they decide if their purchase decision was a success or failure.

Brand loyal consumers may have a much greater tolerance for mistakes. This cohort may forgive negative perceptions of lower than expected quality as their previous experiences have reaffirmed their beliefs about their perceived quality of a brand. As a result the effects of quality issues may not be immediately evident. Overtime, however, continued disimprovement or accumulating negative experiences can erode brand trust and identification which are pivotal in maintaining brand loyalty; the cost of switching in saturated markets is then low when quality is poor. First time or sporadic consumers, on the other hand, have little experience of a brand. Where their first interaction with a product occurs via e-commerce channels, so too does their first assessment of its utility and fit. A first time negative experience or continued disappointment can eventually lead to brand avoidance. While receiving damaged goods may not necessarily dissuade a consumer from buying a product following the first occurrence, over time it will begin to gnaw away at brand equity.

These issues can have a knock on effect on consumers seeking product information. In digital spheres, peer shared information such as user ratings serve as quality measurement tools for users to evaluate goods in lieu of being able to physically test and experience them. Consumers understand reviews based on percentages, when a quality issue presents and is accompanied by a large ratio of bad to good reviews, consumers are often unable to surpass the “information search” and suddenly alternatives may seem more appealing. In this scenario, a potentially rectifiable quality issue occurring at the end of one consumer’s journey, can hinder the ability for this journey to commence with a new consumer.

Action

When e-commerce or distribution channels fail, the outcomes can prove troublesome for manufacturers. With thousands of digital stores to choose from, reaching consumers requires a significant presence. Where issues are identified on receipt of consumer goods speedy resolutions usually deter a consumers exit from an online marketplace. Understanding the issue is key. In this study, solutions were identified for rectifying distribution and packaging shortcomings that were highlighted in assessing each phase of consumer journey. These insights instigated the development of e-commerce tailored packaging, which was specifically designed to protect the studied goods in transit and storage.
Identifying e-commerce quality issues enables FMCG manufacturers to take action towards rectifying potentially harmful brand and process issues. This also provides manufacturers with a unique opportunity to understand how each of its e-commerce channels is performing in terms of quality. Insights such as these enable companies to drive actions within the business based on quality issues or opportunities within the e-commerce channel.

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