Trust in e-commerce is uneven, while companies have less confidence in digital platforms when selling their goods, consumers are more comfortable using them, according to a Chubb report, which also revealed shopper’s confidence in making an online purchase would increase if they had insurance.
The Crossing the e-commerce trust divide report found that the trust gap is most evident among the growing segment of shoppers who have embraced social media commerce sites, with 85% saying they trust social media marketplaces.
In contrast, a significant majority of e-sellers don’t trust these sites. This lack of trust mainly has to do with managing inventory (75%), handling refunds and returns (69%), shipping and fulfillment (67%), payment processing (65%), and security and privacy (58%).
The report also revealed that among online shoppers who have made a purchase through both e-commerce and social media platforms, three out of four reported they have experienced financial fraud, and more than half (55%) have had payments lost due to glitches. More than two in five (42%) say they frequently receive damaged goods.
Amy McNeece, Senior Vice President, Digital Consumer Partnerships for Chubb in North America, said: “Whether it’s on social media or on e-commerce platforms, the customer journey must be simple, easy and give the consumer confidence – their trust is fragile.
“Delivery issues, damaged products and online scams can all shatter consumer trust in an instant, and customer loyalty is critical in the age of digital commerce.”
Among other key findings, Chubb’s report revealed that a majority of consumers say that having insurance would increase their confidence in making online purchases.
Seven out of ten consumers would like to have coverage, mainly to protect purchases such as electronics, home appliances, exercise equipment and clothing.
Although they are sensitive to price, the majority of respondents said that they would be willing to add one percent of the price of the items they buy.
For consumers, nothing is more important than payment security, according to the report. Nearly eight in ten shoppers globally said the security of the payment platform is their top concern.
The report also found that heightened trust in social media marketplaces is not limited to just one generation, with people born after the Baby Boomers – Gen Z, Millennials and Gen X – being more comfortable with social media commerce than with other sales channels.
Moreover, men tend to use social media platforms for shopping more than women by a gap of 61% to 31%. Gen Z, the youngest age group surveyed, shop through social media at twice the rate of Gen X shoppers.
The study also shows regional differences, with consumers in Latin America purchasing from e-commerce platforms more frequently than those in North America, Europe and Asia.
“Latin America’s fast-paced online shopping reveals a savvy digital consumer,” said Gabriel Lazaro, Executive Vice President, and Head of Digital for Chubb’s international general insurance business. “This has been driven by mobile and social media leapfrog behaviors during the last decade. The emerging middle-class consumer has access, thanks to e-commerce platforms, to a wider and broader range of services than through traditional channels.”
There was one area where consumers and e-sellers agreed: they both want a more secure end-to-end shopping experience.
McNeece stated: “The availability of online insurance can contribute to building and maintaining trust. That’s particularly true for smaller businesses that need to think about how to build and protect their brands and get repeat customers.”
