Report: The global rise of digital goods and services

Fiserv has released a new study, “The Global Rise of Digital Goods and Services,” which finds that nearly three quarters (74%) of online purchases worldwide are for digital goods and services.

The study evaluated the digital goods and services market and how purchase rates differ by region and demographic group, querying more than 6,000 consumers across 15 countries and four different age groups – Linksters (18-23), Socialisers (24-34), MTV Generation (34-54) and Maturists (55+). Within the study, digital goods and services are defined as on-demand services, digital subscriptions, digital media, computer software and mobile apps.

Digital goods and services — which include any non-physical item or service purchased online — represent a crucial element of the e-commerce market. With an estimated three times the purchase rate of traditional physical goods, online retailers need to be prepared to deliver positive purchase experience at scale.

To do so, they must truly understand their customers’ needs, which vary drastically by region and demographic. If they are unable able to support those varied needs, online retailers risk losing customers to a vast global ecosystem of competitors, and can miss out on the fastest growing segment in online retail.

Forrester conducted the online survey of 6,115 online adults ages 18+ in 15 countries to explore this topic.

KEY FINDINGS

1. Nearly three quarters of online purchases are digital goods and services. Based on the findings of this study, Forrester estimates that approximately 74% of online purchases are digital goods and services, as opposed to physical.
2. Digital goods and service purchase rates differ substantially between regions and demographics. The digital goods and services market is not a singular entity. The study found that there are vast differences in the digital goods and services that countries and demographics purchase regularly. For example, it was found that: 1) Malaysians used ride sharing services more than five times more often than Germans in the past 12 months and consumers in India download by far the most music of any country studied, but stream music the least.
3. Price, security, and lack of payment options are consumers’ biggest pain points and online retailers’ biggest challenge. When making online purchases of digital goods, consumers cite price, security, and availability of preferred payment options as their most important factors for purchase. Approximately 74% of consumers cited security as a key concern when purchasing digital goods. However, online merchants are consistently failing to meet these needs. Price, security, and availability of preferred payment options are also the three areas consumers cite where online retailers most often provide negative experiences.
4. After having a negative shopping experience, 57% will stop shopping at an online merchant/cancel a service entirely. The consequences of a negative experience has severe implications for online merchants. The majority of consumers will stop shopping at a digital store entirely or cancel a subscription, and almost half (47%) will leave a negative review or tell a friend about the bad experience.

Ridesharing

Ridesharing is the most commonly purchased on-demand service, although with a high degree of variation by country. Malaysia led all countries in the average number of times consumers utilised ridesharing services (13.17) over the last 12 months, while North America neared six (5.98). Ridesharing is most commonly used by Socialisers (11.8 times per year), who use ridesharing nearly twice as often as Linksters (7.3) and the MTV Generation (6.4), and over three times as often as Maturists (3.6).

Restaurant Delivery

Restaurant delivery is the second most popular on-demand service, and despite the growing convergence with ridesharing services, the regional and demographic trends do not mirror those of ridesharing. Brazil led all countries in the average number of times consumers utilised restaurant delivery services (10.2) over the last 12 months, while Malaysia ranked sixth (8.26) and North America came in tenth (4.73). The MTV Generation used restaurant delivery more frequently than ridesharing in the previous year, and the inverse is true for Linksters.

Digital Media Subscriptions

Across all age groups, consumers have an average of nearly two (1.96) digital media subscriptions, with video streaming the most popular type of media subscription overall –47% of consumers globally reported having at least one video-streaming service subscription. North America, Scandinavia, and Australia have the highest average number of video-streaming subscriptions per person, while India, the Philippines, and Poland have the fewest. Music is the second most popular digital media subscription type among consumers, as 34% of consumers are subscribing to music-streaming services. Brazil, Argentina and Mexico are the top three countries for downloading and streaming music.

Gaming

While the gaming category, which includes the purchase of mobile, console and computer-based games and in-game content, traditionally has and continues to skew young, it is still a thriving market among all age groups. This is thanks in part to new advancements in mobile, streaming, payment and artificial intelligence (AI) technologies.

In the past 12 months, Socialisers led in gaming purchases, with 51% having made a purchase, with Linksters coming in second (45%), followed by the MTV Generation (36%) and Maturists (13%). Regionally, consumers in Argentina, Germany, and Brazil made the most gaming purchases over the last 12 months, whereas consumers in Poland, Scandinavia, and the U.K. purchased the least frequently.

The post Report: The global rise of digital goods and services appeared first on Payments Cards & Mobile.