A number of weeks ago, my Shop.org colleagues and I reached out to some of the Shop.org Committees and asked them what particularly they would like to understand about online consumers this year. In March, we explored consumers’ thoughts on the “green” aspects of online shopping. This month, we wanted to understand what consumers truly value in an online retailer – and is there hope beyond competing solely on price? We asked a similar question in our annual eHoliday research, but given the continued economic turbulence since, could all that have changed? As such, this month we asked consumers, “What are the reasons you would choose to buy from a particular online retailer?” The good news: while price is certainly important, consumers still factor in numerous other criteria when deciding to spend their money with one retailer versus another.

Price and shipping offers are still significant…

A total of 4,023 adults over the age of 18 responded to our question, conducted in April by BIGresearch on behalf of NRF and Shop.org. Consumers were allowed to choose multiple options and, not surprisingly, price (“sales or price discounts”) is still king across numerous demographics, including sex, income, age and US region. Over two-thirds (67%) of women cited price as a significant factor in choosing to do business with a given retailer, though somewhat fewer (58%) men felt strongly about price.

In second place, not quite half (45%) of all consumers overall noted free or discounted shipping as a significant decision factor. Women appear to value free or discounted shipping more so than do men, and, interestingly, consumers making over $50,000 per year value this benefit more so than consumers making less. Furthermore, the older the consumer is between ages 18 and 65, the more highly valued a shipping offer.

…But so are EDLP and merchandise assortment and quality.

Happily, consumers aren’t swayed just by price – or even shipping offers. I was encouraged to see that every day low prices and selection of merchandise ranked third and fourth as decision factors for consumers overall. Times may be tough, but it appears that steady, value-based pricing (vs. ongoing, unpredictable sales that may confuse or cause customers to hesitate), as well as an appealing and well-managed merchandise assortment, are critical components in the retailer’s competitive arsenal. Offering an overly pared down (even boring!) assortment – all short term economic benefits thereof aside – appears simply to imperil the retailer’s ability to capture sales and customers both in the short and longer term. And while coupons and promotion codes ranked fifth for consumers overall, quality of merchandise ranked nearly on par, in sixth place. Of note: for higher income consumers, merchandise quality actually ranked third place overall.

Clearly, while budgets are tight and competition for online customers is stiff, retailers must recognize that consumers need to hear about much more than just price in order to make their purchase decision. Smart retailers will respond by presenting customers with a carefully crafted package of benefits and consideration factors. While consumers certainly welcome the term “value” these days, retailers can set themselves apart by emphasizing merchandise quality, durability and selection in their marketing and product descriptions – and may even want to do some A/B testing around those messages. From a marketing perspective, retailers should segment their customers to most effectively target messages that emphasize purchase factors important to different groups.

Shop.org members may see the detailed results of this consumer research, as well as how other factors appeal to different consumers, from convenience, returns, and customer service, to shipping alternatives such as buy online, pick up in store.

As always, I welcome your comments and feedback. Stay tuned for more consumer insights in the coming months!