Consumers’ biggest ecommerce problems in social media marketplaces: survey

A report from the insurance provider Chubb found that the ecommerce problems of most concern among consumers regarding social commerce were different from those expressed by retailers.

Notably, the report found that consumers tend to trust social media commerce marketplaces more than other channels. Social media commerce platforms were trusted by 85% of the survey-takers who used them. Traditional ecommerce platforms, however, had a trust rating of only 48%. Physical stores, meanwhile, scored a trust rating of 70%, and companies’ own digital storefronts had a trust rating of 55%.

The survey was commissioned by the insurance provider Chubb and performed by the firm iResearch. The authors assessed perspectives from 500 adult consumers, as well as 525 online merchants.

Consumer responses showed that 75% of those taking the survey had been victims of financial fraud. Delivery delays were also common, showing up in 61% of responses. That category was followed by lost payments due to glitches in the purchasing process (55%). Behind that was frequently receiving damaged items (42%).

Comfort levels with social media shopping tended to decrease among older generations, with Gen Z showing the highest rate of activity. 46% of Gen Z participants in the survey were comfortable with buying via social media, compared to 30% of millennials, 22% of Gen X shoppers, and 0% of baby boomers.

Putting those results into context, the report’s authors framed trust gaps as one biggest ecommerce problems and a major obstacle to customer loyalty.

According to Amy McNeece, senior vice president of digital consumer partnerships for Chubb in North America, no matter whether it’s on social media or on e-commerce platforms, the customer journey must be simple, easy and give the consumer confidence as 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.

Trust tended to skew higher in Latin America versus other regions. Shoppers there buying online at least three times per month (75%) showed up at a higher rate than North America (62%), Europe (59%) and Asia-Pacific countries (56%).

Latin America’s fast-paced online shopping reveals a savvy digital consumer. 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.

As for retailers, the Chubb report spotlighted another set of unique ecommerce problems with social media channels. 81% of retailers said they sold through social media marketplaces, and three-quarters indicated that they used social media front-end experiences for marketing. However, trust elsewhere remained a challenge, according to the findings.

Just 35% of online merchants expressed trust in social commerce marketplaces for inventory management. Results were also below 40% for ease of navigation (30%), refunds and returns (31%), shipping and fulfillment (33%) and payment processing (35%).

This skepticism was further illustrated by 70% of retailers indicating that items they sold on social media marketplaces were not delivered in what they considered to be good condition. That failure rate was lower (54%) for goods sold via ecommerce platforms. In addition, 65% of merchants cited a lack of delivery options. 60% mentioned an overall lack of control regarding the state of the goods being delivered to be a problem.