Demystifying the online shopper Study results for further discussion April 2014 c.

Demystifying the online shopper

Study results for further discussionApril 2014

www.pwc.com/r&c

Demystifying the online shopperPwC

A truly global piece of research

Slide 2April 2014


1Myth: Social media will soon become a primary sales channel

Slide 3April 2014


I do not follow any brands or retailers on social media

to purchase an item through a social media site

and purchased some products as a result of information or interactions I have had with

some brands or retailers through social media

to interact with my favourite brands and it makes me like these brands even more

and discovered some brands that I did not know or developed a particular interest in some brands

and retailers because of social media

to provide positive or negative comments about my experience with a product or brand

to follow some of my favourite brands or retailers

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

41%

12%

18%

20%

27%

28%

38%

60% use social media to follow, discover and give feedback on brands and retailers

Q. 75% of online purchasers use social media, with various purposes…

Sample : 8 376 social media users out of the 11 067 online shoppers responding

Don’t follow any brands / retailers

Follow favourite brand / retailer

Give feedback

Discover new brands

Interact with favourite brand

Influenced my purchase

Drove a purchase

Slide 4April 2014


2Myth: Stores as we know them, are dead

Stores of the future will be more like showrooms

Slide 5April 2014


Online buyers still want to shop in stores – for some categories more than others...

Grocery

Furniture

ClothingH & B

Electricals

Electronics

Books, mus...

55%47%

40% 36%34%

26%16%

13%

19%

16% 14% 25%

23%

14%

11% 13%

25% 24% 23%

40%

53%

2% 2% 4% 2% 2% 2% 2%

Store-to-Web

Web only

Web-to-Store

Store only

Column Stacked

Q. Which method would you most prefer for researching and buying?

Sample : Full sample of online shoppers (11 067)

Research and buy in store

Research online, buy in store

Research and buy online

Slide 6April 2014


17% of online users don’t buy online - they simply prefer to shop in stores

Sample : 17% of respondent out of 13 410, which corresponds to quasi non online shoppers « Never shop online » and « once ever »

My favourite retailers dont have an online-store

Greater trust in a physical store than in an online store

Personal advice about the products

Enjoy shopping as a pleasure

Attractive deals/ promotions/ sales

No delivery costs

Receive the product immediately

Ability to see, touch and try merchandise

0% 10% 20% 30% 40% 50% 60% 70% 80%

8%

13%

22%

31%

40%

46%

67%

73%

Q. What are the most important factors that attract you to shopping in a physical store?


Slide 7April 2014


3Myth: The tablet will overtake the PC as preferred online shopping device

Slide 8April 2014


Device penetration for online purchases: tablet 28% vs PC 97%

Online via social media

TV shopping

Online via tablet PC

Online via mobile / smartphone

Catalogue/ magazine

Online via PC

In-store

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2%

1%

2%

2%

2%

4%

8%

4%

3%

6%

5%

7%

23%

34%

6%

6%

9%

9%

15%

40%

34%

12%

15%

11%

14%

39%

30%

22%

Daily Weekly Monthly < once a month Never

Q. How often do you go shopping using the following shopping channels?


Online - PCStores

CatalogueSmartphone

Online - tabletTV

Social media

Slide 9April 2014


Different maturity levels – or is it consumer appetite?

Online shopping via tablet

PC

Online shopping via smart

phone

Q. What is the proportion of online shoppers doing online purchases daily-weekly or monthly via…?


Slide 10April 2014


4Myth: As the world gets smaller, global consumers are getting more alike

Slide 11April 2014


Consumer behavior online and in-store is actually quite specific to each country

On

lin

e b

eh

avi

or

In store behavior

Practical user

Bargain

hunter

Social addict

Shopping lover

Bargain hunter

Practical shopper


Slide 12April 2014


5Myth: China is the future model for online retail

Slide 13April 2014


Global average : 28% and 30%

Chinese shoppers are ahead of the curve in terms of new devices and social media usage

58% of Chinese online consumers have already

shopped via PC tablet and 62% via smartphone

Global average : 11%

24% of Chinese online consumers think they will use tablets or smartphones more in the next twelve months to

shop


56% of Chinese online consumers have already

shopped via a social media platform


Slide 14April 2014


However the model is not necessarily replicable: online shopping habits are very different and unique to China


Only 21% of Chinese online consumers use search results

(Google, Bing) to visit a specific online store

Global average :#2 and #4

For Chinese customers #1 and #2 factors of attraction on a given physical store are the fact they

always enter the store when they are around and friends/experts’

recommendations


Only 36% of Chinese online consumers are attracted by free shipping when shopping on a

specific online store


95% of Chinese online shoppers have shopped with their local leading

online pure player (Taobao in China) over the past twelve months

Global average :#5 and #6

For Chinese customers #1 and #2 factors of attraction on a given

online shop are vouchers/coupons sites and friends/experts’

recommendations

Sample : Full sample of Chinese shoppers out of total sample of the survey (full sample and online only)

Slide 15April 2014


6Myth: Domestic retailers will always enjoy an intrinsic advantage over global retailers

Slide 16April 2014


In most mature markets, local multi-channel retailers are indisputably leading the way...

Q. Who are your top 3 favorite multi channel retailers?


Mature markets

UK

France

Auchan

Darty

Carrefour

Yves Rocher

Fnac

0% 10% 20% 30%

12%

12%

12%

17%

25%

John Lewis

Asda

Marks & Spencer

Tesco

Argos

0% 10% 20% 30% 40%

12%

16%

18%

28%

29%

US

J.C. Penny

Best Buy

Kohl's

Target

Walmart

0% 20% 40% 60%

10%

15%

17%

35%

52%

Germany

Otto

MediaMarkt

Weltbild

H&M

Tchibo

0% 5% 10% 15% 20%

11%

11%

14%

14%

15%

Netherlands

Albert Heijn

Blokker

H&M

Kruidvat

HEMA

0% 5% 10% 15% 20%

15%

15%

17%

17%

19%

Bonjour Beauty

Sasa

Apple Store

Wellcome

ParknShop

0% 10% 20% 30% 40% 50%

10%

14%

31%

31%

42%

Hong Kong

Slide 17April 2014


Carrefour

Wal Mart

Livrarias Saraiva

Livraria Cultura

Lojas Americanas

0% 10% 20% 30% 40%

12%

15%

21%

27%

37%

...and in most emerging markets, foreign players are gaining a strong foothold

Nike

Adidas

Gome

Apple Store

Suning

0% 10% 20% 30%

10%

12%

12%

15%

26%

China

Brazil

Q. Who are your top 3 favorite multi channel retailers?


D&R

Migros

LCW

Vatan Bilgisayar

Teknosa

0% 10% 20% 30% 40%

13%

16%

20%

24%

31%

Turkey

L'Etoille

Eldorado

Yves Rocher

Svyaznoi

Mvideo

0% 10% 20% 30%

9%

14%

14%

18%

24%

Russia

Emerging markets (BRICs)

Foreign multichannel retailers

Slide 18April 2014


7Myth: Global pure players always have an advantage over domestic pure players

Slide 19April 2014


Looking specifically at pure players, foreign leaders are mainly limited to Amazon and eBay

0 2 4 6 8 10

Series1

Number of foreign online pure players among each country’s Top10 online pure players

Number of foreign

online pure

players

Slide 20April 2014


Conclusion : a varied competitive environment across countries. Local and global players share the space

Multi-channel players

Online pure players

Domestic champion

s only

Leading foreign giants

Domestic champions only Leading foreign giantsSample : Full sample of online shoppers (11 067)

Leaders in each country…

Slide 21April 2014


8Myth: Retailers are inherently better positioned than brands, as they are closest to the customer

Slide 22April 2014


More than one in three consumers have shopped directly from a brand’s website

Netherlands

France

Russia

UK

Brazil

Germany

Turkey

Global

Canada

Switzerland

US

China

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

17%

19%

30%

30%

33%

33%

35%

35%

39%

42%

52%

56%

83%

81%

70%

70%

67%

67%

65%

65%

61%

58%

48%

44%

Q. Have you ever bought directly from a consumer brand or manufacturer online?

YES NO

Global average35%

Global


Slide 23April 2014


Brands selling direct attract both brand lovers and deal hunters

Better experience

Customisation/ personalisation of product

Better service

Good stock availability

Better warranty / guarantee

Love of brand / loyalty

That's all I needed - one brand

Full range or more choice

Lower price

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

8%

12%

17%

22%

24%

29%

30%

41%

44%

Q. What made you choose to buy directly from the brand, rather than from a shop selling lots of brands?

Sample : 3 871 respondent (=35% of “Yes” to prior question)

Brand lovers

Deal hunters

Practical shoppers

Slide 24April 2014


9Myth: e-commerce is cannibalising retail sales

Slide 25April 2014


Over 50% of consumers spend more with those select few since they have started shopping across channels

First Second Third0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

6% 7% 8%

37%41%

44%

22%20%

21%

17%16%

12%

11% 9% 9%7% 6% 6% Substantially more

(over 50% more)

A lot more (25-50%)

More (10-25%)

A little more (up to 10%)

No - my spending has been broadly the same

No - my spending has decreased

58% 52% 48%

Q. Do you think you have spent more with your favourite retailer since you started shopping across multiple channels?

Sample : Respondents who provided their 3 favourite retailers (9 427, 5 122, 2 928, )

Slide 26April 2014


10

Myth: Lower prices is the best way to get customers to spend more

Slide 27April 2014


Price is high on the list of consumers’ reason to shop at a retailer in the first place

Other

I like that the brand / retailer was one of the first to offer online shopping

I get early or exclusive access to sales / products

I get points / rewards

They do free returns

I can reserve or purchase items for in-store collection

Website stores my address and personal information

They always have the items I want in stock

I like the store

I know they're always cheap / reasonably priced

I like the products they offer

0% 10% 20% 30% 40% 50% 60% 70% 80%

10%

30%

31%

31%

36%

36%

37%

37%

39%

39%

40%

43%

47%

50%

53%

54%

59%

61%

62%

67%

69%

Q. Why do you shop at your top 3 favourite multi-channel retailers/brands?


Slide 28April 2014


No impact on spending

Increase spending a lot more (> 10%)

Increase spending a little more (1-10%)

Negative impact on increase in spending

However, if you look more closely, increasing your share of wallet should be sought in other attributes

Cheap/reasonably priced

I like the products

Always items in stock

I trust them

Easy to use website

I like the store

I like the staff

Loyalty programme

Click & collect

Fast and reliable delivery

Innovative products

Innovative marketing

Website(and-shop) stores my information

Exclusive access to products

Return items to store

Advice on products

Good return policy

Free returns

Q. What makes existing customers spend even more at their favourite retailers (multi channel)?

Sample : Online shoppers who provided favorite multichannel retailers (8 619)Estimation model: multinomial logistic regression. Significant coefficients are indicated via or

Slide 29April 2014

Demystifying the online shopperPwC Slide 30

April 2014


Eight key customer expectations emerged from the survey 2014

April 2014Slide 31

A compelling brand story that promises a distinctive experience

Customized offerings based on my totally protected personal preferences and information

An enhanced and consistent experience across all devices

1

2

3

• #1 reason people shop at their favorite retailers: “I trust the brand”

• #2 reason (81%) for customers to select a retailer is the “store, location and staff”

• Engage in consistent conversations with customers

• Instill the brand message to employees through hiring and training

• Customers want personalized offerings and to interact with retailers 24/7

• 67% used a coupon received via smartphone

• Enable personalized offerings, payments and loyalty programs in all channels

• Protect against potential cyber-attacks by increasing defenses on customer databases• Customers are multi-device

users• PC is still the preferred

method of online purchasing, but not by much

• Customer information must “travel” with each device and still be secure

• Experience across devices does not need to be identical

Survey says Implications


Eight key customer expectations emerged from the survey 2014 (continued)

April 2014Slide 32

Transparency, real time, into a retailer’s inventory

Favorite retailers are everywhere

To maximize the value of mobile shopping, apps must improve

4

5

6

• 46% of respondents want the “ability to check other store or online stock quickly.”

• Inventory tracking tool can fulfill this customer desire and also enable faster decision-making across the supply chain

• Customers want an ‘always-on’ experience

• Customer loyalty is at risk when a familiar channel closes

• Customer loyalty is subject to change when encountering subpar experience in any sales channel • Growing enthusiasm for

mobile shopping• Many retailers have not

invested heavily into apps• Mobile apps is an

attractive investment, as it is a tool to improve customer experience



Eight key customer expectations emerged from the survey 2014 (continued)

April 2014Slide 33

Two-way social media engagement

“Brands” act like retailers, and we'll treat them that way

7

8

• Retailers should be active online, ready to interact at any hour

• 59% follow favorite brands or retailers via social media

• Investing in social media is a journey toward increasing internal capability and true consumer engagement

• Few distinctions between manufacturers and retailers when purchasing

• 70% of U.S. participants made purchases directly from manufacturing brands

• Increase partnership between retailers and manufacturers, such as private label



Total Retail: Building the next retail business model

April 2014Slide 34

Demystifying the online shopperPwC Slide 35

April 2014

Mag. Andreas PlambergerSenior Manager Technology Consulting

Erdbergstrasse 2001030 Wien

M:+43 (0) 676 83377 2837

[email protected]

http://www.pwc.com/r&c

® 2014 durch PwC. PwC Österreich unterstützt Unternehmen als auch Organisationen dabei, Wert zu schaffen. Das tun wir an acht Standorten in ganz Österreich und als Mitglied im weltweiten Netzwerk von PwC. Wo immer Sie auf uns treffen, rund 180.000 Mitarbeiterinnen und Mitarbeiter haben ein gemeinsames Ziel vor Augen: Mit unseren Dienstleistungen Wirtschaftsprüfung, Steuerberatung und Unternehmensberatung wollen wir Ihnen Mehrwert bieten. Sagen Sie uns, was für Sie von Wert ist. Und erfahren Sie mehr auf www.pwc.at.

Demystifying the online shopper Study results for further discussion April 2014 c.

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