© 2011 Mintel Group Ltd. All rights reserved. Condential to Mintel. Online and Mobile Shopping Billy Hulkower Senior Analyst, Technology and Media www.oxygen.mintel.com Throughout the recession and recovery, e-commerce sales have grown at a signicantl y faster pace than ofine retail sales. The growth has been fueled, in part, by technological advancements and partly by the fact that consumers are becoming more comfortable shopping online from a computer or mobile device. What we think Leading online retailers, like their ofine counterparts and marketing behemoths like P&G, often create ads that are designed to communicate lifestyle relevance. These companies often use a combination of high levels of TV spend, with calls to action on their web sites. Overstock and Netix use TV to communicate convenience and value, as well as announce new categories. Customer Relationship Management (CRM) is at the heart of what has made the leading online retailers so successful. These efforts are supplemented by social media to communicate directly with customers and promote bargains to drive growth viral growth. One-day or limited access sales drive buzz – especially Amazon’s gold box or Friday- only offers. Dell offers substantial prize incentives for writing product reviews. Amazon, Dell, and Staples all lead in their use of facebook and twitter to promote their brands. All respond to customer requests and inquiries both over facebook and twitter. July 2011 - U.S. Consumers are most reluctant to buy fresh food from online retailers as 93% say they would only buy produce at a store, and 90% would only buy fresh meat through a store. Consumers aged 55+ are generally less likely than younger adults to report a willingness to purchase within a variety of categories when shopping online, indicating that big players like Amazon in particular often want to direct their communication at younger segments such 18-24s that have a high proportion of consumers willing to purchase anything or nearly anything online. Retail e-commerce sales are growing at a much faster pace than overall retail sales in the U.S. For instance, while total retail sales in the U.S. increased 6.9% in 2010, e-commerce retail sales grew by 13.1% during the same year . E-commerce therefore must be a critical component of any retailer’s annual revenue growth plans. The ability to “nd exactly what I want” (61%), “save money from price comparison” (61%), avoid the “simple hassle of going to a store” (50%) and Nearly half of consumers surveyed (46%) stated that they search online for coupons that can be redeemed at stores where they shop. This nding indicates that both brick and Consumer: Online vs. Ofine Shopping Market Size and Forecast Consumer: Major Reasons for Shopping Online Consumer: Couponing Interest PRODUCTS PURCHASED ONLY AT A STORE, BY AGE, MAY 2011 TOTAL U.S. RETAIL AND E-COMMERCE SALES, AT CURRENT PRICES, 2006-16 MAJOR REASONS FOR SHOPPING ONLINE, BY GENDER, MAY 2011 DEAL-SEEKING BEHAVIORS AMONG ONLINE SHOPPERS, BY HOUSEHOLD INCOME, MAY 2011 BASE: 1,690 INTERNET USERS AGED 18+ WHO PURCHASED A PRODUCT ONLINE AND HAD IT SHIPPED TO SELF OR SOMEONE ELSE SOURCE: MINTEL SOURCE: MINTEL SOURCE: MINTEL/CENSUS BUREAU’S ANNUAL RETAIL TRADE SURVEY BASE:1,690 INTERNET USERS AGED 18+ WHO PURCHASED A PRODUCT ONLINE AND HAD IT SHIPPED TO S ELF OR SOMEONE ELSE SOURCE: MINTEL BASE: 2,000 ADULTS 18+ WITH INTERNET ACCESS the ability to save money with online coupons and coupon codes (42%) are the most frequently cited major reasons for shopping online. mortar and online retailers can benet from distributing coupons online through social media sites, as well as coupon sites, such as retailmenot.com. 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2 0 0 9 2 0 0 9 2 0 1 3 ( f o r e . ) 2 0 1 3 ( f o r e . ) 2 0 0 7 2 0 0 7 2 0 1 1 ( e s t . ) 2 0 1 1 ( e s t . ) 2 0 1 5 ( f o r e . ) 2 0 1 5 ( f o r e . ) 2 0 0 6 2 0 1 0 2 0 1 0 2 0 1 4 ( f o r e . ) 2 0 1 4 ( f o r e . ) 2 0 0 8 2 0 0 8 2 0 1 2 ( f o r e . ) 2 0 1 2 ( f o r e . ) 2 0 1 6 ( f o r e . ) 2 0 1 6 ( f o r e . ) Total retail sales Total E-commerce sales $ billions % change 3 . 2 - 1 . 3 6 . 9 5 . 0 - 8 . 0 2 0 . 2 3 . 0 1 5 . 2 1 3 . 1 1 3 . 4 1 3 . 0 1 2 . 9 1 2 . 5 1 1 . 3 2 . 1 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Produce Fresh meats Hard- ware and tools House- hold elec- tronics Personal care house- hold items House- hold care items Packaged foods House- hold computer Clothes Toys and games Prescrip- tions Over- the- counter health items 18-24 35-44 25-34 45-54 55-64 65+ I can nd exactly what I want It saves me from ghting crowds at the store It saves me the simple hassle of going to a store It saves me the hassle of having to carry it home from the store I can save money from price comparison I think it’s fun to surf around and see what’savailable I can save money from nding a coupon/promotions codesomewhere online I nd using websites that store my information very convenient Male Female 5 8 % 3 4 % 4 5 % 2 8 % 6 1 % 2 9 % 3 6 % 2 2 % 6 3 % 4 0 % 5 4 % 3 0 % 6 0 % 3 3 % 4 7 % 2 4 % I search online for coupons for stores that I shop at I receive promotions or coupons from stores or products I like via my email I would rather receive a gift card than a specic product or service I receive coupons from a social coupon service such as Groupon or LivingSocial 0% 20% 50% 10% 40% 30% 60% <$25K $25K-49K $75K-99K $50K-74K $1 00 K-1 49 K $1 50 K+