Online Retailing Conference 2009
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Transcript of Online Retailing Conference 2009
eCommerce Europe 2009: Outlook for eCommerce and Online Retail
Victoria Bracewell LewisSenior AnalystForrester Research20 January 2009
3 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Christmas 2009 Offline Winners
4 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Christmas 2009 Online Winners and Losers
WinnerWinnerWinnerWinnerWinner
Winner WinnerWinner
WinnerWinner
Winner
WinnerWinner
Loser
Loser
Loser Loser
LoserLoser
LoserLoserLoser
LoserLoserLoser
LoserLoser
Loser
Loser Loser
The BIG online winner
Amazon
5 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
eCommerce circa 2005
• Fewer than 44 million European adults had broadband
• Capacity to receive data was limited• Media categories dominated eCommerce
6 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Online shopping categories are evolving
1995-1999 1999-2001
Durable goods
2001-2008
Soft goods
Media
Discretionary hard goods
Travel
Luxury goods
7 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Slowly, other sectors such as auto, white goods, and luxury brands are coming on board
8 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
With more firms that don’t sell online, now view the Net as a potential sales channel
May 2008 “Benchmark: Luxury Sector eBusiness Adoption”
9 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Online shopping has become a popular activity for online European consumers
Which of the following do you do regularly online? By regularly, we mean at least once a month
Source: Forrester’s European Technographics® Benchmark Survey, Q2 2008Base: 7,102 online European Adults
85%
55%
46%
43%
37%
45%
44%
22%
26%
27%
26%
34%
17%
18%
10%
15%
84%
59%
46%
40%
40%
36%
33%
32%
21%
21%
21%
20%
18%
14%
13%
8%
Send Email
Research products
Research holiday destinations
Use free Web-based email (e.g. Hotmail)
Make purchases
Read news onlinePrepare trips online (maps, directions, public
transport)Buy/sell things in auctions
Download free/shareware software
Look up sports information
Look up government informationUse an instant messenger (e.g.
MSN/Yahoo! Messenger)Look for/apply for jobs online
Listen to the radio
View stock-market prices
Watch TV programs (live or archived)
EU-7Germany
10 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
The UK and Sweden lead online shopping adoption
U
PLVS RLT
25m28m
16m
5.6m4.8m
4.7m
8m
74%
73%
67%
65%
56%
29%
22%
56%
UK
Sweden
Netherlands
Germany
France
Spain
Italy
EU-7
Q2 2008
Germany and the UK account for almost 60% of Europe’s online shoppers
Base: 14,514 online European adults
“Have you bought any products or services online in the past three months?”
Source: European Technographics® Benchmark Survey, Q2 2008
11 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Retailers also growing their online presence in …
Tesco.com c1998
Tesco.com c2002 Tesco.com 2008
•2008 non-food sales rose 12% to £11.8B•12,000 non-food products available online, catalogue, phone, stores and kiosk•Tesco Personal Finance 1.7 million new customers this year, with 50% financial products sales made online
12 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Neckermann.de c1997
… and throughout Europe
Neckermann.de 2009
•Online since 1995• 140,000 products online•150M visitors a month•2007 - 55% turnover via Internet• 3M+ newsletter registrations• 20K + search terms
13 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
The obstacles that once existed are disappearing
53%
61%
Source: Forrester's Consumer Technographics®Base: European online consumers who do not shop online
“I don’t feel secure about giving my personal financial informationwith purchases online”
2008**
2004*
14 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
However, Germans amongst least secure online
25%
10%
20%
25%
26%
33%
41%
47%
W. Europe
Italy
Spain
Germany
France
UK
Sweden
Netherlands
“I feel secure when giving personal financial information when making purchases online”
Base: 22,673 European consumers
Source: European Technographics® Benchmark Survey, 2008
15 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Today, the eCommerce experience is steeped in its heritage
Top search and nav bar
Special offers at top
Side navigation replicates top
Special offers at top
16 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
…and are now considered THE de-factor basicsThumbnails, name,
price, ratings & recommendations
Additional side navigation
Click to buy button above fold
Delivery info and offers
Source: Amazon.com
Saved Check- out info and
updates
17 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
This utilitarian approach continues to influence eCommerce and online retail
CONVENIENCE Tools Save Time
CONTENTMENT Selection Satisfies Needs
COST Price Saves Money
Source: European Technographics Retail, Customer Experience, and Travel Online Survey, Q3 2008
1¢39%
57%
51%
40%
65%
I preferred to purchase from onlineretailers that offered free shipping
I found better prices online than Idid offline
I found products online that I couldnot find offline
I shopped online to avoid crowds instores
I saved time by shopping online
Base: European population – All age brackets
18 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
But the opportunity is much larger
Mastering What’s Important Now Evolving to the Future
Truly differentiated eCommerce experiences will do to Web shopping what the Apple Stores have done to bricks-and-mortar business.
Source: apple.com
Forrester predicts that by 2012 nearly half of retail sales will either be
transacted online or influenced by the Web.
19 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
€ 4,316M
€ 948M
€ 4,325M
Since 2002, online spending grew 50%. The 55+ more than doubled amount they spend online
In the past 3 months, about how much in total (including shipping and handling) have you spent buying products online, regardless of how you paid?
Source: Forrester’s European Technographics® Benchmark Survey, Q2 2008, Q2 2002
Base: 2,155 online Germans who have made an online purchase in the past 3 months
€ 2,522M
€4,979M
€6,417M
16 to 34
35 to 54
55 and Over
2002**Total - €9,588M
2008Total - €13,921M
*In million on Euros (for a three month period)
20 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Germans are buying more products online
30%
14%
14%
12%
12%
11%
9%
10%
9%
7%
7%
Books
Clothing
Event tickets (e.g. cinema, theater, sport)
CDs/tapes/records
Leisure travel (flights, package tours, hotels, etc.)
Videos/DVDs
Printer supplies (e.g. cartridges, ink)
Toys
Computer software/video games
Footwear
Health products
2008
“And which if any of the following products have you bought online in the past 3 months? ”*
Source: Forrester’s European Technographics® Benchmark Survey, Q2 2002, 2008
Base: 3,769 online German adults
*Top 11 categories
21 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Driven significantly by why Germans buy increasingly more products online
• Because… it’s convenient – 71% say they save time by shopping online
• They love bargains… 62% say they find better deals online
• And, because the internet offers more choice – 52% say they find products online they can’t find anywhere else
22 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
German online shoppers are younger, wealthier, more experienced and confident online
German online shoppers
German online shopping hold-outs
German online population
Millions of consumers 28 mil 32 mil 60 milMale 53% 45% 53%Age 40 years old 51 years old 41 years old
Income €30,008 €22,101 €28,445
Higher Education 42% 28% 39%
Online tenure 5.8 years 4.3 years 5.3 years
I like technology 55% 36% 52%
Personal financial information is secure
online38% 15% 31%
Spent online in the past 3 months €275 - -
Online shopping tenure 3.8 years - -
Base: 3,769 online German adultsSource: Forrester’s European Technographics® Benchmark Survey, Q2 2008
“And in the past 3 months, which of the following apply to you?”
23 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Increasingly the Internet is a preferred channel to buy products.
42%
26%
24%
20%
6%
19%
13%
1%
2%
6%
5%
30%
30%
32%
26%
23%
10%
15%
21%
20%
12%
8%
7%
3%
1%
1%
3%
1%
2%
1%
1%
1%
1%
1%
%
Clothing and footwear
Books
Music
Videos/DVDs
Event tickets
Beauty products
Video games
Hotel reservations
Airline tickets
Computer software
Computer hardware
Shop Internet Post/phone Other
“For each of those you have bought in the past three months, please select all the places you have bought from. ”
Base: 3,715 online German shoppersSource: European Technographics® Retail, Customer Experience and Travel online Survey, Q3 2008
24 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
However, remember . . .
• More consumers online
• Spending more time online
• Spending more money online
• Expecting more online
25 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
New Rules. The shift towards three new eCommerce imperatives
Service Control
Audience Engagement
Convenience Selection
Price
Integrated in a multichannel world
26 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Future retail: The new paradigm
Service Addressing explicit and implicit customer needs
Control Empowering customers to manage their experiences
AudienceEngagement Keeping customers involved and interested
27 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Service means answering questions
Live chat & personal assistants
Co-shopping
Live co-shopping
Source: smatch.de
Source: IKEA.co.uk
28 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
...and transparency
Figleaves offers consumer ratings and reviews, and manages
blogs on social networking sitesSource: Figleaves.co.uk
29 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
. . . And of content, tooRepeat visitors
New customers
Source: Neiman Marcus
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Personalization is more than recommendation engines and collaborative filtering
Source: Netflix
Victoria’s Collection
31 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
79%
80%
81%
87%
90%
Checkoutprocess
Shopping cartpage
Home page
Search/browseresults
Product detailpage
Retailers are now responding to consumer’s higher expectations
Base: 60 to 80 online retailersSource: “The State of Retailing Online 2008,” a Shop.org studyconducted by Forrester Research
Browseexperience
Online retailers are finding that their best investment
efforts are those dedicated to improving the browse/shopping
experience.
32 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
December 2008 “How Europeans Pay For Goods And Services”
Service means easier checkout and payment options
The in-store experience is an arena for differentiation, and POS options such as in-store kiosks are attractive
to consumers.
33 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Source: Forrester's European Technographics® Online Media, Marketing, and Retail Survey, Q3 2007
“From which of the following types of companies do you have shopper/loyalty cards?”
...and here in Europe, loyalty . . .
60%
52%
32%
31%
18%
16%
12%
11%
8%
9%
64%
35%
32%
33%
12%
11%
6%
13%
4%
10%
Supermarkets
Multiretailer cards
Department stores
Petrol stations
Pharmacies/chemists
High-street shops
Airlines
Retailer charge cards or credit cards
Hotels
Other companies
Online shoppersNon-online shoppers
Base: 5,965 European online adults who participate in loyalty programs
Online shoppers own more loyalty cards than Europeans who don’t buy products online
34 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Future retail: The new paradigm
Service Addressing explicit and implicit customer needs
Control Empowering customers to manage their experiences
AudienceEngagement Keeping customers involved and interested
35 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Rich Internet Applications (RIAs) enables control
36 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
As do new delivery models and options
37 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
New channels also enable control
Source: Amazon.co.uk
38 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
• m.ralphlauren.com covers a range of potential user needs from entertainment (exclusive content) to purchasing
• Mobile site offers additional customer touchpoint and deeper customer engagement
• RL premium customer base overlaps with mobile internet users demographics and their devices
• Customer captures QR code through cameraphone which is used to direct phone browser to website
With retailers and brands like Ralph Laruen embracing the mobile channel for closer engagement with consumers
Success of QR codes in Asia has led to it overtaking traditional PC based eCommerce
39 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Future retail: The new paradigm
Service Addressing explicit and implicit customer needs
Control Empowering customers to manage their experiences
AudienceEngagement Keeping customers involved and interested
40 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Audience engagement helps build community
42 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
...and educational...
Sources: Williams-Sonoma.com / Argos.co.uk/
...or bothDarty presents their products with the option of viewing them via WebTV
Source: http://www.darty.com/achat/web-tv/index.html?m=10001
43 Entire contents © 2008 Forrester Research, Inc. All rights reserved.
How to prioritize?
Service Control
Audience Engagement – Get buzz & interactivity
Live chatCo-shoppingCustomer reviewsTagged contentCustomized productPersonalized contentMobile
RIAsChannel diversityMobile
CommunitiesSocial merchandisingVirtual dressing roomsMobile