The online shopper and their customer journey

“Retailers know that issues such as poor customer service and out-of-stock products frustrate their customers, but what is shocking is that only a small number of successful retailers translate this customer insight into meaningful operational customer service improvements. The internet has become an extension of the in-store shopping experience. UK customers are making wide use of it not only to buy products, but to check availability and find the best prices.” - Richard Wildman, UK head of retail, Accenture

• So, what’s the deal?
• Key motivations for shopping online by AOL
• Internet users are impulsive trend setters, who seek convenience, for example
• The benefits of shopping online?
• What Women With Kids - A study exploring Mums and thier online behaviour
• Demographic breakdown of the online retail category
• What about the luxury consumer?
• Who is the recommendation generation, and what does it mean for retail marketers?
• What are shoppers searching for?
• 50 most popular sites for heavy UK visitors to retail sites
• Internet users can also be freaks… the ten weirdest things put on eBay according to Ukpreneur

So, what’s the deal?

• 5% of the population shopped online in 1999 compared to 40% in 2007 (uSwitch 2007 The Retail Bulletin Jan 2008)

• The average UK household spends £980 a year online
• representing 10% of their annual retail bill. (uSwitch 2007 The Retail BulletinJan 2008)

• The most popular products are holidays
• music and films. (uSwitch 2007 The Retail Bulletin Jan 2008)

• Women 25-54 are 16% more likely than the average adult to use the internet for information. Not only researching products online
• these women are also nearly twice as likely to make an online grocery purchase than the general population. (TGI GB Q4 2007)

• Research by Accenture found that poor customer service and limited product offerings in the high street are increasing online shopping in the UK. (Accenture – from IMRG 2008)

• 56% of men said they preferred shopping online to the high street with 44% of all shoppers agreeing with this statement. (Accenture – from IMRG, 2008)

• Research also revealed that 71% of shoppers use the web to preview and compare prices and 44% check stock availability online before heading to the high street. (Accenture – from IMRG 2008)

Key motivations for shopping online by AOL:

• 65% avoid the queues/people

• 64% convenience

• 63% cheaper than the high street

• 60% less stressful

• 53% purchase from stores further away

• 54% easier to find bargains

• 91% have purchased an item before trying it on

• 71% happy to purchase from a non high street store

• 55% have purchased from a store they have never heard of before

From all internet users that have purchased clothing/shoes online (3740)
(AOL E-commerce Jan 08)

Internet users are impulsive trend setters, who seek convenience, for example:

• 45% Convenience plays a part in my purchase decisions

• 35% Shopping online makes my life easier

• 29% People come to me for advice before buying new things

• 25% I am usually the 1st among my friends to know what’s going on

• 28% I am tempted to buy products that I have seen advertised

• 24% If I like something I just buy it without considering the price (TGI GB Q4 2007)

The benefits of shopping online?

Microsoft Advertising conducted some research in 2008 to gain an insight into the lives of today’s mums. They wanted to explore specific habits and attitudes towards media & technology. They found that:

• Mums play a key role in decision making across a range of products and services including holidays, cars and finance.

• The internet has enabled mums to become more informed and hence more engaged in the purchase process e.g. buying a car.

• Brands outside of beauty, baby and household should engage with this audience online by selecting appropriate environments and creative.

What Women With Kids - A study exploring Mums and thier online behaviour

“Women in particular get the chance to shop online without kids in tow. People used to talk about not being able to touch and feel goods but touch has been replaced by a much richer experience, now with video, striking photography and three-dimensional imaging. Superior returns policies and huge choice also make a difference. We really do believe the online boom is finally happening.” Michael Petevinos of Capgemini.

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Demographic breakdown of the online retail category

Source: comScore Media Metrix – June 2008
* Unique Visitors aged 15+, excludes traffic from public computers such
as internet cafes or access from mobile phones or PDAs

What about the luxury consumer?

In January 2008 the IAB and Wallpaper* - a global luxury offline and online magazine - joined forces to research the online luxury consumer, to prove that consumers in the UK market are using the internet to research about luxury goods online, even if they are purchased offline.

• There are approximately 5.9 million regular online luxury consumers in the UK of which 17% (1 million) are “premium” luxury online consumers.

• More than half of premium online luxury consumers have spent £4k+ per person on leisure and travel and £3k+ on electronics in the last 12 months.

• Premium luxury consumers spend over 4 times more online than all luxury consumers on luxury goods. This is £32k per year for the premium luxury consumer vs. £7k per year for all luxury consumers. Online and offline the premium group are spending almost £60k per year on luxury goods compared to £13.5k of all luxury consumers.

• The online premium luxury consumer (17% of online luxury consumers) account for 61% of the total spend on luxury items.

• Over half (56%) of premium luxury consumers are buying designer clothes and accessories online, on a par with the percentage of this group purchasing designer clothes and accessories offline.

• Almost a third of this premium group is spending £2.5k+ on jewellery online and over a third is spending this on furniture online. Almost 2 thirds of the premium group (63%) and 40% of all luxury consumers are spending £500+ on gadgets per year online – this being 38% and 22% respectively offline.

Who is the recommendation generation, and what does it mean for retail marketers? From Chris Tomlinson, former head of digital at WAA:

• We now have ‘Web 2.0’, an online world of social networking and user generated content, inhabited by a new generation of consumers. Known as the ‘recommendation generation’, these net natives have a healthy scepticism of conventional marketing and don’t necessarily believe what brands say about their products.

• This generation wouldn’t dream of buying anything without checking consumer product reviews on independent price comparison websites or forums. Peer referral has always been the most sought-after prize in brand marketing, but now it’s essential for a brand to succeed.

• To tap into this, ‘tell a friend’ culture, brands need to spread their messages via ‘word of mouse’. Online brand marketing will soon solely be about stimulating online conversation in the hope that satisfied customers will become brand advocates.

• Some try a technique known as ‘astroturfing’ and fake positive conversations between bogus consumers in an attempt to mimic grass-roots discussions. But these are as easy to spot as the fake readers letters to tabloid agony aunts that are clearly written by the editorial staff.

• The trick here is to reward contributors with special offers and status even if their contributions aren’t necessarily favorable to your brand!

• Getting the thumbs up from the recommendation generation can be as simple as adding links to social book marking sites such as del.icio.us, Digg, Reddit and StumbleUpon to your own website to allow visitors to vote for its content.

What are shoppers searching for?

A quick UK sample from Google (June 2008):

• Dresses 3,203,800

• Wimbledon 2,082,799

• DVDs 1,189,493

• Laptops 1,728,746

• Sunglasses 1,395,347

• Lingerie 1,069,904

• Sandals 912,036

• Liverpool FC 519,348

• Fridge freezer 409,007

• Barbeque 157,906

Top keywords from Microsoft adCenter for retail (2008):

Games, Shoes, Flowers, Books, Laptops, Lingerie, Dress, TV, Toys, Digital camera, Fashion, Bikini, Florists, Bra, Top, Mobile phones, Rose, Toy, Boots.

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50 most popular sites for heavy UK visitors to retail sites

Source: comScore Media Metrix – June 2008
Ranked by Composition Index UV. * Unique Visitors aged 15+, excludes traffic from public computers such as internet cafes or access from mobile phones or PDAs

Internet users can also be freaks… the ten weirdest things put on eBay according to Ukpreneur:

1. A serial killer’s fingernails – The fingernails of Roy Norris – killer of 5 - were sold for $9.99.

2. A person’s soul – An American man tried to sell his soul for $1 million in 2007 claiming; “I’m not really using it lately - and selling it on the internet is better than letting the Devil have it”.

3. A liver – America again, a man from Florida tried to sell part of his liver for transplant purposes. It was eventually pulled from the site, not before amassing a bid of $5.7million.

4. Haunted rubber ducky – In 2004 this spooky bath toy was sold for $107.50. Quite why anyone would want it, it apparently bites children.

5. Jesus toast – This piece of toast that had the face of Jesus burnt into it, never ended up selling.

6. Justin Timberlake’s French toast – A half eaten piece of toast discarded by Justin Timberlake sold for $3,154 dollars in 2000. You can’t shift JC toast, but JT toast goes for three grand?!

7. Rights to name a woman’s baby – In 2005 a caring mother allowed an online casino site to name her child. She received $15,100 and the child received the name GoldenPalace.com.

8. Imaginary friend – A man decided to sell his imaginary friend called Jon Malipieman, having grown out of him at the age of 27… the imaginary friend sold for $3,000. I kid you not..

9. Ghost cane – Another spooky one, a haunted walking stick sold for $65,000. Guess who bought it? GoldenPalace.com.

10. Giant cheetoh – ‘The worlds largest Cheetoh’ - as big as a kiwi – received bids of $180 before being taken offline and becoming a local tourist attraction.

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