European online shopping

© 2005, Interactive Advertising Bureau & partnersLEADING INTERACTIVE MARKETING ACROSS EUROPEData Source: Nielsen//NetRatings, EMEA, 2005

European online shopping

Data from IAB Europe’s Strategic Partner Nielsen//NetRatings EMEA

Commentary from IAB Europe

IAB Europe research programme: Serving European interactive marketers since 1998

www.iabuk.net

The European Online Commerce LandscapeWith the IAB’s thanks to David DayManaging Director, Nielsen//NetRatings EMEACommentary from Danny Meadows-Klue, CEO, IAB Europe


In this research seminarIn this research seminar……

What are the key trends at a glance?

How are the mature markets pulling away from others around Europe?

How do shopping patterns very by gender?

A very merry www Christmas

Changing attitudes

Further information from the IAB and Nielsen//NetRatings


At a glanceAt a glance• Online retail growth continues to be rapid €50B in 2005 across

Europe

• Clear distinction have emerged between economies fully embracing online shopping (UK) an those slower to take off (Italy)

• Fast ‘always-on’ broadband connections are massive accelerators to ecommerce use

• Search engines are playing a critical role as the link between customers and planned purchases

• The online retail landscape remains skewed, but is increasingly reflecting the high street

• Price has been replaced by ‘convenience’ as the leading reason to shop online


Online or offline?Online or offline?• Online commerce is only part of a complex story of blended purchasing,

with the web increasingly used to research purchases made offline

• Books, CDs and Travel were the first categories to move into online, but they have been joined by a broad range of B2C and B2B sectors

• This range will now broaden quickly, and volumes of spend in existing categories will rise steeply

• While the web is increasingly central to the decision for buying big-ticket items like houses and cars, it may not be the actual channel for the transaction; online commerce figures underestimate the role the web is playing

• There is a time-lag between consumers starting to use the web and gaining the confidence to shop

• There is a second time-lag before these shopping patterns become ingrained

• During the next five years the real changes in online/off-line spending will start to be felt across the maturing European markets

© 2005, Interactive Advertising Bureau & partnersLEADING INTERACTIVE MARKETING ACROSS EUROPE

Mature markets Mature markets pull awaypull awayAlthough online commerce is growing rapidly in most markets, the more mature online markets are separating from the others with a fundamental change now engrained in consumer attitudes


Mature markets pull awayMature markets pull away……

39.7%

43.8%

45.3%

50.1%

62.8%

64.9%

66.6%

Spain

Italy

Sweden

Switzerland

UK

France

Germany

Active Reach of multi-commerce Source: Nielsen//NetRatings NetView Apr 05 home and work data (UK, FR, DE, IT, SE) and home data (ES, CH).


GenderGenderOnline retail spending still demonstrates patterns between genders


Source: Nielsen//NetRatings NetView home and work data UK

65% 57%71%

58%

35%43%

29%42%

Apr-04 Apr-05 Apr-04 Apr-05

Mass Merchandiser Shopping Directories and Guides

Men Women

+8% +13%

Women: online shopping patternsWomen: online shopping patternsProportion of women in overall UK audience is 46%Up 5% compared to the same time last year


Source: Nielsen//NetRatings NetView home and work data UK, Apr 05

Men: online shopping patternsMen: online shopping patternsExample from UKExample from UK

67

118 117 115107

61

103 101 102

79

40

60

80

100

120

140

2 - 17 18 - 34 35 - 49 50 - 64 65+

Men Women

UK audience average

The credit card effect


A www ChristmasA www ChristmasOnline retail spending leaps every Christmas with an ever-broader range of products being bought by an ever-larger number of customers


Different attitudes to Christmas Different attitudes to Christmas shopping across Europeshopping across Europe

0%

10%

20%

30%

40%

50%

60%

70%

Order any of yourChristmas groceryshopping online

Order any of yourChristmas gifts

online

Treat yourself to aChristmas gift

whilst purchasingonline

Treat yourself to aChristmas gift

whilst purchasingon the high street

Accept to receiveemails from the

retailer in order toreceive a discount

off an onlinepurchase

Accept to receivemarketing materialfrom the retailer inorder to receive a

discount off anonline purchase

UK Germany Italy Spain Sweden

Perc

ent l

ikel

y to

, ver

y lik

ely

to o

r hav

e al

read

y do

ne a

ctiv

ity

Nielsen//NetRatings Christmas Retail survey Dec 04


Top 5 Christmas gifts to buy onlineTop 5 Christmas gifts to buy online

Nielsen//NetRatings Christmas Retail survey Dec 04 - *Italy low sample size for this question

61%Films (DVD/VHS)

30%Video game

35%Clothes

57%Books

59%Music

%Item54%Books

20%Clothes

22%Childrens toys

38%Music

39%Films (DVD/VHS)

%Item43%Films (DVD/VHS)

32%Sports & Leisure

32%Music

38%Mobile phone

42%Books

%Item

49%Music

31%Clothes

31%Video game

38%Films (DVD/VHS)

43%Books

%Item61%Films (DVD/VHS)

32%Video game

43%Books

46%Clothes

46%Music

%Item


WhatWhat’’s the one best thing about s the one best thing about Christmas shopping online?Christmas shopping online?

0%

5%

10%

15%

20%

25%

30%

35%

40%

No crowds No waitingor queue

Not havingto deal

with salesstaff

Quick andconvenient

Biggerrange tochoose

from

Cheaper




Trends weTrends we’’re trackingre tracking• UK demonstrating the greatest conversion into online shopping

• As market behaviour matures, consumer purchases of gifts and treats rise, in markets where home delivery infrastructures exist for groceries, these too rise

• There is growing evidence of substitution of online in preference to the high street

• Initially online was used because of a price advantage over the high street, but increasingly it is chosen for consumer convenience

• There is clear enthusiasm for consumers confident with online purchasing to opt-in to email and other online promotions that foster loyalty: coupons, loyalty schemes and integrated online/offline loyalty tools are becoming increasingly common

• Consumers are making less of a distinction between the channels

• Consumers continue to be strongly price sensitive in choosing products, but we think brand values and image will undergo a resurgence in impact


Changing attitudesChanging attitudes


Deciding where to shopDeciding where to shopHow do you know which sites to visit to do your online How do you know which sites to visit to do your online Christmas gift shopping?Christmas gift shopping?


0%

10%

20%

30%

40%

50%

60%

70%

Fromfriends /family /

colleagues

Sawadvertising(not online)

Saw onlineadvertising

Surfing thenet

I use asearchengine

I use ashopping

comparisonwebsite

Sameplaces I

would buyoffline



““If you want to buy things on the If you want to buy things on the Internet, you often canInternet, you often can’’t find a sensible t find a sensible range of productsrange of products””

65% 60%49% 51% 52%

26%24%

28% 23%30%

9% 16% 23% 26%17%


agree/stronglyagree

neutral

disagree/stronglydisagree



““ItIt’’s fun to surf between various s fun to surf between various vendors on the Internet and then to vendors on the Internet and then to make a purchasemake a purchase””

17% 17%

40% 34% 32%

28%19%

28%21% 22%

54%64%

32%46% 46%


agree/stronglyagree

neutral




““There is nowhere else apart from the There is nowhere else apart from the Internet where you can gain such extensive Internet where you can gain such extensive information about products at your leisureinformation about products at your leisure””

19% 22%42%

19% 19%

18%29%

20%

18% 25%

63%49%

38%

63% 57%


agree/stronglyagree

neutral




51% 45%24% 29% 30%

30%32%

21%22% 28%

19% 23%

55% 49% 41%


agree/stronglyagree

neutral


““Usually you just get the information from Usually you just get the information from the Internet and then go and make your the Internet and then go and make your purchase in a purchase in a ‘‘normalnormal’’ shopshop””



““When shopping online, I have concerns When shopping online, I have concerns about the handling of my credit card and about the handling of my credit card and personal detailspersonal details””

27% 27%17% 13%

27%

19% 18%

9%8%

17%

54% 55%74% 79%

56%


agree/stronglyagree

neutral




““Online shopping is terribly complicated; Online shopping is terribly complicated; by the time youby the time you’’ve filled everything in, you ve filled everything in, you might as well have gone to a might as well have gone to a ‘‘normalnormal’’ shopshop””

74% 69%51% 57% 59%

15% 20%

21%20% 22%

12% 11%27% 23% 19%


agree/stronglyagree

neutral




““Price is the only reason for buying Price is the only reason for buying anything on the Internetanything on the Internet””

48% 43%32% 38%

26%

22% 26%

24%23%

28%

30% 31%43% 39% 46%


agree/stronglyagree

neutral




““I like to visit portals where you can see a I like to visit portals where you can see a complete range of all sorts of products from complete range of all sorts of products from various manufacturers at once, and can order and various manufacturers at once, and can order and purchase thesepurchase these””

16% 22% 27% 25%14%

30% 26%23% 20%

23%

53% 52% 49% 55%64%


agree/stronglyagree

neutral




““I prefer to visit I prefer to visit ‘‘normalnormal’’ shops to see items shops to see items in person and then purchase online to get in person and then purchase online to get the cheapest pricethe cheapest price””

36% 33% 33%42% 37%

35%24% 28%

24% 27%

29%43% 39% 34% 36%


agree/stronglyagree

neutral




““I am cautious about ordering online because I I am cautious about ordering online because I have had bad experiences in the past have had bad experiences in the past ((egeg. Damaged goods, delayed delivery, etc). Damaged goods, delayed delivery, etc)””

71% 76% 68%57%

73%

12% 11%13%

16%

13%

17% 13% 19% 27%14%


agree/stronglyagree

neutral




Trends weTrends we’’re trackingre tracking• The novelty of online shopping is over, increasingly consumers see it as simple and

easy; almost 75% of UK consumers disagree that it is complicated

• Online shopping has become need-driven, with the easy comparability of products and the convenience of the experience (for both time and place) driving uptake

• Online shopping is a new behaviour most age-groups have to learn, so there is a longer timelag in its uptake amongst those less confident or exposed to the web

• There is growing evidence of substitution of online in preference to the high street, but also a reappraisal by shoppers of the benefits of each channel

• Barriers to online shopping, notably the perception of credit card fraud and poor customer service, melting away as personal experiences prove the reality is different

• Initially online was used because of a price advantage over the high street, but increasingly it is chosen for consumer convenience

• Rather than a wholesale channel replacement, different shopping products are likely to select their own channels over time, based on the experiences of their customers; organic vegetables and jewellery have strong adherence to offline, while travel and entertainment tickets moved quickly online


More informationMore informationThe eChristmas survey research comes from specialist audience attitudinal research conducted by Nielsen//NetRatings. More information is available from David Day at Nielsen//NetRatings(London)

If this research was useful then ask the IAB about:-Online advertising spend in each market-Online audiences across Europe-Online advertising volumes-Market profiles for each country


European online shopping

Data from IAB Europe’s Strategic Partner Nielsen//NetRatings EMEA

Commentary from IAB Europe

IAB Europe research programme: Serving European interactive marketers since 1998

European online shopping

Documents

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