Omnishopping in the Connected World Consumer Electronics Category Analysis

Transcription

1 Omnishopping in the Connected World Consumer Electronics Category Analysis 1 Omnishopping in the Connected World CE UK

2 Executive Summary Consumer Electronics (CE) is a category where the term omnishopping strongly applies. With a diverse array of products that enhance both productivity and home and work lives everything from micro chargers to refrigerators shoppers in this category make informed decisions about their purchase across channels and devices. Shoppers often go online to research, but then want to experience a complex product like a UHD TV in a store. Mobile phones are both a defining product in the category, and the device that people increasingly using to buy products. Electronics stores are becoming more like showrooms that encourage shoppers to purchase online, and also convenience centers for those who choose to buy online and want ease of pick up. In order to better understand the influences on and behaviours related to shopping in Consumer Electronics, Criteo conducted a survey 1,500 recent buyers in key product categories in the UK: The Shopper Story. The survey focused on omnishoppers: people who research online but sometimes buy in store but also do the reverse: see something in store that they buy online. These people spend on average 13% more online than single channel shoppers. The CE respondents had spent a minimum of 200 in the past three months. Criteo also analysed 2016 data from its Sponsored Products network of leading UK sites that sell electronics (Asda, Tesco, Curry s and PC World) to uncover patterns in how people shop, products in CE they search for, as well as online cart benchmarks for the crucial Festive Season sales period to come. 176 Fast Facts Online cart size with a Consumer Electronics product peaked during the 2016 Festive Season on the 10th of November. 53% of Consumer Electronics buyers do NOT buy from the first website they visit. 52% of CE buyers are nearly as likely to make impulse purchases online as they are offline. There was a 10% YoY increase in spending on Black Friday. Cart sizes are large at this time, with CE specifically. 1 Omnishopping in the Connected World CE UK

3 SECTION 1 Category Trends: Embracing the New Here are a few of the CE trends Criteo sees emerging from product searches and the market overall: The leap into VR will likely happen this Christmas due in part to the release of more affordable headsets from companies like Samsung and Oculus as well as to the increasing amount of content available. In smartphones, Samsung and Apple both have new releases and it s a battle for whose camera has more megapixels and what is being called the zero edge screen 8K has been introduced, but the upgrade cycle in TVs is around 4K, with many models well below 500. Microbooks and combo tablets like the Microsoft Surface Pro will become more the norm. With the rise in Natural Language Processing and artificial intelligence, who needs Cinderella when you can command everything from TVs to Hoovers to refrigerators with voice activation? Every house now needs a hub. It used to the be the router, it s now a smart device as consumers crave simplicity and a product that will control other devices. Amazon, Microsoft, Apple and Samsung all have smart speakers so shoppers will be deciding what connected home ecosystem to buy. Nostalgic Tech: While homes are expected to get more futuristic, there s the contrasting trend of Millennials and Gen Z going retro with audio and photo. Turntables and portable record players are hot again. Polaroid and Fuji Instax are back in the instant photo market and Kodak has re-introduced film like Ektachrome for new camera enthusiasts (trained by their smartphones). 2 Omnishopping in the Connected World CE UK

4 SECTION 2 Category Trends: Omnishopping Behaviour in Consumer Electronics With some high relative price points and many complex details, CE tends to be a highly-researched product category. People compare details, availability and prices across sites, devices and channels. The Criteo Shopper Story survey revealed the breadth of omnishopping behaviours among recent Consumer Electronics purchasers. 75% look forward to shopping in stores when they have time 73% prefer to do most of their shopping online The most common ways that people shop across channels are click and collect, Webrooming, (researching online and buying in store) and Showrooming (see in store and buy online). Omnichannel Shopping is The Norm (percent of total frequency of cross channel purchasing) Order goods online and pick them up in a retail store Browse products online and then purchase them in a retail store Make purchases online after seeing the product at a retail store Make purchases on my phone from within a retail store on another retailer s site (Amazon, etc.) Make purchases on my phone from within a retail store from that retailer s website % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Criteo Shopper Story, UK, 2017 Regularly On Occasion Never Consumer Electronics omnishoppers were asked about what most influenced their purchase at three key stages in their shopping journey: First learn (awareness), go to learn more (consideration) and last influence (point of purchase). Websites and apps had the greatest impact for omnishoppers at every stage. While many marketers continue to rely on traditional advertising, the purchase even if it is made in a store is determined by online activity for these valuable shoppers. 3 Omnishopping in the Connected World CE UK

5 Online is the Key Influence for Customer Electronics Omnishoppers Influences on the purchase (percent of total): How did you % 80% 60% 40% 20% 0% First learn Learn more Influence at purchase decision Websites/Apps (Net) Retail Stores Advertising (Net) People in Real Life (Net) Social Media (Net) Source: Criteo Shopper Story, UK, 2017 Where is the starting place when they intend to buy online? Retail websites are most favoured when people know what they want to buy in terms of the category or specific product: shoppers come to them in buying mode. Retail Sites Appeal to Shoppers with High Intent to Purchase Starting points for online purchases A retail website Amazon.com A brand website Search engine (Google, Bing etc.) Technology website Social media 0% 5% 10% 15% 20% 25% 30% 35% If I know the exact item I want If I know the the type of item I want If I don t have a specific item in mind Source: Criteo Shopper Story, UK, 2017 CE is a highly competitive category and there is a high degree of cross shopping, both within a retail site and across sites: 28% often visit multiple websites to compare products, while just over half (51%) do so within the same site. This is in contrast to a category like FMCG, where only 18% visit multiple sites. What makes shoppers abandon a site? It s not just price: 34% say they wanted better selection, and 24% wanted more information. 4 Omnishopping in the Connected World CE UK

6 SECTION 3 What Are They Looking For? The most commonly searched terms include a healthy mix of old and new tech. Along with gifts sought after November, shoppers look to upgrade with new appliances in advance of their family Christmas at home. In January, they may be buying for themselves (new Bluetooth speakers?) or taking advantage of early year discounts on TVs and home appliances as new models arrive. Top Search Terms January November Q2 Source: Criteo Sponsored Products network data 5 Omnishopping in the Connected World CE UK

7 SECTION 4 Category Predictions for 2017 Festive Season Since Q4 is the biggest season for Consumer Electronics sales, it s important to look at the behaviours gleaned from Criteo s online purchase data in Here is what we saw in the UK: The rise of Black Friday: This American import is growing in retail significance each year. In 2016, Criteo saw sales rise 10% over the previous year. Black Friday is now the biggest day in ecommerce in the UK, overtaking Boxing Day, when the traditional sales begin. But discounting can begin earlier: Retailers learned from Black Friday 2015, when many had challenges with inventory and fulfillment, and spread discounts throughout the week surrounding the day itself. This extended discounting period proved lucrative for those prepared for the surge in shopping. November Saw Big Spikes in Shopping (percent change YoY) 35% 33% 30% 25% 20% 15% 10% 11% 21% 19% 20% 17% 17% 15% 15% 15% 15% 13% 13% 11% 10% 10% 9% 9% BLACK FRIDAY 5% 5% 0% Mon. Tue. Wed. Thu. Fri. Sat. Sun. Mon. Tue. Wed. Thu. Fri. Sat. Sun. Mon. Tue. Wed. Thu. Fri. 7/11 8/11 9/11 10/11 11/11 12/11 13/11 14/11 15/11 16/11 17/11 18/11 19/11 20/11 21/11 22/11 23/11 24/11 25/11 Source: Criteo Shopper Story, UK, 2017 The biggest cart sizes in Electronics are two weeks before Black Friday. Shoppers may be locking in big gifts like gaming systems and TVs. Cart values decline the two days before Black Friday as shoppers wait for deals. On Black Friday the average cart with a CE item was 163 and the average item sold was Omnishopping in the Connected World CE UK

8 Electronics Add Up to Large Cart Sizes in November (average order value vs unit price in Electronics) /11 8/11 9/11 10/11 11/11 12/11 13/11 14/11 15/11 16/11 17/11 18/11 19/11 20/11 21/11 22/11 23/11 24/11 25/11 26/11 27/11 28/11 BLACK FRIDAY Average Unit Price - Electronics Average Order Value Source: Criteo Sponsored Products network data, November, 2017 Purchasers Rose Substantially in Late December (change in user conversions YoY) 100% 80% 60% 40% 20% 0% -20% -40% -60% 5% 9% -13% 4% 6% 12% 101% 252% 1 DAY SHIPPING CUTOFF -2% Sat. Sun. Mon. Tue. Wed. Thu. Fri. Sat. Sun. Mon. Tue. Wed. Thu. Fri. Sat. 17/12 18/12 19/12 20/12 21/12 22/12 23/12 24/12 25/12 26/12 27/12 28/12 29/12 30/12 31/12-51% 15% 28% 20% 58% 44% NEW YEAR S EVE -13% Source: Criteo Sponsored Products network data, December, Omnishopping in the Connected World CE UK

9 Basket values in December spike again with Boxing Day sales. Shoppers use the available device to purchase in these busy times. While desktop baskets are biggest overall, those completed on mobile phones are strong throughout the season. Baskets Stay Large through Christmas then Spike with Boxing Day Sales (Basket values by device) /12 3/12 5/12 7/12 9/12 11/12 13/12 15/12 17/12 19/12 CHRISTMAS BOXING DAY 21/12 23/12 24/12 25/12 26/12 27/12 29/12 31/12 Computer Mobile Tablet Source: Criteo Sponsored Products network data, December Omnishopping in the Connected World CE UK

10 SECTION 5 Optimising CE Commerce From what Criteo data shows, there are key techniques to increase conversions in this omnishopping world. Understand the increasing importance of free return shipping The hassle of returns is probably the last major impediment to the sale, and free return shipping ranks even higher than discounts as a factor in determining where to buy online. There is a cost/benefit involved as this is a costly challenge for retailers in a category with large items. In store returns provide another opportunity to upsell. Importance of Factors on Websites (percent of total) Free return shipping Discounts available Appealing photos Product reviews organised with the most relevant first Website optimised for mobile devices Website has many unique products 360 product images Website shows how the products can be used Videos of product usage/demonstrations Product recommendations based on my purchase history Online chat so i can communicate with a real person The retailer has a specific app % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Very Important Somewhat Important Not Important Source: Criteo Shopper Story, UK, 2017 Bring the products to life This is the category that invented online demos and consumers have high expectations. 77% of Consumer Electronics omnishoppers say videos are important. 89% say something as simple as more appealing product photos can make the difference. 9 Omnishopping in the Connected World CE UK

11 Optimise reviews to make the sale 87% of shoppers say reviews ranked on relevance are important. That s great news for brands selling on retail sites, as it means that shoppers put a high value on both the retailers and other shoppers to validate the items under consideration. Brands should leverage Sponsored Products to reinforce their products on trusteed retail sites during this crucial search for information. Increase the genius level of in-store personnel This is a category where consumers hop back and forth between online merchandise and in store purchase. Consumers may very much want to test that TV and smart fridge in store. 39% of omnishoppers said that knowledgeable salespeople were a top reason to shop in store. Make sure the campaign extends through the full length of the purchase cycle Consumers spend considerable amounts of time on the highest price point items in CE. Make sure you are in market to reinforce your brand message throughout their shopper journey, which so often goes beyond the standard 30-day window. Facilitate cross-purchasing According to the Criteo Shopper Story, 53% of purchases in Consumer Electronics are made on impulse, which is excellent news for CE brands. What it means, especially during Festive Season, is that shoppers are open to purchasing goods that aren t on their list. Criteo Sponsored Products enable CE brands to cross sell to encourage shoppers to buy the protective case with the mobile device and the cables with the television. Create the online version of in-store display With so many competing products in subcategories like TVs, Tablets, Smartphones and Wearables, visibility onsite is crucial for CE brands. Criteo Sponsored Products bring goods into view on a retail site in a way similar to end aisle displays in electronics stores. Reach the shopper, not the device or channel Activate your CRM data with Criteo to ensure a seamless consumer shopping experience across devices. And, with a deterministic matching solution like Criteo Universal Match, you can focus on people-based vs. device centric marketing efforts. Criteo Device Graph is an attribution tool that allows marketers to track the impact of digital campaigns both online and in stores, and can even measure outside of Criteo display campaigns. It s the ultimate enabler of omnichannel marketing. Take advantage of the breadth of Criteo offerings Criteo offers a full suite of performance marketing products for brands and retailers. Reach your customers with the most relevant ad experience. Criteo Sponsored Products increase product visibility as busy shoppers sort through thousands of options across retail sites. Brands benefit from the lift in sales, retailers from the incremental revenue. Criteo Dynamic Retargeting can not only recommend the best offer from your entire product catalog in real-time serving up personalised ads for maximum sales it can drive shoppers back to your site once they ve wandered away. We keep your CE products top-of-mind when they re ready to buy. Getting shoppers what they need and love? It s what Criteo does best. 10 Omnishopping in the Connected World CE UK

12 About Criteo Criteo (NASDAQ: CRTO), the leader in commerce marketing, is building the highest performing and open commerce marketing ecosystem to drive profits and sales for retailers and brands. 2,700 Criteo team members partner with 16,000 customers and thousands of publishers across the globe to deliver performance at scale by connecting shoppers to the things they need and love. Designed for commerce, Criteo Commerce Marketing Ecosystem sees over $550 billion in annual commerce sales data. For more information, please visit 11 Omnishopping Contact in the Connected us at World CE UK