Retail: Electrical Goods Trends
May 2011
Adam Goodman
Vertical Insight Manager
Contents
Market Trends
Market Trends
E-Retail Market
The chart here shows the UK online shopping sales from May 2000 to March 2011
“The UK online retail sector grew 14% year-on-year in March,
with Britons spending an estimated £5.1bn
shopping online” (Source: IMRG, April 2011)
“Online continues to be the beacon for the UK retail market during
these tough economic conditions, with the high street suffering its
worst drop in sales for 15 years during the same period. The 18%
annual growth recorded in the first quarter of 2011 is in line with our
prediction for the year”.
“IMRG’s recent online confidence survey revealed that over 70% of UK
retailers expect online sales to remain healthy for the remainder of
the year which, when combined with the solid growth recorded by the
Index, indicates that the outlook for 2011 remains positive for the UK
e-retail industry”
Tina Spooner, Director of Information at IMRG
Electricals Market Size and Forecast
According to Mintel:
•
Spending on electricals was £28.9 billion (incl. VAT) in 2010, a
figure which has hardly changed in five years. The figure
includes all spending – brown goods, kitchen appliances and
PCs. It does not include software.
•
Sales by electrical retailers were £12.9 billion (incl. VAT) for the
same year, down by 21% over the last five years. The sector is
made up of electrical retailers (such as Currys, Comet or Richer
Sounds), where sales were 11% down, and PC and telecoms
specialists where sales were down by 34%.
ELECTRICALS RETAILERS SALES, 2005-15 (F)
According to IMRG:
• The electricals sector has grown 996% since February 2002 and
continues to show consistently strong growth, especially during
the last 3–4 years
Source: Mintel
Market Trends
Electrical Sector
“Over the past 11 years Britons have spent an estimated total of £300bn shopping on the internet, rising from a yearly total of
£0.8bn in 2000 to an estimated £58.8bn in 2010… In the year to April 2011 UK consumers spent an estimated £62bn shopping
online, with 22% of this being spent between May and July 2010, 23% between August and October 2010, 30% between November
2010 and January 2011 and 25% between February and April 2011.
The electricals sector has grown 996% since February 2002 and continues to show consistently strong growth, especially during the
last 3–4 years”
This chart shows the growth of the Electrical Sector between April
2002 and April 2011
Source: IMRG, April 2011
The Electrical Index, year-on-year – the values are displayed from
January to December
Source: IMRG, April 2011
Advertising Market
Search Trends
‘Electronic Goods’ Search
Traffic KPIs
Traffic
• Searches for electronic goods generics increased by +4%
between 2009 and 2010 (April to December timeframe)
•
Searches for electronic goods generic keywords increased by
+9% between October to December 2010 v 2009 – the key
Christmas period.
•
Searches for electronic goods generics increased by +14%
between January to May 2011 v 2010.
Source: Microsoft Advertising Intelligence Tool ( MAIT)
Insights:
• The electricals sector has grown 996% since February 2002 and
continues to show consistently strong growth, especially during
the last 3–4 years (Source: IMRG, April 2011)
•
Kinect for the Xbox 360 is the Fastest-Selling Consumer
Electronics Device ever according to Guiness World Records.
Kinect sold 133,333 units per day, for a total of 8 million units in
its first 60 days on sale from 4 November 2010 to 3 January
2011 (Source: Guinness World Records)
Search Trends
Electronic Goods Daily and
Demographics Trends
Daily
•
Mondays have been the largest traffic driving day
over the last 2 months with 17%, with Tuesday and
Wednesday closely following with 16% each. The
lowest day has seen Saturday (11%) and Sunday
(12%) at lower levels. Friday (13%) is the lowest traffic
driving day out of the days during the working week.
•
Potential incremental targeting opportunities would
include up-weighting between Monday to Thursday
Demographics
• The 35-49 age brackets are the main age groups for
traffic with 32%. 25-34 year olds are slightly less with
24%
•
The key searcher demographics with 53% are males,
with females having 44% share. Unknown gender
accounted for 2% of searches
Source: Microsoft Advertising Intelligence Tool (MAIT)
Microsoft Media Network
Network Demographics Trends
•
The majority of the impressions and clicks occur in
the age groups of 18 to 24 year olds, slightly more
female in audience.
•
Conversions are almost identical however between
the age groups of 18-24 and 25-34 year olds.
•
Clicks in the earlier age groups are more by females,
however this trend changes in the later age groups
of 25 year olds plus.
Source: Microsoft Media Network : Oct 09 : April 2011 - % of all IMP/CLK/Con
Microsoft Media Network
Network Daily Trends
Retail related impressions increase strongly in the very
late evening, peaking towards the very last few hours.
The % of Actions related to consumer electronics
network activity peak from 4pm – 10pm.
The majority of the impressions & clicks occur during
the week with peaks on Mondays to Wednesdays. This
replicates the earlier finding from Search results
through Bing (suggested on slide 9) with a low point
on Saturdays.
Source: Microsoft Media Network : Oct 09 : April 2011 - % of all IMP/CLK/Con
Display
Advertisement Publisher Location
Total Ad Impressions and Advertising Exposed Unique Visitors
•
Microsoft sites had the second highest exposure of UK Unique Visitors throughout Jan – March 2011 for the Retail
category in comScore
•
Microsoft Sites delivered the second most impressions across some of the major publishers
•
This allows branding campaigns to reach the large set of consumers through Microsoft Advertising properties and
deliver high advertising exposed unique visitors.
Source: ComScore AdMetrix – January to March 2011
Display
Advertisement Publisher Location
Share of Impressions and Frequency
•
Microsoft sites also had a very competitive share of Retailers ad impressions during January to
March, slightly less than eBay yet delivered more Unique users than eBay did during this time.
•
Although Microsoft sites received less Ad impressions it’s interesting to see the Microsoft
Advertising average frequency is less than eBay, Yahoo!, Glam Media, Trader Media and AOL.
Source: ComScore AdMetrix – January to March 2011
Industry & 3rd Party Resources
Microsoft & Carat Research Study
New Shopper Journeys Study
Microsoft and Carat have conducted a European New Shopper Journey study.
To learn more about this study and the findings across European markets for Home
Electronics market, please speak to your Microsoft sales representative.
You can find out more information at:
www.MicrosoftAdvertising.com/UK
Microsoft & Carat Research Study
Touchpoints play an important role in
influencing the initial decision
At the start of the consumer journey only 6% of consumers had decided on a sum to spend, 3% on the
retailer and 4% on a specific brand. Digital media has a big role to play…
SOMETHING SEEN
OR READ
SOMETHING SEEN
WHEN SHOPPING
•
•
•
•
12% internet
8% TV
4% magazines
33%
33%
38%
•
Source: New Shopper Journeys Europe 2010
Home Electronics n=2557
•
9% promotion
22% friends/
colleagues
25%
32%
•
•
11% expert reviews
online
10% online
7% print article
•
•
•
7% email
6% brochure
2% coupons
Industry & 3rd Party
Electrical Market Strengths and Weaknesses
•
•
•
•
Technology: Benefits from the most
rapidly changing technology with near
constant flow of must-have new gadgets.
Convergence: New products become
more powerful and incorporate features
of other gadgets.
•
•
•
New stores formats, such as megastores
are driving demand.
Electricals products are now essential to
the way we run our lives.
•
•
Source: Mintel, 2011
Spending will remain under pressure
throughout 2011 and perhaps into 2012.
Convergence – as new products combine
the features of many older ones people
will need fewer of them.
Product gap – there seems to be little to
provide a boost to the sector after the
iPad.
Price: competition is driving prices down
and even new products don’t retain
premium status for long.
Commodities: The emphasis on price ends
up commoditising electrical products.
Industry & 3rd Party
Channels of Distribution
•
•
•
•
Electrical specialist stores such as Dixons, Currys
and Comet agree on the importance of a multichannel offer and both are integrating their online
and stores based formats.
Furthest ahead in multi-channel is Argos and is a
major player in many parts of the sector,
particularly at the cheaper end of the sector. John
Lewis is believed to be the most significant
department store player in terms of electrical
goods sales.
Home shopping is being driven by the internet.
Trading statements from some of the most
successful players have shown some of the
strongest rates of growth throughout the
downturn.
Electricals is particularly well-suited to selling online
given the ease for consumers to compare
specifications and price from impartial sources.
Source: Mintel
(a) Internet specialists, mail order, direct sellers
(b) Department stores and mixed goods retailers such as Argos
(c) Includes DIY/home/kitchen specialists as well as office
equipment specialists
Most popular statements about using the internet for Electricals shopping. (March 2011)
“
A quarter of consumers preferred to research online rather than seek help from store staff.
Base: 1,916 internet users aged 16+ all who have bought electrical products in the last 3 years
“
Industry & 3rd Party
Why people use the internet to shop for
Electricals
In the Microsoft and Carat New Shopper Journey study we found that 74% of home electronics shoppers research their
potential buy. In this vertical, buyers are open-minded, and are prepared to take their time. Out of the study,
electronics shoppers used the internet to perform this research.
Source: New Shopper Journeys Europe 2010 , Home Electronics. Base: Researchers n=1739
79% of home
Industry & 3rd Party
Consumer purchase behaviour
Generally consumers only buy electrical products when they are looking for replacements. Although this maybe the case
products like Kinect, iPod and iPad have bucked this trend as major new products grasp consumers imagination and
entice purchase.
Other key attitudes to buying electicals include:
Source: GMI/Mintel
Industry & 3rd Party
Consumer purchase behaviour cont…
This was backed up by further research carried out by Friends Life. Almost 70% of the survey respondents were asked to
respond to the statement:
“I am keeping household goods (e.g. furniture, electrical goods) for longer before I replace them”
% who agree or agree strongly, by gender, age and social grade
Base: 1,000 online respondents aged 16+, GB
Source: Friends Life/The Future Foundation/nVision, 2011
The young lead the market
• Already PCs are mass market products bought by everyone
• Mobiles are approaching the same status
Dishwasher
MP3 player etc
Affluence
Industry & 3rd Party
The young buy Hi-tech, everyone has to buy white goods
Camera
Computer
Hi-Fi
TV
ff
DVD player
Mobile
phone
Games console
c
m
vc
Small
kitchen appl
Washing
machine
Age
Hi-tech
Source: GMI/Mintel
Brown goods
White goods
Note:
The white goods clustered around the average
lines are:
vc - vacuum cleaners
m - microwave
ff - fridge/freezer
c - cooker
White goods are Small Kitchen Appliances,
Vacuum cleaner, Washing machine, Microwave,
Fridge/Freezer, Cooker
Industry & 3rd Party
Energy Efficiency losing it’s influence on
consumers choice?
Survey respondents indicate that consumers who stated in 2009 that Energy Efficiency influenced the potential
to spend more money on Electrical goods, are now less likely to take this into consideration in 2011. 1 in 3
people agree they would spend more if the electrical good would not harm the environment
“I would be prepared to pay up to 5% more for energy efficient electronic goods if I could be sure that they would not
harm the environment”
% who agree strongly or agree, by gender, age and social grade
Source: EDF Energy/GreenAware/The Future Foundation, 2011
Survey Base: 1,000-1,500 online respondents aged 16+, GB
Industry & 3rd Party
Consumers Save for Electrical goods
Survey respondents indicate that consumers save in order to afford the latest and great electronic goods used within
the home. More 20% of respondents said they save to buy new home electronics equipment – more than people
who said they saved for events, buying a house and those who are saving for their children’s education
“For which, if any, of the following reasons are you saving or borrowing money? Saving”
% who are saving for the following reasons
Survey Base: 1,000-1,500 online respondents aged 16+, GB
Source: EDF Energy/GreenAware/The Future Foundation, 2011
Industry & 3rd Party
Consumer Target groups
The key markets are the bargain hunters and the quality seekers. They have similar
demographics, though radically different attitudes to buying electricals, as their names
suggest.
Quality seekers:
•
•
•
Replacers
16%
Quality
seekers
14%
Bargain hunters:
Apathetics
44%
•
•
•
•
Also younger and more affluent
Wait for special offers
Research and buy online
Not interested in after sales service
Replacers:
•
•
•
Bargain
hunters
26%
Source: GMI/Mintel
Younger and more affluent
Prepared to pay up for quality
Tend to buy for replacement but are doing so more frequently
Older and less affluent
Buy when they have to
Not confident, want help
Apathetics:
•
•
•
Younger less affluent
Many still living at home
Like Argos, especially online
Opportunities
Electronic Retailer Opportunities
Seasonal Peaks
Take advantage of seasonal peaks for products where possible. Positioning of your products, sales and
remember to include call to actions where possible. Including delivery charges, delivery times and price points
will enable consumers the ability to compare prices and purchase easily.
Demographic/Mosiac
The users and searches for electronics index well in demographic sectors and can be targeted with our Mosiac
offering. Find out more information on our Display Ad Targeting and Search targeting options. You can also
use our Microsoft Advertising Intelligence Tool to learn more about audiences by keyword.
Search & Display – Better Together
Utilise the combined efforts of both your Search and Display campaigns to help boost your ROI. We have seen
good increases in traffic throughout 2010 and into 2011 – so make the most of our enormous reach. Through
Microsoft Advertising we reach almost 92% of the Internet population. Read our Display & Search Case study
Retail: Video and M-Commerce
Video
Video and Retailers
According to recent research by ForeSee Results, e-tailers making extensive use of video were among the toprated in customer satisfaction during the 2010 holiday shopping season. (Limelight Networks, Online Retail Trends 2011)
The Limelight Networks survey the results indicated that video product demonstrations and video reviews from customers were listed as
extremely or very important features. This finding seems to be proving correct as we see from comScore the increase Unique Users of Video on
Retail sites.
The video trend is evident just by looking at
some of the largest online retailers today.
Amazon, for example, incorporates both
manufacturer videos and video reviews from
consumers in its product pages
Mobile
Retail M-Commerce
“The evolution of mobile technology has given rise to the empowered consumer: at the
touch of a button, almost anywhere, consumers can research products, companies,
and even make purchases.” (ForseeResults)
Forsee study of 10,000 UK visitors to the biggest e-retail sites in the UK (according to IMRG) stated:
Key findings:
•
•
•
•
Source: Foresee Results, Jan 2011.
Shoppers are using mobile phones to access websites and apps more
than ever before – “32% of respondents have used their phone to access a
retailer website, and an additional 32% indicated they plan to access
retailer websites or mobile apps by phone in the future”
Purchase behaviour is exploding – “8% of UK made purchase via mobile
at Christmas 2010”
Shoppers use their phones for a variety of tasks – “47% of shoppers
used phone for price comparison reasons”
Good experiences with mobile sites and apps have critical crosschannel impact - “Shoppers who are highly satisfied with a mobile
experience say they are 32% more likely to buy from that retailer online
and 31% more likely to buy offline”
Mobile
UK Retailers & Mobile Apps
41% of retailers expect to have a transactional site/app within the next year
"51% of consumers say they are more likely to buy from
retailers that have a mobile site, but fewer than 5% of
retailers have such a site" eMarketer Nov 2010
Examples of some Windows Phone 7 shopping apps
41%
Source: IMRG, AIME & IAB B2B M-Commerce Study
Base: Sector 1, Retailers & Brands (42) , Do you offer an application / mobile specific website which is fully transactional with credit, debit or alternative payments?
Mobile
Retail M-Commerce
Source: Forseestudy of nearly 10,000 visitors to the biggest e-retail websites in the United Kingdom
In which of the following ways did you use your
phone while shopping in a store?
67%
accessed that
store’s website
on their phone
26%
accessed a
competitor’s website
on their phone
“Applications and websites tailored to mobile shoppers are a must-have for
retailers. As smartphone use increases, more customers will turn to the mobile
channel to find price and product information before making a purchase.”
(ForeseeResults)
Mobile & Consoles
UK Shoppers – Mobile & Consoles
UK shoppers are using mobile phones to validate product attributes and compare prices:
Shopping With Mobile Phones
Source: RichRelevance & BazaarVoice ‘New Rules of Engagement or Todays Empowered UK Shopper,
WhitePaper. (BazaarVoice)
“20% to 30% of all transactions will
be made from smartphones within
the next three years”
Nick Robertson, ASOS
Shop Direct chief executive Mark
Newton-Jones said the multichannel
retailer was also starting to get
orders through web-connected
games consoles such as the Xbox
360
“60% of phones sold today being smartphones, and more users likely to connect to the internet via
mobile devices…retailers are rushing into m-commerce with alacrity. Apps have been big news −
Tesco’s Grocery app has been downloaded by 350,000 people, and the Argos app has achieved 800,000
downloads. Many in the industry see mobile websites as the future, most likely operated in conjunction
with specialist apps” (RetailWeek, Nov 2010)
Mobile
Summary of M-Commerce Usage
All users
80%
Smartphone users
75%
70%
60%
50%
62%
58%
53%
43%
37%
40%
35%
27%
30%
Smartphone users are
63%
20%
10%
0%
Research
Purchase direct to
bill
Experience
enhancers
Source: IAB Consumer M-Commerce Study October 2010 Base All UK Mobile Users (1039)
Purchase via
card/bank details
more likely to engage in
M-Commerce
Appendix
Top e-Retail Facts
Source: IMRG, 2011