Global multi-channel consumer survey 2012

10 myths of multichannel retailing

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While no one has a crystal ball, our survey research has shown some conventional wisdom to be at odds with how online shoppers are actually behaving and what they value in the multichannel experience. Click below to delve further into our 10 myths.

Myth 1: Social media will soon become an indispensable retail channel

On its own, social media isn't likely to become an important retail channel anytime soon. But it's becoming more popular every year--and it's driving more shopping across all channels, not just online ones.

Our survey data shows that social media will remain a backwater sales channel for the near future. The use of social media sites like Facebook has exploded in recent years, but only a tiny minority of our survey respondents say they're using social media sites to shop. Some of our social media-related results from our survey:

  • 60% of respondents use social media to follow, discover, and give feedback on brand and retailers
  • But social media is not a major traffic driver to these brands and retailers-- just 10% of our survey sample said a social media interaction led them to a specific online store
  • 56% of Chinese online consumers have already shopping via a social media platform, versus a global average of 24%
  • 49% of our survey respondents said they use social media every day

Myth 2: Stores will become mainly showrooms in the future

Many multichannel shoppers say they research online, but more still prefer to buy products at a physical store.

The physical store remains the centerpiece of the purchase journey for many shoppers. In nine out of the 11 product categories in our survey, in fact, the majority of consumers use physical stores for both researching and purchasing. In addition:

  • 23% of our respondents research consumer electronics online and then go to a store to buy the product, compared to only 2% who do it the other way around
  • Over the next 12 months, our sample expects to shop in-store far more than they expect to ship online via table or online via smartphone
  • Even in a category in which our respondents prefer to research and buy online -- consumer electronics -- a healthy 26% still prefer to research and shop in-store
  • When asked to rank the most important factors that attract them to shopping in a physical store, 73% of our survey sample chose "Ability to see, touch and try merchandise" -- an attribute that an online store will never be able to match

Myth 3: The tablet will soon overtake the PC as the preferred online shopping device

Shoppers are still overwhelmingly using their PCs to shop online. Tablets and smart phones won't catch up any soon--but they may become more important for other parts of the purchase journey.

For all the devotion shown to tablets from their owners -- three-quarters of tablets users reach for their device at least once a day and nearly half spend more than 11 hours per week on them -- tablets are still not a preferred online shopping device. Of our respondents:

  • Just 9% say they have changed their habits to shop with a tablet more often
  • Just 11% think they'll shop more with a table in the next 12 months
  • On the other hand, more than one-third of our global sample expects to increase their PC shopping next year
  • In China, 87% of online shoppers use their PC to shop every month

Myth 4: As the world gets smaller, global consumers are getting more alike

Although consumers shop with more global retailers than ever before, as well as shop online across borders, there are a wide range of local differences in consumer behaviors.

Across the world, lower prices, free shipping, and ease of comparison are top reasons to shop online. The ability to touch and see a product, and get it immediately are main draws for physical store shopping. But our data from this year's study suggests that consumers in different countries are still much more dissimilar than they are alike. Among our findings:

  • Major disparities in what consumers in different countries get out of shopping: for example, in China nearly half of our respondents enjoy shopping in a physical store as a pleasure; in Turkey just 16% like to shop for enjoyment
  • Less than half of our Chinese sample goes to an online store looking for a particular brand or product, far below the pace of our mature markets surveyed in the study like Canada, France, Germany, Netherlands, Switzerland, the UK and the US

Myth 5: China is the future model of online retail

China is at the forefront of some key trends, but we believe its multichannel and online model is unique.

In last year's report we detailed how Chinese consumers have adopted the Internet as a retail channel much faster than their global peers, even though just 30% of our Chinese respondents have been shopping online for more than five years, compared to 44% of the global sample.

This year's findings have only heightened our appreciation for the sophistication of the Chinese online shopper. Far more Chinese online consumers have already shopped via smartphone and tablet than other those in other countries, and far more are also using social media platforms to make purchases. But some fundamental differences between Chinese and other consumers lead us to think that it's far from a fait accompli that consumers in other countries follow China's lead :

  • Demographically, China's online shoppers are the youngest and most employed, a set of characteristics that might be at the root of different consumer behaviors
  • China's leapfrogging of traditional land line and other infrastructure may be forcing consumers' hands to adopt technology at a much quicker pace

Myth 6: Domestic retailers will always have a "home field" advantage over global retailers

Foreign retailers are making inroads intro consumers' lists of favorite multichannel retailers.

Retailing has long been a domestic game, and in our 2011 survey we weren't very surprised when domestic players dominated on the lists of our respondents' favorite multichannel retailers.

This year, we've seen some inroads made by global retailers:

  • Among our Canadian sample's top ten favorite multichannel retailers are three U.S. retailers
  • In Switzerland, several retailers from other European countries, including Ikea and Weltbild, made the top 10 list
  • Our German respondents named three non-domestic companies in their top 10 choices -- Espirit, H&M, and C&A

Myth 7: Global online pure players like Amazon will always have a scale advantage over domestic online pure players

Many domestic online pure players are holding their own.

Despite the seeming dominance that online pure players like Amazon and eBay have carved out in the global marketplace -- in Germany, for example, 89 percent of online shoppers made purchases on their PC with Amazon over the previous 12 months -- there actually seems to be ample room for domestic players to find their own niche:

  • Even with a 15-year presence in Germany, Amazon still has just as 13.8% share of total internet sales in the country
  • Our survey shows that, in many cases, domestic online pure players register excellent brand recognition and customer loyalty

Myth 8: Retailers are inherently better positioned than brands, as they are closest to the customer

Consumers are shopping directly from manufacturers and many no longer distinguish between retailers and their favorite brands.

The direct-to-consumer phenomenon could be one of the biggest stories for both consumer goods companies and retailers in the next five years. If our sample is any indication, consumers are taking advantage of their newfound ability to connect with manufacturers over the Internet:

  • 35% of our sample bought directly from brand sites
  • In China (56%) and the U.S. (52%) more than half of our respondents say they are going direct to brand sites
  • 29% of our total sample chose to buy directly from a brand because of brand loyalty -- an ominous development for retailers, as in such cases they can't respond effectively with lower prices

Myth 9: Online retail is cannibalising sales in other channels

Consumers are actually spending more with their favorite multichannel retailers, not just shifting some purchases to a different channel.

Our research shows that when consumers use multiple channels, the majority spend more at their favorite retailers. In fact,

  • Nearly one in five of our global sample say they spend at least 25% more at their favorite retailer when buying over more than one sales channel
  • In Brazil, 68% of our survey respondents say they spend more
  • The catch is that, first, retailers have to get in the inner circle of favorite retailers -- 95% of our sample shops with five or fewer retailers via multiple channels

Myth 10: Low price is the main driver of customer spend at favorite retailers

Customers value quality innovative brands over price when shopping at their favorite multichannel retailers.

When it comes to what our survey participants liked about their favorite online retailers, we were surprised by both the main factors and the main non-factors:

  • Price point was not a critical factor in getting consumers to spend more at a favorite retailer. Cheap prices might help a company to enter the inner circle of favorite retailers, but it won't make customers spend more on a consistent basis
  • A store's look and feel, as well as a friendly staff, don't noticeably affect spending behavior
  • Once a store is established as a multichannel favorite, four key drivers effect spend: fast and reliable delivery, a good returns policy, exclusive or early access to products, and innovative products
 
 

2012 Global multichannel consumer survey

Social Brand lovers shop more often in every channel

2012 Global multichannel consumer survey

The purchase journey across selected categories

2012 Global multichannel consumer survey

A significant number of Internet users said they never shop online

2012 Global multichannel consumer survey

Far more online shoppers use their PC’s to make purchases

2012 Global multichannel consumer survey

More than one-third of shoppers expect to use their PC more often for shopping next year

2012 Global multichannel consumer survey

Why shoppers go online is dramatically different across countries

2012 Global multichannel consumer survey

Chinese consumers shop online much more frequently

2012 Global multichannel consumer survey

Chinese shoppers are ahead of the curve when it comes to using new devices and social media

2012 Global multichannel consumer survey

Recommendations are a top reason Chinese consumers visit specific online shops

2012 Global multichannel consumer survey

Foreign retailers and brands make it to the top 10

2012 Global multichannel consumer survey

Our survey sample very much prefers shopping with between two and five online-only retailers

2012 Global multichannel consumer survey

Reasons consumers buy directly from a brand or manufacturer

2012 Global multichannel consumer survey

Online shoppers are spending more when they use multiple channels

2012 Global multichannel consumer survey

Number of favorite retailers

2012 Global multichannel consumer survey

Top drivers of customer spending vary by country

2012 Global multichannel consumer survey

Top drivers of customer spending vary by country