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![18 2017 CONNECTED COMMERCE REPORT
ACTIVATION STRATEGIES TO OVERCOME ONLINE SHOPPING
BARRIERS FOR CONSUMABLES
GLOBAL PERCENTAGE IN EACH GROUP WHO SAY THE STRATEGY WOULD
DEFINITELY ENCOURAGE THEM TO BUY CONSUMABLES ONLINE
Source: The Nielsen Global Connected Commerce Survey, Q3 2016
WE GUARANTEE YOUR MONEY BACK FOR
PRODUCTS NOT MATCHING WHAT WAS ORDERED
OUR WEBSITE PROVIDES REAL-TIME, DETAILED
PROGRESS ON THE STATUS OF YOUR ORDER
WE PROVIDE SAME DAY PRODUCT
REPLACEMENT SERVICE FOR PRODUCTS
NOT MATCHING WHAT WAS ORDERED
WE HAVE A NUMBER OF CONVENIENT COLLECTIONPOINTS AT TRAIN STATIONS, BUS TERMINALS ETC.
WE SEND YOU A TEXT/E-MAIL IN CASE AN ORDERED
PRODUCT IS UNAVAILABLE SO YOU CAN SELECT A
PREFERRED SUBSTITUTE PRODUCT
WE OFFER FREE DELIVERY TUESDAY TO
THURSDAY, EVERY WEEK
WE HAVE PRECISE DELIVERY WINDOWS (AT 30
MINUTE INTERVALS) TO FIT YOUR SCHEDULE
WE OFFER FREE DELIVERY FOR
PURCHASES ABOVE A MINIMUM SPEND
TRY ONLINE PURCHASE AND
RECEIVE
FREE DELIVERIES SEVEN
DAYS A WEEK
IN
THE NEXT THREE MONTHS
BUY AN
‘ANNUAL PASS’ AND
ENJOY UNLIM
ITED
FREE
DELIVERIES SEVEN
DAYS A
W
EEK
58%
56%
49%
46%
38%
40%
50%
46%
48%
43%
36%
37%
50%
46%
49%
47%
42%39%
36%35%
CONSIDERERS
[CURRENTLY NOT BUYING ONLINE, BUT WILL
CONSIDER BUYING IN THE NEAR FUTURE]
TRIALISTS
[HAVE BOUGHT ONLINE IN THE
PAST, BUT NOT RECENTLY]
ACCURACYFULFILLMENTDELIVERYFEES](https://image.slidesharecdn.com/nielsenglobalconnectedcommercereportjanuary2017-190312073640/75/Nielsen-global-connected-commerce-report-january-2017-18-2048.jpg)
![22 2017 CONNECTED COMMERCE REPORT
ACTIVATION STRATEGIES THAT ADDRESS QUALITY CONCERNS ARE MOST
IMPACTFUL FOR FRESH CATEGORIES
GLOBAL PERCENTAGE IN EACH GROUP WHO SAY THE STRATEGY WOULD DEFINITELY
ENCOURAGE THEM TO BUY FRESH PRODUCTS ONLINE
Source: The Nielsen Global Connected Commerce Survey, Q3 2016
WE GUARANTEE A FULL REFUND FOR FRESH
PRODUCE THAT DO NOT MEET YOUR EXPECTATIONS
WHEN SELECTING PRODUCTS ON OUR SITE,
YOU CAN SEE CUSTOMER RATINGS AND
WRITTEN REVIEWS ON THEIR EXPERIENCE
WITH PRODUCT FRESHNESS
FOR FRESH PRODUCE ITEMS THAT DO NOT MEET
YOUR EXPECTATIONS WE NOT ONLY GUARANTEE A
FULL REFUND BUT YOU GET THE SAME PRODUCE FOR
FREE WITH NEXT PURCHASE
OUR PRODUCTS HAVE FRESHNESS LABELS TO
TELL YOU HOW MANY DAYS IT WILL STAY FRESH
AFTER IT IS DELIVERED
ALL OF OUR FRESH PRODUCE CARRY DETAILED
PRODUCT DESCRIPTIONS AND INFORMATION
YOU CAN MAKE SPECIAL PRODUCT
REQUESTS TO SUIT YOUR NEEDS
OUR QUALITY TEAM ASSESSES FRESHNESS
DAILY AND AWARD FRESHNESS RATINGS
TO PRODUCE
SEE
WHAT
OTHER
SHOPPERS
ARE
BUYING
VIA
OUR
‘BUYER’S PICK’ AND
‘BEST-SELLING ITEMS’ BANNER
CONSIDERERS
[CURRENTLY NOT BUYING ONLINE, BUT WILL
CONSIDER BUYING IN THE NEAR FUTURE]
TRIALISTS
[HAVE BOUGHT ONLINE IN THE
PAST, BUT NOT RECENTLY]
54%
50%
52%
42%
39%
40%
37%
39%
46%
45%
40%
40%
24%
26%
42%
54%
OVERCOME
QUALITY
CONCERNS
OVERCOME
EXAMINATION
CONCERNS](https://image.slidesharecdn.com/nielsenglobalconnectedcommercereportjanuary2017-190312073640/75/Nielsen-global-connected-commerce-report-january-2017-22-2048.jpg)
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Nielsen global connected commerce report january 2017
The document discusses online grocery shopping trends globally. It finds that while durable categories like fashion and travel dominate online purchases currently, consumable categories like personal care, meal kits, and packaged groceries are growing in popularity. Fresh groceries have more barriers to online adoption. Innovative fulfillment options beyond just home delivery, like curbside pickup, could help drive more online grocery shopping. Data from France shows alternative fulfillment there has helped drive strong growth in edible categories like cheese and yogurt being purchased online.
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Nielsen global connected commerce report january 2017
- 1. WHAT’S IN-STORE FOR ONLINE GROCERY SHOPPING OMNICHANNEL STRATEGIESTO REACH CROSSOVER SHOPPERS JANUARY 2017
- 2. 2 2017 CONNECTEDCOMMERCE REPORT THE BLURRING LINES BETWEEN ON AND OFFLINE SHOPPING AROUND THE WORLD • Durable and service-oriented categories continue to lead the way in self-reported online purchasing among survey respondents, but several consumable categories are growing in popularity—especially personal-care and beauty categories and meal-kit and restaurant services. • Online and offline switching behaviors suggest that the majority of consumers who have purchased certain durable and service-related products online continue to shop online more frequently than in store for these categories. The opposite is true for fresh and packaged groceries and medicine or health-care products. • For online purchasing of consumables, the most effective activation strategy among “trialists” (purchased online in the past but not recently) and “considerers” (currently don’t buy online but would consider buying) is a money-back guarantee for products not matching what was ordered. For fresh foods, strategies that address quality concerns top the list. • For consumable categories, the most impactful way to reach consumers with messaging that influences purchase behavior is with traditional touchpoints, such as visits to a physical store. For consumer electronics and fashion purchasing decisions, the most commonly cited information sources are digital touchpoints, such as store or brand websites. • Only a small percentage of consumers around the world say they’re using in-store and online digital technologies to aid in their shopping, but usage is growing.
- 3. 3Copyright © 2017The Nielsen Company If we had to choose a single word to describe today’s consumers, “connected” would surely rise to the top of the list. In fact, with 3.5 billion people using the internet, 7.4 billion mobile-phone subscriptions and 1.79 billion active Facebook users,1 connected might not even adequately describe the current marketplace. Increasingly, everything and everyone is moving online, resulting in the breaking of old habits and establishment of new ones. Indeed, digital has disrupted a whole host of interactions, including the way we watch video content and the ways we communicate with friends and family. The way we shop is no exception. Digital retailing gives consumers more ways to shop and more access to products and services than ever before. It’s clear that consumers are embracing the freedom of shopping whenever and wherever they please, as online sales are capturing a double-digit share of retail dollars in some markets. In China—the world’s largest e-commerce market—online retail sales accounted for 12.9% of the total retail purchases in 2015; in South Korea, it was 11.6%.2 In Great Britain, online accounted for an average of 12.5% of all retail spending through the first 10 months of 2016, and in the U.S., e-commerce represented an average 8.1% of total retail sales through the first three quarters of 2016,3 a rate that Nielsen projects will grow at a compound annual growth rate (CAGR) of 12.2% through 2020. While these measures show more sales going online, the actual consumer behavior is a little more complicated, as the lines between online and offline channels continue to blur. Traditional brick-and- mortar retailers are expanding their digital presence, while pure-play retailers are opening physical stores. The notion of being connected is taking on new meaning: Retailers are implementing innovative digital technologies that are transforming the shopping experience, in order to become more relevant to consumers’ lifestyles and shopping occasions. Thinking in terms of bricks versus clicks is outdated; bricks-and-clicks is the current and future retail reality. 1 Mobile-phone subscriber data from International Telecommunication Union (2016). Facebook user data from Facebook (September 2016). 2 National Bureau of Statistics of China; Statistics Korea. 3 U.K. Office for National Statistics; Census Bureau, U.S. Department of Commerce. BRICKS VERSUS CLICKS IS OUTDATED; BRICKS- AND-CLICKS IS THE CURRENT AND FUTURE RETAIL REALITY.
- 4. 4 2017 CONNECTEDCOMMERCE REPORT ABOUT THE STUDY Nielsen Global E-Commerce spans over 20 countries around the world. Measurement may rely on direct from retailer data (ePOS), data collected via Nielsen’s Consumer Panels, other licensed data, or a combination of the foregoing. Retail sales data for China and France is for the two years beginning September 2014 and ending in August 2016. Survey findings are based on more than 30,000 respondents with online access in 63 countries. While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of only existing internet users, not total populations. In developing markets where online penetration is still growing, respondents may be younger and more affluent than the general population of that country. In addition, survey responses are based on claimed behavior, rather than actual metered data. Cultural differences in reporting sentiment are likely factors in the outlook across countries. The reported results do not attempt to control or correct for these differences; therefore, caution should be exercised when comparing across countries and regions, particularly across regional boundaries. “As shoppers increasingly move seamlessly between offline and online channels, purchase habits are changing. Simply adapting to keep pace is no longer sufficient,” said Kristen Cocco, vice president, global e-commerce measurement, Nielsen. “Savvy marketers know that using digital tools in new and innovative ways to engage with shoppers and influence shopping decisions must be a part of their growth plan for the future. To create maximum ROI in an omni-channel environment, winning brands and retailers must know their shoppers—their demands and how and what they’re buying online and in-store—and then leverage the specific touchpoints that will maximize their shopping experience.” The Nielsen Global Connected Commerce Survey polled online respondents in 63 countries to understand the underlying factors that influence the evolving digital path to purchase. We examine the pain points and barriers associated with buying fresh and other consumable products online, and we uncover the activation strategies that can help overcome these obstacles. We also provide a view into the digital technologies consumers are using in stores today and the ones that hold promise for tomorrow. Finally, we outline the biggest disruptive trends that will fuel the growth of connected commerce in the years to come.
- 5. 5Copyright © 2017The Nielsen Company THE CONNECTED CATEGORY STORY: DURABLES DOMINATE, BUT CONSUMABLES GAIN TRACTION Globally, more than 93% of respondents in Nielsen’s online Connected Commerce Survey say they’ve ever shopped online—not surprising, given that the findings are based on internet-connected consumers. But the significance of this number is noteworthy. Not only does it speak to how pervasive online shopping is among the growing online population, but also provides an insightful view into purchase behaviors that will only accelerate as internet penetration continues to grow. And when it comes to buying online, category dynamics are fluid and evolving. Durable and service-oriented categories continue to lead the way in self-reported online purchasing, as expected. These categories formed the baseline of entry for e-commerce, and their popularity continues to expand. More than half of global respondents in the online study say they’ve purchased fashion products (58%) or travel products or services (55%) online, and half say they’ve purchased books, music or stationery. Consumable categories, in contrast, have been slower to gain popularity among online shoppers, but that is changing—especially for categories that are filling particular need states exceptionally well. In fact, nearly four in 10 global respondents (38%) say they’ve purchased personal-care and beauty products online, and about one- fourth say they’ve ordered meal-kit or restaurant delivery services (27%) or packaged grocery food (24%) online.
- 6. 6 2017 CONNECTEDCOMMERCE REPORT Meal-kit services are an interesting example of a new retail model that has taken the U.S. by storm in the past few years, with companies catering to just about every food preference, from vegan to gluten free. These services have gained traction for several reasons. Ingredients are delivered straight to consumers’ doors with cooking instructions, eliminating the drudgery of having to plan meals and go to the store to get the required ingredients. In addition, they have wide appeal, offering exotic flavors and a more convenient solution to traditional cooking for busy food enthusiasts, while providing guidance for less confident cooks. “Meal-kit delivery services meet consumers’ needs for convenience and customization, allowing time-crunched consumers to choose from myriad options that best fit their lifestyles,” said Cocco. “They also tap into the trend toward more healthful eating by offering fresh, high-quality ingredients, which is creating a powerful recipe for growth. Many opportunities exist for retailers to leverage their ability to grab the in-store purchase and delivery-to-home option by offering meal kits in addition to expanding the prepared-meal space to better compete with restaurant delivery services. While direct-to- consumer meal-kit companies tend to focus on organic or locally sourced products, as more retailers expand their meal-kit offerings, large manufacturers have an opportunity to partner and incorporate their specific ingredients.” When it comes to fresh groceries, images simply can’t replace the physical look, feel and smell of these products. Even so, online shopping in this category is gaining traction in certain markets. About four in 10 online respondents in China (40%) and South Korea (39%) and just over one-third in India (35%) say they’ve purchased fresh groceries online. Nevertheless, the category has significant barriers to overcome to achieve widespread e-commerce adoption: less than one-tenth of respondents in Europe (9%), North America (9%), Africa/Middle East (7%) and Latin America (7%) say they’ve purchased fresh groceries online. While not being able to hand-pick fresh groceries is a clear barrier to online adoption, as grocery delivery services expand and improve, and quality assurance is guaranteed, the allure of purchasing fresh groceries will expand. ABOUT FOUR IN 10 ONLINE RESPONDENTS IN CHINA AND SOUTH KOREA SAY THEY’VE PURCHASED FRESH GROCERIES ONLINE. 4 IN 10
- 7. 7Copyright © 2017The Nielsen Company GLOBAL PERCENTAGE WHO SAY THEY’VE EVER PURCHASED THE CATEGORY ONLINE FASHION TOP COUNTRIES FOR SELECTED DURABLE CATEGORIES FASHION RELATED PRODUCTS TRAVEL BOOKS/MUSIC/ STATIONERY CONSUMER ELECTRONICS BEAUTY & PERSONAL CARE PACKAGED GROCERY FOOD HOUSEHOLD CLEANING & PAPER FRESH GROCERIES TOP COUNTRIES FOR SELECTED CONSUMABLE CATEGORIESTRAVEL BOOKS/MUSIC/ STATIONERY IT AND MOBILE EVENT TICKETS CONSUMER ELECTRONICS BEAUTY AND PERSONAL CARE PRODUCTS FURNITURE, DECOR, TOOLS VIDEO GAME RELATED PRODUCTS PACKAGED GROCERY FOOD MEDICINE OR HEALTH CARE PRODUCTS FRESH GROCERIES FLOWERS OR GIFT SETS WINE AND ALCOHOLIC BEVERAGES PET FOOD AND SUPPLIES PRODUCTS FOR BABY AND YOUNG CHILDREN HOUSEHOLD CLEANING AND PAPER PRODUCTS RESTAURANT DELIVERIES OR MEAL- KIT DELIVERY SERVICE Source: The Nielsen Global Connected Commerce Survey, Q3 2016 CHINA 72% INDIA 68% GERMANY 68% SOUTH KOREA 67% AUSTRIA 66% IRELAND 78% NORWAY 73% CHINA 68% INDIA 68% NEW ZEALAND 67% SWEDEN 67% UNITED ARAB EMIRATES 67% JAPAN 68% AUSTRIA 68% SOUTH KOREA 66% GERMANY 66% SWEDEN 62% CZECH REPUBLIC 62% UKRAINE 50% SLOVAKIA 50% BRAZIL 50% SOUTH KOREA 49% GREECE 49% LATVIA 49% INDIA 50% SOUTH KOREA 48% CHINA 47% ROMANIA 43% UKRAINE 42% CHINA 47% SOUTH KOREA 43% INDIA 34% JAPAN 29% TAIWAN 27% SOUTH KOREA 44% CHINA 38% INDIA 37% TAIWAN 32% UNITED KINGDOM 24% CHINA 40% SOUTH KOREA 39% INDIA 35% UNITED KINGDOM 25% ISRAEL 21% DURABLES CONSUMABLES BUYING CONSUMABLES ONLINE HAS ROOM TO GROW 58% 55% 50% 43% 41% 40% 38% 29% 27% 27% 24% 23% 23% 21% 18% 18% 14% 13%
- 8. 8 2017 CONNECTEDCOMMERCE REPORT Innovative fulfillment options, however, could be a catalyst for growth. Ordering online for home delivery has been the traditional model for connected commerce, and it’s still the most preferred. However, home delivery isn’t particularly well suited to fresh categories, where perishability is a concern and refrigeration is a basic requirement. To overcome these barriers, retailers in a host of countries are experimenting with new models that offer the convenience of e-commerce without the spoilage concerns; examples include refrigerated lockers at terminal stations, instant delivery services within a one- or two-hour window and “to go” models where consumers can order online for pick up at the retailer during a specified time slot. More consumers are open to these options than have been in the past. Nielsen’s 2014 E-commerce and the New Retail Survey showed that 31% of global respondents were unwilling to order online for pick up inside the store, and 33% were unwilling to order online for drive-through pickup (the click-and-drive model popular in France). In 2016, resistance to each of these options declined by four percentage points to 27% and 29%, respectively.
- 9. 9Copyright © 2017The Nielsen Company GLOBAL PERCENTAGE: WILLINGNESS TO USE FULFILLMENT OPTIONS FOR ONLINE GROCERY SHOPPING INNOVATIVE FULFILLMENT OPTIONS CAN BE A CATALYST FOR ONLINE SHOPPING GROWTH ALREADY USING DEFINITELY/SOMEWHAT WILLING TO USE NOT WILLING TO USE DELIVERY TO HOME PICK UP INSIDE THE STORE USE DRIVE-THROUGH PICKUP PICK UP CURBSIDE OUTSIDE THE STORE DELIVERY TO HOME PICK UP INSIDE THE STORE USE DRIVE-THROUGH PICKUP PICK UP CURBSIDE OUTSIDE THE STORE DELIVERY TO HOME PICK UP INSIDE THE STORE USE DRIVE-THROUGH PICKUP PICK UP CURBSIDE OUTSIDE THE STORE 2014 2016 25% 12% 15% 12% 10% 55% 55% 55% 14% 27% 29% 35% 52% 21% 31% 33% 37% 11% 11% 57% 60% 57% 57% 28% Note: Percentages may not equal 100% due to rounding Source: The Nielsen Global Connected Commerce Survey, Q3 2016
- 10. 10 2017 CONNECTEDCOMMERCE REPORT Nielsen e-commerce sales data from France, where click-and-drive is the dominant model for online sales of consumer packaged goods (CPG), suggests that alternative fulfillment models can be very effective in driving sales of edible products. In fact, the majority of the top 15 online CPG categories in France are edible. Prepackaged cheese is by far the largest online CPG category, with sales of over $311 million between September 2015 and August 2016, a 16.9% increase over the previous 12 months. Yogurt, ham and biscuits are also among the top online CPG categories. The double-digit growth in the top online categories is particularly impressive given these categories are experiencing only modest growth, or even declining, in brick and mortar stores. For example, prepackaged cheese sales were up 1.2% in stores, while yogurt and ham sales declined 0.5% and 0.1%, respectively. Growth was also modest in several beverage categories including milk (1.9%), carbonated soft drinks (0.6%) and mineral water (0.2%). ONLINE VALUE SALES FOR TOP CATEGORIES, 2015-2016 EDIBLE CATEGORIES DOMINATE FRANCE’S TOP 15 ONLINE CPG CATEGORIES CHEESE (PRE-PACKED) MINERAL WATER MILK CARBONATED SOFT DRINKS BABY CARE YOGURT HAM BABY FOOD FRUIT JUICE BISCUITS COFFEE BEER KITCHEN & TOILET PAPER LAUNDRY DETERGENT CANNED VEGETABLE 16.9% 16.8% 14.6% 10.8% 15.2% 15.1% 14.8% 14.4% 14.7% 19.1% 20.3% 27.6% 20.7% 18.6% 15.7% VALUE SALES (IN MILLIONS, USD) YEAR-OVER-YEAR CHANGE $311.0 $164.3 $152.4 $141.5 $127.7 $123.6 $114.5 $112.3 $107.9 $109.7 $106.1 $101.6 $97.9 $89.7 $81.4 Source: Nielsen Global E-Commerce Measurement Sales data, September 2015 to August 2016 EDIBLE NON-EDIBLE
- 11. 11Copyright © 2017The Nielsen Company AN E-COMMERCE POWERHOUSE China is the most powerful e-commerce market today. Furthermore, considering that the country is home to 1.4 billion people and has online penetration of only 52%, there is significant room to grow. Online sales of all CPG categories measured by Nielsen totaled $23.2 billion between September 2015 and August 2016, up 25.4% over the previous 12 months. Of the top 15 CPG categories purchased online, the majority were nonedible, covering the personal-care, home-care and baby-care categories. In terms of value sales, skin moisturizer was the largest online CPG category, with sales of $3.4 billion, up 24% over the previous 12 months. Facial masks were the third-largest online CPG category in China, with sales of $2.0 billion, up 1% year-over-year. The online baby-care market in China also is quite sizable. Online sales of infant milk formulas totaled $2.8 billion for the 12 months ended August 2016, while online diaper sales totaled $1.8 billion, up 22.8% over the previous year. Beyond infant fomula, edible categories haven’t achieved the same online success as their nonedible counterparts, but they’re growing rapidly. Pet food is the second largest edible category, with $697.0 million in online sales between September 2015 and August 2016, up 45.5% over the previous 12 months. Liquid milk and biscuits also are showing strong online growth, with sales up 80.2% and 50% year over year, respectively. As was the case in France, the majority of the top online CPG categories are experiencing stronger growth online than in stores. Online sales of infant diapers grew 22.8% year-over-year, compared to 9% in stores. Similarly, online sales growth greatly exceeded that in brick and mortar for liquid milk (80.2% versus -4%, respectively), biscuits (50% versus -1%, respectively) and skin moisturizer (24% versus 2%, respectively). There are, however, notable exceptions to this trend. In fact, brick and mortar growth exceeded online sales growth for infant milk formula (7% versus -9%, respectively) and facial masks (16% versus 1%, respectively). SPOTLIGHT ON CHINA
- 12. 12 2017 CONNECTEDCOMMERCE REPORT 24.0% -9.0% 1.0% 22.8% 32.4% 28.0% 131.4% 45.5% 90.3% 80.2% 50.0% 24.6% 57.1% 60.2% 12.9% ONLINE VALUE SALES FOR TOP CATEGORIES, 2015-2016 NON-EDIBLE CATEGORIES DOMINATE CHINA’S TOP 15 ONLINE CPG CATEGORIES SKIN MOISTURIZER INFANT MILK FORMULA FACIAL MASK DIAPER FACIAL CLEANSER TONER FACIAL TISSUE PET FOOD LAUNDRY LIQUID MILK BISCUITS SHAMPOO PERSONAL WASH SANITARY CHOCOLATE VALUE SALES (IN MILLIONS, USD) YEAR-OVER-YEAR CHANGE $3,385.2 $2,808.5 $2,017.5 $1,837.4 $977.9 $828.3 $790.4 $697.0 $686.4 $619.7 $597.0 $577.9 $552.2 $527.0 Source: Nielsen Global E-Commerce Measurement Sales data, September 2015 to August 2016 EDIBLE NON-EDIBLE $459.7
- 13. 13Copyright © 2017The Nielsen Company ONCE ONLINE, ALWAYS ONLINE? As important as what consumers are buying online is how connected commerce is affecting in-store behaviors. Once consumers make an online purchase for a particular category, do they shop for it more often online? Or do they switch back to in-store purchase behaviors? In several durable or service-related categories, findings suggest that once a consumer makes an online purchase, the online channel remains the favorite shopping destination. Among global respondents who say they’ve purchased travel products or services online, more than two-thirds (69%) say they buy the category more often online than in store. The same is true for event tickets and video-game-related products, where roughly six in 10 respondents who’ve purchased the categories online say they purchase more frequently online (62% and 58%, respectively) than in store. But the story isn’t the same for all durables. For categories with high price tags, infrequent purchasing cycle and an experiential dimension (where interacting with the product is important), the online channel isn’t nearly as dominant. For example, among global respondents who purchased consumer electronics online, only 37% say they buy the category more often online; 21% say they buy more often in store, and 43% say they buy online and in store at the same frequency. For fashion, 33% say they buy more often online, and 26% buy more often in store. And for furniture and décor, the percentage saying they buy more often in store (30%) is greater than the percentage saying they buy more often online (25%), though the largest percentage say they buy in store and online equally (46%).
- 14. 14 2017 CONNECTEDCOMMERCE REPORT ONLINE IS THE FAVORITE SHOPPING DESTINATION FOR SOME CATEGORIES GLOBAL PERCENTAGE: ONLINE SHOPPERS WHO SAY THEY SHOP MORE OFTEN ONLINE OR IN-STORE BY CATEGORY BUY MORE OFTEN IN-STORE BUY MORE OFTEN ONLINE BUY ONLINE AND IN-STORE AT SAME FREQUENCY DURABLES CONSUMABLES 26% 30% 33% 36% 39% 37% 32% 34% 41% 43% 40% 41% 41% 37% 36% 37% 46% 33% TRAVEL PRODUCTS OR SERVICES EVENT TICKETS VIDEO GAME RELATED PRODUCTS BOOKS/MUSIC/STATIONERY IT AND MOBILE RESTAURANT DELIVERIES OR MEAL-KIT DELIVERY SERVICES HOUSEHOLD CLEANING AND PAPER PRODUCTS PET FOOD AND SUPPLIES FLOWERS OR GIFT SETS CONSUMER ELECTRONICS BABY CARE FASHION BEAUTY AND PERSONAL CARE MEDICINE OR HEALTH CARE PRODUCTS PACKAGED GROCERY FOOD WINE AND ALCOHOLIC BEVERAGES FURNITURE, DECOR, TOOLS FRESH GROCERIES 5% 7% 9% 14% 17% 18% 27% 28% 21% 21% 24% 26% 26% 33% 35% 44% 30% 37% 62% 69% 58% 49% 45% 45% 41% 38% 38% 37% 35% 33% 33% 30% 29% 26% 25% 23% Note: Percentages may not equal 100% due to rounding Note: Among those who say they have purchased respective categories online. Source: The Nielsen Global Connected Commerce Survey, Q3 2016
- 15. 15Copyright © 2017The Nielsen Company The story is equally mixed when it comes to consumable categories. Among respondents who have purchased household cleaning and paper products online, respondents are likeliest to say they buy more often online (41%). For beauty and personal care, one-third say they buy more often online, while 41% say they buy online and in store with the same frequency. For edible categories, particularly fresh, online faces a more difficult climb to widespread adoption. Sixty-three percent of online respondents in Africa/Middle East say they prefer to buy their fresh and household groceries at a physical store and will not consider buying them online. In Europe, the share who say the same is 59%, and in North America, it’s 54%. While the majority would not consider buying fresh and household groceries online, there are sizable proportions of respondents who can be considered “regular” online shoppers (those who already buy these products online), “trialist” online shoppers (those who purchased online in the past but not recently) and “considerers” (those who currently do not buy online but would consider buying in the future).
- 16. 16 2017 CONNECTEDCOMMERCE REPORT ATTITUDES ABOUT BUYING FRESH AND HOUSEHOLD GROCERIES ONLINE IDENTIFY BEST-FIT ONLINE GROCERY SHOPPERS GLOBAL ASIA-PACIFIC EUROPE AFRICA/MIDDLE EAST LATIN AMERICA NORTH AMERICA Considerers: “I am currently not buying online, but will consider it in the near future” Trialists: “I have bought online in the past, but haven’t recently” Avoiders: “I prefer to buy at a physical store, and will not consider buying them online” Regulars: “I am currently buying online regularly” 30% 28% 29% 27% 39% 36% 11% 15% 7% 6% 9% 6% 14% 22% 5% 4% 6% 4% 44% 34% 59% 63% 47% 54% Note: Percentages may not equal 100% due to rounding Source: The Nielsen Global Connected Commerce Survey, Q3 2016
- 17. 17Copyright © 2017The Nielsen Company CONVERTING TRIALISTS AND CONSIDERERS TO REGULAR ONLINE SHOPPERS Converting trialists and considerers to active online shoppers for consumable products such as food and beverages, personal-care products, and health and beauty products requires overcoming several barriers. The biggest obstacles to online shopping for consumable categories are the inability to inspect goods and uncertainty about product quality and freshness. More than two-thirds of online respondents to Nielsen’s 2015 Connected Commerce Survey (69%) agreed that they prefer to examine products personally, while more than six in 10 online respondents (64%) agreed that they were concerned about the freshness or quality of products purchased online. Secondary online shopping barriers are concerns about order accuracy and delivery scheduling. More than half of online respondents in the 2015 survey said they were concerned that the groceries they received wouldn’t accurately match what they ordered (57%) or that grocery deliveries would take place when they weren’t home (55%). How can brands convince lapsed purchasers and those who have never purchased online to buy online? For consumables in general, the most effective strategies address accuracy concerns. By far the most effective activation strategy cited among both trialists and considerers is a money-back guarantee for products not matching what was ordered. Fifty-eight percent of considerers and 56% of trialists say this strategy would definitely encourage them to buy consumable products online. Strategies addressing respondents’ pricing and delivery-scheduling concerns also have the potential to be quite effective. Half of considerers (50%) and 46% of trialists say precise delivery windows (at 30-minute intervals) or free delivery Tuesday to Thursday would definitely encourage them to buy consumables online. Similar percentages—49% of considerers and 47% of trialists—say free delivery for purchases above a minimum spending level would encourage them to buy.
- 18. 18 2017 CONNECTEDCOMMERCE REPORT ACTIVATION STRATEGIES TO OVERCOME ONLINE SHOPPING BARRIERS FOR CONSUMABLES GLOBAL PERCENTAGE IN EACH GROUP WHO SAY THE STRATEGY WOULD DEFINITELY ENCOURAGE THEM TO BUY CONSUMABLES ONLINE Source: The Nielsen Global Connected Commerce Survey, Q3 2016 WE GUARANTEE YOUR MONEY BACK FOR PRODUCTS NOT MATCHING WHAT WAS ORDERED OUR WEBSITE PROVIDES REAL-TIME, DETAILED PROGRESS ON THE STATUS OF YOUR ORDER WE PROVIDE SAME DAY PRODUCT REPLACEMENT SERVICE FOR PRODUCTS NOT MATCHING WHAT WAS ORDERED WE HAVE A NUMBER OF CONVENIENT COLLECTIONPOINTS AT TRAIN STATIONS, BUS TERMINALS ETC. WE SEND YOU A TEXT/E-MAIL IN CASE AN ORDERED PRODUCT IS UNAVAILABLE SO YOU CAN SELECT A PREFERRED SUBSTITUTE PRODUCT WE OFFER FREE DELIVERY TUESDAY TO THURSDAY, EVERY WEEK WE HAVE PRECISE DELIVERY WINDOWS (AT 30 MINUTE INTERVALS) TO FIT YOUR SCHEDULE WE OFFER FREE DELIVERY FOR PURCHASES ABOVE A MINIMUM SPEND TRY ONLINE PURCHASE AND RECEIVE FREE DELIVERIES SEVEN DAYS A WEEK IN THE NEXT THREE MONTHS BUY AN ‘ANNUAL PASS’ AND ENJOY UNLIM ITED FREE DELIVERIES SEVEN DAYS A W EEK 58% 56% 49% 46% 38% 40% 50% 46% 48% 43% 36% 37% 50% 46% 49% 47% 42%39% 36%35% CONSIDERERS [CURRENTLY NOT BUYING ONLINE, BUT WILL CONSIDER BUYING IN THE NEAR FUTURE] TRIALISTS [HAVE BOUGHT ONLINE IN THE PAST, BUT NOT RECENTLY] ACCURACYFULFILLMENTDELIVERYFEES
- 19. 19Copyright © 2017The Nielsen Company PERCENTAGE WHO SAY THE STRATEGY WOULD DEFINITELY ENCOURAGE THEM TO BUY CONSUMABLES ONLINE LATIN AMERICAASIA-PACIFIC EUROPE AFRICA/MIDDLE EAST NORTH AMERICA Source: The Nielsen Global Connected Commerce Survey, Q3 2016 53% 54% 43% 60% 46% WE GUARANTEE YOUR MONEY BACK FOR PRODUCTS NOT MATCHING WHAT WAS ORDERED WE OFFER FREE DELIVERY FOR PURCHASES ABOVE A MINIMUM SPEND 47% 46% 38% 53% 37% WE OFFER FREE DELIVERY TUESDAY TO THURSDAY, EVERY WEEK 44% 45% 52% 39% 37% 45% 53% 38% 36% 47% WE PROVIDE SAME DAY PRODUCT REPLACEMENT SERVICE FOR PRODUCTS NOT MATCHING WHAT WAS ORDERED WE HAVE PRECISE DELIVERY WINDOWS (AT 30 MINUTE INTERVALS) TO FIT YOUR SCHEDULE 47% 35% 39% 50% 36% OUR WEBSITE PROVIDES REAL-TIME, DETAILED PROGRESS ON THE STATUS OF YOUR ORDER 43% 34% 43% 53% 37% A MONEY-BACK GUARANTEE IS THE MOST EFFECTIVE STRATEGY TO ENCOURAGE ONLINE SHOPPING FOR CONSUMABLES The effectiveness of these messages, however, can vary by region. A money-back guarantee is the most effective message in every region, but it is more influential in developing markets than advanced markets. Sixty-two percent of respondents in India, 58% in Southeast Asia, 52% in China and 54% in emerging European countries say a money-back guarantee would definitely encourage them to buy consumables online, compared with 46% in North America, 37% in the advanced Pacific and Asian markets, and 36% in the advanced European markets. This pattern holds true for all of the activation strategies reviewed.
- 20. 20 2017 CONNECTEDCOMMERCE REPORT The most effective activation strategies are consistent across generations, with a money-back guarantee the clear winner among respondents of all ages. However, all of the strategies reviewed are more likely to be effective with younger respondents than older ones, perhaps not surprising, given their level of comfort with technology. More than half of global Millennials (54%) say a money-back guarantee would encourage them to buy consumable categories online, compared with 45% of Baby Boomers. Outside the top strategies, the gap is even wider. For example, 49% of Millennials say they’d definitely be encouraged to buy if retailers offered same-day product replacement service for products not matching what was ordered; only 36% of Boomers agree. GLOBAL PERCENTAGE IN EACH GROUP WHO SAY THE STRATEGY WOULD DEFINITELY ENCOURAGE THEM TO BUY CONSUMABLES ONLINE YOUNGER RESPONDENTS ARE MOST RECEPTIVE TO ONLINE SHOPPING ACTIVATION STRATEGIES FOR CONSUMABLES MILLENNIALS (21-34) BOOMERS (50-64) Source: The Nielsen Global Connected Commerce Survey, Q3 2016 WE GUARANTEE YOUR MONEY BACK FOR PRODUCTS NOT MATCHING WHAT WAS ORDERED WE PROVIDE SAME DAY PRODUCT REPLACEMENT SERVICE FOR PRODUCTS NOT MATCHING WHAT WAS ORDERED WE OFFER FREE DELIVERY FOR PURCHASES ABOVE A MINIMUM SPEND WE HAVE PRECISE DELIVERY WINDOWS (AT 30 MINUTE INTERVALS) TO FIT YOUR SCHEDULE OUR WEBSITE PROVIDES REAL-TIME, DETAILED PROGRESS ON THE STATUS OF YOUR ORDER TRY ONLINE PURCHASE AND RECEIVE FREE DELIVERIES SEVEN DAYS A WEEK IN THE NEXT THREE MONTHS WE HAVE A NUMBER OF CONVENIENT COLLECTION POINTS AT TRAIN STATIONS, BUS TERMINALS ETC. BUY AN ‘ANNUAL PASS’ AND ENJOY UNLIMITED FREE DELIVERIES SEVEN DAYS A WEEK 54% 45% 49% 36% 48% 48% 48% 42% 41% 36% 36% 35% 32% 29% WE SEND YOU A TEXT/E-MAIL IN CASE AN ORDERED PRODUCT IS UNAVAILABLE SO YOU CAN SELECT A PREFERRED SUBSTITUTE PRODUCT 37% 27% 22% 25% WE OFFER FREE DELIVERY TUESDAY TO THURSDAY, EVERY WEEK 47% 35%
- 21. 21Copyright © 2017The Nielsen Company THE MOST PROMISING PRODUCE PITCH: FRESHNESS GUARANTEED When it comes to online purchases of fresh foods, such as fruit, vegetables, meat and dairy, there is a clear hierarchy in terms of strategy effectiveness, and it’s remarkably consistent among both trialists and considerers. At the top of the list are strategies that address consumers’ quality concerns. A full refund for fresh produce that doesn’t meet consumers’ expectations is most influential among both trialists and considerers. However, while considerers are most satisfied with a refund alone (54%), trialists say a refund paired with a replacement product on their next trip is most influential (54% versus 50% for a refund only). “Retailers need to assure strict quality standards and be willing to stand by them when consumer expectations fall short,” said Cocco. “Including freshness labels to tell how many days the product stays fresh after it’s delivered would encourage more than four in 10 trialists and considerers (46% and 45%, respectively) to buy fresh foods online, and 42% in each group say they would definitely be encouraged by the inclusion of detailed product descriptions about the origin of the supplier and nutritional information.”
- 22. 22 2017 CONNECTEDCOMMERCE REPORT ACTIVATION STRATEGIES THAT ADDRESS QUALITY CONCERNS ARE MOST IMPACTFUL FOR FRESH CATEGORIES GLOBAL PERCENTAGE IN EACH GROUP WHO SAY THE STRATEGY WOULD DEFINITELY ENCOURAGE THEM TO BUY FRESH PRODUCTS ONLINE Source: The Nielsen Global Connected Commerce Survey, Q3 2016 WE GUARANTEE A FULL REFUND FOR FRESH PRODUCE THAT DO NOT MEET YOUR EXPECTATIONS WHEN SELECTING PRODUCTS ON OUR SITE, YOU CAN SEE CUSTOMER RATINGS AND WRITTEN REVIEWS ON THEIR EXPERIENCE WITH PRODUCT FRESHNESS FOR FRESH PRODUCE ITEMS THAT DO NOT MEET YOUR EXPECTATIONS WE NOT ONLY GUARANTEE A FULL REFUND BUT YOU GET THE SAME PRODUCE FOR FREE WITH NEXT PURCHASE OUR PRODUCTS HAVE FRESHNESS LABELS TO TELL YOU HOW MANY DAYS IT WILL STAY FRESH AFTER IT IS DELIVERED ALL OF OUR FRESH PRODUCE CARRY DETAILED PRODUCT DESCRIPTIONS AND INFORMATION YOU CAN MAKE SPECIAL PRODUCT REQUESTS TO SUIT YOUR NEEDS OUR QUALITY TEAM ASSESSES FRESHNESS DAILY AND AWARD FRESHNESS RATINGS TO PRODUCE SEE WHAT OTHER SHOPPERS ARE BUYING VIA OUR ‘BUYER’S PICK’ AND ‘BEST-SELLING ITEMS’ BANNER CONSIDERERS [CURRENTLY NOT BUYING ONLINE, BUT WILL CONSIDER BUYING IN THE NEAR FUTURE] TRIALISTS [HAVE BOUGHT ONLINE IN THE PAST, BUT NOT RECENTLY] 54% 50% 52% 42% 39% 40% 37% 39% 46% 45% 40% 40% 24% 26% 42% 54% OVERCOME QUALITY CONCERNS OVERCOME EXAMINATION CONCERNS
- 23. 23Copyright © 2017The Nielsen Company As was the case for consumables in general, the activation strategies for fresh products showed greater adoption willingness among respondents in developing markets than advanced markets. However, the relative influence of each strategy (how effective it is in relation to the other messages) is consistent across the regions, with only a few exceptions: While a full refund (either with or without replacement product) is the most effective strategy in almost every region, freshness labels top the list in the emerging European markets, where this strategy was cited by 49% of respondents. In addition, while a full refund is the most effective strategy in India, a full refund with replacement product ranks significantly lower (sixth of eight messages). PERCENTAGE WHO SAY THE STRATEGY WOULD DEFINITELY ENCOURAGE THEM TO BUY FRESH PRODUCTS ONLINE LATIN AMERICAASIA-PACIFIC EUROPE AFRICA/MIDDLE EAST NORTH AMERICA Source: The Nielsen Global Connected Commerce Survey, Q3 2016 50% 50% 35% 53% 44% WE GUARANTEE A FULL REFUND FOR FRESH PRODUCE THAT DO NOT MEET YOUR EXPECTATIONS OUR PRODUCTS HAVE FRESHNESS LABELS TO TELL YOU HOW MANY DAYS IT WILL STAY FRESH AFTER IT IS DELIVERED 46% 41% 33% 45% 34% OUR QUALITY TEAM ASSESSES FRESHNESS DAILY AND AWARD FRESHNESS RATINGS TO PRODUCE 42% 38% 43% 29% 26% 47% 52% 42% 37% 50% FOR FRESH PRODUCE ITEMS THAT DO NOT MEET YOUR EXPECTATIONS WE NOT ONLY GUARANTEE A FULL REFUND BUT YOU GET THE SAME PRODUCE FOR FREE WITH NEXT PURCHASE ALL OF OUR FRESH PRODUCE CARRY DETAILED PRODUCT DESCRIPTIONS AND INFORMATION 43% 31% 40% 45% 32% YOU CAN MAKE SPECIAL PRODUCT REQUESTS TO SUIT YOUR NEEDS 39% 26% 38% 40% 35% FRESH ACTIVATION STRATEGIES ARE MOST IMPACTFUL IN DEVELOPING MARKETS
- 24. 24 2017 CONNECTEDCOMMERCE REPORT POWERFULLY PERSUASIVE INFORMATION SOURCES When it comes to reaching consumers with messaging to influence purchasing, what sources are most effective? For consumable categories, the most widely cited information sources used in purchasing decisions are traditional touchpoints. Visits to a physical store are helpful for all product categories, but they’re clearly the most influential source for personal-care and fresh-grocery products. Forty-four percent of global respondents say in-person store visits help them decide which fresh groceries to buy, and the percentage is 39% for personal-care and beauty products. Globally, word of mouth is the second-most-influential source for the fresh-grocery (27%) and personal-care and beauty (32%) categories. In North America, in-person store visits are particularly influential for decisions to purchase fresh groceries (52%) and personal-care products (46%). Other sources more widely used for fresh-grocery purchase decisions in North America than globally are flyers or direct mail and coupon websites. About one-quarter of North American respondents say they use flyers or direct mail (25%) or coupon and discount websites (24%) when making purchasing decisions about fresh groceries, compared with 18% for each of these globally.
- 25. 25Copyright © 2017The Nielsen Company PERCENTAGE WHO SAY THE INFORMATION SOURCE HELPS WHEN MAKING A PURCHASE DECISION VISIT TO THE PHYSICAL STORE WEBSITES CONTAINING COUPONS OR DISCOUNTS WORD OF MOUTH FROM SOMEONE YOU KNOW? STORE WEBSITE ONLINE USER REVIEWS (WRITTEN) BLOGS OR SPECIAL INTEREST WEBSITES BRAND WEBSITE NEWSPAPER OR MAGAZINES (CONTENT OR ADS) MARKETING E-MAILS SOCIAL MEDIA RECOMMENDATIONS/ INFORMATION FROM STORE STAFF FLYERS OR DIRECT MAILS TV OR RADIO (SHOWS OR ADS) ONLINE USER REVIEWS (VIDEO) TRADITIONAL INFORMATION SOURCES DEVELOPING MARKETS ADVANCED MARKETS 29% 26% 20% 14% 15% 16% 31% 27% 18% 14% 37% 28% 22% 24% 29% 26% 16% 11% 30% 27% 20% 18% 15% 13% 39% 28% 38% 20% Note: See last page of report for list of advanced and developing markets Source: The Nielsen Global Connected Commerce Survey, Q3 2016 BEAUTY & PERSONAL CARE TRADITIONAL INFORMATION SOURCES ARE MOST IMPACTFUL FOR BUYING ONLINE CONSUMABLES
- 26. 26 2017 CONNECTEDCOMMERCE REPORT Conversely, for consumer electronics and fashion, the most commonly cited information sources for purchasing decisions are digital touchpoints. Store websites top the list of sources used to make purchasing decisions about fashion products (49%), and that source is the second most commonly cited for consumer electronics (42%). For consumer electronics, brand websites are the most widely cited source, while store websites placed third (35%), behind in-person visits (40%). For all categories, social media is more influential in purchasing decisions in developing markets than advanced ones. In fact, it’s among the top three sources used for fashion purchasing decisions in India, Southeast Asia and Africa/Middle East, and for personal- care and beauty decisions in Southeast Asia and Africa/Middle East. In all regions, social media has little influence in fresh-grocery purchasing decisions. “Depending on the category and the country, the mix of traditional and digital sources used to influence purchasing must be carefully considered,” said Cocco. “The most effective strategies start with a keen understanding of how shoppers make decisions along the path to purchase—both online and in store—and then offering touchpoints that are specific and relevant to their needs.”
- 27. 27Copyright © 2017The Nielsen Company PERCENTAGE WHO SAY THE INFORMATION SOURCE HELPS WHEN MAKING A PURCHASE DECISION STORE WEBSITE ONLINE USER REVIEWS (WRITTEN) VISIT TO THE PHYSICAL STORE NEWSPAPER OR MAGAZINES (CONTENT OR ADS) BRAND WEBSITE BLOGS OR SPECIAL INTEREST WEBSITES WORD OF MOUTH FROM SOMEONE YOU KNOW RECOMMENDATIONS/INFORMATION FROM STORE STAFF TV OR RADIO (SHOWS OR ADS) SOCIAL MEDIA ONLINE USER REVIEWS (VIDEO) MARKETING E-MAILS WEBSITES CONTAINING COUPONS OR DISCOUNTS FLYERS OR DIRECT MAILS DEVELOPING MARKETS ADVANCED MARKETS 32% 22% 19% 14% 9% 14% 39% 25% 24% 11% 39% 28% 43% 15% 31% 20% 18% 15% 32% 23% 20% 19% 13% 12% 52% 31% 41% 16% Note: See last page of report for list of advanced and developing markets Source: The Nielsen Global Connected Commerce Survey, Q3 2016 FASHION DIGITAL AND TRADITIONAL INFORMATION SOURCES ARE IMPACTFUL FOR BUYING ONLINE NON-CONSUMABLES DIGITAL INFORMATION SOURCES
- 28. 28 2017 CONNECTEDCOMMERCE REPORT WHAT’S NEXT FOR IN-STORE DIGITAL- TECHNOLOGY ADOPTION? E-commerce is only part of the digital picture. Increasingly, stores are going digital as retailers incorporate a variety of digital tools—from digital coupons to smart shelves to virtual stores. These technologies bridge the online and physical worlds, bringing the ease, convenience and personalization of online into brick-and-mortar stores. And they’re not just “cool” nice-to- have features; they create real value for retailers. In-store digital- enablement options have been shown to increase dwell time, engagement levels, basket size and shopper satisfaction. While only a small percentage of consumers around the world say they’re using digital technologies—for example, in-store handheld scanners, self-service checkouts and mobile apps—to aid in their shopping, usage is growing. The availability of many in-store digital technologies is most prevalent in the advanced markets, where modern trade is well developed and internet and smartphone penetration rates are high. Israel is a leader when it comes to mobile-based features. Nearly four in 10 Israeli respondents say they’re using online or mobile coupons (38%) and shopping lists (24%), both up from 2014 (up five percentage points and four pp, respectively). One- fifth (20%) have downloaded a retailer or loyalty program app to their device to receive information or offers while in store (no change from 2014). Switzerland is another digital leader, with some of the highest rates of self-reported digital coupon and retailer-specific app use in the worldwide study. Twenty-eight percent of Swiss respondents say they’re using digital coupons (up 12 pp), and 17% say they’ve downloaded a retailer or loyalty program app (up eight pp). Swiss retailers also have incorporated several technologies to speed up the checkout process that have gained traction with shoppers. Thirty-six percent of Swiss respondents say they’ve used a self-service checkout (up five pp), and 28% USAGE OF IN-STORE DIGITAL TECHNOLOGIES IS MOST PREVALENT IN DEVELOPED MARKETS PERCENTAGE WHO SAY THEY’RE ALREADY USING SPECIFIED DIGITAL TECHNOLOGY FOR GROCERY SHOPPING TOP COUNTRIES FOR SELECTED DIGITAL OPTIONS USE ONLINE OR MOBILE COUPONS USE SELF-SERVICE CHECKOUTS USE A HAND-HELD STORE SCANNER TO PURCHASE PRODUCTS AS YOU SHOP USE ONLINE OR MOBILE SHOPPING LISTS ISRAEL 38% INDIA 36% SWITZERLAND 28% UNITED STATES 28% SOUTH KOREA 28% SLOVENIA 46% IRELAND 45% PORTUGAL 41% NEW ZEALAND 40% ESTONIA 39% SWEDEN 35% SWITZERLAND 28% BELGIUM 28% ESTONIA 28% NETHERLANDS 26% INDIA 37% ISRAEL 24% TURKEY 24% THAILAND 22% SAUDI ARABIA 21% Source: The Nielsen Global Connected Commerce Survey, Q3 2016
- 29. 29Copyright © 2017The Nielsen Company are using handheld scanners as they shop, rather than standing in checkout lines to purchase products (down one pp). The only country with higher self-reported use of handheld scanners is Sweden. Thirty-five percent of Swedish respondents say they use handheld scanners to avoid checkout lines (down three pp). Slightly more (36%) say they use self-checkout (down two pp). Why have these tools gained traction in these markets? Above all, availability is central. In Israel, a large pharmacy chain has a very popular app that includes a shopping-list feature as well as personalized and general coupons. In Switzerland, two major retailers dominate the grocery market—with 80% share— reaching nearly every Swiss shopper. Both of these retailers have incorporated digital technologies in their stores—for example, introducing mobile apps that include mobile coupons and payments. Finally, in Sweden, handheld scanners have been in the market for over 10 years and are available in almost all of the hypermarkets. Attitudes toward technology and high adoptions rates also are important growth drivers. Israel has a high concentration of early adopters and one of the highest smartphone penetration rates in the world, while Sweden and Switzerland are global leaders in terms of smartphone and internet adoption. While use of some digital tools may be higher in advanced markets, the examples from Israel, Sweden and Switzerland demonstrate that as these tools become more widely available, adoption in other markets will likely grow, especially considering the high percentages of respondents who say they’re willing to use them.
- 30. 30 2017 CONNECTEDCOMMERCE REPORT PERCENTAGE WHO SAY THEY’RE WILLING TO USE DIGITAL OPTIONS FOR GROCERY SHOPPING* WILLINGNESS TO USE IN-STORE DIGITAL OPTIONS IS HIGH IN DEVELOPING MARKETS DEFINITELY WILLING SOMEWHAT WILLING USE ONLINE OR MOBILE COUPONS USE A HAND-HELD STORE SCANNER TO PURCHASE PRODUCTS AS YOU SHOP TO AVOID CHECKOUT LINES LOGIN TO STORE WIFI WITH MY MOBILE TO RECEIVE MORE INFORMATION OR OFFERS WHILE IN STORE USE SELF-SERVICE CHECKOUTS TO REDUCE CHECKOUT TIME USE ONLINE OR MOBILE SHOPPING LISTS DOWNLOAD RETAILER APP OR LOYALTY PROGRAM APP TO MY MOBILE PHONE TO RECEIVE INFORMATION OR OFFERS WHILE IN STORE Asia-Pacific Europe Africa/Middle East Latin America North America Asia-Pacific Europe Africa/Middle East Latin America North America Asia-Pacific Europe Africa/Middle East Latin America North America Asia-Pacific Europe Africa/Middle East Latin America North America Asia-Pacific Europe Africa/Middle East Latin America North America Asia-Pacific Europe Africa/Middle East Latin America North America 55 I 36 33 I 35 48 I 31 57 I 25 38 I 35 53 I 34 30 I 30 49 I 32 58 I 24 30 I 32 60 I 33 36 I 33 47 I 32 60 I 25 44 I 32 54 I 36 29 I 33 46 I 33 52 I 29 31 I 36 50 I 36 27 I 31 45 I 34 52 I 28 32 I 33 58 I 33 35 I 37 48 I 33 57 I 28 34 I 39 *Note: Among those who say they are not already using specified technology. Percentages may not equal 100% due to rounding. Source: The Nielsen Global Connected Commerce Survey, Q3 2016
- 31. 31Copyright © 2017The Nielsen Company DISRUPTIVE TRENDS THAT WILL CONTINUE TO DRIVE CONNECTED- COMMERCE GROWTH Several major economic and consumption trends will drive connected commerce’s growth and reshape traditional definitions of shopping: • Business model innovation. E-commerce is reshaping what it means to shop, as new retail models gain traction. The click- and-collect model has gained traction in France, and consumers around the world indicate they’re open to using this and other pickup models in the future. In the U.S., meal-kit services, direct-to-consumer models and automatic-subscription models have seen tremendous growth. Eighteen percent of online purchases in the U.S. are based on subscriptions, including 30% of health and 29% of personal-care purchases. As more retailers and manufacturers continue to define their vision for the future and experiment with new formats that blend the digital and physical worlds, what it means to shop and what consumers expect from stores will continue to evolve. But no single model is right for everyone, and the challenge is to determine how to take the best of the online and offline worlds and blend them in a way that deepens the relationship with shoppers.
- 32. 32 2017 CONNECTEDCOMMERCE REPORT • Rising connectivity. The Demand Institute, jointly operated by Nielsen and The Conference Board, projects that an additional 1.2 billion people will come online by 2020. The majority of this growth will occur in emerging markets, driven largely by the spread of mobile devices, which will bring billions of consumers online for the first time. GSMA, a mobile-operator trade association, predicts that the number of smartphone subscriptions worldwide will rise from 2.6 billion in 2015 to 5.8 billion by 2020. Many of these new users will be in remote areas with underdeveloped retail infrastructure. While online retailers must overcome logistical challenges in reaching these consumers, limited retail infrastructure may actually be a boon for connected commerce, as consumers with limited choices will likely enthusiastically welcome access to new products and services made possible by e-commerce. Moreover, worries about internet security are not barriers to online purchasing for most. In fact, 62% of global respondents in Nielsen’s survey—including 81% in India and nearly two-thirds in Southeast Asia (66%) and Latin America (65%)—say they’re confident that their personal information is secure when buying items online. Emerging markets are not the only ones where retailers will benefit from the mobile explosion. It’s already an important growth engine in advanced markets. In the U.S. in 2016, Black Friday and Cyber Monday retail sales via mobile devices were up 33% and 34% over the previous year, and Black Friday became the first day ever to generate over a billion dollars in sales via mobile devices ($1.2 billion).4 As retailers continue to improve the mobile experience and consumers grow more comfortable transacting on their phones, tremendous growth will continue. • Digital-payment disruption. Mobile also is helping to address another major challenge for online retailers: the large unbanked population in much of the developing world. According to GSMA, mobile money services are now available in 90 countries worldwide, enabling billions of new consumers to engage in e- and m-commerce and consumer credit markets for the first time. The Demand Institute estimates that growth in access to cashless payments could lead to as much as $10 trillion in additional consumer spending over the next decade. 4 Adobe Digital Insights (November 2016).
- 33. 33Copyright © 2017The Nielsen Company Mobile payment systems aren’t just bringing new consumers online, they also are a critical part of the digital disruption that’s transforming what it means to shop. Mobile payments are a critical part of Amazon’s vision for the retail store of the future, with shoppers entering the store and paying for goods without ever taking out their wallet. But mobile payments aren’t just a distant fantasy; they’re already affecting the way many consumers shop. Just look at the popularity of Uber and Lyft, which allow consumers to hail and pay for a ride completely via mobile device. In Nielsen’s Global Mobile Shopping, Banking and Payment Survey, more than 28% of global respondents, including 35% of Millennials, said they were highly likely to use mobile payments in bars, restaurants or retail stores in the next six months. As these methods gain traction, their impact on consumers’ expectations will be tremendous. • Rising economic prosperity and consumption-led growth. According to the World Bank, consumer purchasing power is growing between 7% and 9% per year in China, India and sub- Saharan Africa. In addition, the Organization for Economic Cooperation and Development predicts the global middle class will increase from 1.8 billion in 2009 to 4.9 billion by 2030. Rising prosperity will be a growth engine for consumption, with young consumers—digital natives entering their prime spending years—being a particularly powerful force. The McKinsey Global Institute projects that increased consumer spending will drive three-quarters of global consumption growth between 2015 and 2030. • Urban living. According to the United Nations, the world is currently undergoing the largest wave of urban growth in history. More than half of the world’s population (54%) lives in an urban area—up from 47% in 2000—and this number will rise to nearly two-thirds (66%) by 2050. This trend presents retailers with challenges and opportunities. Urban areas often have the digital and physical infrastructure necessary to facilitate connected- commerce growth. At the same time, urban consumers typically have ready access to stores, and they’re often the first with access to innovative new store or service formats, digital technologies and order fulfillment options. As a result, these shoppers have very high expectations when it comes to flexibility and efficiency, and optimizing the shopping experience will be critical for retailers of all formats.
- 34. 34 2017 CONNECTEDCOMMERCE REPORT COUNTRIES IN THE GLOBAL SURVEY Classifications of advanced and developing markets are based on the International Monetary Fund’s definitions. Advanced markets include Australia, Austria, Belgium, Canada, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, Latvia, Lithuania, Netherlands, New Zealand, Norway, Portugal, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, Taiwan, U.K., and U.S. Developing and emerging markets include Argentina, Belarus, Brazil, Bulgaria, Chile, China, Colombia, Croatia, Czech Republic, Egypt, Hungary, India, Indonesia, Kazakhstan, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Romania, Russia, Saudi Arabia, South Africa, Thailand, Turkey, Ukraine, United Arab Emirates, Venezuela and Vietnam. MARKET INTERNET PENETRATION Australia 93% China 52% Hong Kong 80% India 37% Indonesia 34% Japan 91% Malaysia 68% New Zealand 94% Philippines 53% Singapore 81% South Korea 92% Taiwan 84% Thailand 60% Vietnam 52% ASIA-PACIFIC MARKET INTERNET PENETRATION Egypt 37% Morocco 61% Pakistan 18% Saudi Arabia 65% South Africa 49% United Arab Emirates 92% AFRICA/MIDDLE EAST MARKET INTERNET PENETRATION Canada 93% United States 87% NORTH AMERICA EUROPE MARKET INTERNET PENETRATION Austria 83% Belarus 59% Belgium 85% Bulgaria 57% Croatia 75% Czech Republic 80% Denmark 96% Estonia 84% Finland 94% France 84% Germany 88% Greece 63% Hungary 76% Ireland 83% Israel 73% Italy 62% Kazakhstan 54% Latvia 82% Lithuania 82% Netherlands 96% Norway 96% Poland 68% Portugal 68% Romania 56% Russia 71% Serbia 66% Slovakia 83% Slovenia 73% Spain 77% Sweden 95% Switzerland 87% Turkey 60% United Kingdom 92% Ukraine 43% MARKET INTERNET PENETRATION LATIN AMERICA Argentina 79% Brazil 68% Chile 80% Colombia 59% Mexico 56% Peru 59% Venezuela 62% Source: Miniwatts Marketing, Internet World Stats, June 30, 2016 (Europe is updated through Nov. 30, 2015), www.internetworldstats.com Advanced and emerging European markets are referenced throughout. Classifications are based on the International Monetary Fund’s definitions. Advanced markets include Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Israel, Italy, Latvia, Lithuania, Netherlands, Norway, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland and U.K. Emerging markets includes Belarus, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Russia, Turkey and Ukraine.
- 35. 35Copyright © 2017The Nielsen Company ABOUT NIELSEN GLOBAL E-COMMERCE MEASUREMENT SALES DATA Nielsen Global E-Commerce spans over 20 countries around the world. Measurement may rely on direct from retailer data (ePOS), data collected via Nielsen’s Consumer Panels, other licensed data, or a combination of the foregoing. Specific methodologies may vary from country to country, in accordance with each country’s rules and regulations. Data for China is a combination of direct from retailer data (ePOS) and other licensed data projected to a total country number. France is an aggregation of direct from retailer data for the click and collect market (which accounts for 85% of all CPG e-commerce sales in France). ABOUT THE NIELSEN GLOBAL SURVEY The Nielsen Global Connected Commerce Survey was conducted October 31–November 18, 2016, and polled more than 30,000 online consumers in 63 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America. The sample includes internet users who agreed to participate in this survey and has quotas based on age and sex for each country. It is weighted to be representative of internet consumers by country. Because the sample is based on those who agreed to participate, no estimates of theoretical sampling error can be calculated. However, a probability sample of equivalent size would have a margin of error of ±0.6% at the global level. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% internet penetration or an online population of 10 million for survey inclusion. ABOUT THE NIELSEN GLOBAL SURVEY The Nielsen Global Connected Commerce Survey was conducted October 31–November 18, 2016, and polled more than 30,000 online consumers in 63 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America. The sample includes internet users who agreed to participate in this survey and has quotas based on age and sex for each country. It is weighted to be representative of internet consumers by country. Because the sample is based on those who agreed to participate, no estimates of theoretical sampling error can be calculated. However, a probability sample of equivalent size would have a margin of error of ±0.6% at the global level. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% internet penetration or an online population of 10 million for survey inclusion.
- 36. 36 2017 CONNECTEDCOMMERCE REPORT ABOUT NIELSEN Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services for all devices on which content — video, audio and text — is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90% of the world’s population. For more information, visit www.nielsen.com. Copyright © 2017 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. Other product and service names are trademarks or registered trademarks of their respective companies. 17/10714