jupiter research - liane dietrich & nate elliot
TRANSCRIPT
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Attracting and Retaining Customers in a Attracting and Retaining Customers in a Challenging EconomyChallenging Economy
An exclusive report into the UK’s online retail market, in An exclusive report into the UK’s online retail market, in association with JupiterResearchassociation with JupiterResearch
2
AgendaAgenda
• Introductions– Liane Dietrich, Managing Director, LinkShare– Nate Elliot, Research Director, Jupiter
• Why this research?• Findings relevant to Affiliate Marketing• Takeaways• Questions
3 © 2008 JupiterResearcha Forrester Research company
Agenda
• Research objectives• Customer Perceptions of – and Reactions to –
the Economic Crisis• Understanding and Engaging Customers in
this Trying Time• Leveraging Customer Influence to Drive Sales• Key Takeaways
4 © 2008 JupiterResearcha Forrester Research company
Objectives
• LinkShare approached JupiterResearch to offer unbiased research that would educate the market about trends in online shopping, and to discuss how publishers, marketers, affiliates will be affected by these trends
• The study offers insight into the behaviors, preferences, and opinions of UK online shoppers
5 © 2008 JupiterResearcha Forrester Research company
Agenda
• Research objectives• Customer Perceptions of – and Reactions to –
the Economic Crisis• Understanding and Engaging Customers in
this Trying Time• Leveraging Customer Influence to Drive Sales• Key Takeaways
6 © 2008 JupiterResearcha Forrester Research company
European Online Retail Spending Has Tripled In the Past Four Years
€ 16.5€ 24.6
€ 34.1
€ 47.2
€ 61.2
€ 75.8
€ 90.1
€ 103.8
€ 117.4
€ 131.1
€ 145.4
€ 0
€ 30
€ 60
€ 90
€ 120
€ 150
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Eu
rop
ean
On
lin
e R
etai
l S
pen
din
g
(in billions)
Source: JupiterResearch Internet Retail Model, 8/07 (Western Europe)
Note: Retail does not include auto, travel, or prescription drugs.
7 © 2008 JupiterResearcha Forrester Research company
Britons Spend More Online Than Any Other Consumers in Europe
£3.7£5.4
£7.3
£9.9
£12.7
£15.6
£18.4
£21.0£23.4
£25.7£28.0
£0
£10
£20
£30
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
UK
On
lin
e R
etai
l S
pen
din
g
(in billions)
Source: JupiterResearch Internet Retail Model, 8/07 (Western Europe); Xe.com: €1 = £ 1.287 (an average of monthly exchange rate for Jan through Sept 2008, using the rate on the first day of each month)
Note: Retail does not include auto, travel, or prescription drugs; All years converted to Pounds based on 2008 average Euro/Pound exchange rate
8 © 2008 JupiterResearcha Forrester Research company
Groceries Generate Highest Spending, Followed by Electronics
£0.3£0.2
£0.2£0.2
£0.4£0.4
£0.5
£0.5£0.6
£0.9£1.2
£1.8£2.6£2.6
£3.3
£0 £1 £2 £3 £4
GroceriesConsumer Electronics
OtherPCs & Laptops
ClothingBooks
Computer PeripheralsSoftware
MusicVideo
Events TicketsFootwear
ToysSporting Goods
Personal Care
2007 UK Online Retail Spending by Category(in billions)
Source: JupiterResearch Internet Retail Model, 8/07 (Western Europe); Xe.com: €1 = £ 1.287 (an average of monthly exchange rate for Jan through Sept 2008, using the rate on the first day of each month)
Note: All years converted to Pounds based on 2008 average Euro/Pound exchange rate
9 © 2008 JupiterResearcha Forrester Research company
UK Online Buyers •UK online buyers say they’ll spend an
average of £702 online in 2008
•UK online buyers made an average of 9.3 purchases online in the past 12 months
•34% of online buyers are frequent online purchasers**
•95% of online buyers research products at more than 1 site
**Frequent purchasers = have purchased products or services online more than 10 times in past 12 months
UK Online Buyers Spend More Per Capita Than Anyone in US or Europe
Source: JupiterResearch Internet Shopping Model, 11/07 (US only) JupiterResearch Internet Retail Forecast, 8/07 (Western Europe) JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=788 (Online buyers, UK only); JupiterResearch/ LinkShare Custom Survey (12/07), n=777 (Online buyers, US only);
*Source; xe.com; €1 = £ 1.287 (an average of monthly exchange rate for Jan through Sept 2008, using the rate on the first day of each month
10 © 2008 JupiterResearcha Forrester Research company
15%
63%
23%
28%
62%
10%
0% 20% 40% 60% 80% 100%
"The generalhealth of the UKeconomy does
not concern me"
"I believe the UKeconomy is in a
recession"
Agree Neutral Disagree
However, UK Consumers are Worried about the State of the Economy
Percentage of Online ConsumersQuestion: Please indicate to what extent each statement describes your attitudes. (Select one for each)
Source: Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=1,000 (UK only)
11 © 2008 JupiterResearcha Forrester Research company
12%
17%
17%
33%
18%
39%
41%
13%
14%
17%
21%
23%
40%
51%
0% 20% 40% 60% 80% 100%
I'll plan offline shopping trips in more detail usingthe Web so that I make fewer trips
I don’t intend to change my shopping habits
I'll buy used or refurbished products so that I cansave money while maintaining my lifestyle
I will avoid any major purchases
I will do more of my shopping online rather thanoffline (in physical shops)
I will shop less overall
I will do more research online (before purchasing)to be sure I get the best price
High Spenders
Low Spenders
Consumers Will Turn to the Internet to Help Them Find the Best Prices
Percentage of Online Buyers
Question: Given the current state of the UK economy, how are you planning to change your shopping habits? (Select all that apply)
Annual Online Spend:
Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=645 (Online buyers who spent less than or equal to £750 online in last 12 months); n=143 (Online buyers who spent more than £750 online in the last 12 months), UK only
Note: Only select responses shown
12 © 2008 JupiterResearcha Forrester Research company
Reduce
Stay the same
Increase
UK Consumers More Likely to Decrease Offline Spending than Online Spending
Reduce
Increase
Stay the same
In Billions of Euros
Source: JupiterResearch Internet Commerce Forecasts, 08/07 (Western Europe Only) excl Travel
Percentage of Online Consumers Who Know How Their Spending Will Change
Question: Due to the current economic conditions, how do you plan to change your spending online and offline in the next 12 months, as compared to the previous 12 months? (Select one for each)
Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=763 (online consumers who know how their online spending will change, UK), n=804 (online consumers who know how much their offline spending will change, UK)
Overall Online Spending Change = 4.9% Decrease
Overall Offline Spending Change = 6.4% Decrease
42% 56%46%
8%
46%
2%
13 © 2008 JupiterResearcha Forrester Research company
That Will Continue to Push a Greater Share of Consumer Spending Online
£15.6£18.4
£21.0£23.4
£25.7£28.0
6.3% 6.6% 6.8% 7.0%5.8%
5.2%
£0
£10
£20
£30
2007 2008 2009 2010 2011 2012
0%
3%
6%
9%
12%
15%
UK Online retail spendingUK Online retail spending as percentage of total retail spending
UK
On
lin
e R
etai
l S
pen
din
g
(in billions)
UK
On
lin
e R
etai
l S
pen
din
g a
s P
erce
nta
ge
of
To
tal
Ret
ail
Sp
end
ing
Source: JupiterResearch Internet Retail Model, 8/07 (Western Europe); Xe.com: €1 = £ 1.287 (an average of monthly exchange rate for Jan through Sept 2008, using the rate on the first day of each month)
Note: Retail does not include auto, travel, or prescription drugs; All years converted to Pounds based on 2008 average Euro/Pound exchange rate
14 © 2008 JupiterResearcha Forrester Research company
Agenda
• Research objectives• Customer Perceptions of – and Reactions to –
the Economic Crisis• Understanding and Engaging Customers in
this Trying Time• Leveraging Customer Influence to Drive Sales• Key Takeaways
15 © 2008 JupiterResearcha Forrester Research company
5%
19%
24%
24%
24%
26%
26%
28%
43%
61%
69%
0% 20% 40% 60% 80% 100%
Nearly All UK Online Buyers See the Benefit of Shopping Around
Usually like to shop around
Percentage of Online Buyers
Question: Why did you use more than one site when deciding what products to buy online? (Select all that apply)
See more prices
Validate/contrast info from the retailer/manufacturer
See more product information
See if other sites have similar products
Seek out expert reviews/opinions information
Better sense of what others said about the product
Not sure what store to buy from
Usually don’t trust single site for purchase decisions
Gather purchase suggestions from other sites
Note: Only select responses displayed
I did not visit more than one site
Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=788 (Online buyers, UK only)
16 © 2008 JupiterResearcha Forrester Research company
35%
37%
41%
41%
59%
61%
68%
0% 20% 40% 60% 80% 100%
Shopping comparison sites
Visit shops/stores in person
Consumer review sites (e.g. Amazon, Reevoo,TripAdvisor)
Manufacturer websites
Search engines
Auction sites
Shop/store websites
Percentage of Online Shoppers
Question: Which of the following have you used when researching and purchasing products or services both online and offline? (Select all that apply) Note: Only select responses shown.
Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=914 (Online shoppers, UK only); JupiterResearch/ LinkShare Shopper Consumer Survey (6/08), n=1087 (Online shoppers, US only);
UK Consumers Use a Wide Range of Online Shopping Resources
17 © 2008 JupiterResearcha Forrester Research company
31%
47%
46%
53%
56%
65%
65%
34%
31%
33%
35%
30%
27%
31%
35%
22%
21%
12%
14%
8%
4%
0% 20% 40% 60% 80% 100%
Voucher code/coupon sites
Websites that offer special rewards such as cashback, loyalty schemes, etc.
Shopping Comparison Sites
Manufacturer Websites
Sites that feature consumer reviews
Search engines (including Google Images)
Shop Websites
Useful Neutral Not useful
Percentage of Resource Users
Question: How useful were each of the following resources while researching your most recent online purchase? (Select one for each)
Sites Offering the Most Information are the Most Used, and the Most Useful
Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=788 (Online buyers, UK only)
% of Online Buyers Who Used Each Resource
70%
45%
37%
32%
17%
59%
42%
18 © 2008 JupiterResearcha Forrester Research company
• Household income and average online spend is similar to all online buyers
•About as likely as average online buyers to decrease online spending due to the economy
• Two-thirds agree that “Using shopping comparison sites is the most efficient way to
find a product and make a decision of what to buy” (versus one-half of all users)
•One-half say in this economy they will research more online to look for low prices as compared
to 39% of all online shoppers
Bargain Shoppers are Average Online Shoppers who Focus Primarily on Price
Bargain Shoppers: 38% of UK Online Shoppers
Source: Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=1,000 (UK only); n=300 (Online consumers who look for the best bargains and always buy from the shop with the lowest price, even if they haven’t purchased there before, UK only)
19 © 2008 JupiterResearcha Forrester Research company
• More affluent than the average online user
• 90% have purchased online in the past 12 months as compared to 79% of all online users
• Purchase more frequently, spend more money than all online buyers
• Will only decrease their online spending by one-third as much as average online buyers
Luxury Shoppers are a Select and Active Group of Online Buyers
Luxury Shoppers: 12% of UK Online Shoppers
Source: Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=1,000 (UK only); n=116 (Online consumers who make a point of buying luxury products and are happy to pay more for luxury brands, designer labels, UK only)
20 © 2008 JupiterResearcha Forrester Research company
21%
35%
41%
37%
41%
59%
61%
68%
20%
42%
42%
39%
44%
63%
64%
66%
32%
35%
39%
48%
55%
59%
64%
66%
0% 20% 40% 60% 80% 100%
E-mail newsletters/Promotional e-mails
Shopping comparison sites
Manufacturer websites
Visit shop(s) in person
Consumer review sites (e.g. Amazon, Reevoo)
Search engines (including Google Images)
Auction sites
Shop websites
Luxury Shoppers
Bargain Shoppers
All Online Shoppers
Bargain Shoppers Compare Shops, Products to Find Best Deal
Percentage of Each Segment
Question: Which of the following have you used when researching and purchasing products or services both online and offline? Please select all that applyNote: only select responses shown.
Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=914 (All online shoppers); n=351 (Bargain shoppers); n=108 (Luxury shoppers), UK only
21 © 2008 JupiterResearcha Forrester Research company
21%
35%
41%
37%
41%
59%
61%
68%
20%
42%
42%
39%
44%
63%
64%
66%
32%
35%
39%
48%
55%
59%
64%
66%
0% 20% 40% 60% 80% 100%
E-mail newsletters/Promotional e-mails
Shopping comparison sites
Manufacturer websites
Visit shop(s) in person
Consumer review sites (e.g. Amazon, Reevoo)
Search engines (including Google Images)
Auction sites
Shop websites
Luxury Shoppers
Bargain Shoppers
All OnlineShoppers
Luxury Shoppers Want to Hear About Others’ Experiences, Have Their Own
Percentage of Each Segment
Question: Which of the following have you used when researching and purchasing products or services both online and offline? Please select all that applyNote: only select responses shown.
Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=914 (All online shoppers); n=351 (Bargain shoppers); n=108 (Luxury shoppers), UK only
22 © 2008 JupiterResearcha Forrester Research company
36%
38%
64%
42%
44%
61%
41%
33%
21%
36%
29%
26%
23%
29%
15%
22%
27%
13%
0% 20% 40% 60% 80% 100%
All Internet Users
Bargain Shoppers
Luxury Shoppers
All Internet Users
Bargain Shoppers
Luxury Shoppers
Agree Neutral Disagree
Luxury Shoppers Much More Loyal to Brands and Retailers
Percentage of Each SegmentQuestion: Please indicate to what extent each statement describes your attitudes. (Select one for each)
“When I find a brand I like, I tend to stick to it and rarely try
other brands”
“When I find a retailer I like, I tend
to stick to it and rarely try other
shops”
Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=1000 (All Internet users); n=375 (Bargain shoppers); n=116 (Luxury shoppers), UK only
23 © 2008 JupiterResearcha Forrester Research company
18%
26%
24%
20%
23%
31%
45%
34%
24%
35%
36%
24%
32%
37%
56%
41%
36%
37%
40%
40%
41%
51%
52%
56%
0% 20% 40% 60% 80% 100%
Targeted email marketing messages based on my profile
A comparison shopping site
Offers from voucher code/coupon sites
Targeted email marketing messages based on pastpurchases
Offers from other affiliate sites to the seller
A promotional offer I saw when I searched for a product ona search engine
Regular promotions from the seller
Websites that offer special rewards such as cash back,loyalty schemes , etc.
Luxury Shoppers
Bargain Shoppers
All Online Buyers
Rewards, Promotions Can Drive Loyalty from All Shoppers if Properly Targeted
Question: How influential were each of the following in your decision to continue to purchase from an online seller from whom you have purchased in the past? (Select one for each) Note: only select responses shown.
Percentage of Online Buyers in Each Segment Who Say Each Tool is Influential
Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=788 (All online buyers); n=300 (Online buyers in the bargain shopper segment); n=104 (Online buyers in the luxury shopper segment), UK only
24 © 2008 JupiterResearcha Forrester Research company
50%
5%
6%
5%
4%
5%
17%
26%
18%
51%
4%
6%
5%
5%
6%
18%
28%
15%
25%
12%
13%
15%
15%
21%
24%
30%
31%
0% 20% 40% 60% 80% 100%
I have not used my mobile phone for any of the above
Viewed an ad (e.g. SMS, banner ad)
Researched a product or service
Used SMS to get vouchers/coupons and discounts
Responded via a text message to a magazine or newspaperad
Used SMS to make a payment or donation
Sent SMS to a # found on product packaging to respond toan offer
Received a text message from my mobile carrier
Downloaded mobile content
Luxury Shoppers
Bargain Shoppers
All Internet Users
Percentage of Each SegmentQuestion: Which of the following have you done on or with your mobile phone in the past 12 months? (Select all that apply)Note: Only select responses shown
UK Consumers Are Increasingly Comfortable with Mobile Services
Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=1000 (All Internet users); n=375 (Bargain shoppers); n=116 (Luxury shoppers), UK only
25 © 2008 JupiterResearcha Forrester Research company
10%
14%
35%
25%
20%
20%
65%
67%
45%
0% 20% 40% 60% 80% 100%
All Internet Users
Bargain Shoppers
Luxury Shoppers
Agree Neutral Disagree
Question: Please indicate to what extent each statement describes your attitudes. (Select one for each) Percentage of Each Segment
One-Third of Luxury Shoppers Say They’re Ready for Mobile Commerce
“I would like to be able to shop and make purchases on my mobile phone”
Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=1000 (All Internet users); n=375 (Bargain shoppers); n=116 (Luxury shoppers), UK only
26 © 2008 JupiterResearcha Forrester Research company
Agenda
• Research objectives• Customer Perceptions of – and Reactions to –
the Economic Crisis• Understanding and Engaging Customers in
this Trying Time• Leveraging Customer Influence to Drive Sales• Key Takeaways
27 © 2008 JupiterResearcha Forrester Research company
There Are Two Key Ways Customers Influence Each Others’ Purchases
Source: JupiterResearch (9/08)
!
!
!
!
!
!
?
?
?
?
?
?
New Influentials Classic InfluentialsPrimarily exert active influence by
proactively giving advicePrimarily exert passive influence byresponding to requests for advice
28 © 2008 JupiterResearcha Forrester Research company
17%
19%
44%
26%
36%
47%
40%
35%
22%
39%
29%
25%
44%
47%
34%
35%
34%
27%
0% 20% 40% 60% 80% 100%
All Internet Users
Bargain Shoppers
Luxury Shoppers
All Internet Users
Bargain Shoppers
Luxury Shoppers
Agree Neutral Disagree
Luxury Shoppers Most Influential, but Others Can Be as Well
Percentage of Each SegmentQuestion: Please indicate to what extent each statement describes your attitudes. (Select one for each)
NewInfluence
I am the first person to tell people about a retail
site or new product
Classic Influence
I am the first person people come to for recommendations
about products to buy
Source: JupiterResearch/ LinkShare Shopper Consumer Survey (8/08), n=1000 (All Internet users); n=375 (Bargain shoppers); n=116 (Luxury shoppers), UK only
29 © 2008 JupiterResearcha Forrester Research company
27%
37%
37%
38%
42%
43%
60%
60%
0% 20% 40% 60% 80% 100%
Reviews Leverage Consumer Influence, Make Sites More Useful
Percentage of Online Shoppers Who Have Employed User Reviews
Question: How do you employ user-generated reviews while you research products online? (Select all that apply.)Source: JupiterResearch/Ipsos-Insight Retail Consumer Survey (4/06), n = 1,750 (online shoppers who have employed user-generated reviews, US only)
To get a sense of product reliability
To get a feeling for product quality
To decide on what product to buy
To narrow my options
To see how the product might fit me or my needs
To see if someone used the product same way I will
To get ideas
To get a sense of other, similar products
30 © 2008 JupiterResearcha Forrester Research company
9%
10%
13%
14%
17%
31%
34%
41%
52%
63%
0% 20% 40% 60% 80% 100%
Sporting goods and equipment
Auto parts and car accessories
Tickets for entertainment
Fashion
Home furnishings
Toys, video games, and game consoles
Software
Books and videos (i.e., DVD, VHS)
Personal computers and computer peripherals
Consumer electronics, mobile phones, &accessories
Electronics and Entertainment Buyers Most Interested in Consumer Reviews
Percentage of Online Product Researchers Question: For what product categories do you find online consumer reviews most useful in making a purchase decision? Select up to five.
Source: JupiterResearch Consumer Survey (12/07), n = 821 (online product researchers, UK)
31 © 2008 JupiterResearcha Forrester Research company
15%
15%
22%
49%
20%
46%
56%
0% 20% 40% 60% 80% 100%
Sites Must Build Depth and Context Into User Product Reviews
Percentage of Online Product Researchers Question: Which of the following features help you trust online consumer reviews? Select up to three.
Source: JupiterResearch Consumer Survey (12/07), n = 821 (online product researchers, UK)
Votes from other shoppers on the helpfulness of the review
Review offers a mix of positive and negative comments
Review is comprehensive and well written
Reviewers’ identification of where the product was purchased
Numerical rating with the review
Profile information that identifies reviewers
Review includes pros and cons about the product
Depth of reviews
Context of reviews
32 © 2008 JupiterResearcha Forrester Research company
Agenda
• Research objectives• Customer Perceptions of – and Reactions to –
the Economic Crisis• Understanding and Engaging Customers in
this Trying Time• Leveraging Customer Influence to Drive Sales• Key Takeaways
33 © 2008 JupiterResearcha Forrester Research company
Key Takeaways
• UK shoppers spend more online than their peers – but they’re worried about the economy
• Consumers turn to a range of online resources, especially those with lots of information
• Online marketers must understand their target audience; Luxury Shoppers are most valuable, but others can be valuable too if targeted correctly
• Mobile commerce is on the horizon• Most online shoppers use and trust consumer reviews;
they can help marketers leverage the power of consumer influence
34
Any Questions?Any Questions?
Nate Elliott - Research Director, JupiterResearchNate Elliott - Research Director, JupiterResearch
Liane Dietrich – Managing Director, LinkShareLiane Dietrich – Managing Director, [email protected]@linkshare.com