online retail research report 2012

7/28/2019 Online Retail Research Report 2012

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The other lines moving aster

Adventures in

Retail

A research report on the changing relationship

between consumers and traditional retailers


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Introduction

Over the last decade, the world o retail has seen its greatest

transormation in modern times. Gone are the days o customers

only being able to make purchases by physically visiting a shop. Now,

with the prolieration o home computers, smartphones, tablets and

iTV, there are more channels and devices than ever or brands to

interact with consumers. This situation has naturally brought with it an

opportunity to reach larger audiences, but also numerous challenges.

The modern customer now expects more rom retailers than just apositive experience in store. Brands must replicate their values and

services digitally in order to meet these expectations and stave o the

threat rom their ellow high street competitors and online specialists.

But, as this study o UK and US consumer habits shows, as digital

continues to become integral to many peoples lives, traditional retailers

are alling behind, creating a substantial shortall between what is being

provided to customers and what customers actually want.


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Adventures in Retail: The other lines moving fasterBrand Perfect 3

Virtual high streets?

Although the type o service being sought could dier depending

upon context, eg. someone using a tablet might want to browse

high resolution product videos whereas a smartphone user

might want to add something quickly to a grocery list customers

expect the quality o the service they receive online to match

that which they get in high street stores. But is this happening?

We asked consumers to give their opinions o shopping online

with 10 o the UK and USs top retailers. Tellingly, only a minority

o respondents rated these brands as their preerred online

retailers. In the UK and US respectively Tesco and Walmart were

reported as providing the best online shopping experience o

those on the list, but they were also chosen as the two brands

oering the worst experience too. Just 17% o UK consumers

asked put Tesco at the top, with Argos and John Lewis coming

in behind them with 15% and 10% o the vote. These brands

may take some comort rom their results, with supporting

comments rating them variously or consistency o message,

design and layout across multiple platorms, but its clear rom

such a low share o the overall rating that even those at the top

Executive summary o statistics

62% o UK and 40% o US consumers dont rate the top high

street shops online

Consumers cite slow loading (64%) and diculty in nding

products (55%) as the top two irritations when shopping online

29% o respondents said poor design was a major reason or

aborting an online shopping attempt

Good or bad, most people share their eelings about their

online shopping experiences with riends and amily 9 out

o 10 UK and US consumers share bad experiences

O those who buy using a mobile device, only 3%4% would

spend more than 500 online, compared to 34% o people in

the UK and 42% in the US who would be willing to do so rom

a desktop computer

The British public trust mobile phones less than their US

counterparts when it comes to shopping 71% o UK

respondents (almost three quarters) said they wouldnt use

a smartphone or other mobile phone to purchase goods,

whereas in the US the gure ell to 42%


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Over a quarter o consumers also highlighted their positive

experiences with BestBuy (26%) and almost one in ve voted

or Target (19%). However, as with Tesco in the UK, Walmart,

perhaps suering in relation to some o those retailers native

to the web, was also selected by 10% o consumers as providing

worst overall experience online and BestBuy received a high

volume o stinging comments rom respondents, including

criticisms o its perormance on smartphones and reports o

poor customer service and the act that oten prices are

dierent between in-store and online. So although some US

stores appear to be making better progress than their UK

counterparts, theres still much to be done.

o the list have plenty o work still to do when it comes to

providing the service that their customers truly wish or.

The brands joining Tesco at the top o the list or those rated

the worst have even more to worry about. Among those

consumers saying Debenhams oered the worst experience

were comments such as its desktop site being messy and that

it was not easy to nd items and other popular brands like

Argos (also eatured on the Interbrand chart), Next and IKEA

are still struggling to satisy some o the more basic online

shopping requirements, such as site perormance and web

browser compatibility, clear communication and ensuring all

their products available or online ordering.

Things are a bit better in the US. One in three (37%) shoppers

singled out Walmart as their preerred online store. With its

multi-platorm approach and consistent brand messaging, its

oering sets a bar or British retailers to aim or.


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Setting the standards

The more complementary and cohesive the experience o the

physical and the digital across devices and touchpoints, the

better the customer experience.

Branding is not just about how your website looks. Its about the

experience provided to customers who increasingly rate technical

perormance and user experience just as highly as aesthetics.

Brands need to build an awareness o this into their plans rom

the outset, and outline their own technical standards to their

design and development partners.

The insurance group Aviva plc has set a great precedent here

by publishing its own standards or developers as an open

access document (see the link index at the end o this report).

This document provides an excellent starting point or brands

that do not currently oer standards guidance to the agencies

they work with. Working to a predetermined standard provides

not only a better experience or customers, it also saves money

and development time and can help oster a mutually respectul

relationship with technical partners.

Brand Perect

Regarding emerging technology standards, which should be

inorming the decisions brands are making, the much-discussed

HTML5 standard has the potential to smooth the development

o many web-based projects.

Alan Tam, Director o Product Marketing with Brand Perect

ounders Monotype is a vocal advocate: HTML5 provides a

consistent and standardised digital medium or brands to

eciently and eectively reach their audience across a sea o

devices with ragmented platorms and screen resolutions.

As well as being exible enough or desktop and mobile web

design and development, and that required or rich media

advertising and web applications, Tam adds that, In the mobile

space, HTML5 makes a nice starting point, and is complementary

to native development.

Adventures in Retail: The other lines moving aster 9


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No smarts please, were British

As with most sectors, mobile is an important growth area or

retailers today, but or consumers, despite the smartphones

inltration into many o our everyday lives, ears still persist

about buying on them.

In the US shoppers are more trusting, with 58% regularly making

purchases on their phones, compared to just 29% o people in

the UK. This dierence in use carries through to tablets too, with

three quarters (75%) o British consumers not willing to use a

tablet or shopping, whereas more than hal o people in the US

(53%) are happy to do so. But despite this willingness in the US

to buy rom mobile, shoppers are reluctant to do so when it

comes to high-value purchases, and the preerred device or

online shopping on both sides o the Atlantic remains the desktop

PC. When it comes to digital, 33% o UK and 41% o US consumers

said that this was how they liked to shop. Brands have o coursebeen investing in creating services or the home computer or

ar longer than they have or mobile and tablet use, and its little

surprise that this more embedded shopping method is the most

avoured. But just what is it thats holding customers back rom

embracing mobile spending?

Online shopping provides consumers with the convenience o

being able to shop wherever and whenever theyre within reach

o a telephone signal, and, i the sellers are doing their jobs

properly, with whomever they wish. Theres little need to re-state

the enormity o the opportunity brought about by aordable

smartphones, tablets and netbooks, and with the launches this

year o Apples iPad Mini, Googles Nexus 7 and Nexus 10,

Amazons new Kindle Fire and a range o phones and tablets

rom smartphone leader Samsung, this Christmas will see the

market explode to a size barely imaginable a couple o years ago.

The problem or shoppers is not a technological one. Theyre

more than comortable with using their devices to buy music,

rent movies and, yes, to shop, shop, shop. Only theyre not

necessarily doing these things with the high street vendors.


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2. Next

Conusing messaging on an emailed

order conrmation rom Next,

attempting to clariy its payment

processes. Note this is coupled with a

rustrating Do not reply instruction.

1. John Lewis

Screen grab o johnlewis.com taken

rom a Nexus 7. Retailers with

smartphone-optimised sites are

missing a trick by serving these bydeault to users o increasingly

popular 7 tablets.

3. Argos

Screen grab o the LEGO branded

section o the Argos site, taken on a

13 MacBook Pro, highlighting some

serious text ormatting problems.

Examples

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4. Boots

In the contest or lengthy menu

systems, Boots are right up there

with John Lewis. On their mobile

site it takes seven pages to get tothe eye shadow.

5. Walmart

Screen grab o Walmarts mobile

site taken on a Galaxy Nexus.

The site was the slowest loading o

those we tested, and there was no

zoom enabled or the items shown.

Examples

6. BestBuy

This iPhone 5 screen grab shows

you can get our menus or the

price o one at BestBuy. 4

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7. Tesco

Tesco has done a great job o its

Tesco direct mobile site. The design

is exemplary and the site is intuitive

and on the iPhone 5 in Saari, wasvery quick. (It was a bit slower in

Chrome on a Galaxy Nexus.)

8. Tesco

Unortunately, when it comes to

the desktop, Tesco isnt quite

so up-to-date. The main menu

system, an overlay, is conusinglynot-quite-alphabetical. Thanks to

this, a simple task, such as nding

the television section, could take

more time than it needs to.

Examples

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Gone in the blink o an eye

UK and US consumers shared the same rustrations when

shopping online. Two thirds (67%) o UK and more than hal o

US shoppers (51%) cited slow loading times as the top reasontheyd abandon a purchase. Following this were issues with site

navigation and diculty nding products (50% UK and 41% US),

and too many steps to purchase (40% o UK and 37% o US).

Poor customer service was also reported as problematic by a

quarter o shoppers (UK 26%; US 24%).

Research rom Google this year (see link index) has shown that

just 400 millisecondsliterally, the blink o an eyeis too long

or many people to wait or a web page to load. People will visit

a site less oten i it is slower than a close competitor by more

than 250 milliseconds.

Retailers must invest more in design support when creatingdigital services or their customers, to maintain brand consistency

across online and ofine activities, and to have the expertise on

hand to properly consider user experience. It is part o a brands

responsibility to ensure they communicate eectively with

Slow browsing - pages or product images are

slow to load

It isnt easy to use, e.g. I cant nd the product I want;

I cant move around the site with ease

Too many steps when I try to purchase goods

Not being able to gauge size

Having to register

Not being able to try on

Not being able to get a eel or quality

Not being able to see true colour

Poor design

There is a lack o customer support

Not being able to touch products

Payment process

Design doesnt reect the brand

Other (please speciy)

1,568

1,048

780

633

560

525

518

499

465

461

401

386

306

153

86

66.8

49.7

40.4

35.7

33.5

33.0

31.8

29.7

29.4

25.6

24.6

19.5

9.8

5.5

their design and technical partners, and consult with them as

early on during the process as possible to make the best use

o their knowledge.

When shopping online, what are the biggest irritations and/or whatwould make you abort?

UK respondents by %


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Site is easy to browse, e.g. it is easy to navigate

Site is secure

Site would load and unction properly

Site is easy to read, e.g. the ont is clear

Site is well designed

Site is just as easy to use as the website

Site would link to my account and enable

quick shopping

Site looks and eels authentic

Other (please speciy)

60.9

58.8

51.5

43.8

42.5

42.2

27.6

26.3

4.6

1,005

612

591

518

440

427

424

277

264

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Gerry Leonidas, a senior lecturer with the Department o

Typography and Graphic Communication at the University o

Reading agrees that design is o paramount importance when

it comes to online shopping.He says,Even in well-establishedbrands that enjoy considerable trust by consumers, an onlineexperience that is inconsistent, unintuitive, or o-brand will

either turn people o online shopping, or lead to abandoned

browsing and purchasing,

I you shop online using a cell, tablet or desktop device how could your

shopping experience be improved?

US respondents

Nine out o 10 cats

Brands also need to bear in mind that people who dont have

happy shopping experiences arent just walking quietly over to

the competition. A soberingly high volume o customers willshare news o their poor experiences. Not only with riends and

amily, but also through social media, voicing their complaints

directly and publicly. When asked the question: Would you tell

amily and riends about a bad online shopping experience?

90% o respondents said they would.

The good news is that this cuts both ways. Word-o-mouth

recommendations have always had a powerul eect on brand

equity but, when those opinions are online, the inuence can be

multiplied. Making mobile shopping social can give customers

a range o opportunities to share with their peers and with

brands themselves. And in the UK, 82% o people said they would

tell amily and riends about a good online shopping experience,

with those in the US even more willing to spread the love, with

90% saying the same. Word-o-mouth recommendations are

like advertising nirvana or brands. Almost hal o US (43%) and

a third (27%) o UK respondents say they value advice rom

amily and riends when making their online shopping decisions.

by %


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Intelligent, good looking and easy to talk to

That there is an opportunity to appeal to consumers by building

brand consistent, seamless services should give encouragement

to traditional retailers, many o whom have long-establishedbrand cach on the high street, which can be transerred online

and to a broader market. The trick is to ensure digital is a boon

and not a bane.

UK and US consumers agreed that improving the navigation

and unctionality o retail sites would benet the overall user

experience, making it easier and more pleasurable to shop.

Both visual and service design are crucial. Rob Le Quesne, design

consultant at global digital service design agency Fjord,

comments, I there is one thing retailers need to do in order to

succeed in these changing times, it is to put people rst. Its no

longer acceptable to consider a brands online and in-store

experience as two separate propositions. Retailers need tobetter understand the human behaviours associated with

shopping and use technology to ampliy the things that humans

can do together.

The top three requests highlighted by our research are or online

shopping to be made:

Saer (61%)

Easier to navigate (57% UK; 59% US)

Faster (52%)

Any process that asks customers to provide personal nancial

inormation must have robust security, yet stories in the past

year, such as the attacks on Amazon-owned shoe vendor Zappos,

Microsot Indias online store and Apples in-app payment system,

demonstrate that even the worlds tech giants are struggling

against todays increasingly sophisticated cyber criminals. But

bricks-and-mortar sellers shouldnt be too quick to say I-told-

you-so. In October, hackers bugged card readers in 63 Barnes

& Noble stores across the US.


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I have had people walk out on me beore, but not when I was

being so charming

Replicating the ofine shopping experience online is tough. 49%

o consumers in the UK and 52% in the US said that not beingable to touch a product beore purchase was the main drawback

to shopping online. At the moment, the simplest means o

overcoming this is to oer a reliable, no uss and ree o charge

returns policy, but unortunately 41% o people in the UK and

47% in the US think this is also missing.

Marketers want insight into consumers thinking at the moment

they are making a decision about whether or not to buy. Whenever

someone arrives at this point, theyll look to various sources o

inormation to inorm their decision. Online brands not only have

the ability to provide direct access to many o these sources at

the point o purchase, they can also track a users decision-

making with web analytics, which means theres little excuseto continue making the wrong call time and again.

Imagine i you will that youre looking or a Christmas present

or a loved one. You stumble upon something that could be right,

but just need a little non-partisan encouragement. Most online

stores now include customer reviews, yet ew stores are willing

to publicly display a stream o bad reviews, however helpul

these might be in the long-term to buyers. But when it comes

to social media, all voices need to be heard to have any chanceo developing a reputation as an honest brand.

Our research shows 36% o UK and 44% o US consumers will

turn to search engines to research a product. This research

inorms their buying choices even more than recommendations

rom amily and riends, which stand at 26% in the UK and 43%

in the US. At 26%, the third most popular source o shopping

inormation and inspiration comes in the orm o reviews rom

trusted publications, outpacing social media darling Facebook,

which still accounts or a not-to-be-snied at 16% inuence.

Imagine then that as well as the on-site customer reviews you

nd accompanying that possible Christmas present purchase,youre served up extracts rom product reviews in the media,

and mentions rom social networks.


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By building this kind o thinking into their products, retailers are

going to keep hold o site visitors or longer and have more o

an inuence over their eventual decision-making. Fjords Rob

Le Quesne agrees. By embracing the human elements involved

in shopping, brands can oer customers more personalisedcontent rom browsing online through to in-store purchases

and in doing so build more customer loyalty and ultimately,

more protable relationships.

The connection a brand orms with its audience is vital to

spearheading growth and development. Thoughtul design and

brand cohesion are essential when looking to transer a

customers shopping condence rom the high street to the

digital world. This means placing investment in both traditional

branding disciplines (colour, layout, typography, logos and tone

o voice, etc.) and user experience design (ease o use, expected

unctionality and clear communication) side by side as central

to a retail brands digital success.

Checkout

Retailers must address the common problems highlighted

in this studyslow loading, weak site design, poor customer

service and mobile device securityto translate the aithcustomers have in their in-store services to their online

experiences.

Important progress in digital has been made by all o the brands

covered by our research, as well as by many others, but in order

to deliver the seamless brand perormance customers want,

its essential that brand managers, marketers and brand creatives

work together with designers and developers at all stages o

the planning and execution o their digital strategy.


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The town mouse and the country mouse

Even once theyve addressed all o the issues laid out in this

report, with over hal o all users saying that speed is a major

problem when attempting to shop online, its clear that substantialinvestment in service inrastructure rom operators is an essential

component o online retail success.

Its ironic that the shoppers who have access to the best

connections are also those closer to the high street. According

to Ocom, in the UK, superast broadband is only available with

any degree o reliability in major cities, and even then some key

regions or the digital industry, such as Brighton in the south-east

and Bristol in the south-west, where users are subsequently

going to be more inclined to use new technology, service isnt

quite up to scratch.

This year during the Summer Olympics, London Undergroundcontracted Virgin Media to provide ree public Wi-Fi to Tube

users in parts o London, and a similar initiative by Google gave

the same access to passengers using areas o New Yorks

subway system. Both programmes were universally welcomed.

Coinciding with this, the UK government outlined plans to have

the best superast broadband in Europe, with 90% o homes

benetting rom it by 2015, while President Obama ranks the

need or the widespread availability o high connection speeds

so highly that it has been a point o note in his last two State othe Union addresses, with the USs Federal Communications

Commission pledging in 2010 that 98% o the US will benet

rom 4G coverage by 2020.

In the UK, where many people in Wales, Cumbria and the west

o Scotland are deprived o broadband speeds much beyond that

youd expect rom old dial-up services, recently rolled-out 4G

coverage looks like it might improve the lot o some customers

even sooner than that. But this is as yet untested technology and

i shoppers are currently not condent in spending rom the

desktop, will they be happy doing so rom a mobile device, where

the issue o security plays even more on peoples minds?

In the not-too-distant uture, when superast broadband is universally

available in Britain and the US, the brands that heed the advice

outlined in this report will be the ones to gain a competitive edge

and go on to thrive in the ever-expanding world o digital retail.


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Research methodology

In August 2012, market research agency Opinion Matters

surveyed 1,568 online shoppers in the UK and 1,005 in the US.This report has been based upon the results o that survey. On

the ollowing pages you will nd a demographic breakdown

o those surveyed, along with the ull results o the research.

We selected our two lists o traditional retailers based on

Interbrands UK and US lists o the Top 10 Retail Brands o 2012.

Our lists were adjusted to ensure they covered comparable

sectors. In the US we dropped Amazon and eBay (as web-rst

retailers), adding in Nordstrom and Publix (ranked 11th and 12th

by Interbrand). We also added in Topshop and removed ASDA

in the UK, to cover as wide a set o demographics as possible.


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Potential participants or online responses were identied using

both the Opinion Matters online panel as well as a trusted partner

that adheres to the same strict codes o conduct and research

guidelines. These are actively managed, online global panels

recruited or market research purposes. All panelists have gonethrough a double opt in process and have agreed to participate

in online surveys, and to provide honest opinions or market

research studies. A wide range o recruitment processes are

used or the panel including reerral, web advertising and public

relations, to partner-recruited panels and alliances with web

portals that experience high volumes o user trac.

Respondents did not receive an incentive or joining the panel,

but either receive points or each completed survey or are

entered into a prize draw, where or this survey they had the

opportunity to win a prize with a value o 500. Points accrued

can be redeemed or money or go towards charitable donations.

For each survey, panelists are sent an invitation to participate

in the survey (via email); invitations are sent on a random basis

within the target groups or the research.

Brand Perect

Each invitation reiterates the terms and conditions or the

research, including the potential uses by the researchers o the

inormation provided, although they are reminded that personal

identity and other personally identiable details o the respondents

will be protected.

All research conducted by Opinion Matters adheres to MRS

Codes o Conduct (2010) in the UK. Within these parameters

there are guidelines that ensure all research is carried out in a

proessional and ethical manner. Furthermore, all members o

ESOMAR and AIMRI Opinion Matters abide by the ICC/ESOMAR

International Code on Market and Social Research.

Opinion Matters is registered with the Inormation Commissioners

Oice and is ully compliant in accordance with the Data

Protection Act. The company is also certied under Quality

Assurance Scheme IS0 9001.

41Adventures in Retail: The other lines moving aster


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25/30



26/30



27/30


Not being able to touch products

Not being able to try on

Returning goods easily

Not being able to get a eel or quality

Not being able to see true colour

Being able to browse

Face to ace customer service

Finding something I wasnt expecting

The thrill o nding what I want

In-store brand experience

Shopping with riends

Other

49.0

43.9

40.6

48.6

36.9

31.1

26.2

26.5

12.5

12.2

9.7

1.6

52.0

49.8

46.9

46.7

33.4

29.0

28.8

26.3

16.0

15.6

13.8

1.0

769

689

636

762

579

488

411

416

196

191

152

25

523

500

471

469

336

291

289

264

161

157

139

10

by % by %1,568 1,005

UK

respondents

When shopping online, what things do you miss about the in-store

retail experience?

US

respondents


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I do not shop on this device1-50

51-100

101-200

201-500

500+

71.3

11.3

7.0

4.8

3.6

2.1

1118

177

109

75

56

33

by %1,568UK respondents

Mobile/Smartphone

How much would you limit yoursel to spending when using the ollowing devices:

Tablet iPad, Galaxy tab, etc. Desktop PC, Mac, laptop, etc.

75.8

6.4

5.2

4.7

4.0

3.9

1189

100

82

73

63

61

1,568 by %

1.1

33.9

21.0

17.7

14.1

12.2

17

531

329

278

221

192

1,568 by %

I do not shop on this device

$1-50

$51-100

$101-200

$201-500

$500+

No set limit

41.9

12.017.4

15.9

8.5

4.2

0.1

421

121175

160

85

42

1

by %1,005US respondents

Cell/Smartphone

How much would you limit yoursel to spending when using the ollowing devices:

Tablet iPad, Galaxy tab, etc. Desktop PC, Mac, laptop, etc.

47.0

5.37.6

10.7

18.1

11.2

0.1

472

5376

108

182

113

1

1,005 by %

1.4

9.414.1

14.1

19.2

41.5

0.3

14

94142

142

193

417

3

1,005 by %


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About Brand Perect

Brand Perect is a Monotype initiative that has been conceived to

help brands keep pace with technological change and learn how

to deliver seamless interactive experiences to their audiences.

It is supported by contributions rom developers, designers, creative

agencies and brands. It is open to stakeholders involved in creating,

developing and delivering branding in interactive media.

The Brand Perect Maniesto

Learn what brands need rom agencies and technology, andconvey this to the wider technology industry and standards bodies

Provide brands with insight through specic industry research

Reduce the complexity o designing and implementing technology

enabled brand experiences by dening best practice

Connect organisations with design and development experts to

help them deliver better brand experiences, at lower costs andthat will require less time to get to market

Brand Perect

Join our community

brandperfect.org is the home o our community o designers, brands

and developers. On the site youll nd an editorially curated selection

o opinion pieces, brand case studies and interviews by Brand

Perect advocates, as well the opportunity to get news o and priority

tickets or our events. You are also welcome to become a part o

the community and contribute your own opinion to the discussion.

brandperect.org | @brandperect

Link index

Brand Perects Adventures in Retail report:

http://brandperect.org/brandperectreport.pd

Aviva web and mobile standards:

http://standards.aviva.com

Ocoms Fixed Broadband Map or the UK (2012):

http://maps.ocom.org.uk/broadband

Google user response to load times article:

http://nyti.ms/UVDmsA

Google page speed general advice:

http://bit.ly/theneedorspeed

TechCrunchs Everything You Always Wanted To Know About HTML5

(But Were Araid To Ask):

http://tcrn.ch/WjB4Pb



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Julie Strawson

[email protected]

+44 (0)1737 781624

Neil Ayres / Editor

[email protected]

07775 023 758

Laura Liggins / Designer

Laura Barnard / Illustrator

online retail research report 2012

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