In the retail universe, where cyberspace equals a planet in our solar system, what is the impact on retail as a result of broadband shopping, and why do you need to know?
According to new research conducted by Media-Screen™, online shopping is taking a bite out of brick
and mortar retail. That is to be expected, as we argue here that the experience is more important than the product or service. And sitting in the comfort of our homes sipping coffee while shopping equals a great experience for many of us. This means happy customers, that often stores and shops fail to produce.
Called Netpop™, this ongoing study looks at attitudes and behaviors around advertising, shopping, community, entertainment and mobile devices. The analysis of 1,397 people in the U.S. who shop online is part of a larger study of 4,190 consumers who access the Internet via a broadband connection. Here is a taste of the data, as provided by Media-Screen:
- The average number of sources used to research a product before making a purchase is: Online: 2.3
Offline: 2.0 - The average number of hours spent researching a product is:
Online: 1.9 hours
Offline: 1.3 hours - The Purchase Channel for products eventually purchased:
Retail (e.g. store); 58%
Online: 36%
Telephone: 3%
Other: 2% - Average hours spent researching products online by select product categories (Not impulse buys):
Home and garden – 2.3
Travel – 2.1
Beauty – 1.3
Clothing – 1.2 - How these consumers spend their time:
• Shopping: 12% (e.g., researching products, comparing prices, buying products)
• Leisure & Entertainment: 27% (e.g., online games, downloading/listening to music, video clips, websites for fun)
• Communications: 27% (e.g., email, IM, SMS, posting reviews, blogs, photo-sharing, meeting people)
• News and Information: 19% (e.g., search, phone numbers, weather, movie show times, bus information, research for school/work)
• Personal Productivity: 16% (e.g., online banking, investments, calendars, managing contacts, storing personal files) - Percent saying user generated content influenced purchase decision: 9% (This includes consumer review/rating sites, blogs/discussion boards, Instant messaging/chat rooms and social networking sites.)
• People spend 3.8 hours on average researching online purchases
• 50% of all purchases were influenced by an Online Source
• For online purchases, 76% were influenced by Online Sources
• For offline purchases, 35% were influenced by Online Sources
With this data in hand, retailers and all businesses need to focus heavily on their online presence, no matter what their products and services. At L&G, we encourage our clients to create active communications tools to provide Internet users good content that helps them make smart decisions. We also advise that a few of the tools (e.g., blogs, forums, etc.) offer consumers the ability to provide their own views and to engage companies in conversation.
Marketing and communications departments need to take an active role engaging their customers and potential customers to grow market share. By giving customers good content that meets their wants and needs (not the businesses' wants and needs), customers are engaged and appreciative, enhancing the possibility of helping them become loyal customers and brand evangelists. By giving them a voice, businesses create engaged customers who feel valued.
