NORDIC E-COMMERCE DIBS S ANNUAL REPORT ON E-COMMERCE, MOBILE COMMERCE AND PAYMENTS

Transcription

1 NORDIC DIBS S ANNUAL REPORT ON, MOBILE COMMERCE AND PAYMENTS

2 NORDIC 1 Intro 2 Swedish E-commerce Online payments in Sweden 4 Danish E-commerce Online payments in Denmark Norwegian E-commerce Online payments in Norway Nordic survey Glossary

3 INTRO 2 4 MOBILE PAYMENT SOLUTIONS ARE TAKING TO THE NEXT LEVEL STOCKHOLM NOVEMBER 27 TH, 14 We re in the midst of a big transformation. Our ways of shopping and paying are likely to change more in the next few years than they have over the last two decades. We are becoming less dependent on both physical shops and computers. The shopping of the future is mobile. The growth of e-commerce is almost exclusively taking place on mobile devices and is driven by a change in consumer behavior. The percentage of Nordic consumers who are shopping via their mobile phone or tablet has increased rapidly over the last two years. This development is spurred by services: travel, music streaming services and subscriptions to magazines and newspapers. Yet to a large extent, physical products, such as clothing, footwear, consumer electronics and healthcare products, are also being purchased on mobile devices. The demand for mobile shopping solutions already exists. The providers of payment solutions now have to ensure that their services are efficient and easy enough for mobile devices. Local payment solutions for mobile phones have gained strong foothold in both Denmark and Sweden. Swedish company Swish is growing by 13, users per month and will likely launch a payment solution for e-commerce in 15. The Danish equivalent to Swish, MobilePay, is even further ahead. More than 1.8 million Danes are using MobilePay, payment with the app is possible in more than 25 physical shops and the e-commerce service was launched recently. Together, Nordic banks have decided to commit to MasterCard s solution MasterPass, which stores the consumers card details and the delivery address. The consumer is automatically connected to the service and identified by Mobile BankID in Sweden and BankID 2. or BankID in Norway. This will reduce friction during purchases made not only on mobile devices, but on computers as well. Apple s new mobile payment solution, Apple Pay, has sparked a great deal of interest. It is worth mentioning that this solution requires both new hardware and a change in consumer behaviour. Furthermore, Apple Pay is only compatible with payments made through apps. However, Apple s solution is very simple and sets the bar high for other market players. For the first time in a very long time, we are now presented with a number of options that appear to have the ability to fundamentally transform the way we use mobile devices to pay. Whether consumers will choose MasterPass, MobilePay, Swish or Apple Pay, they are all examples of solutions that simplify the shopping experience significantly compared to before. Moreover, these solutions include an important ingredient which other mobile payment solutions lack: an existing relationship with the consumer. New payment solutions have the ability to change a great deal, but not everything. The most significant change an online shop can make in order to simplify shopping via mobile devices is to offer a mobile responsive website. 4 out of 1 Danish and Swedish consumers and half of Norwegian consumers state that they have cancelled a purchase due to the website not being optimized for mobile devices. Consumers are already shopping via their mobile phones. Now shops are being adapted to suit their needs. New, effortless mobile payment solutions are furthermore being established, meaning that purchases will be moved from computers to mobile devices at an even faster rate than they have been so far. I hope you will find this report useful I would be happy to hear from you should you have any questions. Daniel Larsson Deputy CEO, DIBS 4 5

4 2SWEDISH 4 IN SWEDEN 14 E-commerce continues to grow. Today, this growth takes place almost exclusively on mobile devices. Not only lower prices motivate us to shop online. The most important reasons are saving time and accessing a larger selection compared to traditional shops. IS GROWING STEADILY S W E D E N E-commerce in Sweden yields a turnover of 81 billion SEK. That is 5.3 billion (7 percent) more than the previous year. In two years, e-commerce has increased by 15 percent. These figures are based on the actual growth of approximately 15, online shops % E-commerce experienced its first growth peak in the early s, from to, after which the development levelled out. It still continues to increase, but at a slower pace. The big trend during 14 is that a considerable part of e-commerce has been transferred to mobile devices: smartphones and tablets. The proportion of mobile phone or tablet shoppers has increased by more than percent. The products and services we purchase on the internet cover a wide spectrum. 29 percent of online shoppers spent over 5, SEK on the internet in the last three months. Among parents of small children, the percentage is as high as 39 percent. The Stockholm area has seen the greatest development, where high-level consumers, who made more than 25 individual purchases during the last six months, are nearly twice as many as in any other region. No wonder, then, that the growth in e-commerce occurs almost exclusively through use of mobile devices such as smartphones or tablets. Last year, the number of online shoppers using smartphones or tablets was 26 percent. This year, it amounts to 37 percent. Mobile shopping is increasing greatly in every age group. While the share of mobile shoppers is lower in the older age groups, the biggest increase can in fact be found in the group aged years. Generally, there is a lag in which older age groups take longer than younger generations before they embrace the possibilities of new technology. In this context, it is worth mentioning that almost one out of ten young consumers aged say they don t own a computer at all % E-commerce has become a vital tool that helps us juggle our busy lifestyles. Effortlessness is key. The single most important reason for shopping online is that it saves time. This story has yet to reach its end. 83 percent believe that they will make at least as many purchases online during this coming year as they do today. 6 NORDIC 14 7

5 2SWEDISH 4 Number of purchases per person increases more slowly Number Purchases made online (desktop & mobile devices) per person per year ,4 Since 1, the number of purchases per person has increased by 31 percent. This development levelled out during 14. The entire growth of e-commerce took place on mobile devices. 13,3 13, ,2 16, DISTRIBUTION OF IN SWEDEN 1% CLOTHING & FOOTWEAR 9% INTERIOR DECORATING 32% TRAVEL 6% HEALTHCARE 12% ELECTRONICS 7%SERVICES E-commerce helps us juggle Number Online purchases (desktop & mobile devices) per person per year % MEDIA 6% HOME CONSUMABLES Age People in the ages make up virtually the entire increase in number of purchases. Juggling a busy life is the most challenging for parents of small children. While many are well established professionally and make a good income, they have little time left for shopping. Being able to shop online instead saves time. Travel dominates Swedish e-commerce and make up a third of the market. The percentage of travel and services is increasing compared to the previous year. The Swedish e-commerce market is estimated at 81 million SEK and has seen a growth of 15 percent in two years. 8 NORDIC 14 9

6 2SWEDISH 4 Large-scale mobile breakthrough Number of purchases increases on mobile phones % Have you purchased anything via your smartphone or tablet in the past six months? 5 42% 38% 37% 35% Have you purchased anything via your smartphone or tablet in the past six months? 1 14% 18% 3% 6% 2% 4% 37% 14 26% times 3-5 times 6-1 times times More than 25 times Online shopping is growing noticeably on mobile devices. What is more, those who shop online are purchasing more frequently. The percentage of high-level consumers, i.e. people with at least 25 individual internet purchases within six months, has doubled. At the same time, the rate of shoppers with one or two purchases is decreasing by 17 percent. On average, consumers shop on their smartphones or tablets 11,14 times per annum. 15% 12 Half of all consumers aged shop via mobile devices % Have you purchased anything via your mobile phone or tablet in the past six months? Age This year, the number of mobile shoppers grew by over forty percent, from 26 to 37 percent of those asked. This corresponds to 736, new consumers. Mobile devices are up to standard; surfing is possible practically anywhere, and a growing number of shops have optimized their websites to mobile use. The groups with the biggest percentage of mobile consumers, both on smartphones and on tablets, are families with children and young people. Mobile shopping is increasing rapidly across all age groups. The highest percentage of shoppers using mobile devices can be found in the age groups and 35-44, where half have now made mobile purchases. These age groups are also responsible for the fastest growth compared to NORDIC 14 11

7 2SWEDISH Your mobile phone is closest at hand % Why did you shop on your smartphone? The hunt for footwear goes mobile % What have you purchased using your smartphone or tablet in the past 6 months? 4 My smartphone was closest at hand at the time of purchase I used an app to shop I opened an offer via on my smartphone I don t own a computer 5% 17% 27% 6% women men 19% 13% electronics 9% 26% 3% 32% home consumables 14% 1% 27% 34% I was in a shop but purchased the product online instead 3% interior decorating travel media I didn t have any other internet connection I scanned a QR-code 3% 4% clothing & footwear 48% % healthcare 26% 9% services 8% 18% We use our smartphone to shop mainly because it is closest at hand at the time of purchase. Three percent were in a physical shop but still chose to use a smartphone to order online. The line between physical shops and the internet is becoming increasingly blurred. We might do our research online and the actual shopping offline, or the other way round. Three categories of products and services stand out in mobile e-commerce: clothing and footwear, media, and travel. Women purchase clothes, shoes and healthcare products to a much greater extent than men, whereas men tend to buy consumer electronics. Young people own tablets instead of computers % Why did you shop on your tablet? The screen size determines how we shop % How we shop using our smartphones or tablets My tablet was was closest at hand at the time of purchase I opened an offer via on my tablet I used an app to shop I don t own a computer 7% 13% 12% 75% 43% Tablet browser 41% Smartphone app I was in a shop but purchased the product online instead I didn t have any other internet connection I scanned a QR-code 3% 2% 2% % Tablet app 36% Smartphone browser Accessibility is even more important for tablet users. 3 out of 4 choose the tablet because it is closest at hand at the time of purchase. It is noteworthy that one out of five young people between the ages state that not having a computer is why they use a tablet to shop. Consumers who shop using their mobile phones tend to use an app to do so, while tablet users prefer shopping via a web browser. This is, of course, a matter of screen size. Exploring, comparing and looking at products on a tablet is a different experience than on a small smartphone screen. 12 NORDIC 14 13

8 2SWEDISH 4 Mobile shopping is increasing in almost all areas % Which products or services have you bought with your smartphone or tablet in the last 6 months? SUBSCRIPTIONS AND HOME DELIVIERIES HELP BUSY FAMILIES % What products or services have you subscribed to online? 1 Electronics Home consumables Interior decorating Travel Media Clothing & footwear Healthcare Services TV / Film Streaming Service (Viaplay, Netflix and HBO) Ages % Mobile consumption has increased within most categories. Clothing and footwear have more than doubled in the last two years and now represents the most popular shopping category on mobile devices, thus exceeding media. Travel is also increasing vastly, by as much as 35%. However, healthcare is presenting the largest growth percentagewise. While mobile commerce is commonly related to apps and mobile services such as bus tickets, it does in fact constitute a large business throughout all sectors, ranging from footwear to furniture. 27% TOTAL Music Streaming Service (Spotify and Wimp) Ages Big spenders via mobile prefer to travel % How do you distribute the money spent on shopping via your smartphone or tablet? euro 5 euro or more Ages % 21% TOTAL Magazines, Newspapers and Books 27% TOTAL 6% TOTAL Groceries 9% % 3 Ages Electronics Home consumables Interior decorating Travel Media Clothing & footwear Healthcare Services Shoppers spending at least 5 Euro (approximately 5, SEK) via smartphones or tablets predominantly purchase travels, whereas those spending less than 1 Euro (approximately 1, SEK) primarily spend that money on media. Mobile media consumption is mainly focused on buying individual songs and films. The travel category does not consist mostly of metro and bus tickets, but rather many people tend to buy their business trips and family holidays on mobile devices. Clothes and footwear are frequently purchased by both consumer categories. More than one out of four consumers have subscribed to music or film streaming services. One interesting trend is the development of home delivery groceries and prepacked groceries, which varies significantly across the country. In Stockholm, one in ten have purchased this type of regular service, compared with a mere percent in rural Sweden. Families with children represent the highest percentage, with 14 percent having subscribed to home delivery shopping services. That is three times the number of young adults without any children, and seven times that of older people whose children have flown the nest. However, older consumers are overrepresented among subscribers to magazines and newspapers. 14 NORDIC 14 15

9 2SWEDISH 4 HELLO THERE! What s your mobile e-commerce story? Why did you commit to a mobileoptimized website? We relaunched our website at the beginning of 12, already having noticed that more and more users were visiting the website on their mobiles. In 11, approximately percent of our visitors were using a mobile device. So it was only natural for us to include smartphones in the project. We launched new websites both for desktops and for mobiles in May of 12, which resulted in a substantial increase in mobile traffic. Within six months, 5 percent of our traffic was coming from mobile devices. How did that go? Very well! Mobile phones now make up the majority each month, so with any new activity we consider mobile usage firstly. We draw a great deal of traffic to our website via and Facebook, where consumers are largely mobile device users. Why have you succeeded? We discuss technology and services at length, but essentially it s about offering a broad selection in order to build volume. We ve built a successful online shop that is well integrated with our physical shops. We re very committed to being available to our customers in whichever channel they prefer, and whether that s a physical shop, the mobile or desktop version is a secondary question. What happens now? Mobile shopping keeps increasing more and more each month. But it s also important to keep in mind that many customers start their journey on their mobile only to complete the purchase on their computer or in a shop. Mobiles serve as a way of keeping up to date with new products. Saving time is the most important reason % What is the most important reason why you shop online? 64% 58% 56% 43% 52% Saves time, easy and effortless Lower prices The single most important reason to shop on the internet is that it saves both effort and time. At the same time, it is noteworthy that four different reasons have been stressed as influential by more than half of those asked. E-commerce has more than just one strength, and thus meets consumers needs and wishes in a variety of ways. % What is the most important reason why you shop online? 66% 63% Saves time, easy and effortless 6% 56% Lower prices Easier to compare products 53% 59% Easier to compare products Larger product selection Women prioritise saving time and men lower prices % 46% women Larger product selection Always open Saving time is most important for people in the greater Stockholm area and the ages 35-44, while it is of least importance to the youngest group aged 15-24, who are instead driven by lower prices. Young people are also likely to be more motivated by the larger product selection found on the internet. 5% 55% Always open men Mikael Stålnacke ecommerce Manager, MQ The fact that online shopping saves time and helps you juggle a busy life is of greater significance for women, whereas men tend to prioritise all other reasons to a slightly higher degree than women. 16 NORDIC 14 17

10 2SWEDISH Selection and prices drive customers abroad % Why did you choose an online shop abroad for your purchase? GENDER GAPS IN PLANNED MOBILE PURCHASES 4 The product or service is not available in Swedish online shops Lower prices than in Swedish online shops The product or service is not available in physical shops in Sweden Lower prices than in physical shops in Sweden 33% 35% 57% 6% In what areas are you planning to increase your shopping via smartphone or tablet over the next twelve months? Lower tax/vat Other reason The product will be used in the country where purchased 5% 4% 7% women men 41 percent of those who have made purchases on the internet have used online shops abroad to do so. The single most important reason is that the product or service was unavailable in Swedish online shops. Mobile device purchases will increase derna? % How do you expect your shopping via smartphone or tablet to develop in the next 12 months? Almost as many people gave lower prices as their motivation. 47% 22% CLOTHING & FOOTWEAR 27% 41% MEDIA 16% 24% INTERIOR DECORATING 45% 38% TRAVEL 22% 14% HEALTHCARE 17% 21% HOME COMSUMABLES 16% 28% SERVICES 13% 38% ELECTRONICS 5% Less 5% Same as now % More Half of the consumers asked estimate that they will continue to shop online at about the same rate as they do today. One out of five expect their mobile shopping to increase. A total of 7 percent believe they will be shopping at least as much as they do today. Only five percent estimate that their mobile shopping will decrease. The travel sector appears to be on the verge of a mobile rise - that is, if you are to believe the consumers. 41 percent plan to increase the travels purchased on their mobile devices. Consumer electronics, media, as well as footwear and clothes will generate increasingly large sales. The distinct gender gaps in expected purchases cannot be ignored. Twice as many women as men intend to purchase more clothing and footwear, while three times as many men as women mean to increase their mobile shopping of consumer electronics. In this context, it is relevant that men already represent three times as many purchases of consumer electronics as women, who in turn buy more than twice as much clothing and footwear as men do. 18 NORDIC 14 19

11 2 ONLINE PAYMENTS IN SWEDEN We prefer paying by card % What is your payment method of choice? Card Online bank payment Invoice PayPal, Payson etc. Other method 4 THE TECHNOLOGY IS READY FOR THE NEXT BIG STEP 7% 5% Half of all mobile shoppers want to store their card number when they shop. New solutions are underway. That is the time for e-commerce to take the next big step forward. 23% % online purchases We re in the midst of a breathtaking development. Last year, John Donahoe, CEO of the U.S. e-commerce website ebay, predicted that the world was about to witness a bigger transformation in how we shop and pay over the next few years than we have seen in the past twenty years. In the beginning, around year, mobile surfing was expensive and slow. A few years later, smartphones and their big, user-friendly screens were a widespread success. Surfing became less frustratingly slow with 3G, and the arrival of 4G provided an entertainment, gaming and shopping portal. In 1, percent of the population owned a smartphone; three years later that number has risen to 6 percent. Suddenly, the technology was ready. Over the last years a growing number of online shops have adapted their websites to mobile use. E-commerce and shopping in physical shops are now becoming increasingly seamless. We do our research online and then head to the shops for the purchase, or browse the stores to get a feel for the product before we order it online. Now the time has come for e-commerce to take its next step. The devices are up for the challenge, surfing speed is fast enough and online shops are straightforward, well assorted and easy to navigate. The only problem is that entering card details while on the bus or sofa is far too inconvenient. 54 percent of mobile shoppers say they would like to be able to save their card number on their mobile phone. It is even more important for older people than younger ones. Next year will see the launch of several services that make it possible. Nordic banks have agreed to commit to MasterCard s new solution, MasterPass, which stores the consumers card information. Swish will be launching a mobile payment solution of their own at the same time. Apple recently launched its solution, Apple Pay, although it is yet unclear when it will be available in Scandinavia. This year already sees Danish users make 3 million transactions with the Swish-equivalent MobilePay. One prerequisite for the development of mobile payment methods in Sweden is that the usage of Mobile BankID positively exploded during 14. Banks did their share by introducing the service to their customers, and authorities such as Försäkringskassan, the Swedish Social Insurance Agency, and Skatteverket, the Swedish Tax Agency, also contributed to this breakthrough. With Mobile BankID, it will be easier to fill in your income-tax return forms, and, before long, to do your shopping without having to fuss around with your card information. 6 percent of mobile shoppers say they made a mobile purchase because the smartphone or tablet happened to be closest at hand. Not only are these devices usually the most convenient, they re always online, too. Everything points towards e-commerce taking a big leap forward once mobile payment methods become userfriendly enough not to hinder a purchase. 22% 1% 9% When shopping on the internet, we prefer to pay by card, regardless of whether we re using a desktop, our mobile phone or a tablet. Almost one out of four people would rather be invoiced, but this group is decreasing compared to the previous year. Micropayment, such as PayPal, has seen a slight increase 25% 17% mobile purchases 42% and the increase in payment via online bank payments is mostly composed of purchases made on mobile phones. However, no dramatic changes have occurred in the popularity of the respective payment methods over the last few years. NORDIC 14 21

12 2 ONLINE PAYMENTS IN SWEDEN 4 Men prefer card, women prefer invoice % What payment method do you prefer when shopping online? 6 5 women men New payment methods are growing fast % Which payment options are you familiar with? 1 9 Know of and have used Know of but have not used Do not know of 93% 92% % Card Online bank payment Invoice PayPal, Payson etc. Other method 7 Most people prefer to pay for their online purchases by card. One in four would rather be sent an invoice or pay directly via online bank payment. Women prefer paying through invoices to a higher degree than men do, while men are more inclined to pay by card compared to women % 59% 52% 44% Payments should be easy and secure 39% 33% 36% % What is the most important reason for your choice of payment option? Card Online bank payment Invorice PayPal % 22% 19% % % 12% 5% 6% 7% PayPal Payson Swish Wywallet SEQR V.me MasterPass 1% 1% Easiest Most secure Earning bonus points Cheapest Ideally, we like our payment method to be effortless and secure. Two interesting aspects stand out in this context: those who pay by card value effortlessness above any other factor, whereas those who prefer invoices are prepared to accept a little more inconvenience, since they feel that this method offers a higher level of security in return. Swish is a mobile payment service that was introduced by Swedish banks and lets private individuals transfer money to each other. It has achieved an impressive exposure within a very short period of time. 81 percent state that they are familiar with Swish, and as many as 22 percent have used it. Among people under the age of 35, almost a third have used Swish. People are about as familiar with PayPal as they are with Swish, but have used it to an even higher degree. 5 percent have used PayPal, and in the age group that number constitutes over 6 percent. 22 NORDIC 14 23

13 2 ONLINE PAYMENTS IN SWEDEN All age groups would like to be able to store card numbers % Would you prefer % not Skulle having du to använda enter your en card webbutik number oftare every där time du inte you behövde shop online? skriva in ditt kontonummer för varje e-handelsköp? JA NEJ One in four would shop more if they didn t have to enter card details each time % Would you use an online shop more frequently if you did not have to type in your card number for every purchase? 4 online purchases 49% online purchases 26% mobile purchases mobile purchases mobilen Avser mobil handel 58% 28% To many people, always having to type in your card information is an annoying aspect of e-commerce. Half of all customers would prefer if they didn t need to enter their card information every time they make a purchase. This percentage is even higher among consumers using mobile devices (58 percent). All age groups would prefer not having to enter their card number for every single purchase, but the proportion is larger among middle-aged and older consumers. 26 percent of consumers say they would use an online shop more often if it didn t require them to type in their account number each time they make a purchase. This number peaks in the oldest group, aged 66-74, where as many as 32 percent say they would shop more if they didn t have to enter their card number for each purchase. Among shoppers on mobile devices, the percentage is even higher: 28 percent. 24 NORDIC 14 25

14 2 ONLINE PAYMENTS IN SWEDEN 4 Many consumers cancel their purchases % Have you cancelled an online purchase in the past 6 months? 5 45 YES CONSUMERS DEMAND MOBILE-OPTIMIZED WEBSITES 35 3 Have you cancelled a purchase because of the website not being adapted to mobile devices? YES Cancelling an initiated purchase is far from unusual. 39 percent of consumers have cancelled a purchase they had already initiated. This number is slightly lower than the previous year. 39% TOTAL It is important to offer the right payment method % Why did you cancel the purchase? % 31% 27% 26% 23% 19% 18% 18% 5% 37% 36% 38% 39% Many consumers will cancel a purchase if the website is too difficult to navigate and insufficiently adapted to the smaller screens of mobile phones. Young people are the most demanding in this aspect, with 5 percent of consumers aged having cancelled a purchase for that reason in the last six months. This is an increase compared to last year s 48 percent. Mobile responsive websites contribute to higher conversion rates. Not my preferred payment method The payment process Registration is too bothersome Unclear terms and conditions Technical difficulties Insufficient information Other reason Lacking trust 2% Not possible to pick up product The most common reason for cancelling an online purchase is that the online shop does not offer the customer s preferred payment method. Offering a wider variety of payment methods creates a better chance of high rates of conversion from visitors into customers. The second most frequent reason for having cancelled a purchase is problems with the payment process followed by finding the registration of customer data too inconvenient. 26 NORDIC 14 27

15 2 4DANISH IN DENMARK 14 E-commerce continues to grow. But almost all growth is now happening on the mobile devices. We shop online not only because of lower prices. The single most important reason is saving time. IS GROWING FAST D E N M A R K E-commerce in Denmark has a turnover of 54.4 billion crowns. That is 7,2 billion crowns (15 percent) more than the last year. In two years e-commerce has increased by 31 percent. The numbers are based on an actual growth seen in 15. online shops % The E-commerce market presented its strongest growth in the beginning of, specifically from to, after which the growth slowed down a bit. It is still increasing, but not at the same rate. The main trend of 14 is that a large part of e-commerce has migrated to mobile devices. The number of people using their mobile phones or tablets for shopping has increased by 74 percent in two years. The products and services we purchase online are immensely varied. 29 percent of online shoppers have spent at least 5 (37 kr.) in the past three months. The largest development can be seen in the Copenhagen area and among families with young children. The share of families with young children who have shopped more than 25 times in the last 6 months (14 percent) is more than 5 percent higher than the share of young people who shop as often. E-commerce can become the way to make everyday life work. Flexibility is the key. The most important reason for shopping online is that it saves time, which is especially important for parents of young children. That is why it is no wonder that almost half the growth we see is on mobile devices such as smartphones and tablets. Two years ago 19 percent shopped via smartphones or tablets. This year it is 33 percent. Mobile shopping is increasing significantly in all age groups. It decreases somewhat with age, but the fact is that every fourth person in the group aged 55-64, today have used their smartphone or tablet for online shopping. Normally there is a gap because younger consumers tend to be more accepting of new technology than the older generations. In that regard it may be interesting to mention that almost every tenth mobile consumer in the youngest age group states that the main reason why they shop via their smartphone is because they do not have a computer. And it doesn t end here. Only 8 percent believe that they will do less online shopping in the following year than they do today, while more than double state that they intend to increase their online shopping. We will see a steady increase, especially on mobile devices % 28 NORDIC 14 29

16 2 4DANISH Total amount of purchases has stagnated Number Online purchases (desktop & mobile devices) per person per year ,8 The development of number of purchases has stagnated after a few years of constant growth. The development in e-commerce continues, but the entire growth in 14 took place on mobile devices. 13,6 15, ,4 16, DISTRIBUTION OF IN DENMARK 1% CLOTHING & FOOTWEAR 11% INTERIOR DECORATING 34% TRAVEL 4% HEALTHCARE 11% ELECTRONICS 7%SERVICES E-commerce makes everyday life easier Number Online purchases (desktop & mobile devices) per person per year % MEDIA 5% HOME CONSUMABLES People in the ages of cover the entire increase in number of purchases. It is when the children are young that everyday life is most challenging. While many are well established professionally and make a good income, they have little time left for shopping. Being able to shop online instead saves time. Ages Do you remember ordering your vacation trip at a physical travel agency? Today, it seems like a long time ago. The internet has made it possible to compare prices, search for destinations, watch Youtube videos of different hotels and eventually book your tickets and hotels online. The category Travel also covers the bus- and metro tickets you buy with your phone while on the go. 3 NORDIC 14 31

17 2 4DANISH Strong development of mobile e-commerce Mobile customers are shopping more % Have you purchased anything via your smartphone or tablet in the past six months? 5 39% 39% % 33% Have you purchased anything via your smartphone or tablet in the past six months? 1 14% 17% 4% 6% 3% 4% 36% times 3-5 times 6-1 times times More than 25 times Those who started shopping on mobile devices are doing so increasingly often. The group of consumers who made 3-5 purchases in the last six months has decreased, while those who made more purchases has increased. 3% 13 19% 12 Mobile shopping is increasing in all age groups % Have you purchased anything via your smartphone or tablet in the past six months? Ages Purchases made on mobile devices continue to grow significantly. The amount of people shopping on their mobile phones or tablets has increased by 74 percent in two years and there is no indication that the development is slowing down. Mobile e-commerce has had a breakthrough in all areas. The mobile devices are of good quality, you can surf online almost everywhere and more and more shops are making their websites mobile responsive. Mobile e-commerce is increasing in all age groups. As expected the biggest share is in the age group, but it is actually growing the quickest in the age group years, where 47 percent more people have been shopping on a mobile device compared to last year. 32 NORDIC 14 33

18 2 4DANISH Your mobile phone is always near you % Why did you shop on your smartphone? Mobile gender patterns % What have you purchased using your smartphone or tablet in the past 6 months? My smartphone was closest at hand at the time of purchase I used an app to shop I opened an offer via on my smartphone 16% 31% 58% women men electronics 13% 32% home consumables 12% 12% I don t own a computer 3% 15% 13% 23% 21% 28% 35% I was in a shop but purchased the product online instead 5% interior decorating travel media I didn t have any other internet connection I scanned a QR-code 3% 4% clothing & footwear 42% 18% healthcare 13% 5% services 12% 19% The most common reason for using your mobile to shop is that it was closest at hand at the time of purchase. It is worth mentioning that 5 percent were in a physical shop but still decided to order the product online via their smartphone. The line between physical shops and the internet is becoming increasingly blurred. Sometimes we do research online and shop offline, sometimes the other way around. There is quite a difference between the mobile habits of men and women. Women buy clothes and footwear and healthcare products twice as often as men, while men are overrepresented in the electronics shops. The tablet is used when closest at hand % Why did you shop on your tablet? Mobile shopping in both browsers and apps % How we shop using our smartphones or tablets My tablet was closest at hand at the time of purchase I used an app to shop I opened an offer via on my tablet I don t own a computer 3% 17% 16% 73% 39% Tablet browser % Smartphone app I was in a shop but purchased the product online instead I didn t have any other internet connection I scanned a QR-code 2% 1% 1% % Tablet app 26% Smartphone browser Accessibility is even more important for tablet users. 3 out of 4 explain their choice of device with the fact that their tablets were closest at hand at the time of purchase. The distribution between apps and browsers is very even in regards to both smartphones and tablets. An exception is smartphone browsers that due to lower quality and smaller size are less popular than browsers on the larger tablet. 34 NORDIC 14 35

19 2 4DANISH Mobile commerce is growing in most product categories % Which products or services have you bought with your smartphone or tablet in the last 6 months? SUBSCRIPTION AND STREAMING SERVICES ARE WIDELY POPULAR % What products or services have you subscribed to online? 1 Electronics Home consumables Interior decorating Travel Media Clothing & footwear Healthcare Services TV / Film Streaming Service (Viaplay, Netflix and HBO) Ages % Mobile commerce is growing in most product categories. Media is still the largest category. It is worth noting that mobile purchasing of services has increased by 5 percent. 32% TOTAL Magazines, Newspapers and Boooks Ages Mobile big spenders prefer travel Ages % TOTAL 16% % How do you distribute your online spending via your smartphone or tablet? euro 5 euro or more 22% 1% TOTAL Music Streaming Service (Spotify, Wimp) 4% TOTAL Groceries 6% Ages Electronics Home consumables Interior decorating Travel Media Clothing & footwear Healthcare Services People who spend at least 5 via smartphone or tablet most often shop within the travel category. Travel is not primarily about tickets for bus or metro, many consumers also book vacations and business trips on their mobile devices. Those who spend the least - less than 1 - most often buy media products. Mobile media consumption is divided between people buying individual songs and movies and people shopping on a significantly larger scale. The pattern of e-commerce is relatively similar across different age groups. One exception is music streaming, which is significantly more popular among young consumers than the other age groups and five times more popular than among consumers aged However, the oldest age group is overrepresented when it comes to newspaper subscriptions. We can also note that video streaming, such as Viaplay, Netflix and HBO, has had a major breakthrough. Not only do half of people under the age of 34 already hold a subscription to such service, so does a third of those in the ages of NORDIC 14 37

20 2 4DANISH Saving time is the most important reason % What is the most important reason why you shop online? 61% 58% 52% 32% 52% Saves time, easy and effortless Lower prices Easier to compare products Larger product selection Always open The most important reason for shopping online is that it is easy and it saves time. E-commerce simplifies everyday life. At the same time it is worth noting that more than half of the respondents stress four reasons as important. E-commerce not only fulfils one specific need, but rather a whole range of consumer needs and wishes. Women prioritize ease, men price % What is the most important reason why you shop online? 7 62% 62% 6% 6 54% 5 5% 53% women 54% 5% men 3 31% 32% 1 Saves time, easy and effortless Lower prices Easier to compare products Larger product selection Always open Women and men generally agree on why they shop online. The only significant difference is that men consider price a bigger motivation for action. 38 NORDIC 14 39

21 2 4DANISH Selection and prices drive customers abroad % Why did you choose a foreign online shop for your purchase? GENDER GAPS IN PLANNED MOBILE PURCHASES The product or service is not available in Danish online shops Lower prices than in Danish online shops The product or service is not available in physical shops in Denmark Lower prices than in physical shops in Denmark 33% 32% 55% 61% In what areas are you planning to increase your shopping via smartphone or tablet over the next twelve months? Lower tax/vat Other reason The product will be used in the country where purchased 48 percent of online consumers have shopped in a foreign online shop in the past six months. The most common Mobile purchases will increase derna? % How do you expect your shopping via smartphone or tablet to develop in the next 12 months? 4% 5% 1% reason is price followed by the fact that the product or service is not available in Danish online shops. 54% 27% CLOTHING & FOOTWEAR 3% 43% MEDIA 19% 17% INTERIOR DECORATING women 34% 35% TRAVEL men 19% 8% HEALTHCARE % 17% HOME CONSUMABLES 21% 3% SERVICES 18% 41% ELECTRONICS 8% Less % Same as now 17% More 57 percent of mobile customers expect that they will shop at least as much via mobile devices in the course of the next year. Only 8 percent expect to shop less. Women shop more for clothes and shoes on mobile devices, which is also where they plan to increase their shopping next year. Men, who currently shop the most for electronics and media, expect to increase their shopping in these categories. NORDIC 14 41

22 2 4 ONLINE PAYMENTS IN DENMARK We prefer paying by card % What is your payment method of choice? Card Online bank payment Invoice PayPal etc. Other method THE TECHNOLOGY IS READY FOR THE NEXT BIG STEP 2% 3% 5% 4% 4 out of 1 mobile customers would like to be able to store their credit card number on their mobile phone. New solutions will be launched next year. That is the time for e-commerce to take the next big step forward. online purchases 86% We are in the midst of a rapid development. Last year, John Donahoe, CEO of the U.S. e-commerce website ebay, predicted that the world was about to witness a bigger transformation in how we shop and pay over the next three years than we have seen in the past twenty years. In the beginning, around, mobile surfing was expensive and slow and mobile devices were not good enough. A couple of years later smartphones broke through with large and user-friendly screens. 3G made mobile surfing a little faster and 4G meant that the mobile became a serious portal for entertainment, gaming and shopping. Today 3 out of 4 Danes have a smartphone. Suddenly the technology was ready. During the past few years more and more online shops have understood where things were going and have adapted their websites for mobile use. The line between e-commerce and shopping in physical shops is growing increasingly blurred. We might do our research online and then head to the shops for the purchase, or browse physical stores to be able to measure and get a feel for the product before we order it online. Apps let us pre-order our morning coffee without having to wait in line. Now is the time for e-commerce to take the next big step. The devices are good enough, surfing speed is fast and the shops are user-friendly, well stocked and easy to navigate. The only problem is that trying to punch in your credit card number while sitting on the bus, or having to rummage for your debit card again! when sitting on the sofa just to order some take-out is far too inconvenient. percent of Danish mobile consumers state that they would like to be able to save their card information on their mobile phone. 17 percent even state that they would shop online more often, if they did not have to fill in their card information every time. The technology of mobile payment solutions is developing rapidly. This fall Apple will be launching their solution, Apple Pay, which, however, is not yet accessible in Denmark. Next year at least one major card company will launch a solution making it easier for consumers to save their card information on their mobile devices, helping them avoid having to fill in the card information for every purchase. 58 percent of mobile shoppers in this year s study say they chose their mobile or tablet to do their shopping because it happened to be in most direct reach at the time of their purchase. Not only are these devices usually the most close at hand, they re always online, too. Everything points towards e-commerce taking a big leap forward once mobile payment methods become user-friendly enough not to hinder a purchase. 2% 2% 6% 6% In Denmark card is so far the most popular payment method. No matter whether the purchase takes place on a computer, mobile phone or tablet, Danes prefer paying by card. In addition to this, the share of purchases on mobile devices is increasing. Last year every tenth mobile user mobile purchases 84% would use an e-wallet service such as PayPal, but now almost half of them have joined the large group of card users. Both the use of online bank payment and paying by invoice has a much weaker position in Denmark than in other Nordic countries. 42 NORDIC 14 43

23 2 4 ONLINE PAYMENTS IN DENMARK Cards dominate as a payment method % Which payment method do you prefer when shopping online? 1 8 women men New payment methods are growing rapidly % Which payment options are you familiar with? Know of and have used Know of but have not used Do not know of 1 97% 95% % Card Online bank payment Invoice PayPal etc. Other method 7 Almost all Danish consumers prefer to pay by card. That goes for both men and women. Both the use of online bank payment and paying by invoice has a much weaker position in Denmark than in other Nordic countries % Paying by card is easy and secure 41% 37% % 38% 43% % What is the most important reason for your choice of payment option? Card Online bank payment Invorice PayPal % 22% % 9% 4% 3% 1% 1% 1% MobilePay PayPal Swipp Paii MasterPass V.me Easiest Most secure Earning bonus points Cheapest Card users prefer cards because it is both easy and safe almost to the same degree. The few who use other methods focus much more on safety as the reason for their choice. In a short time the mobile service MobilePay have gained impressive popularity. Almost 8 percent of Danes know the service and more than percent have already used it. In the ages more than 6 percent have used the service. Also e-wallet services such as PayPal are known and are being used to a relatively high degree. 44 NORDIC 14 45

24 2 4 ler på internettet? JAONLINE PAYMENTS NEJ IN DENMARK Many would like to save their card information on the phone % Would you prefer % not Ville having du anvende to enter en your webbutik card number oftere, every hvis du time ikke you behøvede shop online? indtaste dit kortnummer for hvert køb? JA NEJ A stored card number can drive sales % Would you use an online shop more frequently if you did not have to type in your card number for each purchase? online purchases 37% online purchases 14% mobile purchases mobile purchases mobilen Avser mobil handel % 17% 4 out of 1 customers state that they would like to be able to safely store their card information in order to avoid filling it in for each purchase. The share is highest among mobile customers, which makes good sense. Filling in card information or being hooked up to a safety device is less annoying when you are on the computer, than when you are shopping while being on a bus or on the couch via the mobile. Every sixth mobile customer think that they would shop more if they could store their card information and avoid having to fill it in for every purchase. The number is highest among the youngest, both with regards to computer and mobile users. 46 NORDIC 14 47

25 2 4 ONLINE PAYMENTS IN DENMARK More consumers cancel their purchases % Have you cancelled an online purchase in the past 6 months? 5 45 CONSUMERS DEMAND MOBILE-OPTIMIZED WEBSITES 35 3 YES Have you cancelled a purchase because of the website not being adapted to mobile devices? YES We demand more from the online shops we visit. The share of those who have cancelled an online purchase after having begun the transaction is holding steady, while the share of those who have not is decreasing. More than every third Dane has cancelled a purchase in the past six months. 38% TOTAL Unclear conditions result in cancelled purchases % Why did you cancel the purchase? % 44% 39% 38% 24% 33% % 19% 22% 23% 24% 21% 21% 6% Around 4 out of 1 between the ages of have cancelled purchases because the website did not accommodate the small screens of mobile phones. In the youngest age groups the amount of people cancelling purchases for this reason increases. Since practically all growth in e-commerce is taking place on mobile devices, online shops have good reason to explore how well the shopping experience accommodates the customers needs. It is clear that mobile adapted websites contribute to conversion rate. Not my preferred payment method The payment process Registration is too bothersome Unclear terms and conditions Technical difficulties Insufficient information Other reason Lacking trust Not possible to pick up product Unclear terms and conditions is the main reason for aborted purchases with every third consumer aborting their purchases for this reason. One in four consumers state that lack of information is the main reason for cancelling a purchase. This is something web shops should pay attention to. In order to sell your products, the process of payment needs to be simple, safe and not least clear. Added to that, 15 percent of consumers who aborted their purchases did so because the shop didn t offer the preferred payment method. 48 NORDIC 14 49

26 2 4 NORWEGIAN IN NORWAY 14 E-commerce continues to grow. And, almost all growth is taking place on our mobile devices. It s not only lower prices that compel us to shop online, but rather the fact that it is more practical and saves us time over shopping in traditional stores. IS GROWING RAPIDLY N O R W Norwegian e-commerce has a turnover of 69,1 billion NOK, that is 8,8 billion NOK (15 percent) more than the last year. In two years, e-commerce has increased by 33 percent. The numbers are based on the actual turnover of approximately 15 online shops. A Y % E-commerce grew rapidly in the beginning of the s, from to. From there its development flattened out. It continues to grow, but not as quickly. The biggest trend in 14 is that a significant part of online shopping has been launched on mobile devices: smartphones and tablets. The share of consumers who shop via mobile devices has increased by 78 percent. The goods and services that we purchase online stretch over a broad range. Of those who have shopped online, 37 percent have spend more than 5 euro (4 15 NOK) on online shopping in the last three months. This amount is significantly higher than in other Nordic countries. E-commerce has had the biggest breakthrough in the Oslo area and among families with small children. The category of major consumers, those who have shopped online at least 25 times within the last half-year, has almost double the amount of families with children. E-commerce has become a way of balancing the average day. Flexibility is a guiding factor. The most important reason to shop online is to save time. This is why it is not strange that almost the whole growth occurs on mobile devices, like phones and tablets. Two years ago, 18 percent shopped via their smartphones or tablets. This year, the number is 32 percent. Mobile purchases increase within all age groups. It decreases somewhat with age and has increased the most among the elderly. In the age groups over 55 years, the share that has shopped via mobile devices has almost doubled. Usually the older age groups lag behind the younger generations when it comes to new technology. In this context it might be interesting to mention that every fourth youth aged do not have any other internet connection than their smartphone and 11% do not own a computer. The story doesn t stop here. 79 percent think that they will shop online at least as much next year. We will see a continuous growth, especially on mobile devices % 5 NORDIC 14 51