THE OMNICHANNEL CONSUMER

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1 THE OMNICHANNEL CONSUMER KEY FINDINGS FROM THE DELOITTE REPORT THE OMNICHANNEL OPPORTUNITY TO HELP RETAILERS UNLOCK THE POWER OF THE CONNECTED CONSUMER

2 INTRODUCTION The internet and mobile devices have revolutionised shopping. The way in which an increasing group of consumers now shop has prompted retailers to begin to seek alternative ways to reach their audience. This new system of retailing - connecting stores, ecommerce, mobile apps and social media - is referred to as omnichannel retailing. By integrating and aligning channels, omnichannel retailing provides a flexible and seamless shopping experience for consumers, regardless of whether the customer walks into a store, browses a website or orders via a mobile phone. This booklet is written and produced by ebay. Key results and retailer views are taken from the Deloitte report The Omnichannel Opportunity supplemented by ebay s own perspective and other sources. The full report from Deloitte is available here. Just who are these omnichannel consumers? ebay has worked with Deloitte to examine the impacts and opportunities of the omnichannel phenomenon across Europe. As part of the survey, Deloitte commissioned Ipsos Mori to survey 1000 adults in each of the UK and Germany on their behaviours and attitudes in relation to omnichannel retailing. This booklet contains a selection of key observations for the UK.

3 UNDERSTANDING THE OMNICHANNEL CONSUMER Omnichannel is becoming a reality for retailers 33% of consumers have recently made an omnichannel purchase 33% Online only Omnichannel Offline only 31% 34% 51% of consumers visited a store prior to making a recent online purchase. of consumers used online channels before or during a recent purchase in-store. of consumers used additional online resources.

4 That s That s ONE IN FIVE of us with regard to offline shopping TWO IN FIVE of us with regard to online shopping Frequent shoppers account for up to 70% of total retail spending. They re more likely to use multiple channels too. Frequent shoppers are more likely to be omnichannel shoppers, and are defined as consumers who shop for non-grocery products at least once per week, online or offline. They re not abandoning the high street they regard the high street and online shopping as complementary, with half of them shopping offline at least once per week. Frequent shoppers are almost TWICE AS LIKELY to visit a retailer s website, do an online search, or use price comparison and customer review sites before and during a visit to a store. Up to 63% of all consumers used multiple channels when making orders over 100.

5 BEHAVIOURS AND ATTITUDES OF THE OMNICHANNEL CONSUMER Consumers are using multiple devices to support their shopping habits adults in UK and Germany use computers to look for shopping related information use mobile phones to find shopping related information 82% 56% 23% of UK and German adults use tablets in relation to shopping In addition to seeking information from more sources, consumers are using more devices in these ways: 86% 56% 18% use the internet to find shopping related information do this using at least 2 devices (for example a computer and tablet or smartphone) use all 3 of these devices

6 High value purchases are more likely to be omnichannel purchases And the highest value purchases are likely to be completed using a mix of online and offline channels. Average spend by channel of purchase: Bought offline Bought online Bought offline, online research during purchase Bought offline, online research prior to purchase Bought online, additional online research Bought online, in-store research A broad presence across multiple channels can help retailers ensure they effectively support higher spending customers at any stage of the shopping process. Easy access to information on quality and value, for instance, can help encourage consumers to spend more on items. A majority of consumers now use either smartphones or tablets for shopping. A majority of consumers also use multiple devices for shopping. OVER 50% OVER 80% of those who hadn t purchased via their smartphone had still used it as part of their shopping journey. of tablet owners have used their tablet for shopping.

7 Omnichannel consumers are being influenced in their shopping 69% said that visiting the retail store had a big influence on their shopping 2/3 are influenced by customer reviews, and slightly higher by price comparison sites 43% 1/2 reported that they were influenced in their shopping by apps reported that they were influenced by social media and blogs These findings are based on asking consumers about the information sources used prior to purchase. For each source Deloitte asked the consumer whether the information available influenced their decision to complete the purchase.

8 There is significant variation across product categories in the share of omnichannel purchases with electronics and home products the most likely to be bought using multiple channels. Consumers use multiple channels when purchasing electronics. And they re more likely to use multiple channels before buying home and garden products, and sports and leisure products but least likely on clothing items, which suggests they are a more spontaneous purchase. % of online purchases that involve research using other channels % of in-store purchases that involve online research % of online purchases that are preceded by a visit to one or more stores 31% All 34% All 37% Home 40% Home 43% Home 37% Sports and leisure 34% 24% 23% Sports and leisure Clothing Books/ DVDs, etc 32% 48% 56% Clothing 45% 26% Sports and leisure Groceries 24% Books/ Electronics Electronics 24% DVDs, etc Electronics 25% Clothing 17% Groceries 18% Books/ DVDs, etc 21% Groceries

9 TODAY S CONSUMERS ARE USING CONVENTIONAL AND EMERGING CHANNELS Consumers use new channels but still value stores and positive word-of-mouth Nearly 3/4 2/3 1/2 of consumers said they were influenced in their shopping by friends and family. Over said they were influenced by visiting the store. 62% are influenced by visiting other stores. reported that they were influenced by social media and blogs. These findings are based on asking consumers about the information sources used prior to purchase. For each source Deloitte asked the consumer whether the information available influenced their decision to complete the purchase.

10 MOBILE IS PROPELLING OMNICHANNEL Across the population, laptops are still the device most often used for shopping but mobile is gaining ground, and younger consumers are far more likely to use smartphones for shopping. Tablet ownership rates remain lower, at about one fifth of adults, but tablets are becoming a popular channel for shopping related activities across age groups. Consumers are making use of mobile-specific technologies. This includes newer features such as barcode scanning, location recognition and contactless payment. Retailers could obtain a strategic advantage by being quick to adapt their stores and online resources to make the most of these tech features.

11 Percentage of smartphone owners who have used their phone to... Find nearby stores = 35% Take a picture of a product to retrieve information on the product = 34% Recognise their location and provide information on local offers = 23% Scan barcodes in order to access additional information = 23%

12 HOW CAN RETAILERS SUPPORT THE OMNICHANNEL CONSUMER WHAT WE VE FOUND WHAT RETAILERS SHOULD CONSIDER HOW EBAY CAN HELP A majority of consumers use MULTIPLE DEVICES for shopping An integrated OMNICHANNEL STRATEGY can help ensure that these consumers seamlessly experience the full range of a retailer s resources through any device. The use of MULTIPLE INTEGRATED CHANNELS can allow retailers to build brand loyalty and create social engagement with their brand. Through the 3 ebay Inc companies EBAY, PAYPAL & EBAY ENTERPRISE we can help support a seamless shopper experience, placing the retailer at any stage of the shopper journey, whatever the channel. TABLETS AND SMARTPHONES are more likely to be used for research than purchase Retailers can use APPS & MOBILE OR TABLET OPTIMISED WEBSITES to appeal to omnichannel consumers as they gather information. EBAY APPS have been downloaded more than 220 million times in 190 countries and in 8 languages. At any time, shoppers can browse over 550 million listed items on ebay by mobile. We also know that 40% of all purchases on ebay are touched by mobile.* *Source: ebay research

13 WHAT WE VE FOUND WHAT RETAILERS SHOULD CONSIDER HOW EBAY CAN HELP 1 IN 4 CONSUMERS that bought online said they could not find the product in a local store. NEARLY 1 IN 3 prefer the convenience of online shopping Retailers can appeal to these consumers via an ONLINE PRESENCE and making available a broad range - if not all - of their items online. ebay provides one of the world s largest online marketplaces to customers via any connected device. By making its items available on ebay.co.uk, A RETAILER CAN ACCESS OVER 18.5 MILLION VISITORS.* ebay is not just a checkout it s a vital part of the shopper journey too. www Consumers buying online are also likely to visit the websites of OTHER RETAILERS WEBSITES Retailers should seek to ensure that they have a presence across a BROAD RANGE OF ONLINE RESOURCES. ebay supports retailers with branded storefronts that mirror the brand experience across other channels and keep the retailer in control. This is supported by PROMOTIONS, ADVERTISING AND VARIOUS OTHER SERVICES. Roughly 1 IN 5 SHOPPERS don t like to wait for delivery or pay for it Retailers should offer a range of fulfillment options, such as SAME-DAY DELIVERY OR CLICK & COLLECT services that offer more flexibility. ebay offers various attractive delivery services including its NEW CLICK & COLLECT SERVICE plus FAST & FREE which increases listing conversion by an average 3%.** *Source: ebay research Jan-Dec **Based on test on ebay.co.uk Feb-Mar 2013, in which 40% of buyers were exposed to listings with the FAST & FREE logo. Individual seller results may vary.

14 Percentage of users who reported that they were influenced by... WHAT RETAILERS SHOULD CONSIDER HOW EBAY CAN HELP Apps Blogs and social media 43% 50% Retailers should make better use of APPS AND SOCIAL MEDIA. These sources are less likely to be viewed as important - or used frequently - by them. In addition to its highly popular apps, ebay is making shopping PERSONAL AND INSPIRING for omnichannel consumers, via personalised feeds and community engagement. www Retailer s websites www Other retailers websites 63% 65% Customer reviews Price comparison sites 66% 68% Consumers are influenced by a RANGE OF ONLINE RESOURCES. This suggests that retailers need to work on their entire web presence, not just their own site. ebay is used as a VALUE BENCHMARK by today s shoppers. And with 70% of items listed being new and 73% fixed price*, these consumers are going to ebay for their brand fix. Visiting the store 69% 72% *Source: ebay research 2013 Friends and family Consumers value IN-STORE EXPERIENCE AND POSITIVE WORD-OF-MOUTH. Technology needs to be backed up by good customer service. ebay appreciates the point well since POSITIVE FEEDBACK drives our SELLERS SUCCESS.

15 This is the first of 3 observation guides based on the report The Omnichannel Opportunity. This Deloitte report and the other 2 guides can be downloaded here. For more information, or to discuss the omnichannel opportunity with ebay, please contact your account manager or us at 2014 ebay. All rights reserved. ebay and the ebay logo are registered trademarks of ebay. Designated trademarks and brands are the property of their respective owners.

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