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Retail: Electrical Goods Trends May 2011 Adam Goodman Vertical Insight Manager.

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Presentation on theme: "Retail: Electrical Goods Trends May 2011 Adam Goodman Vertical Insight Manager."— Presentation transcript:

1 Retail: Electrical Goods Trends May 2011 Adam Goodman Vertical Insight Manager

2 Contents

3 Market Trends

4 E-Retail Market The chart here shows the UK online shopping sales from May 2000 to March 2011 Market Trends The UK online retail sector grew 14% year-on-year in March, with Britons spending an estimated £5.1bn shopping online (Source: IMRG, April 2011)IMRG The UK online retail sector grew 14% year-on-year in March, with Britons spending an estimated £5.1bn shopping online (Source: IMRG, April 2011)IMRG Online continues to be the beacon for the UK retail market during these tough economic conditions, with the high street suffering its worst drop in sales for 15 years during the same period. The 18% annual growth recorded in the first quarter of 2011 is in line with our prediction for the year. IMRGs recent online confidence survey revealed that over 70% of UK retailers expect online sales to remain healthy for the remainder of the year which, when combined with the solid growth recorded by the Index, indicates that the outlook for 2011 remains positive for the UK e-retail industry Tina Spooner, Director of Information at IMRGIMRG

5 Electricals Market Size and Forecast According to Mintel: Spending on electricals was £28.9 billion (incl. VAT) in 2010, a figure which has hardly changed in five years. The figure includes all spending – brown goods, kitchen appliances and PCs. It does not include software. Sales by electrical retailers were £12.9 billion (incl. VAT) for the same year, down by 21% over the last five years. The sector is made up of electrical retailers (such as Currys, Comet or Richer Sounds), where sales were 11% down, and PC and telecoms specialists where sales were down by 34%. According to IMRG: The electricals sector has grown 996% since February 2002 and continues to show consistently strong growth, especially during the last 3–4 years Source: Mintel ELECTRICALS RETAILERS SALES, 2005-15 (F)

6 Electrical Sector Market Trends Source: IMRG, April 2011IMRG The Electrical Index, year-on-year – the values are displayed from January to December This chart shows the growth of the Electrical Sector between April 2002 and April 2011 Source: IMRG, April 2011IMRG Over the past 11 years Britons have spent an estimated total of £300bn shopping on the internet, rising from a yearly total of £0.8bn in 2000 to an estimated £58.8bn in 2010… In the year to April 2011 UK consumers spent an estimated £62bn shopping online, with 22% of this being spent between May and July 2010, 23% between August and October 2010, 30% between November 2010 and January 2011 and 25% between February and April 2011. The electricals sector has grown 996% since February 2002 and continues to show consistently strong growth, especially during the last 3–4 years

7 Advertising Market

8 Electronic Goods Search Traffic KPIs Traffic Searches for electronic goods generics increased by +4% between 2009 and 2010 (April to December timeframe) Searches for electronic goods generic keywords increased by +9% between October to December 2010 v 2009 – the key Christmas period. Searches for electronic goods generics increased by +14% between January to May 2011 v 2010. Insights: The electricals sector has grown 996% since February 2002 and continues to show consistently strong growth, especially during the last 3–4 years (Source: IMRG, April 2011)IMRG Kinect for the Xbox 360 is the Fastest-Selling Consumer Electronics Device ever according to Guiness World Records. Kinect sold 133,333 units per day, for a total of 8 million units in its first 60 days on sale from 4 November 2010 to 3 January 2011 (Source: Guinness World Records)Guinness World Records Search Trends Source: Microsoft Advertising Intelligence Tool ( MAIT)Microsoft Advertising Intelligence Tool (

9 Electronic Goods Daily and Demographics Trends Daily Mondays have been the largest traffic driving day over the last 2 months with 17%, with Tuesday and Wednesday closely following with 16% each. The lowest day has seen Saturday (11%) and Sunday (12%) at lower levels. Friday (13%) is the lowest traffic driving day out of the days during the working week. Potential incremental targeting opportunities would include up-weighting between Monday to Thursday Demographics The 35-49 age brackets are the main age groups for traffic with 32%. 25-34 year olds are slightly less with 24% The key searcher demographics with 53% are males, with females having 44% share. Unknown gender accounted for 2% of searches Search Trends Source: Microsoft Advertising Intelligence Tool (MAIT)Microsoft Advertising Intelligence Tool (

10 Network Demographics Trends The majority of the impressions and clicks occur in the age groups of 18 to 24 year olds, slightly more female in audience. Conversions are almost identical however between the age groups of 18-24 and 25-34 year olds. Clicks in the earlier age groups are more by females, however this trend changes in the later age groups of 25 year olds plus. Microsoft Media Network Source: Microsoft Media Network : Oct 09 : April 2011 - % of all IMP/CLK/Con

11 Network Daily Trends Microsoft Media Network Source: Microsoft Media Network : Oct 09 : April 2011 - % of all IMP/CLK/Con Retail related impressions increase strongly in the very late evening, peaking towards the very last few hours. The % of Actions related to consumer electronics network activity peak from 4pm – 10pm. The majority of the impressions & clicks occur during the week with peaks on Mondays to Wednesdays. This replicates the earlier finding from Search results through Bing (suggested on slide 9) with a low point on Saturdays.

12 Advertisement Publisher Location Total Ad Impressions and Advertising Exposed Unique Visitors Microsoft sites had the second highest exposure of UK Unique Visitors throughout Jan – March 2011 for the Retail category in comScore Microsoft Sites delivered the second most impressions across some of the major publishers This allows branding campaigns to reach the large set of consumers through Microsoft Advertising properties and deliver high advertising exposed unique visitors. Display Source: ComScore AdMetrix – January to March 2011

13 Advertisement Publisher Location Share of Impressions and Frequency Microsoft sites also had a very competitive share of Retailers ad impressions during January to March, slightly less than eBay yet delivered more Unique users than eBay did during this time. Although Microsoft sites received less Ad impressions its interesting to see the Microsoft Advertising average frequency is less than eBay, Yahoo!, Glam Media, Trader Media and AOL. Display Source: ComScore AdMetrix – January to March 2011

14 Industry & 3 rd Party Resources

15 New Shopper Journeys Study Microsoft and Carat have conducted a European New Shopper Journey study. To learn more about this study and the findings across European markets for Home Electronics market, please speak to your Microsoft sales representative. Microsoft & Carat Research Study You can find out more information at:

16 At the start of the consumer journey only 6% of consumers had decided on a sum to spend, 3% on the retailer and 4% on a specific brand. Digital media has a big role to play… Touchpoints play an important role in influencing the initial decision Microsoft & Carat Research Study 38% ADVERTISEMENTS 33% SOMETHING SEEN WHEN SHOPPING 33% WORD OF MOUTH 32% SOMETHING SEEN OR READ 25% NEWSLETTE RS/ EMAILS/ COUPONS 12% internet 8% TV 4% magazines 9% promotion 22% friends/ colleagues 11% expert reviews online 10% online 7% print article 7% email 6% brochure 2% coupons Source: New Shopper Journeys Europe 2010 Home Electronics n=2557

17 Electrical Market Strengths and Weaknesses Industry & 3 rd Party Technology: Benefits from the most rapidly changing technology with near constant flow of must-have new gadgets. Convergence: New products become more powerful and incorporate features of other gadgets. New stores formats, such as megastores are driving demand. Electricals products are now essential to the way we run our lives. Source: Mintel, 2011 Spending will remain under pressure throughout 2011 and perhaps into 2012. Convergence – as new products combine the features of many older ones people will need fewer of them. Product gap – there seems to be little to provide a boost to the sector after the iPad. Price: competition is driving prices down and even new products dont retain premium status for long. Commodities: The emphasis on price ends up commoditising electrical products.

18 Channels of Distribution Industry & 3 rd Party (a) Internet specialists, mail order, direct sellers (b) Department stores and mixed goods retailers such as Argos (c) Includes DIY/home/kitchen specialists as well as office equipment specialists Electrical specialist stores such as Dixons, Currys and Comet agree on the importance of a multi- channel offer and both are integrating their online and stores based formats. Furthest ahead in multi-channel is Argos and is a major player in many parts of the sector, particularly at the cheaper end of the sector. John Lewis is believed to be the most significant department store player in terms of electrical goods sales. Home shopping is being driven by the internet. Trading statements from some of the most successful players have shown some of the strongest rates of growth throughout the downturn. Electricals is particularly well-suited to selling online given the ease for consumers to compare specifications and price from impartial sources. Source: Mintel

19 Why people use the internet to shop for Electricals Most popular statements about using the internet for Electricals shopping. (March 2011) Industry & 3 rd Party Base: 1,916 internet users aged 16+ all who have bought electrical products in the last 3 years A quarter of consumers preferred to research online rather than seek help from store staff. In the Microsoft and Carat New Shopper Journey study we found that 74% of home electronics shoppers research their potential buy. In this vertical, buyers are open-minded, and are prepared to take their time. Out of the study, 79% of home electronics shoppers used the internet to perform this research. Source: New Shopper Journeys Europe 2010, Home Electronics. Base: Researchers n=1739

20 Consumer purchase behaviour Industry & 3 rd Party Generally consumers only buy electrical products when they are looking for replacements. Although this maybe the case products like Kinect, iPod and iPad have bucked this trend as major new products grasp consumers imagination and entice purchase. Other key attitudes to buying electicals include: Source: GMI/Mintel

21 Consumer purchase behaviour cont… Industry & 3 rd Party This was backed up by further research carried out by Friends Life. Almost 70% of the survey respondents were asked to respond to the statement: I am keeping household goods (e.g. furniture, electrical goods) for longer before I replace them Source: Friends Life/The Future Foundation/nVision, 2011 Base: 1,000 online respondents aged 16+, GB % who agree or agree strongly, by gender, age and social grade

22 The young buy Hi-tech, everyone has to buy white goods The young lead the market Already PCs are mass market products bought by everyone Mobiles are approaching the same status Industry & 3 rd Party Note: The white goods clustered around the average lines are: vc - vacuum cleaners m - microwave ff - fridge/freezer c - cooker White goods are Small Kitchen Appliances, Vacuum cleaner, Washing machine, Microwave, Fridge/Freezer, Cooker Source: GMI/Mintel

23 Energy Efficiency losing its influence on consumers choice? Survey respondents indicate that consumers who stated in 2009 that Energy Efficiency influenced the potential to spend more money on Electrical goods, are now less likely to take this into consideration in 2011. 1 in 3 people agree they would spend more if the electrical good would not harm the environment Industry & 3 rd Party I would be prepared to pay up to 5% more for energy efficient electronic goods if I could be sure that they would not harm the environment % who agree strongly or agree, by gender, age and social grade Source: EDF Energy/GreenAware/The Future Foundation, 2011 Survey Base: 1,000-1,500 online respondents aged 16+, GB

24 Consumers Save for Electrical goods Survey respondents indicate that consumers save in order to afford the latest and great electronic goods used within the home. More 20% of respondents said they save to buy new home electronics equipment – more than people who said they saved for events, buying a house and those who are saving for their childrens education Industry & 3 rd Party Source: EDF Energy/GreenAware/The Future Foundation, 2011 Survey Base: 1,000-1,500 online respondents aged 16+, GB For which, if any, of the following reasons are you saving or borrowing money? Saving % who are saving for the following reasons

25 Consumer Target groups Quality seekers: Younger and more affluent Prepared to pay up for quality Tend to buy for replacement but are doing so more frequently Bargain hunters: Also younger and more affluent Wait for special offers Research and buy online Not interested in after sales service Replacers: Older and less affluent Buy when they have to Not confident, want help Apathetics: Younger less affluent Many still living at home Like Argos, especially online Industry & 3 rd Party Source: GMI/Mintel The key markets are the bargain hunters and the quality seekers. They have similar demographics, though radically different attitudes to buying electricals, as their names suggest.

26 Electronic Retailer Opportunities Seasonal Peaks Take advantage of seasonal peaks for products where possible. Positioning of your products, sales and remember to include call to actions where possible. Including delivery charges, delivery times and price points will enable consumers the ability to compare prices and purchase easily. Demographic/Mosiac The users and searches for electronics index well in demographic sectors and can be targeted with our Mosiac offering. Find out more information on our Display Ad Targeting and Search targeting options. You can also use our Microsoft Advertising Intelligence Tool to learn more about audiences by keyword.Display Ad Targeting Microsoft Advertising Intelligence Tool Search & Display – Better Together Utilise the combined efforts of both your Search and Display campaigns to help boost your ROI. We have seen good increases in traffic throughout 2010 and into 2011 – so make the most of our enormous reach. Through Microsoft Advertising we reach almost 92% of the Internet population. Read our Display & Search Case studyDisplay & Search Case study Opportunities

27 Retail: Video and M-Commerce

28 Video and Retailers Video According to recent research by ForeSee Results, e-tailers making extensive use of video were among the top- rated in customer satisfaction during the 2010 holiday shopping season. (Limelight Networks, Online Retail Trends 2011) The video trend is evident just by looking at some of the largest online retailers today. Amazon, for example, incorporates both manufacturer videos and video reviews from consumers in its product pages The Limelight Networks survey the results indicated that video product demonstrations and video reviews from customers were listed as extremely or very important features. This finding seems to be proving correct as we see from comScore the increase Unique Users of Video on Retail sites.

29 Retail M-Commerce The evolution of mobile technology has given rise to the empowered consumer: at the touch of a button, almost anywhere, consumers can research products, companies, and even make purchases. (ForseeResults)ForseeResults Forsee study of 10,000 UK visitors to the biggest e-retail sites in the UK (according to IMRG) stated: Mobile Key findings: Shoppers are using mobile phones to access websites and apps more than ever before – 32% of respondents have used their phone to access a retailer website, and an additional 32% indicated they plan to access retailer websites or mobile apps by phone in the future Purchase behaviour is exploding – 8% of UK made purchase via mobile at Christmas 2010 Shoppers use their phones for a variety of tasks – 47% of shoppers used phone for price comparison reasons Good experiences with mobile sites and apps have critical cross- channel impact - Shoppers who are highly satisfied with a mobile experience say they are 32% more likely to buy from that retailer online and 31% more likely to buy offline Source: Foresee Results, Jan 2011.Foresee Results,

30 UK Retailers & Mobile Apps Mobile 41% of retailers expect to have a transactional site/app within the next year Source: IMRG, AIME & IAB B2B M-Commerce Study Base: Sector 1, Retailers & Brands (42), Do you offer an application / mobile specific website which is fully transactional with credit, debit or alternative payments? 41% Examples of some Windows Phone 7 shopping apps "51% of consumers say they are more likely to buy from retailers that have a mobile site, but fewer than 5% of retailers have such a site" eMarketer Nov 2010

31 Retail M-Commerce Mobile In which of the following ways did you use your phone while shopping in a store? Source: Forseestudy of nearly 10,000 visitors to the biggest e-retail websites in the United Kingdom accessed that stores website on their phone accessed a competitors website on their phone Applications and websites tailored to mobile shoppers are a must-have for retailers. As smartphone use increases, more customers will turn to the mobile channel to find price and product information before making a purchase. (ForeseeResults)ForeseeResults 67% 26%

32 UK Shoppers – Mobile & Consoles Mobile & Consoles UK shoppers are using mobile phones to validate product attributes and compare prices: Source: RichRelevance & BazaarVoice New Rules of Engagement or Todays Empowered UK Shopper, WhitePaper. (BazaarVoice)BazaarVoice Shopping With Mobile Phones 60% of phones sold today being smartphones, and more users likely to connect to the internet via mobile devices…retailers are rushing into m-commerce with alacrity. Apps have been big news Tescos Grocery app has been downloaded by 350,000 people, and the Argos app has achieved 800,000 downloads. Many in the industry see mobile websites as the future, most likely operated in conjunction with specialist apps (RetailWeek, Nov 2010)RetailWeek 20% to 30% of all transactions will be made from smartphones within the next three years Nick Robertson, ASOS 20% to 30% of all transactions will be made from smartphones within the next three years Nick Robertson, ASOS Shop Direct chief executive Mark Newton-Jones said the multi­channel retailer was also starting to get orders through web-connected games consoles such as the Xbox 360

33 Summary of M-Commerce Usage Mobile Source: IAB Consumer M-Commerce Study October 2010 Base All UK Mobile Users (1039) Smartphone users are 63% more likely to engage in M-Commerce

34 Top e-Retail Facts Appendix Source: IMRG, 2011


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