Online and Mobile Shopping

July 2011 - U.S.

Billy Hulkower Senior Analyst, Technology and Media www.oxygen.mintel.com
Throughout the recession and recovery, e-commerce sales have grown at a significantly faster pace than offline retail sales. The growth has been fueled, in part, by technological advancements and partly by the fact that consumers are becoming more comfortable shopping online from a computer or mobile device.
20.2

Market Size and Forecast

TOTAL U.S. RETAIL AND E-COMMERCE SALES, AT CURRENT PRICES, 2006-16

4,500 4,000

Total retail sales Total E-commerce sales

What we think
Leading online retailers, like their offline counterparts and marketing behemoths like P&G, often create ads that are designed to communicate lifestyle relevance. These companies often use a combination of high levels of TV spend, with calls to action on their web sites. Overstock and Netflix use TV to communicate convenience and value, as well as announce new categories. Customer Relationship Management (CRM) is at the heart of what has made the leading online retailers so successful. These efforts are supplemented by social media to communicate directly with customers and promote bargains to drive growth viral growth. One-day or limited access sales drive buzz especially Amazons gold box or Fridayonly offers. Dell offers substantial prize incentives for writing product reviews. Amazon, Dell, and Staples all lead in their use of facebook and twitter to promote their brands. All respond to customer requests and inquiries both over facebook and twitter.

$ billions

% change
15.2 13.1 13.4 13.0 12.9

2012(fore.)

2013(fore.)

2014(fore.)

2015(fore.)

2012(fore.)

2013(fore.)

2014(fore.)

2015(fore.)

2016(fore.)

2011(est.)

Consumer: Online vs. Offline Shopping

Consumers are most reluctant to buy fresh food from online retailers as 93% say they would only buy produce at a store, and 90% would only buy fresh meat through a store. Consumers aged 55+ are generally less likely than younger adults to report a willingness to purchase within a variety of categories when shopping online, indicating that big players like Amazon in particular often want to direct their communication at younger segments such 18-24s that have a high proportion of consumers willing to purchase anything or nearly anything online.

SOURCE: MINTEL/CENSUS BUREAUS ANNUAL RETAIL TRADE SURVEY

Consumer: Major Reasons for Shopping Online

The ability to find exactly what I want (61%), save money from price comparison (61%), avoid the simple hassle of going to a store (50%) and the ability to save money with online coupons and coupon codes (42%) are the most frequently cited major reasons for shopping online.

Consumer: Couponing Interest

Nearly half of consumers surveyed (46%) stated that they search online for coupons that can be redeemed at stores where they shop. This finding indicates that both brick and mortar and online retailers can benefit from distributing coupons online through social media sites, as well as coupon sites, such as retailmenot.com.

PRODUCTS PURCHASED ONLY AT A STORE, BY AGE, MAY 2011

100% 90% 80% 70% 58% 63% 61% 60% 45% 54% 36% 60% 50% 40% 30% 20% 10% 34% 40% 29% 33% 28% 30% 22% 0% 24% 47% 18-24 25-34 35-44 45-54 55-64 65+

MAJOR REASONS FOR SHOPPING ONLINE, BY GENDER, Male MAY 2011

Female

DEAL-SEEKING BEHAVIORS AMONG ONLINE SHOPPERS, BY HOUSEHOLD INCOME, MAY 2011

<$25K $25K-49K 0% $50K-74K 10% $75K-99K 20% 30% $100K-149K 40% 50% $150K+ 60%

I search online for coupons for stores that I shop at

I can find exactly what I want

I can save money from price comparison

It saves me the simple hassle of going to a store

I can save money from finding a coupon/promotions code somewhere online

I would rather receive a gift card than a specific product or service

I receive promotions or coupons from stores or products I like via my email

Produce

Fresh meats

HousePackaged hold care foods items

Overthecounter health items

Personal care HardHouse- HousePrescriphold elechouseware and hold tions hold tools computer tronics items

Clothes

Toys and games

It saves me from fighting crowds at the store

SOURCE: MINTEL

I think its fun to surf around and see whats available

It saves me the hassle of having to carry it home from the store

I find using websites that store my information very convenient

I receive coupons from a social coupon service such as Groupon or LivingSocial

SOURCE: MINTEL BASE: 2,000 ADULTS 18+ WITH INTERNET ACCESS

SOURCE: MINTEL BASE: 1,690 INTERNET USERS AGED 18+ WHO PURCHASED A PRODUCT ONLINE AND HAD IT SHIPPED TO SELF OR SOMEONE ELSE 2011 Mintel Group Ltd. All rights reserved. Confidential to Mintel.

BASE:1,690 INTERNET USERS AGED 18+ WHO PURCHASED A PRODUCT ONLINE AND HAD IT SHIPPED TO SELF OR SOMEONE ELSE

2016(fore.)

2011(est.)

2007

2008

2009

2006

2007

2008

2009

2010

2010

Retail e-commerce sales are growing at a much faster pace than overall retail sales in the U.S. For instance, while total retail sales in the U.S. increased 6.9% in 2010, e-commerce retail sales grew by 13.1% during the same year. E-commerce therefore must be a critical component of any retailers annual revenue growth plans.

12.5

3,000 5.0 2,500 3.0 2.1 2,000 1,500 -1.3 1,000 500 0 3.2 6.9

-8.0

11.3

3,500