Page 3.......................................................................................................................... 3...................................................................................................................................Meet ............Meet The Team Page4................................................................................................................Online Buyi Buying uying An Overview Page 5.................................................................................................................The Shopp Shopping opping Experience Page 6.........................................................................................................The shopping Expe Experience xperience Cont. Page 7...........................................................................................How can our website help my customer? customer? Page 8..........................................................................ASOS – Leading pure play online fashion retailer? retailer? Page 9.......................................................................................................................... 9...........................................................................................................................................ASOS ....................ASOS cont. Page 10......................................................................................................................... 10..................................................................................................................................Easy ............Easy Navigation Page 11........................................................................................................................E 11........................................................................................................................Easy ..Easy Navigation Cont. Page 12........................................................................................................................C 12........................................................................................................................Consumer ..Consumer Interaction Page 13...............................................................................................................Consumer 13...............................................................................................................Consumer Interaction Interaction cont. Page 14...................................................................................................................YOUR 14...................................................................................................................YOUR habits habits – Research Page 15......................................................................................................................... 15...............................................................................................................................Analysis .........Analysis of Survey Page 16......................................................................................................................... 16......................................................................................................................................Market ................Market Value Page 17.......................................................................................................................Gr 17.......................................................................................................................Grocery .Grocery Market Share Page 18......................................................................................................................... 18.......................................................................................................................................Site .................Site Revenue Page 19..........................................................................................Does Online Retailing Effect Business? Business? Page 20......................................................................................................................... 20..................................................................................................................................Clicks ............Clicks V Bricks Page 21......................................................................................................................... 21..........................................................................................................................The ....The Online Process Page 22............................................................................................................Scared of Homeware Homeware Sites?? Page 23......................................................................................................................... 23...................................................................................................................................Gender .............Gender Divide Page 24......................................................................................................................... 24.......................................................................................................................................Typical .................Typical Guy Page 25......................................................................................................................... 25....................................................................................................................................Seasonal ..............Seasonal Sites Page 26......................................................................................................................... 26..................................................................................................................................M ............M - Commerce Page 27......................................................................................................................... 27...................................................................................................................................Cost .............Cost Effective? Page 28............................................................................................M– 28............................................................................................M–Commerce – Where are We Now Page 29......................................................................................................................... 29.................................................................................................................................Pure ...........Pure Play Sites Page 30......................................................................................................................... 30.........................................................................................................................................Love ...................Love Film Page 31..............................................................................................................Amazon Mark Market arket Hound? Page 32.............................................................................................................So What's Next Next – Findings
MANAGING DIRECTOR MONIQUE ANDERSON
CREATIVE DIRECTOR
FINANCIAL DIRECTOR
ALICIA RAY
SADIYA RIYAZ
MARKETING DIRECTOR DAMI ODUMOSU
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Exploration of latest trends in ecommerce – Online Online buying has become Online retailing has become Shopping increasingly popular in the last 10 years. The introduction of faster internet speeds has allowed easier and faster access for consumers. The internet was dominantly used for research and development in the 1960’s, and has come a vey long way since then. Now 70% of the population now has easy access to the internet (Mintel 2011). With the internet offering a solid form of information through email and social medias. To processors that allows us to upload documents at immense speed. It as only a matter of time before business's started to use this form of communication to entice their customers into buying their products.
“The marketers that give you MORR “
dominant in the online buying market and therefore has upheld certain trends. Such as retail sites having personalisation features, to which you can find clothes to Issue No. 1 fit your size and taste through 21ST January 2011 refining your search, also the introduction of personalised emails adds a level of personification because it makes the customer feel as though someone has actually sat down and wrote them this email. In order to establish the most popular and successful trends a variety of sites had to be analysed in order to gain a clear understanding 4
THE Shopping Experience...
Most people view shopping as a form or retail therapy others view it is a necessity. The weekly shop. To truly have an understanding of peoples buying behaviours research was undertaken to determine how often they shop and what they shop for most. Due to the vast increase in online shopping behaviours, it has become more poplar for people to do their purchasing online. Online clothing stores such as Dorothy Perkins, New Look and Topshop have introduced This creates a different experience because it enables the consumer to browse and define what they are looking for at customised value.
The site enables you to refine what you are searching for, from the size, to the colour and cut ofthe item you wish to view 5
The shopping bag icon indicates where all the products you have clicked to purchase have stored, this allows for any last alterations to your order
Like that of a department store, retail sites such as these have categorised their products for easy navigation. This has become a popular trend in online buying as it adds a level of personification to the search. This is due to the buyer feeling as though the company has taken the time to break down there needs into categories
Online retailers want to make the experience of shopping g online as highquality as possible, they have taken allot of time and effort to ensure that their customers find their sites easy to use and a growing trend in the market is to do just that.
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How can our website help my consumer??? The purpose of a website is to help the customer and generally ask themselves ‘how can our website help my consumer’. It is important to make sure the consumer or stakeholder is to be able to find information easily and help them enjoy a better web experience.
Trends in E-Commerce •
Online shopping is the process whereby consumers directly buy goods or services from a seller in real-time, without an intermediary service, over the Internet.
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If an intermediary service is present the process is called electronic commerce or e-commerce.
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Online shopping has become popular; however, it still caters to the middle and upper class. In order to shop online, one must be able to have access to a computer, a bank 7 account and a debit card.
Search engine optimisation involves achieving the highest position or ranking in the natural listings on the search engine results page after specific combination of keywords has been typed in. (Chaffey) ASOS is the leading pure play online fashion retailer in the UK. Having started with a branded offer geared to the young market, it has expanded and developed own brand lines as well. ASOS main success rests on having both responded to and having led developments in online retailing.
Wireframes also consider special offers and promotions which can be effective if they occupy a consistent position on the screen. On the homepage ASOS display this trait particularly well. On the F Frame it displays their special offer of 20% off if you have an NUS Card and also on the home page in clear bold writing it displays that there is a sale of up to 70% off selected items, without it being over bearing.
When you type in a few buzz words, for example, ‘ASOS, online shopping’, ASOS are in the highest position in the search engine optimisation which proves that although there are no charges for these listings, ASOS are prepared to spend what is required for optimisation work that make sure their web pages are the highest in the rankings.
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Website is on first page of the search engine optimisation.
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Clear, concise tabs: easy access/ usage
Use of the wireframes make the site easy to navigate
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It is commonly perceived that the first place our eyes are drawn too is the top left hand side of the screen. hence why most businesses if not all tend to place their large logos there seeing as you would like the stakeholders to know what site they are viewing.
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Consumer interaction
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It is very important to show some sort of consumer interaction. The majority of retail companies realise that we as a public have become more accustomed to social networking. On the ASOS homepage there are links which allow you to follow them on social networking sites, Twitter and Facebook. The impact of social networks on online retailing has been the most dramatic trend since the growth of the web itself. Having looked at the snapshot of the worldwide usage and growth of social network sites in 2007 by an audience panel Comscore which can be found in ‘Chaffey’s EMarketing Excellence book page 114’ it shows the staggering audience size and growth rates of the top networks. 13
YOUR Habits - Site analysis Survey “I would prefer to go in store, I love trying on the clothes I just don't have the time” C2 Female - 27
“I don't really mind when it comes if I'm honest, if I needed it urgently I would have gone and got it” C1 Male 20
In order to have a full grasp on the concept of ecommerce it was clear that further insight had to be found. This was do through two stages, the first to actively watch the buying behaviours of people around Christmas time. As this is the most popular time that online buying is done. Although many that were observes showed an active care as to whether or not their ordered products would reach them in time. However all continued with their orders. Should sites offer a delivery guarantee and subsidise the order if not delivered in time? As a vice to get well rounded results 10 people were observes, 5 men and 5 women. All participant where between the ages of 18-45 and ranged from a b,c1,c2,d backgrounds. The second path of research was to do an online survey of 50 people between the ages of 18-24 o see if it was actually this age gap that dominated the market for online buying. This survey in particular turned up some very interesting result.... “I pay up to £5 for delivery sometimes, “ I like shopping online because I find there are if I’m paying for a service I expect the better deals, and actually a wider range” AB company to carry it out” BC Female 42 Male - 30 14
When doing the online survey, the assumed trend had changed quite drastically. When the observation took place it became apparent that EVERYONE purchased online at least once. It was the head running g trend, however when doing an online survey of 50 participants it found that this was not the case. It could be argues that due to the age range surveyed were of an age were they do not an exposable income like that of older generations. Unsurprisingly the most bought product online amongst the 18-24s was clothing, a clear connotation of the online retailers success in the market. Although it had been established that older generations used the internet to purchase their grocery shopping online it was surprising to see 18-24s also taking advantage of the home delivery service that most grocery stores now offer. This suggests a growing trend in the market as more younger people are using online retailing sectors for more than just fashion and music.
The Last result ( which I can only describe as scientific anomalies) shows that the census surveyed preferred to go in store. Which completly contradicts previous suggestion of their online behaviour. Has a new trend been set. Or is this a portrayal of we cant always get what we want.?? When combining the survey with information from the observation it was clear that although they would prefer to go in store they do not always have the time and resources to do so, where as that new top they really wanted could be theirs at the click of a button. Trend or Fad? 15
Online retail sales were around £17.8 billion in the UK in 2009, 6.6% of all retail sales. The market has become bigger by 150% since 2005, 25& per annum.
“Online now accounts for almost 40% of all nonnon-store retailers’ sales” (i.e. all mail order, pure-play internet retailers and markets). That is because mail order retailers have actively embraced the internet and encouraged their customers to order online and so allow them to close down expensive call centres. (Mintel 2010) According to Mintel online sales will be £27 billion, excluding VAT in 2014, 9.1% of all retail sales (adjusted to include offshore retailers which are not included in the UK retail sales data).
Online shopping is very popular with the 25 – 44 year olds, for the younger generations shopping is a socialising activity, but for the 22+ age group its a different matter. They have commitments and responsibilities such as children and mortgages, budgeting for them is very important. The most frequently bought products online are books, CDs and DVDs, next is fashion, 9% of fashion is sold online, and then its Computers and electronics. Customer satisfaction with products bought online is very high, even with deliveries there no problems. Smart phone ownership is quite low but it is expected to rise in the coming years, according to Mintel half of owners already use them for shopping and they show considerable enthusiasm for doing so. (Mintel 2010) 16
Examples of market share for online retailers are demonstrated here. With this knowledge, it can demonstrate the effects and differences between an online and offline consumer. M&S -General merchandise - £4.1bn sales (+4.0%) market share value 11.0% and the market share volume is 11.2%. Food - £4.3bn sales (+1.8%) market share 3.8%. M&S Direct £413m sales (+27%) M&S Direct are on target to achieve £500m in sales by 2010/11. Sainsbury's - A 16.1% market share in the UK, up by 0.2% on last year. Groceries online business is growing rapidly with sales up just under 20%, within the reach of nearly 90% of UK households. Waitrose - has a 4.3% share of the market. Gross sales up £375.9m, 9.0% to £4.5bn. Tesco - has a 30.7% share of the market, online sales £13.1bn this means sales have gone up by 6.2%. Argos - has a share of 10% in the market. Asda -has a share of 17.1 in the market.
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Sainsbury's – Sainsbury's online turnover is around £500million annually, it is rising fast at 15%. In the first half of 2009/10, there was further solid sales growth, with a rise of 5.0% in turnover excluding VAT to £10,433 million. Online grocery sales grew 20%. The company said that there had been a “very successful launch” for nonfoods online. Waitrose – Waitrose deliver sales went up by 45% in December 2010. Tesco – Tesco is the largest UK food retailing market and the worlds largest online grocery retailer. It claims to be the most profitable of all retailers in the market. 6.7% of Tesco's grocery sales are online,
“UK grocery accounts for some £1.5billion of Tesco online sales and Tesco direct for around £300million.”
Argos – Argos generates 28% of sales from online. In the last financial year, Argos online sales have grown 8% to £4.2bn. The Argos online site is the second most visited internet retail site in the UK. Growth of 250% over the past five years highlights the potential for online operations. Asda – According to Mintel 2010, Asda does not publish its online sales, but in January 2008 Asda indicated that their online sales of 2007/08 were around £200million, sales rose by some 40% in 2008/09. No figures are available for 2010.
Tesco have an impressive 3.4 million visitors to the site a year. 18
Online shopping has been growing phenomenally during the last few years every year the figures for online sales are increasing in June according to IMRG online sales in the UK rose 20%, this means that there has been a major leap since summer 2008. In the first of 2010 alone, the UK has spent a healthy £26.2 billion online, with June experiencing a record of £4.4 billion online sales. This is a 15% increase in sales when compared to the same time last year. The increase in online sales is said to be because of weather and summer of sport. Consumers were shopping online for alcohol and summer sports clothing. Online retail again became very popular during the weeks up to Christmas 2010, because of the freezing conditions and the snow, consumers made the most out of online shopping, Shoppers spent a record £7.66bn online in the ten weeks running up to Christmas – a rise of 54% on the same period in 2005.
Impact on the businesses online retailing
Online retailing is having a brilliant affect on the UK economy a study from the IMRG shows that online businesses are a growing force in the UK job market, generating wealth for the nations economy. More than 600,000 British jobs are now either directly created in or support the UK’s estimated 150,000 online retail businesses. Internet retail has been significantly impacted by the recession — costing internet retailers an estimated £1.6bn in lost revenues that would otherwise have been gained had the economy not fallen. 19
CLICKS VS BRICKS Offline To fully appreciate the online shopping market, understanding the purchase decision model is key. Whether its a high risk purchase of a car or low risk buying a bar of chocolate, consumers conform to the model and ultimately make a marketers job a whole lot easier. However, when it comes to online purchasing, it is necessary to question if this differs in any way from offline and how this will develop as technology continues evolve. The basic model for a high risk purchase such as a car or holiday is shown here.
Need Recognition & Problem Awareness The initial step of the model involves consumer realisation of a need to purchase the high risk item. “Although the quality of Daniel’s TV had not changed, for example his standard comparison was altered, and he was confronted with a desire he did not have prior to watching his friend’s TV. Information Search This part of the process involves searching online for specifications, full listings of nearby stores, consumer reviews etc. This can be done offline but is increasingly becoming an online option due to the amount of access and time consumption. Evaluation of Alternatives Comparison websites play a vital role here and continue to evolve as the need is ever increasing. Again, customers will read others reviews of their options and compare from this. Purchase Purchase is made after considerable research. Post-Purchase Evaluation Even after all the research made prior to the purchase, consumers will most likely consider whether they made the right choice over alternatives. Even though the model regards a high risk purchase, the process of a low risk buy can still involve this stage. Again, regarding a high risk buy, online the model is similar to the traits of the offline process. However, the differences are highlighted concerning the engagement of the consumer to your site, a tricky thing to do.
We all know how easy it is to get distracted and start surfing the net for pointless buys and its all there at the click of a button. It is for this reason that sites have to work hard in this area. For example, a consumer may have already test driven a car but then decides to buy online. Maintaining their interest and attention is key.
“We don’t want to lose the customer at this point so make purchasing slick and simple” backed up by a phone number is they have an anxieties. (e-Marketing excellence, 2008). This may be one way of retaining consumers in the buying process. However, there are other difficulties that effect online buying in a substantial way. 20
The online buying process is much more complex than an offline purchase as there is a considerable amount more to contemplate. Security of personal details is one of many main concerns when buying online. “Almost daily we hear of hackers getting into a business or even a government website and causing havoc” (Consumer Behaviour, 2006.) Businesses spend a significant amount of money maintaining security online and conduct regular audits to ensure the integrity of their sites. Another inconvenience of buying online is the effect of hedonic consumption. “Hedonic consumption is the data that we receive from our sensory systems and determines how we respond to products” (Consumer Behaviour, 2006). Whilst purchasing books or a computer online may be more of a simpler task, shopping for clothing or fragrances is a different matter altogether. Their main selling point, sight, touch and/or smell is distorted or non-excitant through the web. Some websites such as New Look for a limited time experimented with a virtual wardrobe where it was possible to choose items to make an outfit and demonstrate in as much detail as possible to look desired. H&M have most recently caught on to this idea and offer suggestions for options that will suit with a particular item. This then enabled consumers to recreate in a restricted way the act of high street shopping, online.
Online Process Other limitations include delivery and return prices. Mintel report “Buying for the home online, 2009” suggests
“51% think that it is not worth paying delivery charges for small items.” This may then cause consumers to wait for a need of other and buy a number of items in bulk or simply add more items not necessarily for ‘need’ but ‘want’ and ultimately benefit businesses. On the other hand, positives include a wide range of available services to help promote online buying. Wedding dress designing is becoming increasingly popular on the web and will most likely to continue to develop in the next few years. A service that is bound to attract the female consumer!
References Chaffey, D. (2008). E-Marketing Excellence. 3rd ed. Oxford. ButterworthHeinemann. Pg153. M , Solomon. (2006). Consumer Behaviour. 3rd ed. Essex: Pearson Education. 315. 21
Scared of Homeware Sites? Despite the downturn in the economy, buying for the home online continues to thrive in the market. As every market, e-commerce in the sector of homeward online has its weaknesses. With a mass decline in house sales due to the reduction of house prices and unsecure jobs, customers are becoming ever more cautious on spending of large and expensive purchases such as sofas, cookers etc. On the other hand, deceptive as a negative issue, the falling of house prices also has its advantage. Consumers that were looking to move house may instead build extensions and refurbish. This then has a positive input and could even balance out the negativity of consumer’s cautious minds.
There will always remain this issue of hedonic consumption, and sites are constantly trying to develop this area to gain traffic to their website. Delivery prices and service are also a battle businesses have to face and
as we all know, at Christmas things can get out of hand...literally! 22
Websites are often criticised for being too gender orientated and inevitably adapt in order to appeal to both male and female consumers. Mintel report ‘Buying for the Home Online’ 2009 reveals that regarding homeware buys, women’s most popular buys online are; furniture, china, glass, decorative items and textiles. Whereas men’s most common buys are lighting and DIY, a typical behaviour of offline shopping some might say. Online purchasing however, are able to offer an extra range of services to charm the gender that are less common to be shopping on a certain site. For example, B&Q is generally a male dominated store due to its ‘boys toys’ reputation, a refreshing approach to attract women to the buy on the site would include instruction videos on how to use the products and develop more of an understanding that in store does not offer.
Although in these examples of House of Fraser, Debenhams and John Lewis the colours, fonts and layout is very generalised with regards to gender, the actual products on show are oriented towards the female consumer. Displaying fashion items, sales promotion and glasses as proven by Mintel to be a popular female buy, the sites conform to their offline reputation and overall appearance. However, with the undemanding work of adapting displays online, home pages can be changed often to appeal to a different audience potentially each day. This is also convenient for seasonal or event changes including Valentines Day, Easter and most significantly, Christmas. It’s no secret that Britain has such unpredictable weather and where are those wellies when you need them? They were thrown away 10 years ago when it didn’t snow heavily twice a year and you grew out of Thomas the Tank Engine. Just one click away could be your answer to saving you falling head over heals in the high street...if they’re 23 digital savvy that is.
Research has proved that designs by female generally tend to attract female consumers and male designs appeal to the male consumer. This is generally due to personal preference between genders being stereotypically more similar than to that of the opposite sex. For example, the B&Q site, male dominated and House of Fraser, appealing largely towards females shows that their design were most likely designed by the gender they are aimed at. The B&Q site is very typical of the male attraction. The layout is linear and simple with no distractions, complications or excitement. Men don’t generally need excitement for this type of website though. The need is already there as these are essential items and lets face it...men get excited over gadgets they buy anyway. Whereas the House of Fraser page has a lot more colour and involvement in the layout. Layers demonstrate an attractive development and depth. 24
It’s not just the products displayed on the site that gives appeal to the consumer, the overall appearance effects how the site is viewed and more important a massive giveaway as to how often the site is updated. Consumers become wary of un-updated sites as it can be a sign of company going bust! Sites do this in order to attend to consumers needs as much as possible. Consumers can then feel at ease and rely on the sites to cater to their needs and desires.
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...M – Commerce... A new and growing trend in the market is the use of mcommerce, the use of browsing the internet on a mobile phone. The use of applications and mobile site web pages makes it increasingly easier to purchase online.
Due to the use of applications on mobile phones and tables such as the I-Pad, online retailers can also create customised apps. Allowing the customer full control from the touch of a button with a device to which is kept with them most of the time.
Retail sites such as boohoo have further enhanced the way in which they communicate to their customers 26 whilst promoting their own products
...Cost Effective? Mobile retailing is becoming a popular means of shopping, With the rise of the Smartphone, buying via mobile has become truly viable. Marks & Spencer received 1.2m unique visitors to its m-commerce site within four months of launch in May 2010, this shows that people are warming to the idea of mobile retailing. purchase and compare prices.
Consumers are using this mcommerce for many reasons not only just to make a purchase, consumers use their mobiles to search for competitive brands to find the best deals. Tesco has already launched iPhone and BlackBerry apps for such services as its Club card loyalty scheme. Two-thirds of UK retailers haven’t yet optimised their websites for mobile. Businesses also have a worry that not all consumers have smart phones or not as of yet, this is a worry to some online retailers out there. 17% of all UK mobile users expressed an interest in using their mobile to research a purchase and compare prices.
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eBay is the world’s biggest auction house, offering a wide array of goods and services for sale from small businesses and individuals. It is not a retailer as such, acting merely as a conduit between the parties involved. It is a well respected and trusted trading medium for a wide selection of customers from across the globe. The success of the company is largely based on its vast network of members the more available buyers that exist, the more the potential selling price of products increases. The eBay name is universally known, and clearly opportunities exist for the company to expand its presence further as ecommerce develops around the globe. PayPal provides the company with a safe, well-respected and secure payment method for buyers to ease any expansion even further
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There are over a dozen companies offering DVD/video/game rentals via postal delivery, of which LoveFilm is the undisputed market leader. In fact, data show that LoveFilm has overtaken Blockbuster as the UK’s largest (in terms of volume) rental provider. Like all well known brands, LoveFilm is recognised for its colours and overall appearance. This appeals to consumers as it is easily visible whilst surfing the web and therefore help to build traffic to the site.
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Amazon wants to cash in on rising customer demand for click and collect services where shoppers buy online and then pick up their goods from a nearby store.
Amazon is the largest pure play internet retailer in the world and is also the largest just in Europe. Starting with books and then music, its range now encompasses such diverse businesses as electronics and jewellery. Amazon also provides virtual outlets for independent retailers through its own site. The great strength of Amazon is that from the start it established very high standards of service. It realised that if e-commerce was to have a future then it would be founded on service and convenience. From the start it established a very high quality operation, understanding that it needed to achieve high levels of service if it was to woo consumers away from shops
Consumers who are fed up with waiting at home for deliveries are increasingly choosing to buy online and collecting goods at a time that suits them. Amazon being as commercially huge as they are, plans for expansion shouldn't be far off. Interaction with the consumer can be improved. Reacting to the competition and setting up social networking feeds allowing the consumer to have more insight into future plans or product releases can only be beneficial for the business. High street outlets is another plan that could increase revenue and increase the brand awareness. 31
This report has been an exploration of the latest trends in E-Commerce however it is clear to see that the industry is changing and developing daily. With the introduction of personalised login it makes it increasingly easier for companies to track their customers, and for customers to track their products. Could this be the changing times for in store buying? The rate of purchasing that is done online suggest that there will soon be more people purchasing online that in store. Especially with the increase of older generations also using online buying as a more productive value. The use of pure play sites have also made a huge increase in usage, becoming a very popular trend with the 18-24s. Although there is no one to directly contact or physically speak to the quality of service is enough for customers to return. The report also defined that the running trends in ecommerce change through the generations, the line were teenagers were the dominant online buyers has become blurred as their are so many sites that offer a range of differed products.
A very in demand and somewhat surprising trend that was found throughout the report was that people are now preferring to do their grocery shopping online rather that in store. As consumers are becoming more carer driven and times are becoming busier, it becomes much easier to things on the go and with the increased development of phone applications which allow you to do so it sufficiently less time consuming. Many franchise stores have came about from major conglomerate companies, what does the increase of online shopping do to them? Will we soon become a nation or virtual buyers.......... Read Next Months Issue to find out! 32
“The marketers that give you MORR”
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