According to the annual survey of global shoppers by PwC, based on more than 11,000 shoppers in 11 different countries spanning four continents, the study debunks some of the mythology concerning consumers, retailers and CPG companies.
Using a “10 Myths” framework, the report separates fact from fiction to better serve today’s multichannel shoppers. John Maxwell, Global Retail and Consumer Leader, PwC, says to take social media, for example: There's no denying that the world is changing fast as consumers use social media to research brands, praise their favorite products, and point out the weaknesses of other products.
But the survey data reveals that just 12% of the respondents have purchased an item through a social media site, up from 5% in 2011, and only 18% purchased a product as a result of information obtained through a social media site.
Myth 1: Social media will soon become an indispensable retail channel
On its own, social media isn’t likely to become an important retail channel anytime soon, says the report. But it’s becoming more popular every year, and it’s driving more shopping across all channels, not just online ones.
While social media is not yet a separate retail channel for most markets, it’s clearly a robust marketing and communications tool for retailers and consumer product companies. According to the study, 49% of survey respondents say they’ll click through to a specific online store if offered a good sale or an attractive special offer.
Brand Lovers, Deal Hunters And Social Addicts Have Different Motivations For Visiting Brand Social Media Sites
Motivation to Visit
% of Respondents
Opportunity to participate in contests
Interested in new product offerings
Follow the brand because I shop with them
Interested in interacting with the brand
Interested in interacting with others that follow this brand
Friends or expert recommendation
Friends also interact with this brand on social media
Feedback about a good or bad experience1
To research products before I buy them
Access to customer service through social media
Source: PriceWaterhouseCoopers (PwC), January 2013
Myth 2: Stores will become mainly showrooms in the future
Many multichannel shoppers say they research online, but more still prefer to buy products at a physical store. Far from cannibalizing store traffic and turning physical locations into showrooms or museum pieces, says the report, web product research drives far more shoppers to make a physical store purchase than vice versa.
23% of respondents research consumer electronics online and then go to a store to buy the product, compared to only 2% who do it the other way around. A similar ratio holds true across several shopping categories. With the exception of the books, music, movies and video game category, consumers don’t yet seem ready to erase the traditional retail outlet from their shopping landscape.
The ability to see, touch and try products still ranks as shoppers’ number one reason to visit a store in person. Getting the product immediately is important to almost as many. The study respondents make more daily or weekly purchases in brick-and-mortar stores than they do online. And while significant numbers of shoppers intend to shop more online next year, most don’t plan to concurrently cut purchases from physical stores.
Myth 3: The tablet will soon overtake the PC as the preferred online shopping device
While tablets and smart phones are catching up, shoppers are still overwhelmingly using their PCs to shop online. In 2012, the world saw a 100% increase in global tablet sales, and by 2015 Gartner expects tablet sales to reach 320 million units. Tablets aren’t just replacing smart phones or laptops, they’re expanding the ways people use online devices. Three-quarters of tablet users reach for their device at least once a day and nearly half spend more than 11 hours per week on their tablets.
By 2015, the manner by which consumers will access the Internet will look much different than it does today, with the smart phone accounting for 40% of Internet traffic, computers 34% and tablets 26%. Global spending on mobile apps is projected to soar from $7 billion in 2010 to $35 billion in 2015.
The survey suggests that tablets will not soon take over as the preferred online shopping device. Only 9% of shoppers say they they’ve changed their habits to shop with a tablet more often, and three out of five don’t use this type of device to shop at all. The respondents don’t expect to increase their tablet purchases much next year, with only 11% thinking they’ll shop more with their tablet.
Smart phones aren’t making serious inroads as a shopping device, either. As with tablets, most of those using these devices don’t expect to use them more for shopping in the near future. And many still don’t use them for shopping at all. In fact, the overwhelming majority of respondents still use their PC to make purchases. That situation doesn’t look likely to change anytime soon. More than one-third of the global sample expects to increase their PC shopping next year, far more than the percentage who say they expect to shop more using other devices.
A quick look at more of the Myths exposed is summarized here, with access to the PDF file containing details at the conclusion:
Myth 4: As the world gets smaller, global consumers are getting more alike
Although consumers shop with more global retailers than ever before, there is a wide range of local difference in consumer behaviors.
Myth 5: China is the future model of online retail
China is at the forefront of some key trends, but the study suggests its multichannel and online model is unique.
Myth 6: Domestic retailers will always have a “home field” advantage over global retailers.
Foreign retailers are making inroads into consumers’ lists of favorite multichannel retailers.
Myth 7: Global online pure players like Amazon will always have a scale advantage over domestic online pure players.
Many domestic online pure players are holding their own.
Myth 8: Retailers are inherently better positioned than brands, as they are closest to the customer
Consumers are shopping directly from manufacturers and many no longer distinguish between retailers and their favorite brands.
Myth 9: Online retail is cannibalizing sales in other channels
Consumers are actually spending more with their favorite multichannel retailers, not just shifting some purchases to a different channel.
Myth 10: Low price is the main driver of customer spend at favorite retailers
Customers value quality and innovative brands over price when shopping at their favorite multichannel retailers.
The report concludes by noting that when it comes to channels and devices, CEOs should have realistic expectations. Social media and tablets aren’t taking over any time soon, but no executive can afford to ignore them either. Realism is the key-word when it comes to China, as well. While there’s no disputing it will be an important market, but Global consumers continue to have far more differences than they do similarities.
While domestic retailers have some advantages in the multichannel arena, foreign players are breaking into the scene, and consumers are buying direct from some brands too. Domestic online pure players are also holding their own against global online pure players in a number of markets.
In the view of the study analysis, moving into the multichannel space can have big advantages, particularly in emerging markets where the potential for revenue growth is highest, and consumers aren’t as tied to the idea of a physical store.
For considerable detail about the Myths, and charts and graphs illustrating the conclusions, please access the PDF file here.