International Digital Marketing

When first online supermarkets were launched … they were a flop. After a long silence, the online food and grocery shopping has started to evolve and increase its popularity during recent years, thanks to ongoing development of e-commerce, Internet and mobiles. However, despite of the potential they have, the online supermarkets still reach only a small niche market.

What could bring the online grocery shopping experience closer to the mainstream?

Constantly evolving market

According to International research company IGD, the amount spent on online food and grocery shopping will reach £7.2 billion by 2014. Currently 64% of UK users have done online shopping yet according to the Office for National Statistics, only 13% have bought groceries. In Spain e-commerce is booming, but only 10.7% of the consumers have purchased groceries online. E-commerce in Italy had an estimated value of 10 billion Euros in 2009, but the online food and grocery shopping accounted only for 1.9% of the total.

In France, with a turnover of 250 million Euros, the online supermarkets represent only a small part of the French e-commerce (25 billion Euros). The amount of cyber buyers (24 million in 2009) is increasing, even though the “cyber-markets” are considered to be too expensive with 13% Internet price premium.

Online grocery shoppers

The report Online Shopping 2009 by IGD states that 30% of the online grocery shoppers purchase less often than once a month and 61% visit more than one online supermarket. 49% would like to try alternative store, yet half of users have not done so because they believe it takes too much effort to do . 34% of the surveyed wants to shop only in supermarket and 7% prefers online purchasing for food and groceries.

Convenience is the main motivation for online grocery shoppers to buy online, since it takes less time and physical effort. Overall it is perceived as a more organized shopping experience and means avoiding the queues. 61% of the current and potential online shoppers also stated that having free delivery would definitely increase their motivation to buy groceries online.

The main concern blocking the online grocery shopping is quality. Consumers do not trust companies to deliver them the freshest products and newest sold-by-date if they purchase online.

Best practice – Digital supermarket

Tesco supermarkets in South Korea decided to take it a step further to reach number two position in the country. Instead of opening more physical stores, Tesco concentrated on virtual shopping by creating digital supermarkets called Homeplus in metro stations.  The objective was to bring virtual shopping directly into consumers life. The decision was made after market survey revealed that many consumers concentrated on journeys to and from work without having time to do grocery shopping.

The company designed big screens that looked exactly like physical store shelf where users could use their Smartphones to scan the QR codes and put the products in their shopping cart. When the shopping was done, the groceries were delivered to user’s home once he returned from work.

Online shopping between November 2010 and January 2011 increased 130%, while the number of clients increased 76%. Homeplus itself became the number one online grocery store.

Multi-channel shopping experience

There is great potential in online grocery shopping, since it represents currently only a small percentage of e-commerce and there is a lot of space for growth. Consumers are already using different channels and technologies to shop online and this can be extended to online supermarkets. By offering consumers a possibility to use mobile technology, they are able to purchase on the go, and by bringing online grocery shopping into the physical world, like Tesco did in South-Korea, companies can increase awareness and offer consumers a digital in-store experience.

The future of online grocery shopping looks bright if users are given an online shopping experience that brings them the most perceived value. By offering online shoppers different purchase channels, consistent quality, free delivery and greater choice of products, companies can turn online supermarkets from a niche into mainstream.

“In three to five years, 10 percent to 15 percent of total consumer spending in developed countries may go through sites such as Facebook”

Mike Fauscette, Analyst, IDC Consulting

There has been a lot of debate whether Facebook can be used for pure sales purposes or if brands should only concentrate on increasing brand awareness and engagement.

Dr Paul Marsden, Syzygy’s Social Media specialist, published recently a very interesting white paper ‘F-commerce; Selling on Facebook, The Opportunity for Consumer Brands’. The report is based on an 18-month study tracking the emerging trend of f-commerce and provides an overview of consumer brand f-commerce identifying the key risks and opportunities setting up a shop on Facebook brings.

Interestingly the report does not only focus on ‘social consumer’, but talks about ‘SoLoMo consumer’. A consumer who connects with brands not only through social, but also location-aware and mobile technology. With emerge of these new technologies, the way consumers engage with brands has changed during years. Users want information in real-time, on-demand and on-the-go. Taking advantage of different channels, SoLoMo consumers have built their own trusted networks of friends and experts and are less likely to be influenced by advertising or marketing messages. This is where F-commerce kicks in – it offers brands a way to move away from the pure marketing messages towards building a real brand advocacy.

However, only setting up a large e-commerce store on Facebook would not work. Instead, by focusing on the three key ‘advocacy activators’ ( Experience; Involvement; Incentives), brand can reach SoLoMo consumers and use f-commerce to drive sales and activate brand advocacy.

I would recommend downloading the white paper  – it gives a great insight and information on the f-commerce sales and brand advocacy (and it is free!)

“Sales of green products will not become commonplace until suppliers give consumers better price incentives in-store and online to follow their consciences,”

Bruce Fair, Kelkoo Managing Director

Despite of the recent ecological disasters and constantly increasing environmental awareness, the green retail market holds only a small percentage of the total retail purchases in Europe. Although the total green sales have increased by 114% since 2000, the market accounted for only 2.5% of total European retail sales in 2009. This is not highly surprising, considering that the European consumers are charged on average 46% more for green non-food items and 25% more for green food items than for standard products.

Increasing green demand

However, according to the “Centre for Retail Research Green Buying Guide,” a study conducted in 2010 for Kelkoo, it is predicted that green product purchases will double from 56 billion Euros to 114 billion Euros by 2015, capturing a 5% share of the European retail market. The price of green products will also decrease by 13% by 2012, decreasing the price difference from 46% to 40,5%.

European households will increase their green spending from 386 Euros to 751 Euros per year by 2015. Germany (30.2 billion Euros), France (21,7 billion Euros) and the UK (19,8 billion Euros) will keep their position as the biggest green economies, while Switzerland (1133 Euros/household), Sweden (873 Euros/household) and Denmark (843 Euros/household) have the highest green spending per household in Europe.

Price main obstacle for purchase

The green market in overall has been increasing due to change in consumer attitudes and behaviour, government and company environmental policies and increasing environmental awareness. The main reason why it has been increasing so slowly is the cost. While demand for energy-saving products such as energy-efficient appliances and light bulbs helping consumers to save in long term has soared especially during recession, the demand for less “pocket-friendly” organic green goods has suffered. Unless suppliers make green products available at a reasonable price, the demand stays highly dependable of consumers’ buying power, however environmental friendly they might be.

Online green retail spending increasing

However, a very interesting fact that came up in the Kelkoo study is that European E-Commerce sales of green products account for 6.2% of all green retail spending with 3.5 billion Euros and is constantly increasing. Interestingly, consumers buying green products online do not do so only because they are on average 11% cheaper, but because the selection is larger than in stores close by and it results a more convenient way to purchase.

For an ecological brand Green E-Commerce might be an interesting opportunity to increase awareness and demand of the green products among environmentally friendly consumers, especially when it will decrease the dependence of the supermarkets, eco-stores and rest of the supply chain. By cutting off different providers on the way to the consumer, it is actually possible to offer the product with a reasonable price to fuel the consumer demand. Green is still fashionable and people want to buy it despite of the recession – by establishing a trustworthy online reputation through Social Media and consumer forums and by providing a convenient, user friendly e-commerce platform the green brand is able to increase its market share. Not only in one country, but across Europe.

However, in the time of green-washing it is very important to create a believable eco-brand. Discover the top tips here.

E-commerce, M-commerce, now T-commerce…just like Smartphones, the amount of “tablets” such as iPads is increasing across the globe. In 2010 Apple sold 14,8 million iPads and the Analyst IDC estimates the number of tablets, not just iPads, to reach 44 million in 2011. Meanwhile, according to Forrester, many retailers report that over 50% of their mobile traffic is now coming from the tablets.

What is very interesting is that a study by e-commerce platform provider Shopatron, supporting more than 800 brand stores in 35 industries, claims that the conversion rate from tablets is much higher than conversion rate from mobiles or even PCs. According to the study, the average conversion rates for non mobile optimized pages (iPhone, Android, iPod…) was an average of 0.37%, yet the average conversion rate from iPad was a whopping 2.04%. For some of the e-commerce stores the iPad conversion rate was double than the conversion rate from personal computers.

Are tablets better for e-Commerce than Smartphones?

Smartphones used for investigation

Consumers are using mobiles to investigate before buying a product, but not for actual transactions. Currently 6-8% of the retailers’ traffic comes through mobile, but only 1% of the final purchases are done by mobile.

This is mainly because, unless the web is mobile optimized, transactions through mobile are not very user friendly, especially if the user has to fill up long forms. Instead, Smartphone is ideal for users to investigate products and do a pre-purchase at any time in any place. Consumers access mainly the product price, availability and client reviews. During the weekend consumers dedicate 30% more time on investigation than other days per week

This reflects in the number of searches. According to the Google Mobile, in Q1 2010 mobile search queries from Smartphones on Google grew 62% over the previous quarter. Concerning the m-commerce, Google mobile searches on shopping-related keywords grew 2500% in the past three years.

To enhance users mobile shopping experience, here are some tips on how to mobile optimize your site.

Tablets used for purchases

Let’s face it: tablets are bigger and with a bigger screen the shopping experience is closer to the familiar PC e-commerce experience. The buying process is also much simpler. It can actually turn out to be much richer and exciting with a touch screen giving the user a bigger possibility to interact with the brand and the store.

And of course, another reason is that there are far too many non mobile optimized sites. A webpage that is unpleasant to browse in a mobile looks slightly more appealing in a bigger tablet screen. Still not optimal, but better.

Tablet users want more precise and up-to-date information than mobile users with all the details of the product, purchase process and delivery. To give users what they want, make sure that the page is “tablet optimized” and the shopping experience as simple and pleasant as possible. Make sure the “shopping basket”, product price and image (and discount if applicable) are always clearly visible. Also test the page in different tablets and check that the content is easy to navigate. Include user reviews and comments and optimize the user journey by making payment and delivery fast and effective.

Tablet, Smartphone or PC?

Why not all three? Whether you call it E, M or T, online commerce is increasing fast and retailers should compensate the decline in physical store sales by investing more in online reputation and sales.

Tablets are coming and offer very nice figures. PC still drives most of the traffic and sales. Smartphones maybe are less likely to be used for transactions than tablets, yet mobiles are considerably increasing the traffic to the actual POS. Besides of search and product investigation, users rely on them to find locations and deals near by, check opening hours, and compare prices online. The potential they have to drive sales offline and online is enormous.

By taking advantage of different channels and devices retailer can stay ahead of the competition, create strong online reputation and increase the number of leads. Therefore it is not wise to concentrate only on one channel, but to invest in e-commerce, t-commerce, m-commerce as well as mobile search.

According to a study by Akamai Technologies for IDC, consumers in Western Europe have increased their online and mobile shopping. The study interviewing 1.500 consumers from 7 different European countries (France, UK, Germany, Italy, Spain and Sweden) reveals quite interesting results for online retailers and other companies interested in e-commerce.

Main findings:

• Most of the consumers wait that the website downloads in less than 4 seconds, if not, around 70% will go to another website.
• In total 30% of the respondents have increased their online spending during 2010, Spain being the biggest growing e-commerce country in Europe with 44%.
• 62% of the respondents bought clothes and shoes online, books and magazines following with 59% and travels with 47%.
• Surprisingly, people spending most money online in Europe (1.500 €/year) are 35-54 years olds.
• Around 30% of the respondents uses, or plans using, mobiles to buy online. Inside this group 10% uses already their mobile or smartphone to search shops, compare prices or buy online. Besides, 20% of the respondents is planning to do it in the future.
• Multi-channel buyers spend 15%-30% more than a consumer who uses only one channel.

However, even if  users have increased online spending, the conversion rate from visitors to clients is still low. According to a study by The e-tailing group, the conversion rate is still below 5%. Also, only 17% of the users visiting online stores even have an intention to buy. When users can move to competitor’s website with one click, it is essential to re-think the strategy: How to motivate the users who arrive without intention of buying? And those who do, how to turn the intention into a sale?

34% of the online store users do not find what they are looking for, says a study by e-marketer. It means that in most of the product information is not visible or the product is not classified properly. 8% of the users say as well that the information available is insufficient for purchase decision. According to another study by conZumo.com, 64% of the consumers believe that it is essential for the portal to be well-known (security).

To increase conversion rate, make your website more user friendly:

• Easy access: To facilitate the access to the products, highlight the “search” button, add different categories and subcategories, recommendations and different channels to access the products.
• Organized products: It is very important that the website is organized and the user can see the products clearly. Just like in a physical store.
• Clear product information: It is essential that the visitor has all the necessary information during the purchase. For example, price, delivery, delivery time and availability have to be clear because they are the factors that influence most the buying decision.
• Purchase confirmation: Show clearly required steps needed for purchase. Include thank you page and send the client confirmation e-mail after the purchase. Also, if possible give user a chance to follow his delivery. This gives users feeling of security.
• Different delivery options: Users should have a possibility for a different way of delivery, for example – buying online, but getting the product in physical store to avoid delivery costs.
• Sense of urgency: To turn visits to sales, it is important to create a sense of urgency. Tell visitors it is the last day the product or discount is available or show how few products are left with the discount (like Ryanair: “only 5 seats left with this price”)

Consumers expect more from their online shopping experience and they demand better services and support from the online retailers. With the increase of mobile usage in buying process, the e-commerce retailers must have also a proper mobile strategy in place.