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Buying for the Home Online - UK - April 2011

INTRODUCTION
Definitions
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Best- and worst-case forecast of online sales of household goods, 2005-15
UK consumers spend £2.9 billion online for the home
Online shopping is growing share of consumer spend on home goods
Figure 2: Online share of consumer spending on goods for the home, 2006-10
Market factors
Figure 3: Broadband penetration, by age, 2010
The connected consumer
Online shopping is going mobile
High willingness to shop online
Home goods hit by poor market conditions
Companies, brands and innovation
Figure 4: Websites used for online shopping, March 2011
Four general retailers are the most used
Some home goods retailers risk being left behind
Plenty of innovation in evidence
The consumer
Figure 5: Products bought for the home and shopping patterns, March 2011
Large electrical appliances top the list of goods for the home online
Figure 6: Attitudes towards shopping for the home online, March 2011
Convenience and saving money the biggest factors
Voice of real customers
Not worth the bother of shopping online for smaller items
Figure 7: Further attitudes towards shopping for the home online, March 2011
Not the end of shopping as we know it
What we think
ISSUES IN THE MARKET
Which websites are consumers visiting for online purchases of household goods?
Why are some goods more suitable for shopping online than others and what are retailers doing to expand appeal?
What do consumers feel are the advantages of online shopping for the home?
What are the latest developments in online shopping for household goods and who is ahead of the game?
What are the key factors driving or holding back development of this market?
What is the future for online shopping for goods for the home?
FUTURE OPPORTUNITIES
Trend – Affection
Trend – Guiding Choice
INTERNAL MARKET ENVIRONMENT
Key points
More than eight in ten under-45s have broadband
Figure 8: Trends in broadband penetration, by age, 2004-10
Only 13% of internet users do not shop online
Rapid uptake of smartphones
Figure 9: Device ownership summary, April 2009-October 2010
M-commerce will bring sweeping changes
16-24s early to adopt m-commerce
Trust the voice of real people
Use of the internet for information
Figure 10: Agreement with selected lifestyle statements on other media, 2006-10
Multichannel shoppers spend more
BROADER MARKET ENVIRONMENT
Key points
Slow housing market dents demand for housewares
Figure 11: Number of £40,000+ UK residential property transactions (SA), Q1 2007-Q3 2010
Consumers return to saving
Figure 12: GDP, PDI, consumer expenditure and savings, at current prices, 2005-15
More 25-34s – positive for spending on the home
Figure 13: Trends in the age structure of the UK population, 2005-15
Social climbing
Figure 14: Trends in the socio-economic structure of the UK population, 2005-15
Golden age for retirement?
Figure 15: Trends in the lifestage structure of the UK population, 2005-15
ONLINE SHOPPING FOR THE HOME IN CONTEXT
Key points
Shopping activity in context
Figure 16: Goods/services bought online, December 2010
STRENGTHS AND WEAKNESSES IN THE MARKET
Strengths
Weaknesses
MARKET SIZE AND FORECAST
Key points
High growth from low base
Figure 17: Online sales of household goods, at current prices, 2005-10
Cannibalising store sales
Home goods sales
Figure 18: Retail value sales of household goods, 2006-10
How much is online?
A note of caution
Figure 19: Estimated consumer spending on household goods and household goods bought online, 2006-10
Plenty of growth in prospect
Will online shopping reshape retailing?
 FORECAST
Figure 20: Best- and worst-case forecast of online sales of household goods, 2005-15
Online for the home will grow by more than half over five years
RETAIL COMPETITOR ANALYSIS
Key points
 FURNITURE/HOUSEWARES SPECIALISTS
IKEA
Carpetright
Dreams
Allied Carpets
Habitat
Lakeland
Other leading furniture retailers with no, or limited, e-commerce
 OTHER HOUSEWARES STORES ONLINE
Argos
Amazon
Dunelm
eBay
John Lewis
Next
Marks & Spencer
 DIY STORES
B&Q
Homebase
 ELECTRICAL STORES
DSGI (Currys/Dixons)
Comet
 GROCERS
Tesco
Asda
Sainsbury’s
THE CONSUMER – HOW THEY SHOP FOR PRODUCTS FOR THE HOME
Key points
Electrical home goods highest for online shopping
Figure 21: Products bought for home and shopping patterns, March 2011
Stores have strong conversion rates
Over a third browse and buy appliances in-store
About one in four buy appliances online
Carry-home items less likely to be purchased online
Many items for the home have weak online sales
25-34s more inclined to shop online
Silver shoppers gravitate to stores
See it first, then order online
Repertoire of products bought
Figure 22: Repertoire of products bought online, March 2011
CONSUMER – WEBSITES USED FOR SHOPPING FOR THE HOME
Key points
Argos tops the list of websites used
Figure 23: Websites used for shopping for the home, March 2011
Websites used – demographic analysis
Shoppers who use Amazon
Why consumers like to shop online with Argos
Tesco hitting Argos customers
Specialist stores
eBay for bargains
CONSUMER – BUYING BEHAVIOUR FOR HOUSEHOLD PRODUCTS
Key points
Online shopping is convenient
Figure 24: Attitudes towards shopping for the home online, March 2011
Hands-on experience important
Advice from ‘real people’
Weighing up the delivery costs
Convenience rules
Saving wasted time
Browsing at leisure
Seeking out scarce items
Price savings influence shoppers
Four in ten compare prices
M-commerce still small
Giving up
The issues associated with buying furniture and carpets online
CONSUMER – ATTITUDES TOWARDS SHOPPING ONLINE FOR THE HOME
Key points
Figure 25: Level of agreement with attitudes towards buying for the home online, March 2011
Use of the internet is growing
No worries about human contact
Easy to find what you want
For some delivery takes too long
Negatives about shopping for the home online
Buying from unfamiliar websites
Attitudes towards prices online
Figure 26: Agreement that prices online are better than in the shops, by age, March 2011
Figure 27: Agreement that for some items, consumers would never consider buying online, by age, March 2011
THE CONSUMER – TARGET GROUPS
Figure 28: Target groups for online shopping for the home, March 2011
E-shoppers (32%)
Occasional onliners (40%)
Cost-cutters (28%)
APPENDIX – INTERNAL MARKET ENVIRONMENT
Figure 29: Broadband penetration, by demographics, 2004-10
APPENDIX – CONSUMER – HOW THEY SHOP FOR PRODUCTS FOR THE HOME
Figure 30: Most popular products ever bought, by demographics, March 2011
Figure 31: Next most popular products ever bought, by demographics, March 2011
Figure 32: Most popular products bought online, by demographics, March 2011
Figure 33: Next most popular products bought online, by demographics, March 2011
Figure 34: Most popular products browsed online and ordered online, by demographics, March 2011
Figure 35: Next most popular products browsed online and ordered online, by demographics, March 2011
Figure 36: Most popular products browsed online and then bought in-store, by demographics, March 2011
Figure 37: Next most popular products browsed online and then bought in-store, by demographics, March 2011
Figure 38: Most popular products browsed and bought in-store, by demographics, March 2011
Figure 39: Next most popular products browsed and bought in-store, by demographics, March 2011
APPENDIX – CONSUMER – WEBSITES USED FOR SHOPPING FOR THE HOME
Figure 40: Products ever bought, by most popular websites used to buy products, March 2011
Figure 41: Products ever bought, by next most popular websites used to buy products, March 2011
Figure 42: Products ever bought, by other websites used to buy products, March 2011
Figure 43: Products ever bought, by least popular websites used to buy products, March 2011
Figure 44: Products bought online, by most popular websites used to buy products, March 2011
Figure 45: Products bought online, by next most popular websites used to buy products, March 2011
Figure 46: Products bought online, by other websites used to buy products, March 2011
Figure 47: Products bought online, by least popular websites used to buy products, March 2011
Figure 48: Most popular websites used to buy products, by demographics, March 2011
Figure 49: Next most popular websites used to buy products, by demographics, March 2011
Figure 50: Other websites used to buy products, by demographics, March 2011
Figure 51: Least popular websites used to buy products, by demographics, March 2011
APPENDIX – CONSUMER – BUYING BEHAVIOUR FOR PRODUCTS FOR THE HOME
Figure 52: Most popular statements on buying for the home online, by demographics, March 2011
Figure 53: Next most popular statements on buying for the home online, by demographics, March 2011
Figure 54: Websites used to buy products, by most popular statements on buying for the home online, March 2011
Figure 55: Websites used to buy products, by next most popular statements on buying for the home online, March 2011
Figure 56: Websites used to buy products, by other statements on buying for the home online, March 2011
Figure 57: Products bought online, by most popular statements on buying for the home online, March 2011
Figure 58: Products bought online, by next most popular statements on buying for the home online, March 2011
Figure 59: Products bought online, by other statements on buying for the home online, March 2011
Figure 60: Products bought online, by most popular websites used to buy products, March 2011
Figure 61: Products bought online, by next most popular websites used to buy products, March 2011
Figure 62: Products bought online, by other websites used to buy products, March 2011
Figure 63: Products bought online, by most popular websites used to buy products, March 2011
APPENDIX – CONSUMER– ATTITUDES TOWARDS HOUSEHOLD SHOPPING ONLINE
Figure 64: Products ever bought, by most popular attitudes towards buying for the home online, March 2011
Figure 65: Products ever bought, by next most popular attitudes towards buying for the home online, March 2011
Figure 66: Products ever bought, by other attitudes towards buying for the home online, March 2011
Figure 67: Products bought online, by most popular attitudes towards buying for the home online, March 2011
Figure 68: Products bought online, by next most popular attitudes towards buying for the home online, March 2011
Figure 69: Products bought online, by other attitudes towards buying for the home online, March 2011
Figure 70: Websites used to buy products, by most popular attitudes towards buying for the home online, March 2011
Figure 71: Websites used to buy products, by next most popular attitudes towards buying for the home online, March 2011
Figure 72: Websites used to buy products, by other attitudes towards buying for the home online, March 2011
Figure 73: Statements on buying for the home online, by most popular attitudes towards buying for the home online, March 2011
Figure 74: Statements on buying for the home online, by next most popular attitudes towards buying for the home online, March 2011
Figure 75: Statements on buying for the home online, by other attitudes towards buying for the home online, March 2011
Figure 76: Repertoire of products bought online, March 2011
Figure 77: Repertoire of products bought online, by demographics, March 2011
APPENDIX – THE CONSUMER – TARGET GROUPS
Figure 78: Target groups, by demographics, March 2011
Figure 79: Products ever bought, by attitudes towards buying for the home online, March 2011
Figure 80: Products bought online, by attitudes towards buying for the home online, March 2011
Figure 81: Websites used to buy products, by target groups, March 2011
Figure 82: Websites used to buy products, by repertoire of products bought online, March 2011
Figure 83: Attitudes towards buying for the home online, by target groups, March 2011
Figure 84: Attitudes towards buying for the home online, by repertoire of products bought online, March 2011
Figure 85: Target groups, by repertoire of products bought online, March 2011
Figure 86: Statements on buying for the home online, by repertoire of products bought online, March 2011
Figure 87: Statements on buying for the home online, by target groups, March 2011

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