Brands gain ground in online retail race

Warc, 8 February 2013

NEW YORK: More than a third of internet users have made purchases from brand websites, suggesting a shift in the "shopping universe" could be underway, a multimarket study has argued.

PricewaterhouseCoopers, the services firm, polled 11,000 online consumers worldwide, and found 35% had bought items directly from brand sites, a total reaching 56% in China and 52% in the US.

Low price was a key reason for doing so among 44% of people that had engaged in this activity, ahead of wider choice on 41%. An additional 30% only needed one brand, and 29% stated their loyalty to a specific product brand prompted such a decision.

"Common retail wisdom has long placed retailers at the center of the shopping universe for consumers," the study said. "But our survey provides clear evidence that the centre is shifting towards manufacturers.

Elsewhere, a 58% majority of interviewees were spending greater amounts with their favourite multichannel retailer than when they shopped solely through one channel with the same company.

"Those retailers that become multichannel favorites can expect their online and physical operations to successfully grow in parallel," the study said. "That flies in the face of conventional wisdom that starting an online store will take sales away from your physical stores."

A further 23% of respondents typically researched consumer electronics products on the web and purchased them from bricks and mortar stores, while just 2% did the opposite.

Over 60% of people researched and bought grocery goods in stores, as did more than 50% for furniture and around half for clothing, showing "the death of the physical store" is not immediately forthcoming.

"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 study said.

Indeed, a 32% share of contributors "rarely, if ever" completed ecommerce transactions in Russia, standing at 25% in Canada, as well as 23% in Brazil and 19% in France, according to the analysis.

Social media also remains an insignificant channel for the moment, given a "tiny minority" of people currently  make purchases via this route, and a modest 5% planned to increasingly often in the coming year.

Some 17% of the panel had bought items using a tablet thus far, and 9% had changed their habits to shop with these devices with higher frequency. An 11% share said these gadgets would have a bigger role to play in this area during the next 12 months.

Data sourced from PricewaterhouseCoopers; additional content by Warc staff