Consumers are using online information to identify best deals

30 January 2017 Consultancy.uk

Online sales continue to increase as consumers leverage new shopping channels. New research highlights however that consumers are also increasingly leveraging online information to better inform their purchasing decisions. The additional shopping channels, while adding opportunities, too creates additional challenges for shops as consumers seek out good deals or avoid bad reviews.

As the channels and ease through which consumers can access information goods diversifies, largely due to an increase in the number of digital channels and mobile devices, changes in buying behaviour is becoming more pronounced. Mobile phones connected to global databases, forums and social media sites allows consumers to quickly and easily determine if the deal presented in a shop, online or offline, is a good deal. With the increase in information, competition for sales is becoming fiercer while positive consumer sentiment becomes more important.

In a new report from KPMG, titled ‘The truth about online consumers: 2017 Global Online Consumer Report’, the consultancy firm explores consumer trends around the use of digital avenues, both in terms of their level of online and offline buying behaviour, as well as their wider use of technology to accesses key information to inform that behaviour. The report is based on a study of 18,430 consumers from across the globe.

Online retail sales as a percentage of total retail sales

With the rapid proliferation of online shopping ‘ecommerce’ channels, consumers are increasingly buying products through digital shops. Online sales topped $1.5 trillion in 2015, a total of around 7.4% of total retail sales globally. According to the current trend in sales volume growth, by 2020 total online retail sales are expected to top $4 trillion, or around 14.6% of total retail sales globally. Considerable differences exist between countries however, with the UK already (far) ahead of the global average.

While internet sales channels utilisation represents one considerable change in consumer behaviour, other differences too are noted, that are not directly linked to online sales as such, as consumers leverage online information to better inform their purchasing behaviour – from identifying goods deals to checking reviews.

Percentage of consumers that have used their smartphone to look up a product while in a shop

The study shows that the majority of consumers are using their smartphones to look up products while in shops. Baby Boomers are the least likely to do so, at around 50%, while more than three quarters of Millennials have checked the price of goods in shops.

In terms of information sought while in a shop, price comparisons with other retailers was the most oft sought after information, as cited by 65% of respondents, followed by product information/specifications at 61%. Around 49% of respondents that had check information, checked online reviews, while 35% sought information about product options and 16% looked for store inventory/availability.

Factors driving purchase decisions

The study also sought to identify in how far consumers purchase decisions are affected, by region, in terms of key drivers. In North America for instance, consumers are largely affected by price/promotions and branding, while in Asia product branding and product features are key drivers. Western European consumers are particularly price sensitive as well as focused on product features. In most segments consumers are affected by online reviews.

The improved access to information provided by online channels, in relation to key purchase decision drivers, means that consumers are considerably harder to pin down. Particularly if there is a better deal elsewhere or brand reputation or product quality are affected by word of mouth.

Sites where consumers shared feedback

According to the study, feedback from consumers about their shopping experience, which affects other consumers’ perceptions and buying behaviour, is posted predominantly on the sellers’ website by the three generational groups – a boon to sellers seeking to placate turned off consumers. Facebook is more often used by Millennials (34% of respondents) compared to Baby Boomers (25%), while Baby Boomers (22%) are more likely to use manufacturer or brand websites then Millennials (17%). Other forms of social media are less often leveraged to post views by all consumer groups.

Reasons consumers shop in stores instead of online

Online and in store benefits

The report also looked into what consumers saw as key reasons to shop in the two different environments, online and in store. The top reason to shop in store is related to wanting to see/touch the item before purchase (56%) and trying the item of for size (55%). Practical reasons, such as long shipping times (34%) and high shipping costs (24%) were also cited as issues. Around a quarter of shoppers enjoyed the shopping experience itself.

Reasons consumers shop online instead of in stores

In terms of conditions driving consumers to buy online, the ability to shop 24/7 came in at 58%, followed by the ability to easily compare prices (54%) and leverage the often better prices and sales online (46%). Saving time and the convenience of not having to go somewhere were cited by 40% and 39% of consumers respectively.

Paul Martin, UK Head of Retail at KPMG in the UK, reflects, “Companies should be channel agnostic, meaning it does not matter if they start with online or offline, what matters is that all channels are interlinked to give consumers the convenience they need. Online plays a major part in the customer journey or ROPO (research online, purchase offline). The most successful multi-channel companies established their online channels as early as the late nineties, went on to establish ‘click and collect’, eradicated silos across the entire organization and established a channel agnostic incentive program so retail staff do not consider online as a separate business.”

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Grant Thornton advises on deal for high-growth cloud hosting firm

08 April 2019 Consultancy.uk

Grant Thornton’s North West Corporate Finance team has completed its first TMT deal of 2019. The professional services firm advised the shareholders of Hosted Desktop UK on their investment from specialist SME lender Beechbrook Capital.

Technological disruption and changing consumer behaviour have continued to affect top Technology, Media & Telecommunications (TMT) players in recent years. The industry has seen revenues border on stagnation over the past decade, at 0.4% annual growth since 2008. While the industry is keen to develop new digital services and models to meet market challenges, they face a range of barriers – meaning the recruiting of talent specialising in innovative software and technology has become a key goal for the industry.

Amid this, Hosted Desktop UK (HDUK) provides cloud computing services to small and medium sized businesses across the UK. The firm’s cloud solutions provide businesses with IT reliability, flexibility, value for money and business continuity. As the firm bids to grow in the UK, with demand for its disruptive technologies high, HDUK has secured a key investment from specialist SME lender Beechbrook Capital.

Grant Thornton advises on deal for high-growth cloud hosting firm

The transaction was Beechbrook Capital’s maiden deal from its latest UK SME credit fund, which supports small and medium-sized businesses in the UK with EBITDA of £1 million and above. Manchester law firms Pannone Corporate (sell-side advice, led by Mark Winthorpe) and DWF LLP (buy-side advice, led by Jonathan Robinson) also advised on the deal, while Grant Thornton’s North West Corporate Finance team advised HDUK’s shareholders.

The deal represents the Grant Thornton branch’s first TMT deal of 2019, with a team comprised of Partner and Head of Corporate Finance Peter Terry, Manager Daniel Brecker and Assistant Manager Cariad Mudford advising HDUK shareholders on the investment. It is the third key deal in the TMT sector that the GT North team has advised on in the last 18 months, following the £16.5 million sale of Salford-based Sonassi to Iomart in December 2017 and NorthEdge Capital’s investment in Yorkshire company iPortalis in August 2018.

Grant Thornton’s Peter Terry said of the news, “As our domestic and working lives become ever-more technology dependent, it’s no surprise that there continues to be strong investor interest in any asset in the cloud computing, data infrastructure and connectivity space… We were pleased to work with Beechbrook Capital on the first deal in its new fund. It shows that despite the well-documented uncertainties in the economy there are still good funding options for dynamic SMEs and their management teams.”