2017 FORRESTER REPRODUCTION PROHIBITED WEBINAR State Of Global
© 2017 FORRESTER. REPRODUCTION PROHIBITED.
WEBINAR State Of Global Online Retailing In 2017 Michael O’Grady, Principal Forecast Analyst Satish Meena, Senior Forecast Analyst Susan Wu, Manager, Forecast. View October 31, 2017. Call in at 10: 55 a. m. Eastern time © 2017 FORRESTER. REPRODUCTION PROHIBITED.
We work with business and technology leaders to develop customer-obsessed strategies that drive growth. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 3
Consumer Technographics® GLOBAL SYNDICATED INSIGHTS ON THE INTERSECTION OF CONSUMERS AND TECHNOLOGY — ATTITUDES, BEHAVIORS, AND MOTIVATIONS Coverage area + Longest-running digital consumer study (since 1997) + 400, 000+ completed surveys + 1, 500 brands + 300 attitudes captured + 7 proprietary profiles ___________ = Deep, customizable, and trended consumer insights Countries: Argentina Australia Brazil Canada China © 2017 FORRESTER. REPRODUCTION PROHIBITED. France Germany India Indonesia Italy Japan Mexico The Netherlands Poland Russia South Korea Spain Sweden Turkey United Kingdom United States 4
© 2017 FORRESTER. REPRODUCTION PROHIBITED. 5
Agenda › Global online retail sales • Obtain a global view of online retail sales by nascent/high-growth or mature markets and key product category trends. › Marketplaces • Understand the increasing role marketplaces play in consumer online purchases. › Digitally influenced sales • Understand the drivers and challenges behind offline sales and areas of opportunities affected by purchase journey and price points, with a highlight on luxury goods. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 6
Agenda › Global online retail sales • Obtain a global view of online retail sales by nascent/high growth or mature markets and key product category trends. › Marketplaces • Understand the increasing role marketplaces play in consumer online purchases. › Digitally influenced sales • Understand the drivers and challenges behind offline sales and areas of opportunities affected by purchase journey and price points, with a highlight on luxury goods. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 7
Online retail is quickly evolving © 2017 FORRESTER. REPRODUCTION PROHIBITED. 8
Global online retail will be $2. 6 trillion in 2021 Source: Forrester Data: Online Retail Forecast, 2017 To 2022 (US); Forrester Data: Online Retail Forecast, 2017 To 2022 (Western Europe); Forrester Data: Online Retail Forecast, 2016 To 2021 (Asia Pacific); Forrester Data: Online Retail Forecast, 2016 To 2021 (Latin America); and Forrester Data: Online Retail Forecast, 2016 To 2021 (Poland Russia) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 9
Regional differences affect e. Commerce maturity Source: Forrester Data: Online Retail Forecast, 2017 To 2022 (US); Forrester Data: Online Retail Forecast, 2017 To 2022 (Western Europe); Forrester Data: Online Retail Forecast, 2016 To 2021 (Asia Pacific); Forrester Data: Online Retail Forecast, 2016 To 2021 (Latin America); and Forrester Data: Online Retail Forecast, 2016 To 2021 (Poland Russia) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 10
36% of the population will be <25 years in 2022 Source: Forrester Data: World Online Population Forecast, 2017 To 2022 (Global) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 11
Significant buyer growth potential in emerging markets Source: Forrester Data: Online Retail Forecast, 2017 To 2022 (US); Forrester Data: Online Retail Forecast, 2017 To 2022 (Western Europe); Forrester Data: Online Retail Forecast, 2016 To 2021 (Asia Pacific); Forrester Data: Online Retail Forecast, 2016 To 2021 (Latin America); and Forrester Data: Online Retail Forecast, 2016 To 2021 (Poland Russia) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 12
Emerging economies have the highest mobile buyers Source: Forrester Data Global Consumer Technographics® Online Benchmark Survey, 2017 © 2017 FORRESTER. REPRODUCTION PROHIBITED. 13
2017 top online retail products Grocery Clothing Housewares Car parts PCs Videos and DVDS Event tickets Video games Software Peripherals Music Books Consumer electronics Small appliances Pets Home improvement Sports equipment Furniture Flowers Garden supplies Toys Nutraceuticals Source: Forrester Data: Online Retail Forecast, 2017 To 2022 (US) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 14
World’s largest retailers WALMART IS STILL THE WORLD’S LARGEST RETAILER, BUT ALIBABA AND AMAZON ARE CLOSING IN +2% +26% +24% Source: Walmart annual accounts; Tmall from Forrester Data: Online Marketplace Tracker, 2015 To 2017 (Global); and Forrester estimates (Amazon) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 15
Boundaries between offline and online retailers are fading › Amazon • Amazon acquired Whole Foods — $13. 7 billion. • Amazon acquired 5% stake in Shopper’s Stop (Indian department store chain). › Alibaba invested $8 billion in past two years in offline retail. • Intime Retail Group (Department store chain and mall operator) — $2. 6 B • Opening Hema supermarkets where customers can shop both online or in store • Purchased 18% stake in the Lianhua Supermarket chain Source: Press releases © 2017 FORRESTER. REPRODUCTION PROHIBITED. 16
Holiday shopping days drives online sales Source: Forrester Data: Online Holiday Retail Sales, 2017; Alibaba, Press, China — Single’s Day Sales; India – Big Billion Day and Great Indian Shopping Festival Sales © 2017 FORRESTER. REPRODUCTION PROHIBITED. 17
Key takeaways › Increase spend per buyer: retain loyal buyers, target by category. › Understand country dynamics: appeal to new online buyers, and analyze product fragmentation across markets. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 18
Agenda › Global online retail sales • Obtain a global view of online retail sales by nascent/high growth or mature markets and key product category trends. › Marketplaces • Understand the increasing role marketplaces play in consumer online purchases. › Digitally influenced sales • Understand the drivers and challenges behind offline sales and areas of opportunities affected by purchase journey and price points, with a highlight on luxury goods. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 19
Marketplaces are ruling the e. Commerce market © 2017 FORRESTER. REPRODUCTION PROHIBITED. 20
Half of B 2 C e. Commerce sales comes from marketplaces Source: Forrester Data: Online Marketplace Tracker, 2015 To 2017 (Global); across 16 countries in Europe, APAC, LATAM, and North America; across 11 marketplaces © 2017 FORRESTER. REPRODUCTION PROHIBITED. 21
Tmall, Amazon, and JD. com are taking an increasing share of marketplace sales Source: Forrester Data: Online Marketplace Tracker, 2015 To 2017 (Global); across 16 countries in Europe, APAC, LATAM, and North America; across 11 marketplaces © 2017 FORRESTER. REPRODUCTION PROHIBITED. 22
Without Amazon, sales growth of B 2 C online retail sales would decline by four to five percentage points in the US Source: Forrester Data: Online Marketplace Tracker, 2015 To 2017 (Global); across 16 countries in Europe, APAC, LATAM, and North America; across 11 marketplaces © 2017 FORRESTER. REPRODUCTION PROHIBITED. 23
Source: Half Of B 2 C Online Retail Spend Came From Marketplaces In 2016 Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 24
In China marketplaces are the preferred destination for product finding for Millennials Source: Forrester Data Consumer Technographics® Asia Pacific Survey, H 2 2016 © 2017 FORRESTER. REPRODUCTION PROHIBITED. 25
In the US Amazon is the preferred destination for product finding for Millennials Source: Forrester Data Consumer Technographics® North American Retail And Travel Customer Life Cycle Survey, Q 1 2017 (US) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 26
Source: Half Of B 2 C Online Retail Spend Came From Marketplaces In 2016” Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 27
Marketplaces attract both young and old alike “From which of the following retailers or daily deal sites did you purchase online (via website or app) in the past three months? ” UK online buyer age Source: Forrester Data Global Consumer Technographics® Online Benchmark Survey, 2017; averaging online buyers over age groups 16 to 24, 25 to 34, 35 to 44, 45 to 54, 55 to 64, and 65+ © 2017 FORRESTER. REPRODUCTION PROHIBITED. 28
Marketplaces need to balance. . . Source: “Half Of B 2 C Online Retail Spend Came From Marketplaces In 2016” Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 29
Agenda › Global online retail sales • Obtain a global view of online retail sales by nascent/high growth or mature markets and key product category trends. › Marketplaces • Understand the increasing role marketplaces play in consumer online purchases. › Digitally-influenced sales • Understand the drivers and challenges behind offline sales and areas of opportunities impacted by purchase journey and price points, with a highlight on luxury goods. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 30
Digital influence on retail sales is growing rapidly © 2017 FORRESTER. REPRODUCTION PROHIBITED. 31
Customer journey from discovery to purchase Discovery Research Influence Purchase Digital influence Digital impact © 2017 FORRESTER. REPRODUCTION PROHIBITED. 32
44% of retail sales is digitally affected in 2017 Source: Forrester data for 13 countries including US, EU-7, China, India, Japan, South Korea, and Australia © 2017 FORRESTER. REPRODUCTION PROHIBITED. 33
Influence of Amazon is prominent in customer journey Source: Forrester Data Consumer Technographics® North American Retail And Travel Customer Life Cycle Survey, Q 1 2017 (US) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 34
Product research — use of Amazon for research Source: Forrester Data Consumer Technographics® North American Retail And Travel Customer Life Cycle Survey, Q 1 2017 (US) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 35
Retail influence — Amazon has more influence than in -store display and search engines for consumer electronics, baby products, and toys Source: Forrester Data Consumer Technographics® North American Retail And Travel Customer Life Cycle Survey, Q 1 2017 (US) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 36
Digitally affected retail sales 2017 (US) OTHER THAN GROCERY AND OTC DRUGS EVERYTHING ELSE IS MORE THAN 50% AFFECTED BY DIGITAL Above 90% Software Computers Large appliances Computer peripherals Video games © 2017 FORRESTER. REPRODUCTION PROHIBITED. 75% to 90% Consumer electronics Clothing Music Toys Footwear Books Event tickets Movie tickets Small appliances Office products Videos and DVDs Car parts Housewares 50 to 75% Medical supplies Furniture Beauty and cosmetics Sports equipment Jewelry Flowers Nutraceuticals Garden supplies Home improvement Pets Below 50% Over-the-counter drugs Grocery 37
More than half of luxury goods buyers across EU-5 are digitally influenced; offline influence remains more dominant Source: “Luxury Retail: Revamp Or Revolution? ” Upcoming Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 38
Increasing digital influence especially among Millennials Source: “Luxury Retail: Revamp Or Revolution? ” Upcoming Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 39
What’s next after smartphone? © 2017 FORRESTER. REPRODUCTION PROHIBITED. 40
Amazon Prime members are expected to be early adopters › Amazon Prime users • Amazon doesn’t disclose Prime member numbers. There are surveybased Prime membership estimates from other companies that range as high as 85 million US members and as low as 40 million. • Almost 42% of US online adults have an Amazon Prime membership. Base: 4, 585 US online adults (18+); Source: Forrester Data Consumer Technographics® North American Retail And Travel Survey, Q 4 2016 (US) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 41
Among people who used Amazon Echo devices, 45% own more than one Echo device in their households. 62% of Echo owners interact with Alexa at least once a day. Base: 235 US online adults (18+) who used an Amazon Echo in the past 12 months; Source: Forrester Data Consumer Technographics® North American Retail And Travel Survey, Q 4 2016 (US) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 42
Retail is the next set of use cases provided by smart speakers after information and control Base: 235 US online adults (18+) who used an Amazon Echo in the past 12 months; Source: Forrester Data Consumer Technographics® North American Retail And Travel Survey, Q 4 2016 (US) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 43
Key takeaways › Amazon Prime customers are expected to be the early adopters of smart speakers. › Smart speakers only gradually accelerate true smart home adoption and provide new ways for digital influence. › Grocery is the category to watch out in coming days due to the fading boundaries between offline and online. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 44
Susan Wu swu@forrester. com Michael O’Grady mogrady@forrester. com Satish Meena smeena@forrester. com Thank you FORRESTER. COM © 2017 FORRESTER. REPRODUCTION PROHIBITED.
APPENDIX © 2017 FORRESTER. REPRODUCTION PROHIBITED. 46
Digital Influence Offline Retail Share By Country US leads the Digital influence retail market followed by Japan and UK Source: Forrester Research © 2017 FORRESTER. REPRODUCTION PROHIBITED. 47
Digital Impacted Retail Sales Share By Country US leads the web influence retail market followed by UK and South Korea Forrester Research © 2017 FORRESTER. REPRODUCTION PROHIBITED. 48
Digital Influence in Luxury Goods Category › Burberry – “About 70% of our retail sales are estimated to have involved support from digital technology at some point in the customer journey” Annual Report, 2016 -17 Source: Company Filings © 2017 FORRESTER. REPRODUCTION PROHIBITED. 49
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