Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Advertising creative
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Online sales continue to grow despite weak economy and declines in overall retail sales
- Broadband and increasing comfort with e-commerce driving growth
- Proliferation of mobile driving sales gains
- Most purchases made from a PC
- Resistance to buying consumables online slows sales growth
- Clothing, electronics, and entertainment sales driving growth
- Amazon remains the dominant player
- About one in four internet users made purchase in last 30 days
- About four in 10 influenced by reviews
Insights and Opportunities
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- Growing number of consumers comfortable shopping online, but many require reviews to commit to buying a product
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- Figure 1: Trended opinions on how the internet impacts shopping, January 2004-December 2010
- Twitter and blog influence on purchases
- QR Codes
- Affiliate marketing also driving sales
- Recognizing the value of traffic
Inspire Insights
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- Trend: Alpha Mothers
- Information management and research are parts of her skill set
- Relevant deals will help her make decisions
- Trend: Life Hacking
- My phone is the way to my pocketbook
- Securing space on the digital shelf
Market Size and Forecast
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- Key points
- Online sales far outpace offline retail growth
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- Figure 2: Total U.S. retail and e-commerce retail sales, at current prices, 2006-11
- E-commerce sales expected to grow 10%+ per year between 2011 and 2016
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- Figure 3: Total U.S. e-commerce retail sales, at current prices, 2006-16
- Figure 4: Total U.S. e-commerce retail sales, at inflation-adjusted prices, 2006-16
- Fan chart forecast
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- Figure 5: Total U.S. e-commerce retail sales, at current prices, 2006-16
Market Drivers
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- Key points
- Fixed broadband growth slows as wireless takes off
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- Figure 6: Total U.S. fixed broadband connections (more than 200 kbps), 2006-10
- Smartphone penetration growing quickly
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- Figure 7: U.S. factory unit sales of smartphones, at current prices, 2006-10
- Mobile internet use growing rapidly
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- Figure 8: Devices used to connect to the internet, 2006, 2008, and 2010
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- Figure 9: Total U.S. broadband connections (more than 200 kbps), by type, 2009 and 2010
- Mobile data traffic expected to double each year between 2009 and 2013
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- Figure 10: Global mobile data traffic, 2008-13
- Tablet sales could drive mobile shopping trend
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- Figure 11: U.S. sales to dealers and forecast of mobile PCs and eReaders at inflation-adjusted prices*, 2006-14
- Most smartphone users surf the net and download apps
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- Figure 12: Usage of smartphone functionalities, by smartphone platform, November 2010
- Low consumer confidence and high unemployment could stymie growth
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- Figure 13: Index of Consumer Sentiment, March 2007–May 2011
- Figure 14: Unemployment, Jan. 2007-March 2011
- Better websites lead to more e-commerce
Competitive Context
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- Key points
- Many will still only shop at a store for staple goods
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- Figure 15: Products purchased only at a store, May 2011
- Auto-replenishment
- Auction and garage sale sites continue to compete with mainstream
- Manufacturer sites vs. online retailers
Market Segmentation
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- Key points
- Music/video and electronics top growth areas
- Food sales decline as more cook at home with fresh ingredients
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- Figure 16: U.S. retail sales at electronic shopping and mail order houses, by type of merchandise, 2008 and 2009
Leading Companies
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- Key points
- Amazon maintains dominance with value, broad offering, and convenience
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- Figure 17: Sales and related statistics of top 10 internet retailers, 2009
- Company profiles
- Amazon.com
- Amazon gets mobile
- Dell
- Staples
- Apple
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- Figure 18: Apple.com ad, June 2011
- Overstock.com: Positioned to take on the majors?
- Groupon wins in deal of the day but faced with increasing competition
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- Figure 19: Groupon ad, June 2011
Innovations and Innovators
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- Amazon Local
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- Figure 20: Amazon Local Email, 2011
- Cloud computing could drive profits for many online retailers
- Discount Luxury: Gilt and Ruelala
- Google Wallet
- Square
- ShopSavvy and mobile barcode readers could change the nature of retail
Marketing Strategies—Television Advertisements
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- Overview
- Overstock uses television to communicate convenience and value
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- Figure 21: Overstock.com television ad, 2010
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- Figure 22: Overstock.com television ad, 2010
- Groupon and LivingSocial pitch exceptional value on discretionary items
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- Figure 23: Groupon television ad, 2011
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- Figure 24: LivingSocial television ad, 2011
- Netflix uses TV to communicate value of streaming video offering
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- Figure 25: Netflix, television ad, 2009
Marketing Strategies—Online and Digital Media
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- Overview
- Amazon
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- Figure 26: Amazon CRM –driven email following purchase 2011
- Figure 27: Amazon CRM –driven email following purchase 2011
- Amazon’s use of social media
- Dell.com
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- Figure 28: Dell CRM –driven email following purchase 2011
- Figure 29: Dell CRM –driven email following purchase 2011
- Dell’s social media
- Staples
Weekly Incidence of Online Research and Purchase
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- Key points
- Gathering information for shopping is most popular activity
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- Figure 30: Types of online shopping activities pursued in last seven and last 30 days, by household income, April-December 2010
- Online shopping activities most popular with college grads
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- Figure 31: Types of online shopping activities pursued last seven and last 30 days, by level of educational attainment, April-December 2010
Incidence and Frequency of Online Purchases
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- Key points
- 25-34 year olds frequent buyers
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- Figure 32: Frequency of online purchases, by age, May 2011
- Those earning less than $50K most likely to have not bought online
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- Figure 33: Frequency of online purchases, by household income, May 2011
- Larger households more likely to buy online
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- Figure 34: Frequency of online purchases, by household size, May 2011
- 18-24s who shop online make more monthly purchases than older consumers
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- Figure 35: Number of online purchases made in the last 30 days, by age, April-December 2010
- Shoppers with modest incomes tend to make frequent purchases
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- Figure 36: Number of online purchases made in the last 30 days, by household income, April-December 2010
Frequency of Using Internet for Shopping Research
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- Key points
- 45-54s most frequently research products online
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- Figure 37: Frequency of researching purchases online in last 30 days, by age, April-December 2010
- Those with household incomes of $75K+ more likely to research products online
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- Figure 38: Frequency of researching purchases online in last 30 days, by household income, April-December 2010
Online Shopping and Buying Preferences
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- Key points
- Young adults more likely to be swayed by online reviews
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- Figure 39: Online shopping and buying preferences, by age, May 2011
- Consumers from households with incomes of $75K+ place greater importance on free shipping
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- Figure 40: Internet shopping and buying preferences, by household income, May 2011
- Many seek value through online coupons
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- Figure 41: Deal-seeking behaviors among online shoppers, by household income, May 2011
Frequency of Purchasing Gifts Online
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- Key points
- 25-34 year olds most likely to buy a gift online
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- Figure 42: Online gift buying, by age, May 2011
- Consumers from households with incomes of $100K+ are more likely to make online gift purchases
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- Figure 43: Online gift buying, by household income, May 2011
Major Reasons for Shopping Online
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- Key points
- Women more likely to cite avoiding hassle as reason for online shopping
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- Figure 44: Major reasons for shopping online, by gender, May 2011
- 25-34 year olds are especially likely to cite ability to compare prices as a reason to shop online
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- Figure 45: Major reasons for shopping online, by age, May 2011
- Those from households with incomes of 75K+ more likely to cite ease of finding exactly what they want
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- Figure 46: Major reasons for shopping online, by household income, May 2011
Online vs. Offline Shopping
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- Key points
- Many still reluctant to buy food online
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- Figure 47: Products purchased only at a store, by gender, May 2011
- Older consumers particularly reluctant to buy online
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- Figure 48: Products purchased only at a store, by age, May 2011
- Lower-income consumers less willing to buy online
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- Figure 49: Products purchased only at a store, by household income, May 2011
- Most willing to buy presents, toys, and clothes either online or at a store
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- Figure 50: Products purchased either at a store or online, by age, May 2011
Online Purchasing Frequency by Device Type
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- Key points
- Smartphones are least frequently used for purchases
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- Figure 51: Frequency of online purchase on computers and phones, by age, May 2011
- Among those who purchase on a device, tablet is frequently used
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- Figure 52: Average number of online purchases made in last week, May 2011
Internet Shopping Attitudes
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- Key points
- The internet has changed the way consumers gather product information
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- Figure 53: How the internet has changed behaviors, by age, April-December 2010
- High-income households more likely to have been affected by internet in several areas
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- Figure 54: How the internet has changed behaviors, by household income, April-December 2010
- College grads often influenced by online content
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- Figure 55: How the internet has changed behaviors, by level of educational attainment, April-December 2010
Internet Shopping Opinions
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- Key points
- Privacy is a major concern for internet users
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- Figure 56: Attitudes and opinions regarding internet usage, by age, April-December 2010
- Local info sites appeal to those with moderate to high incomes
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- Figure 57: Attitudes and opinions regarding internet usage, by household income, April-December 2010
- College-educated consumers more interested in privacy
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- Figure 58: Attitudes and opinions regarding internet usage, by level of educational attainment, April-December 2010
- Many require familiarity before making a purchase
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- Figure 59: Internet shopping and buying behaviors, by household income, May 2011
Impact of Race and Hispanic Origin
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- Key points
- Blacks are least likely to have bought something online in past year
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- Figure 60: Frequency of online purchases during the past year, by race and ethnicity, May 2011
- Asians and Hispanics most likely to have joined an online loyalty program
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- Figure 61: Internet shopping and buying behaviors, by race and ethnicity, May 2011
- Blacks are least likely to search online for coupons
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- Figure 62: Deal-seeking behaviors among online shoppers, by race and ethnicity, May 2011
- Asians most motivated by ability to compare prices online
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- Figure 63: Major reasons for shopping online, by race and ethnicity, May 2011
- Asians are least resistant to buying products online
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- Figure 64: Products purchased only at a store, by race and ethnicity, May 2011
Cluster Analysis
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- Mostly Offlines
- Demographics
- Characteristics
- Opportunity
- Minor Middles
- Demographics
- Characteristics
- Opportunity
- Frequently Majors
- Demographics
- Characteristics
- Opportunity
- Characteristic tables
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- Figure 65: Online and mobile shopping clusters, April 2011
- Figure 66: Internet shopping and buying behaviors, by online and mobile shopping clusters, April 2011
- Figure 67: Deal-seeking behaviors among online shoppers, by online and mobile shopping clusters, April 2011
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- Figure 68: Number of online purchases, by online and mobile shopping clusters, April 2011
- Figure 69: Reasons for shopping online, by online and mobile shopping clusters, April 2011
- Demographic tables:
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- Figure 70: Online and mobile shopping clusters, by gender, April 2011
- Figure 71: Online and mobile shopping clusters, by age, April 2011
- Figure 72: Online and mobile shopping clusters, by household income, April 2011
- Figure 73: Online and mobile shopping clusters, by race, April 2011
- Figure 74: Online and mobile shopping clusters, by Hispanic origin, April 2011
- Cluster methodology
Custom Consumer Groups
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- Wireless internet users spend more time gathering information online
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- Figure 75: Frequency of online information gathering, by type of internet access, May 2011
- Users of data plans more likely to make an online purchase
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- Figure 76: Frequency of online purchasing, by type of internet access, May 2011
- Data users more likely than nonusers to visit a variety of e-commerce sites and purchase
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- Figure 77: Online activities, by type of internet access, May 2011
Appendix—Trade Associations
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