Gap Between Online Browsers, Buyers Closing As Online Sales Accelerate
Online Browsing Is Highest in Latin America; Online Buying Is Highest in Asia-Pacific
New York – Aug. 26, 2014 – Online purchase intentions around the world have doubled since 2011 for many durable and entertainment-related categories including e-books, event tickets, sporting goods and toys, according to a new study conducted online by Nielsen. Nearly half of global respondents intend to make an online purchase in the next six months in high-prominence categories including clothing (46%), and airline (48%) and hotel (44%) reservations.
“The lightning-fast pace of change in the digital landscape has ushered in a consumer mindset that is both adventurous and exploratory when it comes to online shopping,” said John Burbank, president of strategic initiatives. “Consumers everywhere want a good product at a good price, and the seemingly limitless options available in a virtual environment provide new opportunities for both merchants and consumers. The market for fast-moving consumer goods is no exception.”
The online market for groceries and other consumable products—while not as strong as non-consumable categories—is starting to show promise, too. Since 2011, global online purchase intentions for the cosmetic category increased 6 percentage points to 31 percent, groceries rose 5 percentage points to 27 percent and baby supplies jumped 12 percentage points to 20 percent. The pet category doubled in two years from 9 percent in 2012 to 21 percent in 2014.
The Nielsen Global Survey of e-commerce polled more than 30,000 Internet respondents* in 60 countries to examine the online shopping and purchasing intentions of consumers worldwide. The study provides clarity about global consumers’ buying intentions for both consumable and non-consumable categories in the growing e-commerce landscape.
Online Buying or Browsing?
When it comes to shopping for clothes, event tickets, books and toys, or making reservations for tours and hotels, there is mostly a one-to-one correlation between online searching and shopping—those who browse online also buy online.
Consumable products have lower online browse/buy intention rates than non-consumable products, but their browse-to-buy correlation rates are just as strong. For example, in cosmetics, 33 percent of global respondents say they browse, and 31 percent say they buy. Similarly, about one-third of global respondents say they browse and buy personal care products (31%/29%) and groceries (30%/27%). About one-fourth browse and buy pet products (24%/21%) and baby supplies (23%/20%), and roughly one-fifth browse/buy flowers (20%/18%) and alcoholic drinks (20%/17%).
“Strong online browse-to-buy conversion rates for fast-moving consumer goods translates to loyal repeat customers for these categories,” said Burbank. “While these categories are still in the early stages of online adoption, these correlation rates signal great news for online retailers. Now is the time to create omni-channel experiences for consumers who are actively using both digital and physical platforms to research and purchase, as consumers increasingly don’t make a distinction between the two.”
Products more conducive to online browsing than buying include: electronic equipment, mobile phones, computer hardware/software, sporting goods, videos/DVDs/games and cars/motorcycles. These products can carry a high price tag and often require a try-before-you-buy test run. The browse-to-buy difference for these products averages about 7 percentage points.
Developing Markets Race to Embrace E-commerce
According to Nielsen’s study, consumer appetite for online browsing is strongest in the largely developing regions of Latin America and Asia-Pacific, with both regions surpassing the global average for all 22 categories in the study. However, while online browsing rates are highest in Latin America, online buying rates for the region are the lowest for just about every category in the study. Conversely, online buying rates in Asia-Pacific are the highest of any region—so high that buying rates exceed browsing rates for more than half (14) of the categories—people are so comfortable buying they do so without even browsing beforehand.
“Latin Americans are enthusiastic online shoppers, but the online retail infrastructure has not yet caught up with offering conversion opportunities,” said Burbank. “Other barriers to e-commerce success include Internet access, shipping costs, high taxes and problematic delivery logistics. Asia is the farthest down the e-commerce maturity curve—in Asia-Pacific, tech-savvy consumers have already embraced the convenience of online shopping. Attracting new buyers using mobile could be an accelerator in developing markets, as it provides greater and faster access to more people.”
Online browsing and buying percentages are similar in Europe, North America and the Middle East/Africa, with a few exceptions, based on availability and opportunity. In North America and the largely developed region of Europe, shopping options proliferate, and online retailing represents another channel competing for market share. On the other hand, in the Middle East/Africa region, lower-than-average online percentages can largely be attributed to opportunity—or lack thereof. In a region where disposable income is low and shopping for daily needs is the norm, online shopping is not a priority. Nielsen expects that will change as more consumers continue to move up the socio-economic ladder.
While computers are the favored device for online browsing and buying among respondents in all regions, mobile phones are a close second choice for respondents in the Middle East/Africa region, with 55% of respondents using the device for online shopping—11 percentage points higher than the global average of 44%. Similarly, mobile phone usage is popular in Asia-Pacific (52%) and Latin America (48%). One-third of European respondents (33%) and more than one-fourth (27%) of North Americans use their mobile phones to shop.
“The study shows the ascendancy of the mobile device as a primary device for e-commerce consumers around the globe,” said Burbank. “The use of these devices introduces all sorts of questions for retailers and manufacturers alike. For instance, will consumers still make shopping trips—buying a whole basket full of items at a time—or will consumers shop throughout the day, one or two items at a time, shifting from retailer to retailer in the process? How will these potentially new shopping patterns impact age-old practices? Over the coming year or two, the industry will need to examine these habits in more detail.”
*While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of existing Internet users, not total populations. In developing markets where online penetration is still growing, audiences may be younger and more affluent than the general population. In addition, survey responses are based on claimed behavior, rather than actual metered data.
About the Nielsen Global Survey
The Nielsen Global Survey of E-commerce was conducted between Feb. 17 and March 7, 2014, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6 percent. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or an online population of 10 million for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.
Nielsen N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA, and Diemen, the Netherlands. For more information, visit www.nielsen.com.