Prepared by J'C' Williams Group'

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Transforming the Multi-channel Shopper

• Prepared by J.C. Williams Group.
• in partnership with

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Methodology

• An online survey was conducted with American
  online1 and offline2 shoppers between April 10
  and April 17, 2006
• A total of 2,472 individuals were surveyed 1,972
  were online shoppers and 500 were offline
  shoppers
• The data has been analyzed across different
  variablesthe most significant of which are
  Frequency and Shopper Type

1 Individuals who have made an online purchase in
the past six months 2 Individuals who have not
made an online purchase in the past six months
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Key Findings Summary

• Heavy online shoppers continue to drive overall
  online spending
• Multi-channel behavior is widespread and varied
  among online buyers
• Best and worst multi-channel shopping experiences
  show how far retailers have come and how far we
  have to go
• Customer reviews and search are the most highly
  rated helpful Website features or tools
• Online buyers high satisfaction levels for Web
  shopping exceeds their ratings for stores
• The vast majority of online buyers are Info
  Driven or Conqueror shopper types
• Interest in mobile commerce and international
  E-commerce is limited to few shoppers today.

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Importance of Heavy-Spending Online Buyers
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Amount Spent Online in the Past Six Months(By
Frequency)

• Online shoppers spent on average 488 in the past
  six months
• Heavy shoppers spent over four times as much as
  light shoppers

Q. In the past six months, how much have you
spent online?
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Categories Purchased Online in the Past Six
Months(By Frequency)

• Heavy shoppers were the key driving force of
  online shopping
• Online shoppers were likely to purchase
  music/DVDs/videos, gifts, clothing and
  accessories, and books/magazines

Q. Which of the following products have you
purchased online the past six months? (selected
all that apply)
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Multi-channel Shopping Behavior is Widespread and
Varied
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Frequency of Shopping in the Following Ways(By
Total)

• 60 of online buyers indicated they prefer to
  receive a coupon and then buy in-store
• 37 selected a preference of browsing a Website
  and then buying in-store and a similar number of
  respondents (36) mentioned they would prefer to
  receive a catalog and buy online

Q. Prior to your last online purchase, which of
the following activities helped you decide where
to purchase the product? Select all that apply.
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Multi-channel Transformational Activities Ever
Done(By Total)

• Around 1 in 3 online shoppers indicated they have
  purchased a product online and picked up the
  product in-store (37)
• 35 mentioned they have purchased via the
  retailers gift registry
• 31 mentioned they have returned a product to the
  store after buying it online

Q. Which of the following multi-channel shopping
activities have you ever done? Percent answering
Yes
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Behavior When Buying from a Gift Registry(By
Frequency)

• Heavy frequent shoppers prefer to complete their
  gift registry purchases online after printing it
• By comparison, less frequent online shoppers
  would prefer to purchase their gift in-store

Q. Which of the following would best describe how
you typically complete a transaction when you
have bought from a gift registry? Select only one.
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Best Multi-channel Shopping Experience

• The majority of online shoppers were satisfied
  with their multi-channel experience
• Many reported being able to buy online and
  pick-up the product in-store is the best
  experience as it is convenient, faster, and
  cheaper

I got an e-mail from Discovery Stores. I liked
the product and checked it out in a catalog. Then
I went to the store to look at it before buying
it.
Best experience for shopping occurs when they
have your item in stock, the purchase is rung up
accordingly and efficiently, and the staff was
courteous and helpful.
I used Google to find which store had the best
price and had stock. I was able to pay online,
print a record of the sale, and immediately go to
the store and pick up the item. The entire time
spent at the store was 10 minutes or less.
I went thru Mypoints.com to order ink at Office
Depot. When I got to the store it was ready to
go. I was out of there in a matter of minutes.
Q. Please tell us about your best or worst
multi-channel shopping experience? (open-ended
question)
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Worst Multi-channel Shopping Experience

• The multi-channel shopping experience has not yet
  been perfected

I chose store pickup for an online purchase. When
I got to the store, the item wasn't ready as the
e-mail stated it would be. I had to wait 15
minutes to get the item and the first time it was
the incorrect item.
The store couldn't find my order but that's
because they typed my name wrong.
My order was never processed and when I got to
the store they did not even have the product.
Bought online and when I got to the store, they
had none of the items in stock despite online
status.
Q. Please tell us about your best or worst
multi-channel shopping experience? (open-ended
question)
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Online Features and Tools
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Transformational Activities that Help Decide
Where to Buy (By Total)

• Over one-third of online buyers (37) indicated
  they would like to start an online purchase with
  a search engine
• Another one-third also stated they knew exactly
  what they wanted and went directly to the online
  store to buy it
• 1 in 5 respondents (21) expressed that they
  would browse a store/online store where they can
  receive loyalty program rewards

Q. Prior to your last online purchase, which of
the following activities helped you decided where
to purchase the product?
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Helpful Online Features and Tools(Total)

• 7 in 10 online shoppers indicated that the
  keyword search function is very/extremely
  helpful in helping them make their online
  shopping decision
• Store locator, and product comparisons,
  zoom/rotate round out the top four helpful online
  features/tools to help shoppers make their online
  purchase decision

Q. Thinking about your online shopping in the
past six months, how helpful were the following
in making your shopping decisions? 4/5 rating on
a 5-point helpful scale.
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Helpful Online Features and Tools Contd(Total)

• Approximately 1 in 3 online shoppers indicated
  that discussion boards/blogs and gift suggestions
  were helpful in their decision making process

Q. Thinking about your online shopping in the
past six months, how helpful were the following
in making your shopping decisions? 4/5 rating
on a 5-point helpful scale.
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Online Buyers High Satisfaction with Web Shopping
Exceeds Store Shopping
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Satisfaction with Channel Used (Total Online
and Offline Shoppers)

• Most online buyers (84) are very/extremely
  satisfied with their Internet shopping
  experience, whereas offline buyers (88) are more
  satisfied with their in-store experience
• Online shoppers (67) are less satisfied with
  their in-store shopping experience compared to
  Internet shopping experience (84)

Q. How would you rate your overall shopping
experience, when you last shopping? 4/5 rating
on a 5 point satisfaction scale.
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Barriers and Payment Preferences
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Barriers to Purchasing Online(Among Offline
Shoppers)

• Concerns about online credit card safety (44)
  and private information being on the Web (42)
  are the top two reasons that prevent offline
  buyers from purchasing online
• Other top reasons include expensive shipping
  costs, no need to purchase online, lack the
  touch and feel of the product, hassle in
  returning a product, among others

Q. What was the main reason(s) why you have not
purchased online in the past six months? Select
all that apply.
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Payment Method Used to Make Online
Purchases(Total)

• Credit cards are the preferred method of payment
  for purchases by online shoppers
• Debit and PayPal are used about one-half as often
  as credit cards

Q. Which of the following payment methods have
you used in the past six months. Respondents
were able to select more than one payment method.
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Info Driven, Conqueror and Browse2Buy Shopper
Types
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Definitions
Q. Which of the following statements best
describes the process you went through during
your last online purchase? Select only one
response that best applies.
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Shopper Types (Total)

• A higher percentage of online shoppers are Info
  Driven
• Twice as many offline shoppers are Browse2Buy
  shopper types

Q. Which of the following statements best
describes the process you went through during
your last online purchase? Select only one
response that best applies.
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Amount Spent Online in the Past Six Months(By
Shopper Type)

• Info Driven shopper types spent approximately 6
  more than the average in the past six months, as
  compared to the Conquerors, who spent about 7
  less than the overall average

Q. In the past six months, how much have you
spent online?
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Frequency of Shopping in the Following Ways(By
Shopper Type)

• Conqueror type shoppers were more likely to buy
  online after receiving/browsing a catalog as
  compared to other shopper types
• Browse2Buy type shoppers were more likely to buy
  online after receiving an e-mail compared to the
  rest

Q. How frequently do you shop in the following
ways? 4/5 rating on a 5-point satisfaction
scale.
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Categories Purchased in the Past Six Months(By
Shopper Type)
Q. Which of the following products have you
bought offline/online in the past six months?
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Categories Purchased in the Past Six Months
Contd (By Shopper Type)
Q. Which of the following products have you
bought offline/online in the past six months?
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Activities that Help Decide Where to Buy (By
Shopper Type)

• Over one-half of Info Driven shopper types
  mentioned that their online purchase decisions
  are influenced by online search engines
• About one-half of Conqueror shopper types
  indicated they knew what they wanted and went
  directly to the online store to buy it.

Q. Prior to your last online purchase, which of
the following activities helped you decide where
to purchase the product? Select all that apply.
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Satisfaction with Post Purchase Features(By
Shopper Type)

• Across the various post purchase features,
  Conqueror shopper types were the most satisfied
  with the features presented relative to other
  shopper types

Q. Thinking of your last online purchase, how
satisfied were you with the following features?
4/5 rating on a 5-point satisfaction scale.
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Mobile Commerce and International E-commerce are
Limited to Few Shoppers
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Interest in Following Mobile Services(Total of
Online/Offline Shopper)

• Just over one in 10 online and offline shoppers
  indicated they were very/extremely interested
  in purchasing music via their mobile phones

Q. How interested would you be in the following
services? 4/5 rating on a 5-point interest
scale.
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Interest in Following Mobile Services(By
Frequency)

• Heavy online shoppers are more likely to use
  mobile-related services compared to light and
  medium groups

Q. How interested would you be in the following
services? 4/5 rating on a 5-point interest
scale..
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International Purchase Experience(By Frequency)

• Just over 1 in 3 heavy frequent online shoppers
  (36) indicated they purchased products for
  personal use from an online retailer based
  outside of the U.S.
• This is noticeably higher than the overall
  percentage of online shoppers who have purchased
  products outside of the U.S.

responding Yes
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International Shipping Experience(By Shopper
Type)

• There is little variance among the shopper types
  when asked if they have ever shipped
  internationally

responding Yes
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Appendix
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Definitions

• The shopper frequencies were defined as follows

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Frequency of Online Shopping(Number of Online
Purchases in the Past Six Months)

• Among 1,972 online shoppers interviewed, 46 are
  light frequent shoppers about one-third are
  medium frequent shoppers and the remaining 22
  are heavy frequent shoppers

Light
Medium
Heavy
Q. How many online purchases have you made in the
past six months?