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SAJINEE SRICHAWLA
IS E-COMMERCE SHOPPER JOURNEY TRULY DIGITAL?
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Is e-commerce shopper journey
truly digital?
MARKET DEVELOPMENTS of online vs offline retail
WHAT DRIVES CONSUMER in shopping online vs offline
What we will be discussing today
WORKSHOP Future Trends of Online Shopping Behavior
MARKET DEVELOPMENTS OF ONLINE VS OFFLINE RETAIL
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3.1
6.2 5.1
15.3
5.3
2.7 2.6
0.7
-0.4
0.9 1.0 2.1
3.0 2.7
2.9 2.8 3.2
7.3
2.8 0.9
3.0
Thailand Real GDP Growth (%)
Q1’16 GDP marks the fastest growth in 12 quarters Thailand GDP shows a sign of recovery with a strong performance in Q1’16 - government spending/investment and tourism support the improvement
Source: National Economic and Social Development Board May 16, 2016 (* Estimated)
Note: GDP = private consumption + gross investment + government spending + (exports − imports)
Private Consumption
+2.3
Private Investment
+2.1
Government Spending
+3.9
Government Investment
+11.7
Export -1.7
Import -4.6
3.0 – 3.5
Forecast 2016*
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Thais face more pressure in spending power Thais shows less intention to allocate spending for Technology products and wealth management
Source: Nielsen Online Survey (Q1’16: n=510)
64
45
3026
22
2833
2521
7
66
45
39
26 28 30
39
29 29
5
64
41
33
21 22 23
30
24 23
4
60
44
35
2319
2529
23 23
7
66
44
35
1621 23
2723
20
7
Putting intosavings
Holidays /vacations
Paying offdebts / creditcards / loans
Newtechnology
products
Homeimprovements
/ decorating
New clothes Investing inshares of stock/ mutual funds
Out of homeentertainment
Retirementfund
I have nospare cash
Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Thailand - Spare Cash Spending Allocation
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FMCG grows in 2015 with market consumption improvement Value growth accelerates in Q1’16, yet with slight cooldown of consumption
Source: Nielsen Retail Index, ending March 2016, Thailand
● Value % Growth vs YA ● Volume % Growth vs YA ● Price/Volume % Growth vs YA
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RETAIL OUTLETS IN THAILAND
456,412
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Traditional Trade remains large in contribution, but Convenience Stores lead in term of growth Competition between offline stores remain; what’s the implication for online stores?
Source: Nielsen Retail Index, March 2016, Thailand
25%
26%
50%
SUPER/HYPERMARKET
TRADITIONAL TRADE
CONVENIENCE STORE
+2.1%
+3.1%
+7.9%
Thailand Offline Retail Trade Channel Contribution as of 2015
TOTAL THAILAND +4%
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Super/Hypermarket Convenience Store
31x → 29x Time/Year
401 → 393
Spending/Time (Baht)
26x → 27x Time/Year
118 → 120 Spending/Time (Baht)
FY 2014 vs. 2015
Consumer purchase momentum growing towards CVS All super categories in Nielsen Basket report HIGHER shopping frequency and basket size in CVS, while shopping frequency apparently declines in Super/Hyper
Source: Nielsen Consumer Panel, Thailand
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ONLINE STORE OWNERS According to Department of Business Development (DBD), Thailand
1,005,000
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11 Source: www.internetworldstats.com, www.internetlivestats.com
6% 7% 9% 11%
15% 17%
20% 24%
27% 30%
38% 37% 39% 41%
56%
0%
10%
20%
30%
40%
50%
60%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Thailand Internet Penetration As % of total population
Thailand Smartphone Penetration (2014-2015)
4958% Source: Nielsen Smartphone Insight
Over half of Thais already have access to internet
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12 *Thailand Urban
of ‘online’ Thais shop online according to e-Commerce Landscape Report (Q4’15)*
22%
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58% 41% 38% 32% 32% 30%
Fashion Grocery Electronics Travel HealthProducts
Cosmetics
WHAT PRODUCTS THAIS SHOP ONLINE? Fashion still lead followed by Grocery
Source: Nielsen e-Commerce Landscape Report Q4’15, Thailand
KEY PRODUCT TYPES SHOP ONLINE (Thai Online Shoppers – Q4’15)
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WHAT DRIVE CONSUMER IN SHOPPING ONLINE VS OFFLINE
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PRE-STORE IN-STORE PURCHASE DEMAND LOYALTY
Consumers’ journeys used to be simple with limited components that could impact consumers judgement…
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Digital TV
Connected Experience
PRE-STORE IN-STORE PURCHASE DEMAND LOYALTY
They are not that simple anymore…
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Blurred boundary between Physical and Digital Worlds, including HOW WE BUY
“ROBO”
WEBROOMING Research Online Buy Offline
SHOWROOMING Research Offline
Buy Online
CONNECTED COMMERCE
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Consumer’s journey can be altered at critical phases Retailers need to ensure consumers navigate within their ecosystems – their physical and online stores. Brands also need to ensure their products are presented both places.
Research Online
Want to buy COFFEE BEANS
Go to store Buy at store
Buy online
RESEARCH PHASE
BUYING PHASE
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Consumers do research online, but still “want to see and try before they buy”- there comes WEBROOMING
Source: Nielsen e-Commerce Landscape Report Q3’15, Thailand
59% Wants to see and try before purchasing products online
7 in 10 of Thai Online Shoppers relied
on RETAILER WEBSITES for information to choose which
sites to shop “For both retailers and brand
owners, offline and online channel teams need to work together to form cohesive
‘CONNECTED COMMERCE’ strategy”
Opportunity to LEVERAGE online stores to LEAD CONSUMERS to
physical stores
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MALES CAN’T MULTITASK; FEMALES CAN AND THEY ARE BIG PICTURE THINKERS
A smaller corpus collosum, the nerve fibers that
connect the two brain hemispheres.
A smaller hippocampus, the center for memory storage.
Larger corpus colossus
Big picture thinking and multi-tasking
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FEMALE VS MALE
SOCIAL
EMPATHETIC
VERBAL
MULTI-TASK & BIG PICTURE THINKER GUIDED BY EMOTIONAL MEMORY
INDEPENDENT
IMPULSIVE
COMPETITIVE
CONCRETE/FACTUAL
SEXUAL
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WHAT ARE THEY WATCHING?
Drama/Soap Opera Movie
News/Current Affairs/Panel
Discussion Shows
News/Current Affairs/Panel
Discussion Shows
Sports Sitcoms
Music show Music Show
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IN SUMMARY
ECOMMERCE WILL ACCELERATE THE RETAIL INDUSTRY
THAI’S ARE HUNGRY FOR CONVENIENCE
BE PRESENT IN OFFLINE AND ONLINE
KNOW YOUR SHOPPERS AND TAILOR YOUR STRATEGIES TO DRIVE TRIGGERS AND OVERCOME BARRIERS
WORKSHOP SESSION FUTURE TRENDS OF ONLINE
SHOPPING BEHAVIOR
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The Macro Trends
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