Mintel - The emergence of Social Shopping

The emergence of ‘social shopping’ - 20th September 2011

Convenience and saving money the biggest factors

· The main motivation for online shopping is convenience, as half (48%) of adults shop online to save time.

· A similar number (47%) like to look online for ideas and inspiration.

· Some 43% like to check the availability of stock before going to the shops and over a third (35%) want to check and reserve an item to collect at a store. So multichannel retailing is hugely important in the marketplace for household goods.

· Two thirds of shoppers think that prices are better online. The perception of better prices is enhanced by price-comparison websites (used by four in ten) and discount voucher sites (used by 23%). Shoppers are becoming more aware of how to seek out bargains; brand or retailer loyalty is becoming less important and shopping around will increase.

Looking for assurances

The voice of ‘real customers’ is an important feature of online shopping these days and four in ten online shoppers like to read customer reviews before deciding what to buy. Retailers are responding by integrating customer ratings into their own websites, while specialist review sites also give customers the opportunity to comment on their purchases. Often these have links to Facebook and other social media.

In our research on shopping for the home we have found that consumers like to read reviews online. When thinking about buying goods for the home 42% of internet users claimed that they look at customer reviews online before deciding what to buy.

This illustrates that social interaction with other real customers is already important to online shoppers, who trust the experiences and opinions of others.

Non-internet users would shop online

According to Office of Fair Trading’s Attitudes to Online Markets report, 9% of non-internet users surveyed would like to use the internet for social networking. But a fairly high number of non-users would shop online. Over a third would use the internet to search for product information (34%), while a similar number would make purchases online (30%).

Facebook leads the way in social networking

Social shopping embraces a range of ideas, from shopping within social networks, to using specific search-engines that use friends recommendations to group buying sites, or allow you to simply sign up, such as Groupon.

Mintel’s report, Social Media and Networking, May 2011, found that Facebook takes the top spot in social networking in the UK, in terms of both total unique visitors and average time spent on the website. Mintel’s research shows that 73% of internet users have used Facebook, and 57% are regular users who visit Facebook at least once a week.

Social media, such as Groupon, are building consumer interest by offering discounts on goods that can only be found via their networks. This helps them to grow consumer interest in their sites as well as providing a reason for consumers to visit them more regularly.

Facebook is already a hot spot for advertising and it is a logical extension that it could also become a hub for online shopping. It claims that already 25 of the UK’s top retailers use the site, although the level of integration is in its infancy. Some simply see it as a way to gain fans for their brand, whereas others, like Asos allow shoppers to make purchases via the social network. Furthermore, Facebook can help users to connect to brands that they care about.

Plenty of companies are making steps towards providing a combination of social network and shopping. For example ChoozOn is built around personalised deals, Shopow (Shopper Power) is a shopping search engine where you can interact with friends and rate your recent purchases. It, like other price comparison sites, allows shoppers to compare goods as well as displaying reviews deals.

What it means

In reality the choices that people make when they buy goods for the home is not about loyalty to any particular store format - it is about the best and simplest way to acquire the goods that they want. And in many cases it is about getting the very best deal possible and shoppingabout for a cheaper price. However, our research has highlighted that the advantages of social media are not simply to gain discounts – it is also a way of tapping into real consumer experiences.

In the future we foresee that new internet users will participate in social networking, and social media in general, particularly once they discover the social and economic benefits. For example, as social media and e-commerce converge, consumers will be able to uncover discounts available exclusively through social networks to apply to their online shopping experience.

Retailers will continue to build more sophisticated websites, where customers can not only post ratings, but will begin to form a true social forum where they learn from each other, listen to experiences and that help them take more informed decisions about what to buy.

But for many major household goods, a trip to the shops remains a hugely important part of the decision process. A lot of home goods are difficult to describe online and consumers still want the hands-on experience of touching and feeling the products and seeing the colours for themselves. So for the future, retailers need to try harder to enhance this experience, with products that consumers can try out for themselves before they decide what to buy.

This is another report from Mintel that supports the effect that social shopping has on consumers and how they feel comfortable placing orders over the internet or on their mobile phones. This also supports how online consumers look for inspiration online so this would be the perfect place to advertise the new service of the Flower Service for Selfridges as they would see this and hopefully become intrigued and want to know about what it is they are offering and look to this as another luxury service that they are now going to be branching out into.

'When thinking about buying goods for the home 42% of internet users claimed that they look at customer reviews online before deciding what to buy.' This was a key quote for me when reading this study as it again supports my service with a posit attitude implying that orders would be placed more so for this product due to this being a home decoration. This then means that they would like the good to be delivered to themselves as they can feature this in their home seeing what it looks like online.