FEATURE31 July 2014

Basket cases

Features

Ecommerce has changed the way we shop, but has it changed the way we engage with brands? Taj Sohal of Arena research discusses.

Hoping to understand the potential differences (if any) between shopping offline and shopping online, and what the implications of these differences might be across a variety of categories, Arena commissioned some research on how brands might look to grow in a digital age,

One particular principle of interest was the work of Byron Sharp; more specifically his book How Brands Grow: What Marketers Don’t Know . In it, Sharp points to the importance of reaching all buyers, especially light users, and driving penetration to achieve growth. What we wanted to observe with our study is what was happening to frequency, weight of usage, basket value and loyalty in our digital age, and if the channel used by the consumer to make a purchase makes a difference.

Our research took a focused approach, contrasting and comparing online shoppers with offline shoppers across a number of different categories. Based on a nationally representative survey of 1,053 adults in the UK, the results showed some significant variations by channel for a few categories. Here are some of our findings in categories with significant digital disruption:

Take-away pizza

For the take-away pizza sector, online buyers not only purchased home-delivery pizza more often, but also had a higher basket value than those who mainly order offline. Additionally, online pizza-buyers had higher scores for brand advocacy and brand consideration for the brand they had ordered from. Online pizza-buyers also felt that their pizza delivery brand communicated with them a lot more than those who ordered offline.

Of course there is an expected difference in demography between online and offline customers. Nevertheless, the findings indicated that digital channels are important conduits to brand growth and brand advocacy. This demonstrates to us that it is key for brands to keep monitoring differences by channel, and seeing where the opportunities for growth are.

Betting

When we looked at placing bets, we divided channels by offline, online and mobile apps. We found that when we asked betters to tell us about their betting behaviour for the previous three months, the frequency of placing bets online and on mobile apps was slightly higher than offline.

Those that had placed a bet in the previous three months via a mobile app had a significantly higher spend than those using online or offline channels. While we are still in the infancy of our research, we are seeing strong suggestions that channel matters. Mobile apps in particular appear to be potent drivers of growth in betting; being devices that are always in the right place at the right time and lend themselves to spontaneity.

Finance

Here we looked at consumer’s relationships with their main current account provider, and split the groups by those that bank mainly online and mainly offline. We found that those that bank mainly online had a slightly higher number of financial products with their main current account provider. We also looked into whether claimed loyalty was any different by channel, but here we found no significant differences. This suggests that despite both groups of consumers thinking that they have equal levels of loyalty, when looking at the mean number of financial products we see a different behavioural picture.

Finance is perhaps one of the most complicated categories and we definitely need to dig further to understand more. The results will be monitored over time as banking changes enacted last year made switching accounts much easier, and we would expect to see a different pattern in loyalty emerging as time goes by.


Speeding up the journey

It’s clear that the impact of digital media and ecommerce has changed the way people buy products across a number of categories. The immediacy of buying online means customers have a very different journey to purchase, influenced by the speed and convenience with which purchases can now be made, and the evident disconnect between the online and offline world.

What this means for brands in the future is that a strategic use of the right mix of digital channels – be they apps, social media or websites – can help brands to grow by increasing frequency of purchase, weight of purchase, usage and consumer spend. Ours is just an initial investigation, but the evidence suggests brands should take some time to look carefully at channel and gear themselves up to divert spend to the channels that best drive growth.

The work conducted by Byron Sharp continues to be invaluable for marketers and researchers alike. However, being in an age of digital disruption, we need to re-evaluate how brands drive growth and keep refreshing our research so we continue to learn more in changing times.

Taj Sohal is insight director at Arena.

2 Comments

6 years ago

Taj I'm afraid this doesn't show anything about change in buying behaviour. All it shows is that the (much smaller) group of people who bought pizza via an app or web page are heavier buyers. They were before the internet and they are now. Light users of the category are less inclined to download apps, sign up on online, and so on. This is called a selection effect. Readers of 'Research' will be familiar with this bias. Equally importantly it isn't a test of the Double Jeopardy of growth. Byron

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6 years ago

Taj.... Where are you? Amy response to Byron's comments RESEARCH LIVE shouldnt just accept articles which plug in products or from authors indulging in self-promotion. And an interactive dialog and discussion through the comments section would benefit all... TAJ - WHERE ART THOU...

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