Five digital trends shaking up Europe

* 5 TRENDS IN EUROPEAN DIGITAL CONSUMPTION THE SECOND "BIG BANG" IN E-COMMERCE A six-month survey of 2011 shows that new categories are emerging as "digital battlegrounds." BRITAIN Share of purchases online in previous six months FRANCE 47% 41% IT -- 42% | 27 % | 27 % | 27 % | 32 % 19 % 12 % | 13 % 10 % | 15 % 18 % VIDEO GAMES 52% 41% 46 % DVD/VIDEOS BOOKS HIGH-TECH 24% 14% CLOTHING DECORATION CONSUMERS ARE STARTING OFFICE SUPPLIES 25% TO BUY ONLINE ACROSS FURNITURE .. 27% A NEW SET OF 21% 13 % 15% 7%1 10 % SHOES PRODUCT CATEGORIES HYGIENE-BEAUTY 15% 3% 3 % DIY HOUSEHOLD PRODUCTS FOOD 2 MOBILE MIGRATION Shoppers are increasingly using their cell phones while shopping in a physical store to check prices. Data also suggests shopping on mobile devices is becoming more common. AT HOME 73% CUSTOMERS CHECK FOR IN STORE 42% DEALS ONLINE WHILE SHOPPING ELSEWHERE 21% % who carry out web searches on their mobiles 12% 2010 21% 2011 % wh did a arch on a mobile PRICE COMPARISONS 34% phone before making an offline purchase PROFESSIONAL COMPARISONS 33% VISIT STORE'S WEBSITE 27% ANOTHER STORE 24% COUPON 23% Reasons for searching online while in store NO EFFECT 17% EFFECT ON NEXT PURCHASE 18% PUTS OFF THE PURCHASE OR CHANGES THE STORE 65% Effect of using a mobile device to search when shopping 3. MULTICHANNEL BUYING IS HERE Customers are checking for products online before making the trip to the store, looking up deals or coupons beforehand and/or buying online and returning the product later in person. 34% Reasons why consumers buy in person: Consumer shopping habits: 21% | 28% TO TRY OR TOUCH NZ 30% BUY ONLINE, RETURN IN STORE TO VERIFY QUALITY CHECKING ONLINE BEFORE BUYING 10% 10 % 10% |12% IS A TREND NZ NZ 26% NO DELIVERY CHARGES ONLINE BOOK APPT IN PERSONALIZATION THE STORE OF THE PURCHASE 22 % EASIER TO RETURN 55% 67% NZ IT IS PRACTICAL ONLINE CHECK IF PRODUCT AVAILABLE IN STORE 22% | 33 % 28 % |37% 47% |44 % NZ NZ NZ |50% ONLINE ACCESS TO MORE PRINT COUPON BUY ONLINE, COLLECT IN STORE DETAILED CONTENT, BUY IN STORE THE SOCIAL I-CONSUMER Millions of social media users follow retailers to find deals and crowdsource opinions from fellow customers. Consumers who left an opinion on the web in Europe in 2011 27% |34% |25% 20% 19% 18% 14% % of Facebook users by country who follow retailers on the site to hear about deals and other product information. SOCIAL SHOPPING BEHAVIOR People following retailers on Facebook said they do it to get*: IS INCREASING * The percentages are based on avg. of consumer data from Germany, UK, France, Italy, Spain, Netherlands. 35% 6% INFORMATION ON SALES/EVENTS .................. 7% OTHER USERS’OPINIONS ......…* 8% VIDEOS/PHOTOS 31% ............ 10% DETAILED PRODUCT INFO f 15% UPDATES OF AVAILABILITY IN STORE % of online consumers who trust website 44% PROMOTIONS AND COUPONS recommendations 5 BIG DATA FOR BIGGER PROFITS Companies can use the huge amount of data that online consumers are generating to drive significant growth (while still maintaining consumer privacy laws). * INCOME - BEST PRACTICE IN COMPANIES 12% - AVERAGE FOR MAIN COMPETITORS GROCERS 6% | 24% ONLINE RETAILERS |-1% I 1 9% | 5% BIG BOX RETAILERS MASTERING BIG DATA 11% IS BECOMING CASINOS 5% 14% BIG COMPETITIVE CREDIT CARDS 19% ADVANTAGE 19% 18% INSURANCE 10 year Compound Annual Growth Rates on Income between 1999-2009 for different kinds of retailers. * Source: Bloomberg and Datastream, annual reports, McKinsey analysis Source: McKinsey iConsumer survey, 2011 McKinsey&Company Chief Marketing & Sales Officer Forum http://cmsoforum.mckinsey.com y https://twitter.com/McK_CMSOForum DIGITAL BATTLEFIELD 18% IMMEDIATE NEED SATISFY