Buying for the Home Online - UK - May 2009

Table of Contents

• Issues in the Market
• Key themes
• Definitions
• Abbreviations
• Market in Brief
• Buying home goods online now a mass market phenomenon
• Online spending grows rapidly despite downturn
• Widening internet access boosts market
• Extended ranges attract customers
• Broadband and other positive factors
• Housing decline a negative influence
• Consumer spending hit by recovery in saving
• More retirees but family lifestagers see no growth
• Retail price deflation and sourcing inflation
• Online gender differences copy the high street
• Argos and other non-specialists take the lead
• Convenience and price biggest draw to home goods online
• Still some problems online
• Delivery and security still pose problems
• Medium and long-term prospects extremely good
• Internal Market Environment
• Key points
• Internet reaches 55-64s, C2s and DEs
  • Figure 1: Internet penetration, by age group, 2003, 2006 and 2009
  • Figure 2: Internet penetration, by socio-economic group, 2003, 2006 and 2009
• Online purchasing patterns
  • Figure 3: Purchasing of various product categories online, January 2008-January 2009
• Broadband takes over
  • Figure 4: Type of connection to the internet, 2004-08
• Growth of mobile internet
  • Figure 5: How people access the internet, 2004-08
• Improvements to customer experience and range availability
• Broader Market Environment
• Key points
• Housing market will hit larger home goods
  • Figure 6: Household transactions, 2004-14
• Inflation fall and pound' s decline will hit margins
  • Figure 7: UK actual and projected price inflation -- all items, white goods and household goods, 2004-14
• Consumers to rein back spending
  • Figure 8: UK real personal disposable income growth, consumer expenditure growth, bank base rate and savings ratio, actual and projected, 2004-14
• Housing equity withdrawal goes into reverse
  • Figure 9: Housing equity withdrawal, 2006 Q1-2008 Q4
• More upmarket population
  • Figure 10: UK adult population 15+, by socio-economic group, 2004-09 and 2009-14
• Rise in retirees a challenge
  • Figure 11: UK adult population 15+, by lifestage, percentage change, 2004-09 and 2009-14
• Market in Context
• Key points
• Home goods sales
  • Figure 12: Total consumer spending on home goods, 2004-09
• Online becomes significant home goods distribution channel
  • Figure 13: Consumer spending on home goods online, total home goods and total consumer spending, 2004-09
• Strengths and Weaknesses in the Market
• Strengths
• Increasing internet penetration
• Widening product ranges online
• More ABC1 consumers
• Improving customer service
• More consumers have broadband access
• Weaknesses
• Decline in the housing market
• Rising unemployment
• Selling price deflation
• Sourcing prices rising
• Rising numbers of retirees
• Market Size and Forecast
• Key points
• Rapid growth but slowing
  • Figure 14: Online market for home goods, 2004-14
• Main factors for the future
• Product price deflation
• Import cost rises
• The housing market and mortgage finance
• Price sensitivity
• Breadth of offer
• Rising access to broadband
• Factors used in the forecast
• Purchasing of Products for the Home Online
• Key points
• Electricals lead buying for the home
  • Figure 15: Products for the home purchased using the internet for browsing or buying, February 2009
• How they browse and buy: Demographic analysis
• Women keener on furniture online
• Men buy lighting
• Buying in-store dominates for carpets
• Tableware female-led but cookware more unisex
• DIY retailers failing to convince key age groups to buy online
• DIY tools remain a male domain
• Gardening favoured by the over-45s
• 35-44s key for white goods
• Non-specialists far ahead of specialists
  • Figure 16: Websites used for buying products for the home, February 2009
• Where they buy: Demographic analysis
• Ikea appeals to the young
• Argos has classless appeal
• B&Q could attract more women
• Homebase
• Comet male-focused
• John Lewis middle class but not middle-aged
• Debenhams peaks among 25-34s
• M&S very female-led
• Next' s regional coverage patchy
• Tesco ' stealing' Asda customers
• Repertoire analysis
  • Figure 17: Number of home goods categories browsed or bought online, February 2009
• The Consumer -- Buying Behaviour and Preferences
• Key points
• Convenience the main driver of online purchasing
  • Figure 18: Buying behaviour and preferences when buying products for the home online, February 2009
• Men are more price driven
• Choice-led consumers are young and affluent
• Parents like to save time
• Women keen on multichannel
• Over-35s check stock first
• Under-35s are lazy searchers and shoppers
• 35-44s keen on customer reviews
• The Consumer -- Attitudes
• Key points
• Online: Good on price, but has limitations
  • Figure 19: Attitudes towards buying for the home online, February 2009
• Internet pricing appeals to men
• More teenagers prefer the high street
• Men and under-25s hate waiting for deliveries
• Women cautious about who they buy from
• Teens are impatient
• Delivery charge puts women off small items
• Retailer Profiles
• Furniture/housewares specialists
• Ikea
• DFS
• Nobia/Magnet
• Carpetright
• Dreams
• Habitat
• Lakeland
• DIY stores
• B&Q
• Homebase
• Electrical stores
• Currys/Dixons.co.uk
• Comet
• Department/variety stores
• John Lewis
• Debenhams
• Argos
• Marks & Spencer
• Next
• Grocers
• Tesco
• Asda
• Pureplayers
• Amazon
• Others
• Appendix -- Internal Market Environment
  • Figure 22: British internet penetration at home/work/place of study or elsewhere, by gender, socio-economic group, age and region, April 2002-Jan 2009
• Appendix -- Broader Market Environment
  • Figure 23: Number of housing transactions, 2004-14
  • Figure 24: UK actual and projected price inflation -- all items, white goods and household goods, 2004-14
  • Figure 25: UK real personal disposable income growth, consumer expenditure growth, bank base rate and savings ratio, actual and projected, 2004-14
  • Figure 26: Housing equity withdrawal, 2006 Q1-2008 Q4
  • Figure 27: UK adult population 15+, by lifestage, percentage change, 2004, 2009 and 2014
• Appendix -- Purchasing of Products for the Home Online
  • Figure 28: Browsing and buying furniture using the internet, by detailed demographics**, February 2009
  • Figure 29: Browsing and buying lighting using the internet, by detailed demographics**, February 2009
  • Figure 30: Browsing and buying carpets/other flooring using the internet, by detailed demographics**, February 2009
  • Figure 31: Browsing and buying china/glassware/cutlery using the internet, by detailed demographics**, February 2009
  • Figure 32: Browsing and buying kitchenware/cookware using the internet, by detailed demographics**, February 2009
  • Figure 33: Browsing and buying household textiles using the internet, by detailed demographics**, February 2009
  • Figure 34: Browsing and buying decorative items using the internet, by detailed demographics**, February 2009
  • Figure 35: Browsing and buying DIY materials using the internet, by detailed demographics**, February 2009
  • Figure 36: Browsing and buying DIY tools and equipment using the internet, by detailed demographics**, February 2009
  • Figure 37: Browsing and buying garden products using the internet, by detailed demographics**, February 2009
  • Figure 38: Browsing and buying large domestic appliances using the internet, by detailed demographics**, February 2009
  • Figure 39: Browsing and buying small domestic appliances using the internet, by detailed demographics**, February 2009
  • Figure 40: Websites used for buying products for the home, by detailed demographics**, February 2009
  • Figure 41: Websites used for buying products for the home, by detailed demographics**, February 2009
  • Figure 42: Websites used for buying products for the home, by detailed demographics**, February 2009
  • Figure 43: Websites used for buying products for the home, by detailed demographics**, February 2009
  • Figure 44: Repertoire of any browsing online, by detailed demographics**, February 2009
  • Figure 45: Repertoire of any buying online, by detailed demographics**, February 2009
  • Figure 46: Websites used for buying online, by repertoire of any browsing online, February 2009
  • Figure 47: Websites used for buying online, by repertoire of any buying online, February 2009
  • Figure 48: Repertoire of number of websites used, by detailed demographics**, February 2009
  • Figure 49: Repertoire of any browsing online, by repertoire of number of websites used, February 2009
  • Figure 50: Repertoire of any buying online, by repertoire of number of websites used, February 2009
• Appendix -- Buying Behaviour and Preferences
  • Figure 51: Buying behaviour and preferences when buying products for the home online, by detailed demographics**, February 2009
  • Figure 52: Buying behaviour and preferences when buying products for the home online, by detailed demographics**, February 2009
  • Figure 53: Buying behaviour and preferences when buying products for the home online, by websites used for buying, February 2009
  • Figure 54: Buying behaviour and preferences when buying products for the home online, by websites used for buying, February 2009
  • Figure 55: Buying behaviour and preferences when buying products for the home online, by websites used for buying, February 2009