Nielsen Global Connected Commerce Report January 2016

Global
Connected
Commerce
Is e-tail therapy the new retail therapy?
January 2016
contents
Introduction and Methodology................................................................ .02
Part I: The evolving online ecosystem...................................................... 05

Is digital a friend or foe?.................................................................................................... .06
Connected shoppers = smart shoppers.....................................................................07
Part II: Online shopping behavior................................................................09

Online shopping baskets are changing.....................................................................10
A global store at your door...............................................................................................15
Credit, digital or cash on delivery?..............................................................................17
Part III: Drivers and barriers for online shopping success......21

When it comes to consumables, convenience is most important.........22
Product assortment and deals provide an online advantage.............25
Conquering a consumable conundrum..................................................................27
Defeating durable difficulties.........................................................................................30
Trust and infrastructure challenges.......................................................................32
Strategies for omni-channel success.......................................................................35
2 Global CONNECTED COMMERCE

Coming to a
device near
you
Around the world
An omni-channel experience is the new retail reality. As digital devices enable consumers to shop
wherever and whenever they choose, the physical store shopping trip needs to be reimagined.
Consumers arent simply showroomingbrowsing in store and then going online in search of
the lowest-cost option. Theyre also webroomingresearching online and buying in stores.
Not all online research methods are leveraged equally by consumers. Reliance on online ads,
store emails and social media is lower than other activities, but they can still have a powerful
latent effect on sales.
Cross-border e-commerce is a growing phenomenon. More than half of respondents in the survey
(57%) say they purchased from an e-tailer outside their countrys border in the past six months.
Credit card (53%) and digital payment systems (43%) are the most commonly used payment
methods, but cash on delivery is particularly common in developing markets.
To overcome online barriers of physical inspection and doubts about quality and accuracy, online
strategies should emphasize differential advantages, such as convenience, assortment and value.
Shoppers today no longer simply go to the nearest store; they grab

the nearest digital device. The online retail ecosystem is fast evolving.
Digital analytics firm eMarketer projects that online retail sales will more
than double between 2015 and 2019 and account for more than 12% of
global sales by 2019. Retail therapy is giving way to e-tail therapy.
And its not just purchasing habits that are going digital: The whole retail
experience is changing. Todays shoppers are incorporating digital touch
points along the entire path to purchase, from reviewing products online
at home to using smartphones as personal shopping assistants in the
store. In fact, in some countries, such as China, consumers are using
mobile devices to purchase selected categories at high rates. Omni-
channel shoppers seamlessly switch between on and offline channels
with ease.
Copyright 2016 The Nielsen Company 3

Consumers interact with brands across both digital and physical
channels, and increasingly, they dont make a distinction between the
two, said Patrick Dodd, president, Nielsen global retailer vertical.
Omni-channel is the new reality, and retailers need to think differently.
Traditional notions of trip, shopping experience and fulfillment and
delivery have been redefined. Todays winning brands use a combination
of on and offline strategies to not only help consumers make more
informed decisions, but to also add value throughout the entire shopping
experiencewherever and whenever that happens to be.
As technology adoption and infrastructure improvements bring more

consumers online and familiarity and comfort with digital platforms
increase, the continued growth of connected commerce is inevitable. But
today there is much uncertainty about the convergence between online
and offline shopping behavior and how to drive margin and profitability in
both.
The Nielsen Global Connected Commerce Survey polled respondents in

26 countries to determine what motivates and deters consumers to make
a purchase online. We look at how consumers are using the Internet to
make shopping decisions both in stores and online, and we examine what
theyre buying, where theyre purchasing and how theyre paying for goods
and services. Finally, we offer insights and recommendations about how
to succeed in the connected commerce space.
ABOUT THE SURVEY METHODOLOGY
The findings in this survey are based on an online survey in 24 countries and a face-to-face survey
in two countries. While an online survey methodology allows for tremendous scale and global
reach, it provides a perspective only on the habits of existing Internet users who have conducted
shopping activities online that may or may not result in a purchase, not total populations. In
developing markets where online penetration is still growing, audiences may be younger and
more affluent than the general population of that country.
Face-to-face interviews were conducted in Saudi Arabia and the United Arab Emirates in order to
better reflect the demographics of online shoppers in these countries. Given the differences in
methodologies used, results from these two countries are not included in the global average.
Survey responses are based on claimed behavior rather than actual metered data unless where
otherwise noted. Cultural differences in reporting sentiment are likely factors in the measurement
of outlook across countries. The reported results do not attempt to control or correct for these
differences. Therefore, caution should be exercised when comparing across countries and
regions, particularly across regional boundaries.

Part I
The
evolving
online
ecosystem

Is digital a
friend or foe?
Online sales are on the rise, but fears about the impact on physical store
traffic may be somewhat inflated. The truth is, online shopping is a two-
way street. Consumers arent simply showroomingbrowsing in store
and then going online in search of the lowest-cost option. Theyre also
webroomingresearching online and buying in stores.
This is particularly true for durable and higher-priced categories such

as consumer electronics, mobile products and furniture/dcor, as the
majority of consumers in the survey say they conducted research online
prior to buying regardless of whether the purchase was in-store or
online. Respondents are also conducting research online for consumable
categories before purchase, but the percentages are notably lower than
for durable products given the high-awareness nature of these products.
Its well known that the impact of online shopping goes well beyond
direct sales, said Dodd. Digital is viewed less as a threat to brick-and-
mortar retailers and more as an opportunity. Instead of thinking in terms
of online and off, savvy retailers are taking an integrated approach to
drive sales in both and providing an engaging experience for consumers
regardless of whether they buy in-store or online.
Online research is a common practice across the globe, but there are
some cultural differences. Respondents in Asian countries such as
Thailand, the Philippines, India and China frequently research products
online before buying in stores or use online reviews to help make
grocery purchasing decisions. Online research and reviews are also used
frequently in Spain and Nigeria. The importance of online research in all
of these markets is likely driven by wide variation in product quality, the
prevalence of social networks and the importance of keeping up with the
latest trends.

Connected
shoppers =
smart shoppers
Consumers are using digital options more and more to make informed
shopping decisions, but not all online research methods are leveraged
equally.
While online activity rates vary by category, three activities score

consistently high no matter the category. They are what you likely
expect: Looking up product information, checking/comparing prices
and searching for deals/promotions/coupons. In the travel products
or services category, for example, 63% of respondents who shopped
or purchased the category in the past six months say they looked
up product information, 52% checked or compared prices, and 46%
searched for deals or coupons. For consumables, particularly edible
products, percentages are notably lower than for durable goods, but the
same online activities remain top strategies. For fresh groceries, 38%
say they looked up information, 39% checked/compared prices and 30%
searched for deals.
Perhaps more telling is what consumers are not doing online. Across
all categories reviewed, the online shopping activities with the lowest
mentions include those that marketers often rely upon heavily to reach
consumersusage of online ads, store emails and social media. Only
about one-tenth of respondents say theyve clicked an online ad or email
ad to find out more in the last six months. Even fewer say they have
subscribed to product or store emails or liked/tweeted/commented
about a product or store on social media.
In an increasingly complex retail environment, engagement is the emerging skill to master, said
Dodd. Retailers must move from a linear marketing approach to a value exchange model in
which customers receive a tangible, personally relevant benefit for their time and attention. This
becomes even more critical as location-based services become more prevalent. Consumers will
be quick to distinguish marketing messages that are simply trying to sell from tools that actually
help their shopping efforts, such as advanced order placement or mobile price-matching features.
Consequently, having the right assets and insights is necessary to fuel context-aware engagement.

INFORMATION GATHERING AND DEAL SEEKING ARE
PRIMARY ONLINE SHOPPING ACTIVITIES
Global * Top and Bottom online shopping activities for selected

categories SHOPPED OR PURCHASED in the past six months
Travel Products or services Consumer Electronics

Beaut y & Personal Care Products Fresh Groceries
Clicked an email
Looked up product advertisement to find
information out more
63% 10%
60% 7%
54% 9%
38% 10%
Checked/Compared SUBSCRIBED TO
Prices PRODUCT/STORE EMAILS
52% 8%
52% 5%
44% 7%
39% 7%
LIKED/TWEETED/COMMENTED
Searched For Deals/ on a product or store on
Promotions/Coupons social media
46% 4%
34% 4%
35% 7%
30% 8%
*See page 36 for countries included in global average

Source: Nielsen Global Connected Commerce Survey, Q4 2015

Part Ii
Online
shopping
behavior

Durables vs.
consumables:
Online shopping
baskets are
changing
Online sales are growing, but when it comes to buying online, not all
categories are created equal.
More respondents say they have purchased durable goods than

consumables online. Clothing is the top category purchased online
in every region except North America (the U.S. and Canada). More
than half of all respondents in the online study (55%) say theyve ever
purchased fashion products online. Slightly fewer have purchased books/
music/stationery (50%) or travel products/services (49%) online. Travel
products are among the top five categories purchased online in every
region and books are among the top five everywhere except the countries
in the Middle East. In fact, books/music/stationery tops the list of
categories purchased in the U.S., Australia, Japan and South Africa.
Categories Included in the Study
Durable Categories Consumable Categories

Books/music/stationery Beaut y & personal care products
Consumer electronics Flowers/gift sets
Event tickets Fresh groceries
Fashion-rel ated products Medicine or health care products
Furniture, dcor, tools Non-food household groceries
Information technology & mobile Packaged grocery food
Travel products or services Pet food and supplies
Video game-rel ated products Products for baby & young children
Restaurant deliveries or meal delivery
Wine and alcoholic beverages

Many consumable products, on the other hand, are much lower on
the list of items respondents have ever purchased online. Only about
one-in-10 online respondents say theyve bought fresh groceries (11%)
or wine and alcoholic beverages (11%) online. Of course, there are
exceptions to this general trend. Beauty and personal care is one such
consumable category. More than one-third of online respondents
in the survey (35%) say theyve purchased beauty or personal care
products online, putting it ahead of video game-related products
(30%) or furniture/dcor/tools (23%). Beauty and personal care may
be particularly well-suited to online purchasing as many cosmetic
companies have been operating beyond physical store boundaries
for decades. Additionally, these are very personal categories with
higher consideration levels, and online channels offer a high degree of
personalization.
Today, online purchase rates for consumables are low, but these categories have the
potential to grow very rapidly once initial adoption rates increase, said Dodd. Given their
perishable nature, purchase frequency for these categories is higher than for durable goods.
Once consumers get over the trial barrier, retailers who get the assortment, convenience
and online experience factors right will benefit from frequent purchasing patterns.
Regardless of whether the product is durable or consumable, there is

significant variation in self-reported online purchasing levels around
the world. Purchasing incidences are highest in the Asian and European
countries in the study. South Korean respondents report the highest
incidence of buying clothes online (77%) and Japan had the highest
levels of purchasing of books/music/stationery (79%). Germany
follows closely behind in both categories (76% and 75%, respectively).
South Korea also leads the way in self-reported purchasing for several
consumable categories. More than half of South Korean respondents
say theyve purchased non-food household groceries (52%) or packaged
foods (51%) online. China is a close second, with more than four-in-10
respondents reporting theyve bought household groceries (45%)
or packaged foods (47%) online. In addition, more than one-third
of respondents in South Korea and the U.K. (37% each) say theyve
purchased fresh groceries online.
In mature markets such as the U.K. and South Korea, retailers offer
extensive online services, said Dodd. In China and other high-growth
e-commerce markets, access, price and trust in imported products are
fueling growth.

MORE CONSUMERS SAY THEYVE PURCHASED DURABLE
GOODS ONLINE THAN CONSUMABLE PRODUCTS ONLINE
Global average *: Percentage who have ever purchased THE category online
Durables
Consumables TOP COUNTRIES FOR TOP COUNTRIES FOR
SELECTED DURABLE SELECTED CONSUMABLE
Fashion-related CATEGORIES CATEGORIES
products 55%
Books/music/ Fashion-rel ated Beaut y &

50%
stationery products personal care
Travel products
49%
or services South Korea 77% South Korea 65%
Germany 76% China 52%
Event tickets 43% China 68% India 48%
India 68% Germany 47%
United Kingdom 67% Pol and 47%
IT & Mobile 40%
Consumer Non-food
37% Books/Music/
electronics household
Stationery
groceries
Beauty & personal
35%
care Japan 79% South Korea 52%
Video game-related Germany 75% China 45%
30% South Korea 72%
products United Kingdom 37%
United Kingdom 66% Japan 33%
Furniture, decor, tools 23% France 64% India 25%
United States 64%
Restaurant deliveries or
21%
meal delivery services
Packaged
Travel
Medicine or health care grocery food
19%
products
Non-food household 18% Spain 67% South Korea 51%
groceries United Kingdom 62% China 47%
Turkey 60% United Kingdom 37%
Packaged grocery 17% Australia 58% Japan 33%
food India 57% India 21%
Germany 57% Germany 21%
Flowers, gift sets 15%
Turkey 21%
Products for baby & 14% Consumer

young children electronics Fresh groceries
Pet food and supplies 13%
Brazil 57%
Germany 52% South Korea 37%
Wine and alcoholic
11% Russia 50% United Kingdom 37%
beverages
United Kingdom 48% Japan 23%
Fresh groceries 11% Pol and 48% China 22%
Australia 18%


Spotlight on
China and
France
Across a growing set of markets, Nielsen Retail Measurement Services
provide continuous online measurement of category, brand and item
sales for the e-commerce channel to understand market share, sales
volume and growth. These services are based on a combination of retail
sales shared by Nielsen cooperating retailers, Nielsen data collection and
proprietary methods to calibrate and project online shopping behavior.
China and France are among the countries measured where e-commerce
is performing particularly well.
China
In China, e-commerce is a must-do for consumer package goods (CPG)

manufacturers and retailers. E-commerces share of sales varies by
categoryfrom 33% for baby care products to 2% for beveragesbut
consumables are witnessing strong double-digit year-over-year sales
growth. In the 52 weeks ending June 2015, online sales of household
products grew 86%, beverage sales increased 72% and food sales grew
52%.
E-COMMERCE IS A MUST-DO FOR CPG IN CHINA
Online share of total category sales
33% 25% 2% 9% 7%
baby-rel ated personal care beverage household food
40% 35% 72% 86% 52%
Year-over-year SALES growth rate
Source: Nielsen Retail Measurement Services, latest 52 weeks ending June 2015

France
In France, Nielsen Retail Measurement e-commerce data is based

upon a defined universe of click-and-drive (order online for pickup
at the store) format retailers, which account for the majority of the
total estimated sales for the channel. Click-and-drive is the dominant
e-commerce purchase method for FMCG in France.
The top e-commerce categories in France are shopping staples such as

refrigerated dairy, confection and refrigerated non-dairy. While the total
share for each category is still relatively small compared to brick-and-
mortar, nearly all of the marketplace growth is driven by the e-commerce
click-and-drive channel. For example, e-commerce accounts for 4% of
frozen food, paper good, non-alcoholic beverage and refrigerated dairy
sales. Online sales for the frozen food category, however, grew 16.8%
over the 52 weeks ending April 2015, compared with a 1.3% decline for
brick-and-mortar stores. For alcoholic beverages, online sales grew
25.1%, while offline grew 1.2% over the same period.
FRANCES LARGEST CATEGORIES ARE GROWING IN E-COMMERCE

ONLINE VS. OFFLINE SALES growth: Top 10 brick-and-mortar categories
Online share of total CATEGORY SALES
3.0% 3.6% 3.2% 2.8% 1.6% 3.9% 2.3% 3.0% 4.2% 4.1%
25.1%
21.1%
19.1% 19.0% 19.8%
18.4% 18.0% 18.2%
16.2% 16.8%
2.8% 1.7%
0.1% 0.3% 1.2% 0.2% 0.8%
-1.1 -0.2% -1.3%

Dry Sugar
Grocery
Refrigerated
Dairy
Refrigerated
Non-Dairy
Shelf-Stable
Grocery
Alcoholic
Beverages
Non-Alcoholic
Beverages
Health and
Beaut y Care
Household
Goods
Paper
Products
Frozen
Foods
Online year-over-year SALES growth Offline year-over-year SALES growth
Source: Nielsen Retail Measurement Services, latest 52 weeks ending April 2015

A global store
at your door
With the world at your fingertips, why only shop domestically?
While connected commerce is still largely a domestic affair, with

consumers primarily ordering from retailers in their own country, this
is changing. Shoppers are increasingly looking outside their countrys
borders, as more than half of online respondents in the study who made
an online purchase in the past six months say they bought from an
overseas retailer (57%).
Nearly three-quarters of Indian respondents who purchased online in the

past six months say they bought items from an overseas retailer (74%)*.
But this isnt just a developing-market trend. Roughly two-thirds of
respondents in Western European countries say they purchased from an
overseas retailer, including 79% in Italythe highest percentage in the
online studyand 73% in Germany.
Retail has been one of the last holdouts of globalization, but technology is giving
consumers access to a world of products previously unavailable, said Dodd. Choice is
greatly enhanced by cross-border e-commerce. In many developing markets, the growing
middle class is trading up and demanding greater assortment than found at their
domestic retailer. For example, some of these consumers are looking overseas to purchase
authentic foreign brands, often at lower prices than they can find in their home country.
Meanwhile, developed-market consumers gain access to a range of goods directly from
foreign companies at often significant discounts to what they would pay domestically.
But with huge opportunity comes great challenge. With more choices
available to consumers than ever before, the shopping experience
becomes a key differentiator between banners. Optimizing the
experience starts with a deep understanding of the local market,
including local perceptions, delivery infrastructure, technology adoption
and use, financial and currency systems and regulatory and customs
requirements. In addition, retailers must ensure that products meet
quality standards, prices are set reasonably, logistics systems are safe
and efficient and after-sales service is optimized for fair refunding/
exchanging processes.
*Note: Internet penetration in India is 30%

OVERSEAS ONLINE PURCHASING RATES VARY GREATLY AROUND THE WORLD
Percentage of online shoppers who SAID THEY have purchased

from overseas retailer in the past six months
Chile Mexico Colombia Brazil Argentina

L atin America
69% 64% 54% 44% 42%
India Australia Thail and Philippines
Asia-Pacific 74% 66% 64% 61%
China South Korea Japan
58% 50% 32%
Italy Germany Russia Spain
Europe 79% 73% 64% 63%
France Turkey United Kingdom Pol and
59% 54% 52% 34%
North America Canada United States Africa Nigeria South Africa
62% 29% 61% 50%

Credit, di gital
or cash on
delivery?
Payment
practices vary
widely
In order to sell, retailers must make it easy for consumers to buy. So
which payment methods are the most preferred? It depends on where
you ask.
Around the world, credit cards are the most commonly used payment
method. More than half of online respondents who say they shopped
online during the past six months paid with a credit card (53%). In
addition, roughly four-in-10 used a digital payment system such as
PayPal or Alipay (43%), debit card (39%) or direct debit from their bank
account (38%). While these methods are the most used around the
world, there are notable differences across countries.
Respondents in the U.S. and Canada prefer paying with credit cards by a
wide margin. During the past six months, 66% of U.S. online shoppers
and 81% of Canadian online shoppers say they paid with a credit card,
well above the percentage that used the next closest optiondebit
card in the U.S. (38%) and digital payment systems in Canada (41%).
Credit card is also the most used payment option in several of the Latin
American countries in the study (52% - 80% across the countries) and
Japan and Korea (76% and 79%, respectively).
The use of digital payment systems in China is extremely popular.

Eighty-six percent of Chinese respondents say they paid for online
purchases during the past six months via digital payment systems.
This is also the most widely cited option in several Western European
countries, including Germany (68%), Spain (56%) and Italy (55%).

ONLINE PAYMENT PRACTICES VARY AROUND THE WORLD
Top three payment methods used by online shoppers

to make purchases in the past six months
Credit card Digital payment systems DebiT card Direct debit
Cash on delivery Store-specific gift card
Global* Eastern Europe*

53% 57%
43% 55%
39% 46%
CHINA North America*

86% 74%
53% 38%
49% 26%
INDIA Africa*
83% 54%
71% 52%
61% 42%
Southeast Asia and

the Pacific* L atin America*
57% 65%
37% 41%
35% 36%
Western Europe* Middle East**

56% 64%
44% 46%
42% 11%
*See page 36 for countries included in global and regional averages

**The survey was conducted using a face-to-face methodology and is not included in the global average

In India, debit cards and direct debit are common payment methods
(71% and 61%, respectively) for online shoppers, but cash on delivery
is the most widely used option, cited by 83% of online respondents.
The popularity of cash on delivery is driven by a few factors. There
is a sizeable group of unbanked consumers in India, credit card
penetration is relatively low, and many consumers avoid paying with
plastic due to security concerns. Moreover, e-commerce is still in its
early stages of development in the country, and the ability to touch,
feel and try on merchandise prior to purchasing reduces the risk of
not getting what they paid for.
India illustrates that the growth of online shopping isnt dependent

on credit card penetration and development, and we should expect
digital payment systems will develop much like they did in China,
said Dodd. Shoppers prioritize security above all else, and retailers
need to collaborate with banks to ensure theyre providing secure and
trusted ways to transact online, particularly on mobile devices.
Cash on delivery is also popular in many other developing markets,

including Nigeria (76%), the Philippines (73%), Russia (70%), United
Arab Emirates (68%), Saudi Arabia (59%), Colombia (57%), Poland
(57%) and Thailand (56%). Similar to India, most of these countries
have below-average (self-reported) credit card ownership or below-
average trust in providing credit card information online.

CASH ON DELIVERY IS POPULAR IN COUNTRIES WHERE CREDIT CARD
PENETRATION AND TRUST ARE LOW
Used cash on delivery ONLINE in last SIX months

Do not have credit card/debit card to buy online
Do not trust giving credit card INFORMATION online
23% United Arab 38%

Global * 36% 68%
54% Emirates** 60%
28% 54%
India 83% Saudi Arabia** 59%
59% 57%
19% 35%
Nigeria 76% Pol and 57%
63% 56%
37% 30%
Philippines 73% 68% Colombia 57% 69%
16% 30%
Russia 70% Thail and 56%
62% 51%

**The survey was conducted using a face-to-face methodology and is not included in the global average
= All respondents who strongly or somewhat agree
An ideal payment gateway has two core characteristics: It is secure, and

it allows consumers to pay with whatever method fits their needs (and
wallets) best, said Dodd. Not every payment method works everywhere.
Retailers looking to expand internationally need to understand local market
nuances and cater their offerings accordingly. Increasing the number of
available payment options can improve the odds of converting browsers
to buyers. In the long run, however, for e-commerce to really take off, it
has to migrate upwards from cash on delivery. To build trust in online
transactions, retailers need to educate consumers about the steps theyre
taking to protect their personal information, and they must find ways to
deliver a better experience than what consumers get from cash. Potential
solutions include providing incentives or discounts for paying online or via
mobile payment systems.

Part Iii
Drivers and
barriers
for online
shopping
success

When it comes
to consumables,
convenience is
most important
What motivates consumers to purchase consumables online? The short
answer: It depends.
For consumable goods, the most important takeaway is that there is no

single driver of success. Consumers shop online for a variety of reasons
including:
Conveniencereducing time and effort spent shopping

Product assortmentgaining access to more choices than available
locally
Informed decision makinggetting information and reviews to help
make better choices
Deal seekingfinding the best price possible
Useful online featuresmanaging shopping lists and building
baskets over time
Successful retailers leverage a combination of drivers to keep shoppers

satisfied and coming back.
That said, however, convenience tops the list by a small margin. More
than half of online respondents in the study agree that shopping online
for groceries is a time-saver (53%). Chinese respondents have the
highest level of agreement (77%), followed closely by Thailand (76%)
and India (71%). China also exceeds the global average for several
other convenience-related attributes. In fact, three of the top five online
shopping motivators in the country are related to convenience.
Busy consumers want to minimize time spent on errands, and grocery

shopping is no exception, said Dodd. Online grocery shopping offers
close to the ultimate in convenience. Consumers can shop any time and
practically anywhere and have the goods delivered to their preferred
location during a predefined timeslot. Its important to note, however,
that how shoppers define convenience varies widely. There is no single
solution that meets all consumers needs.

Accordingly, convenience represents one of the most basic and energetic
areas of innovation for retailers. Some are offering a drive-through
service with spacious collection points, allowing shoppers to collect pre-
ordered baskets without leaving their cars. Others are testing click-and-
collect services that deliver groceries to temperature-controlled lockers
available for pick-up at designated locations such as train stations
and airports. But convenience isnt just about delivery. Its about the
complete order process. How much time do shoppers need to find
items, to build a basket, to sign in/check out? How long do consumers
have to wait for the items to be ready? Retailers need to look for ways to
optimize the entire purchase process, which could include subscription-
based models where products are delivered to consumers doors on
a regular schedule. Of course, the success of any convenience-driven
innovation is dependent on getting the price-value equation right. That
is, offerings must be priced in a way that covers the costs of providing
them, but is low enough to persuade consumers theyre worth paying for.

CONVENIENCE TOPS THE LIST OF ONLINE Purchasing
DRIVERS FOR GROCERIES
Global * Percentage who strongly or somewhat agree with statements

about purchasing GROCERY products online
Save Time &

Effort
Shopping for groceries online is a time-saver 53%

Shopping for groceries online fits my schedule better than shopping in physical stores 44%
I prefer to shop for groceries online as it saves me carrying heavy items 38%
I like to order grocery products online, rather than picking them up in-store 32%
Product
Avail abilit y
I shop for online to get grocery products that I cannot find in physical stores 49%
I shop for groceries online to access stores not available in my area/local shops 47%
I shop for groceries online because there are many more product choices than in-store 41%
I shop for groceries online to buy products not available in my country 40%
Deal
Seeking
To ensure I get the best deals I check the grocery retailers flyer online 49%
I surf around many websites until I find the lowest price when I purchase groceries online 47%
I always check price saving apps or deal websites when planning a grocery shopping trip 44%
Deals at online grocery retailers are better than those in stores 40%
Useful Online
Features
When buying groceries online, I usually add items to my online shopping cart over 34%
several days before making a combined purchase
I manage my grocery list digitally (using a mobile app or online tool) 32%


Product
assortment and
deals provide an
online advantage
Convenience is clearly important, but its not the only factor driving
online shopping for consumables.
Product availability and relevant selections is another key motivator for

online shopping. Nearly half of online respondents in the study (49%)
say they shop online to get grocery products they cant find in physical
stores, and 47% shop for groceries online to access stores not available
in their area.
Product assortment is one area where online retailing has a unique

advantage over the physical store because assortment is not limited
by square-footage space, said Dodd. This is particularly true in places
like India and Nigeria where traditional retail formats (smaller mom
and pop stores) remain strong. To help drive both traffic and conversion
across regions, retailers should consider offering exclusive products
online at attractive price points.
PRODUCT AVAILABILITY IS A STRONG MOTIVATOR FOR ONLINE GROCERY

SHOPPING IN MANY DEVELOPING COUNTRIES
Percentage who strongly or somewhat agree with statements

about purchasing GROCERY PRODUCTS online
74% 75% 69% 66%

69% 65%
64% 63% 63%
57% 59% 63%
49% 47%
Global * Thail and China India Turkey Philippines Nigeria
I shop online to get grocery products that I cannot find in physical stores
I shop FOR groceries online to access stores not available in my area/local shops


Deal seeking is also a key driver. Despite improving economic
conditions, shoppers remain cautious spenders. Nearly half of
respondents in the study (49%) check store flyers online to make
sure they get the best deal, and this activity tops the list of online
Nearly half of
shopping motivators in Argentina (55%), Mexico (52%), South Africa respondents in
(51%), Canada (47%), Italy (42%), the U.S. (40%), Germany (34%) and
Australia (33%), and ranks second in Saudi Arabia (44%) and United the study (49%)
Arab Emirates (34%). In fact, four of the top five motivators in Saudi check store
Arabia and three of the top five in the U.S. are focused on finding the
best possible price. flyers online to
make sure they get
Successful retailers are helping shoppers save with simple and
innovative online promotion strategies. For example, take the weekly the best deal
flyer one step further by sending loyalty program members personalized
promotional offers based on past purchasing behavior. Or look for
equally innovative ways to appeal to customers deal-seeking mentality.
When it comes to purchasing durable products online, motivations are

very similar to those for consumable products: convenience, product
availability, deal seeking and information gathering. For durable goods,
product availability is slightly more important than convenience
especially for clothing and books/music/stationery. Roughly seven-in-10
respondents say they shop online for apparel or books/music/stationery
to get products they cannot find in physical stores (71% and 70%,
respectively), to access stores that arent available in their area (69%
and 67%), and because there are more product choices than in stores
(68% each).
Product availability is also a key driver for consumer electronics and

mobile products, but information gathering and deal seeking are
stronger motivators for online shopping. Roughly three-quarters of
online respondents agree they often research products before buying
them in-store (75% for consumer electronics, 74% for mobile products)
or use online reviews to make purchase decisions (73% each). In
addition, seven-in-10 respondents surf the web to find the lowest price
when they purchase electronics and mobile products online (72% and
69%, respectively).

Conquering
a consumable
conundrum
While online shopping offers significant advantages to consumers

wanting to purchase consumables, it also faces its fair share of
challenges.
The inability to inspect goods poses one of the biggest barriers for
consumable categories. Nearly seven-in-10 online respondents in
the survey (69%) agree or strongly agree that they prefer to examine
products personally. Agreement is strongest in North America, led by
the U.S., which has the highest response rate of 80%. Canada follows
closely behind at 75% agreement. This is also a key concern in Nigeria
(78%), the Philippines (78%), Mexico (77%), South Africa (75%) and
India (74%).
The desire to inspect goods is undoubtedly tied to uncertainty about

product quality and freshness. More than six-in-10 online respondents
in the survey say concerns about product freshness (64%) and overall
quality (62%) are barriers to online shopping. These sentiments are
particularly strong in Nigeria, the Philippines, China, Russia, India,
Thailand, and the Latin American countries in the study.

The five senses are hard to replicate in a virtual environment. This
is especially important when it comes to fruits and vegetables, as
consumers like to see, feel and smell the produce, or for meat, fish and
poultry, where shoppers want to investigate the best cut in person, said
Dodd. As such, transparency and shopper education is necessary to
show the origins of and transportation methods for seasonal produce
and locally-grown/raised products. And perhaps nothing is more
important than word-of-mouth testimonials from satisfied customers,
whether in person or online via reviews and social media.
Other ways to address freshness concerns include providing minimum

expiration-date guarantees and special offers or promotions on products
with shorter expiration or sell-by dates. Looking beyond fresh categories,
retailers could address doubts about product quality by encouraging
product trials. Savvy retailers are including free shipping for first-time
users, double points for loyalty program members or online/mobile-
exclusive offers. The latter two options may be particularly useful for
physical retailers trying to grow their online business. Regardless of the
incentive used, keep in mind that unsatisfied customers are not likely to
return. Matching or exceeding shopper expectations is a sure way to win
repeat business.
A fair, satisfaction-guaranteed returns policy is another important

way retailers can address quality concerns. More than half of online
respondents in the survey (57%) say theyre concerned the groceries they
receive will not accurately match what they ordered, with the highest
levels of agreement in the Philippines (74%), China, Thailand and
Colombia (71% each).
Goods that dont meet expectations can be game-changing for customers,

reducing the likelihood of a repeat purchase from the retailer, said Dodd.
Retailers can turn a potentially negative experience into a positive one by
inspiring trust with a f lexible, hassle-free return policy, fast product
replacement service and well-trained staff to help with substitution selection.
Delivery is also an important sticking point for consumers. Fifty-

five percent of online respondents in the study are concerned about
deliveries arriving when theyre not at home. This barrier is particularly
strong in Mexico (68%), South Africa (68%) and India (67%).
Reengineering fulfillment processes to better meet the needs of online
shoppers who find it inconvenient to wait at home during broad delivery
windows can address this issue.

THE INABILITY TO EXAMINE AND INSPECT GOODS IS THE BIGGEST
BARRIER TO ONLINE SHOPPING FOR GROCERIES
Global * percentage who strongly or somewhat agree with statements about

purchasing GROCERY products online
Qualit y And
Accuracy
I am concerned about the freshness of produce/expiration dates of products 64%
I am concerned about the quality of products 62%
Groceries I get will not accurately match what I ordered online 57%
In-Person
Experience
For groceries, I prefer to be able to examine the products myself 69%
Shopping for groceries in a physical store is a way to engage socially 51%
Shopping for groceries in a physical store is more fun than online shopping 50%
Fulfillment &
Returns
I am concerned about grocery deliveries happening when I am not home 55%
I wont buy groceries online unless I know how to easily return products 50%
I shop in grocery stores because it takes too long to have the products delivered 44%
L acks Price
Incentives
I wont buy groceries online if I have to pay for delivery 52%
I shop for groceries online only if it really saves me money 50%
Ease Of Site
Usage
Browsing through online sites to find grocery products is time consuming 43%
Grocery shopping sites are confusing and products arent easy to find 33%


Defeating
durable
difficulties
When it comes to the online shopping barriers for durable goods, some
factors overlap with consumable products, but there are also some
unique differences to note.
For fashion-related products, concern about product quality is the top

barrier, cited by 59% of online respondents. The inability to inspect
products online also rises close to the top. In fact, its second on the list
of barriers for all four durable categories examined. Fifty-eight percent
of online respondents in the study prefer to examine fashion products
themselves, and nearly as many (57%) are concerned about the accuracy
of their order.
Theres no substitute for touching and trying on clothing in person,

but retailers can incorporate elements to their websites and apps that
help replicate this experience, said Dodd. A number of advanced
digital tools are available to help solve the fit problem, which is a major
pain point for retailers. These range from using algorithms to analyze
fit data and make sizing recommendations to virtual fitting rooms that
allow shoppers to enter their dimensions and see what the garment
might look like when its on. These tools can be tremendously helpful,
but theyre costly and labor-intensive for retailers. Simpler solutions,
however, such as customer ratings and reviews and high-quality, multi-
angle photos, can go a long way in helping to ease fit and quality
concerns.
For consumer electronics and mobile products, many consumers

believe that a price incentive is the only reason to shop online. Six-
in-10 online respondents say theyll only shop online for electronics
(62%) and mobile products (61%) if it saves them money. The desire to
examine products is the second biggest barrier, cited by 60% of online
respondents for consumer electronics and 58% for mobile products.
Other barriers include concerns about product quality (57% for
consumer electronics and 56% for mobile products) and delivery when
not at home (56% and 55%, respectively).
In the U.S., major brick-and-mortar electronics and mobile retailers

are already matching online prices, and many stores offer in-
person consultation and the ability to watch, listen and use goods.
Consequently, the incentive to take a risk and buy online is low.

The barriers to online shopping for books/music/stationery are lower
than for the other durable categories. Similar to electronics and mobile
products, a price-value concern tops the list, cited by 49% of online
respondents, while the desire to examine products is second (47%). A
unique barrier that emerges for books/music/stationery is the pleasure
respondents derive from interacting with people in the store. Forty-five
percent of online respondents say shopping for books/music/stationery
in physical stores is a way to engage socially.
The biggest BARRIERS TO ONLINE SHOPPING FOR DURABLE GOODS

VARY SLIGHTLY BY CATEGORY
Global * percentage who strongly or somewhat agree with statements

about purchasing durable categories online
Books/Music/ Consumer
Fashion IT/Mobile
Stationery Electronics
I am concerned about the quality of products when

59% 42% 57% 56%
shopping this category online
I shop this category online only if it really saves me

57% 49% 62% 61%
money
For this category, I prefer to be able to examine the

58% 47% 60% 58%
products myself
I wont buy this category online unless I know how to

54% 43% 57% 56%
easily return products
I am concerned about delivery of this category

49% 45% 56% 55%
happening when I am not home



Trust and
infrastructure
challenges
There are a few barriers related to trust and infrastructure issues that
affect all categories, particularly in emerging markets.
First and foremost, trust remains an issue. More than half of all online
respondents in the study (57%) have doubts that e-commerce sites will
keep their personal information secure and confidential. Concerns are
highest in Mexico and Thailand (67%), followed closely by China (66%),
the Philippines (66%), Turkey (66%) and South Africa (65%).
Another issue is telecommunications infrastructure and technology

adoption, which varies greatly around the world. Many developing regions
still face significant infrastructure challenges, including low Internet
penetration, high access costs and unreliable connections. Nearly one-
third of online respondents in the study (32%) say their connection is
not stable enough to make them comfortable buying online. In some
developing markets, this figure approaches or exceeds 50%, including
in Saudi Arabia (55%), India (52%), Nigeria (49%), South Africa (48%),
Mexico and the Philippines (47% each). In these markets, mobile devices
have been critical to e-commerce growth, bringing many new and
underserved customers onlineand their importance will continue to
grow.
Indeed, while most people use a computer to make purchases, the use of
mobile devices to make purchases is significantly higher than average in
some countries. For example, in China, over half of the respondents who
ordered restaurant/meal deliveries or purchased events tickets online say
they bought it using their smartphone (71% and 51%, respectively). In
addition, more than four-in-10 Chinese respondents who bought online
say they purchased beauty products (46%) or packaged groceries (45%)
via smartphone. India, Thailand, Turkey and Nigeria also have higher than
average smartphone/mobile phone purchasing rates in several categories.
In fact, India is one country on the leading edge of the mobile trend.
Snapdeal, the countrys second-largest e-commerce company, has made
large investments in building lighter apps and mobile sites that load in
less than three secondseven on the relatively slow networks endemic
to the country. And some online retailers in India are moving from
mobile-first to mobile-only. In 2015, Flipkart, the largest e-tailer in India,
shuttered its desktop website for its fashion store, Myntra, which is now
available only through mobile app and website.

But the shift toward mobile shopping is of course not just happening
in emerging markets. In the U.S., IBM reported that mobile devices
accounted for about 57% of all online shopping traffic this past Black
Friday, the busiest shopping day of the year in the country, up 15% over
the same period in 2014.
The shift toward mobile purchasing reflects a larger shift that is

occurring in retail: proximity shopping, said Dodd. Across all regions,
smaller format stores that are close to work or home are growing
fastest, and nothing offers greater convenience or proximity than the
mobile device in consumers pockets. As more consumers turn to
mobile devices to shop, a coherent mobile strategy should be a key
innovation pillar for retailers. The most successful retailers will be those
that optimize and differentiate their mobile experience and improve the
integration of their in-store and mobile services specific to the realities
in each market.

SMARTPHONE USE FOR ONLINE SHOPPING IS ABOVE AVERAGE IN
SOME ASIAN AND AFRICAN COUNTRIES
Percentage who USED A smartphone or PC/LAPTOP to purchase selected

categories online in the past six months
PC/Laptop Smartphone
Restaurant deliveries or Meal delivery services
68% 71% 66%

58% 56% 52%
42% 48% 48% 46%
Global * China India Thail and Nigeria
Beaut y & Personal care products
80%
71% 70% 69%
63%
46% 48% 41% 48%
26%
Packaged grocery food
80% 81% 77%

68%
45% 43% 48% 46%
25% 31%
Fashion-rel ated products
82%
72% 73% 66% 67%
39% 40% 41% 42%
24%


Strategies for
omni-channel
success
Retailers can no longer think of their online and offline channels separately.
To master a truly seamless omni-channel experience, keep the following
considerations in mind.
Be shopper-centric. With innumerable channels and tools available to

retailers, developing an omni-channel strategy can be a daunting task,
but setting priorities is easier when brands have a deep understanding
of their consumers and shoppers. Take the time to understand not only
their demographics and shopping habits, but what happens along the
path to purchase. Prioritize initiatives around the tools and features
consumers use and desire most.
Prioritize personalization. Ultimately, the greatest value in knowing
your shoppers is that it allows you to provide them with relevant,
personalized information and offers. Personalization can have big
benefits for the bottom line, including increased visitor engagement
and improved customer experience, as well as increased conversion
rates, lead generation and e-commerce revenues.
Recognize and respect differences between countries. Connected
commerce is at drastically different stages of development around
the world. Regulatory requirements and financial and technology
infrastructure and adoption rates can vary widely. In short, no two
markets are alike, and retailers must keep in mind each countrys
unique operating environment when developing a strategy.
Invest in infrastructure. Siloed organizations and ineffective customer
relationship management (CRM), processing, payment and fulfillment
systems can be major barriers to success. To overcome these obstacles
and provide a cohesive customer experience, retailers need to commit
serious resources. This means deploying integrated back-end systems
and structuring the organization around the holistic shopping
experience rather than around separate channels. It also means
evangelizing an omni-channel strategy at all levels of the organization
and equipping employees with the tools and training to deliver an
exceptional customer experience.
Think digital, but dont neglect in-store. Physical stores maintain many
key advantages over online-only channels, and retailers should look
for ways to optimize the in-store experience by leveraging digital tools.
Delivering the basic elements of a great shopping experience, such as
executional excellence and exceptional service, however, must remain
core to any strategy. In fact, customer service is a differentiator in
every channel and should be a priority focus for retailers, regardless of
whether theyre online or off.

Countries in the Study
Asia-Pacific L atin America
INTERNET INTERNET
MARKET MARKET
PENETRATION PENETRATION
China 50% Argentina 80%
India 30% Brazil 58%
Southeast Asia and the Pacific Chile 72%
Australia 93% Colombia 59%
Japan 91% Mexico 49%

Philippines 43%
South Korea 92% Africa
Thailand 56%
INTERNET
MARKET
PENETRATION
Europe
Nigeria 51%
INTERNET South Africa 49%
MARKET
PENETRATION
North America
Western Europe
France 84% INTERNET

MARKET
Germany 88% PENETRATION
Italy 62% Canada 93%
Spain 77% United States 87%
United Kingdom 92%
Middle East (NOT included

Eastern Europe
in global average)
Poland 68%
Russia 71% INTERNET
MARKET
PENETRATION
Turkey 60%
Saudi Arabia 67%
United Arab
96%
Emirates
Note: All countries in the survey used an online methodology except the
Middle Eastern countries, which used a face-to-face methodology
Source: Internet World Stats, November 30, 2015

About the Nielsen Connected
Commerce Survey
The Nielsen Global Connected Commerce Survey was conducted between
August and October 2015 and polled more than 13,000 consumers in 26
countries throughout Asia-Pacific, Europe, Latin America, the Middle East,
Africa and North America. The sample for all countries except Saudi Arabia
and United Arab Emirates includes Internet users who agreed to participate
in this survey and has quotas based on age and sex for each country. It is
weighted to be representative of Internet consumers by country. Because
the sample is based on those who agreed to participate, no estimates of
theoretical sampling error can be calculated. However, a probability sample
of equivalent size would have a margin of error of 0.9% at the global level.
This Nielsen survey is based only on the behavior of respondents with
online access. Global and regional averages used in this report are based on
weighted country data. Internet penetration rates vary by country. Nielsen
uses a minimum reporting standard of 60% Internet penetration or an online
population of 10 million for survey inclusion.
In Saudi Arabia and United Arab Emirates, a face-to-face methodology was

used for nearly 1,000 respondents. Given the differences in methodologies
used, results from the Middle East are not included in the global average.
About Nielsen
Nielsen Holdings plc (NYSE: NLSN) is a global performance management
company that provides a comprehensive understanding of what consumers
watch and buy. Nielsens Watch segment provides media and advertising
clients with Total Audience measurement services for all devices on which
content video, audio and text is consumed. The Buy segment offers
consumer packaged goods manufacturers and retailers the industrys only
global view of retail performance measurement. By integrating information
from its Watch and Buy segments and other data sources, Nielsen also
provides its clients with analytics that help improve performance. Nielsen,
an S&P 500 company, has operations in over 100 countries, covering more
than 90% of the worlds population.
For more information, visit www.nielsen.com.
Copyright 2016 The Nielsen Company. All rights reserved. Nielsen and
the Nielsen logo are trademarks or registered trademarks of CZT/ACN
Trademarks, L.L.C. Other product and service names are trademarks or
registered trademarks of their respective companies. 16/9523


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Global

Part I: The evolving online ecosystem...................................................... 05

Connected shoppers = smart shoppers.....................................................................07

Part II: Online shopping behavior................................................................09

Part III: Drivers and barriers for online shopping success......21

Product assortment and deals provide an online advantage.............25

Conquering a consumable conundrum..................................................................27

Defeating durable difficulties.........................................................................................30

Trust and infrastructure challenges.......................................................................32

Strategies for omni-channel success.......................................................................35

2 Global CONNECTED COMMERCE

Shoppers today no longer simply go to the nearest store; they grab

Copyright 2016 The Nielsen Company 3

As technology adoption and infrastructure improvements bring more

The Nielsen Global Connected Commerce Survey polled respondents in

ABOUT THE SURVEY METHODOLOGY

4 Global CONNECTED COMMERCE

Copyright 2016 The Nielsen Company 5

This is particularly true for durable and higher-priced categories such

6 Global CONNECTED COMMERCE

While online activity rates vary by category, three activities score

Copyright 2016 The Nielsen Company 7

Global * Top and Bottom online shopping activities for selected

Travel Products or services Consumer Electronics

*See page 36 for countries included in global average

8 Global CONNECTED COMMERCE

Copyright 2016 The Nielsen Company 9

More respondents say they have purchased durable goods than

Categories Included in the Study

Durable Categories Consumable Categories

10 Global CONNECTED COMMERCE

Regardless of whether the product is durable or consumable, there is

Copyright 2016 The Nielsen Company 11

Books/music/ Fashion-rel ated Beaut y &

Products for baby & 14% Consumer

*See page 36 for countries included in global average

12 Global CONNECTED COMMERCE

In China, e-commerce is a must-do for consumer package goods (CPG)

E-COMMERCE IS A MUST-DO FOR CPG IN CHINA

Online share of total category sales

40% 35% 72% 86% 52%

Year-over-year SALES growth rate

Copyright 2016 The Nielsen Company 13

In France, Nielsen Retail Measurement e-commerce data is based

The top e-commerce categories in France are shopping staples such as

FRANCES LARGEST CATEGORIES ARE GROWING IN E-COMMERCE

Online share of total CATEGORY SALES

-1.1 -0.2% -1.3%

Online year-over-year SALES growth Offline year-over-year SALES growth

14 Global CONNECTED COMMERCE

While connected commerce is still largely a domestic affair, with

Nearly three-quarters of Indian respondents who purchased online in the

*Note: Internet penetration in India is 30%

Copyright 2016 The Nielsen Company 15

Percentage of online shoppers who SAID THEY have purchased

Chile Mexico Colombia Brazil Argentina

69% 64% 54% 44% 42%

India Australia Thail and Philippines

Asia-Pacific 74% 66% 64% 61%

China South Korea Japan