WEBLOYALTY & CONLUMINO LOOKING AHEAD… SUMMER, … · Webloyalty is a leading reward programme...

LOOKING AHEAD… SUMMER, FOOTBALL AND RETAIL UK CONSUMER SPENDING

WEBLOYALTY & CONLUMINO

JUNE 2014

Introduction

© 2014 Webloyalty & Conlumino [email protected] | 020 7291 8720

Looking ahead ... Summer June 2014

Webloyalty 19-21 Great Portland Street W1W 8QB 020 7291 8720 [email protected] www.webloyalty.co.uk

Conlumino 7 Carmelite Street, London EC4Y 0BS 020 7936 6654 [email protected] www.conlumino.com

This research has been commissioned by Webloyalty to provide retailers with insight into the current trading environment as well as some more specific insight around summer trading and the FIFA World Cup. About Webloyalty Webloyalty is a leading reward programme provider working with major online retailers to help them build stronger, more profitable relationships with their customers. Through our membership programmes we help our online retail partners’ customers save hundreds of pounds a year while providing the partner with an additional revenue stream. As well as incentivising customers to make repeat purchases at the partner’s site, members can also earn cashback and get great deals on everything from fashion to electronics to travel at hundreds of top online stores. Webloyalty was established in the UK in 2007 and has since expanded into France, Germany, Spain, Italy, Ireland, Brazil and the Netherlands. About Conlumino Conlumino is a retail research agency and consulting firm. Our work focuses on all aspects of retailing and consumer behaviour, which we deliver through bespoke reports, projects and presentations. We work with many of the world’s leading retailers, property firms and those in the financial sector to help them maximize success through developing a thorough understanding of the sector and its likely future performance.

Foreword

Introduction



The world cup Just over half of the population intend to actively watch the World Cup, with the vast majority planningto watch at home. Home watching is driving the purchase of food items for consumption – a fifth say they will buy snacks and around 17% will buy alcoholic drinks to consume whilst watching matches. There is some dissatisfaction with the price of replica football shirts; consumers feel that £20 is a fair price to pay.

Summary

Summer holidays With almost 70% of consumers intending to take a holiday this year, spending on holidays is expected to top £9.18bn. This is 2.5% higher than last year. In preparation for their holidays consumers are expected to spend up to £536 on products. When it comes to channels, over 50% of consumers intend to buy at least some of their summer products online, with 6% saying they will do all their shopping online.

The world cup Consumer views and behaviour

The World Cup



World Cup summary

A captive audience With over half the population intending to actively watch the World Cup, retailers have a captive audience to which they can cater. Given the timing of the games, this is all the more so since the majority of people are intending to watch from home – which means they are likely to buy snacks, food and drink to consume while watching.

Get a new TV set With a lot of recent investment in new televisions (thanks to thinner screens, digital upgrades and new technological advances) it is not surprising that relatively few people are planning to buy a new television for the World Cup. Nevertheless, 1% does translate into a sizeable opportunity for retailers.

Overpriced There is a widely held view that replica shirts are overpriced. Almost 79% of those likely to buy shirts say that they have been deterred by the high price points. When asked what a reasonable price for a shirt would be, the majority of consumers think below £30 is fair. On average, they believe £20 is a fair price point. 78% of us wouldn’t have bought one regardless of price.

A boost to retail Overall, we estimate that the spending around the World Cup will be worth £814m. Most of this will be on food and drink. Naturally, some of this will be spend that is reallocated from other areas – for example normal food spend – however, there will be an overall boost to retail spending thanks to the tournament.

The World Cup



Views on the World Cup

What is your attitude to watching the World Cup? All figures are percentages

Almost 18% will actively avoid watching the World Cup

5.0

22.3

14.5

4.3 5.8

8.8

21.6

17.8

I plan to watch every game

I’ll be following it as much as I can

I’ll just watch the England games

I’m most interested in watching the semis and the

finals

I’ll watch a few games socially

with friends

It will be on at home but I’m not that interested in

it

I will not be watching any of the World Cup

I will actively go out of my way to avoid seeing the

World Cup

Just over half of people (51.9%) are actively interested in the World Cup and plan to watch it, at least socially. Almost 9% will have the World Cup on in the background but are not that interested in it. Around 39% will not watch the World Cup or will actively go out of their way to avoid seeing it.

The World Cup



Viewing locations

Where will you watch the games? All figures are percentages

Most people will watch the games at home

93.9

23.1 18.5

2.9 2.5 1.9 1.0

At home At a pub At family or friends’ places

At work At a club Other location At a cafe

The vast majority of people will watch at least some of the games at home. A quarter will watch at the pub, while around 19% will visit friends or family to watch some of the games.

The World Cup



Viewing medium

How will you be watching the games? All figures are percentages

Very few people will watch the games on a mobile device

93.4

29.3

7.8 2.8

6.7

Live on TV Highlights package on TV On a computer/laptop On a mobile device I’ll record a game / games to watch after they are

played live

Most people will be watching the games live on TV. Viewing on mobile devices will be relatively limited, with just under 3% saying they will use this method.

The World Cup



Buying activity

What sort of things will you buy for the World Cup? All figures are percentages

A fifth will buy snacks to eat at home, but only 1% will buy a TV

Snacks to consume at home 20.4

Alcoholic drinks to consume at home 17.9

Alcoholic drinks consumed out of home 10.0

Pizza and other fast food to consume at home 8.7

Non-alcoholic drinks to consume at home 7.5

Snacks consumed out of home 6.2

Ready meals to consume at home 3.8

Other food and drinks to consume at home 3.8

Pizza and other fast food consumed out of home 2.9

Non-alcoholic drinks consumed out of home 2.8

Other meals and food consumed out of home 2.6

Replica football shirts/kit 2.0

Official stickers 1.7

Tournament or team themed Tshirts 1.4

Official books or guides 1.0

Tournament or team themed mugs 1.0

A new TV to watch games on 1.0

Tournament or team themed scarves 0.8

Tournament or team themed sweatshirts/other shirts 0.7

Tournament or team themed posters 0.7

Other tournament or team themed souvenirs 0.7

A new laptop/computer to watch games on 0.7

Other homewares or furniture items 0.7

Other tournament or team themed clothing 0.5

Tournament or team themed keyrings 0.3

A new sofa to sit and watch the games on 0.3

Tournament or team themed ties and accessories 0.2

The World Cup



World Cup spending

Breakdown of World Cup spending All figures are percentages

In total, people will spend £814m on the World Cup

Total World Cup spend:

£814m

World Cup food spend:

£271m

World Cup electricals spend:

£359m

World Cup clothing and souvenirs spend:

£184m

In total, we forecast that consumers will spend some £814m on the World Cup. Although relatively few people will buy electrical items, the high value of purchases means this category will see a solid boost in spending to the tune of £359m. Food will also be a major beneficiary with consumers splashing out £271m on snacks and drinks.

The World Cup



Football shirts

How much do you think it is fair to charge for a replica football shirt? All figures are percentages

Most people think that paying under £30 for a shirt is fair

25.2

29.7

25.4

13.4

4.4

1.0 0.3 0.1 0.0 0.5

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Less than £10

£10-£19.99 £20-£29.99 £30-£39.99 £40-£49.99 £50-£59.99 £60-£69.99 £70-£79.99 £80-£89.99 £90-£99.99

On average, people think that £20.05 is a fair price to pay for a replica football shirt. Very few people think that paying above £40 is reasonable.

£20.05

The World Cup



Price of football shirts

Has the price of the England replica shirt deterred you from buying one? All figures are percentages

18% of people have been deterred from buying a shirt by the price

17.7% 4.8%

Yes No Would not have bought anyway

77.5%

Overall, just under 18% of consumers say that they have been put off buying a replica England shirt because of the cost.

Summer holidays A focus on Summer 2014

Summer 2014



Key trading tips for summer

Summer holidays back on the agenda With more people planning to take a proper summer holiday this year, retailers should be making a big play around preparing and getting ready for the summer break. This includes more emphasis on foreign travel products, including things like guide books and sun accessories.

Premium is in… With finances improving many consumers will be looking to invest in key summer items. These will mostly be statement products such as designer sunglasses or special items of clothing. Retailers should be looking to stretch out their price architectures for these products, giving consumers an option to trade up.

…but value remains critical Although consumers are willing, and able, to trade up on some items, retailers need to recognise that the consumer mindset remains fairly frugal. This means that on certain items, such as basic summer clothing, toiletries and basic accessories, many consumers looking to save money will seek value items or ranges.

Duty-free needs to try harder Although many consumers do buy duty-free products, a significant number are sceptical about whether the savings offered are compelling enough. With a more promotional high street and retail sector in general, duty-free retailers need to work harder at conveying value.

E-holiday boost With the rise of tablets and e-readers, more holiday-makers are now preparing by buying e-books, apps, digital music or films. There is an opportunity for retailers, especially online retailers, to capitalise on this via marketing and promotion during the period just before the holiday season.

Summer 2014



Summer holiday spending 2013

Breakdown of summer spending for 2013 All figures are £bn

Total summer holiday spend in 2013 was £8.95bn

Total Summer Holiday retail spend: 2013

£8.95bn

Buying for holiday spend: 2013

£2.54bn

Summer food and drinks spend: 2013

£3.73bn

General summer-specific spend: 2013

£2.68bn

Last year, total spending on summer holidays was £8.95bn. This splits down into three main areas: •  Buying for actual holidays and

vacations, including things like health and beauty, accessories, clothing and other sundries such as guide books.

•  Buying summer food and drink,

such as BBQ products and salads, which are mainly consumed at home.

•  Other general summer spend, which includes spending on things such as summer clothing not specifically for holidays or things like paddling pools, etc.

Please note all spending is retail spending and so does not include the cost of things like travel, transport and accommodation.

Summer 2014



Summer holiday spending 2014

Breakdown of summer spending for 2014 All figures are £bn

Total summer holiday spend in 2014 is forecast to be £9.18bn

Total Summer Holiday retail spend: 2014

£9.18bn

Holiday products spend: 2014

£2.62bn

Summer food and drinks spend: 2014

£3.83bn

General Summer-specific spend: 2014

£2.78bn

Summer 2014



Summer holiday spending growth

Spending growth rates (2013 versus 2014) All figures are percentages

Overall spending on summer will grow by 2.5%

2.5

3.1

2.7

1.8

Overall Buying for holidays Summer food and drink General summer spend

Overall, spending growth for summer will grow by 2.5% this year. The fastest growth segment will be spending on holidays which will be fuelled by greater numbers of people taking vacations. Summer food and drink spend will grow by 2.7%, however much of this will be driven by higher price inflation rather than by genuine volume increases. General summer spend will see the lowest growth. This is dampened mostly because many consumers invested in things like outdoor f urniture last year during the extended hot spell.

Summer 2014



Holiday intentions

Where are you planning to go on your summer holiday this year? All figures are percentages

Almost a third will take no holiday at all this year

30.3 28.6

18.4

13.9 12.7 12.5

5.4 4.1

Not taking any holiday

Going abroad – short haul

Longer holiday in the UK

Day trips in the UK

Going abroad – long haul

Short city break in the UK

Short city break abroad

Taking time off work but not

travelling

Just over two thirds of people will be taking some form of summer holiday this year, leaving a third with no plans or intentions for a summer getaway. Holidays in the UK are still a popular option, both in terms of day trips and those of a longer length.

Summer 2014



Holiday buying

What sort of things do you intend to buy for your holiday? All figures are percentages

Over half of consumers will buy new clothing for their holiday

55.4 53.3

34.8 33.9

21.4 19.9 18.1

11.9 10.1 7.9

5.8 3.6 2.3 2.3

Clothing Health products

Footwear Washing products

Books or e-book

downloads

Beauty products

Sunglasses Guidebooks Gifts for friends or

family

Beach towels,

umbrellas and other sundries

Camera Beach toys or

equipment

Sports equipment

Portable electronics or gadgets

Summer 2014



Summer spending

Average amounts people spend on certain summer holiday products

In total people spend up to £536 on products for their holidays

Health products £20.60

Beauty products £26.70

Washing products £13.50

Clothing £89.30

Footwear £39.60

Sunglasses £33.80

Sports equipment £53.30

Beach toys £16.50

Beach towels £24.90

Electronics £66.62

Guide books £11.90

E-books £12.20

Camera £94.20

Gifts £32.45

TOTAL SPEND £535.57

Each consumer may spend up to £536 on products for their summer holidays. The most expensive purchases include cameras (average spend of £94), clothing (average spend of £89) and electronics (average spend of £66). In total, almost £61 per person is spent on health, beauty and personal hygiene products.

Summer 2014



Holiday clothing shops

Customer share of leading retailers Figures in left hand column are the percentage using each retailer; figures in the right column are change the since last year

Asda leads the pack for holiday clothing retailers

Asda/George 31.4 +2.1 % pts

M&S 29.3 -1.7 % pts

Primark 25.4 +3.8 % pts

Matalan 21.7 +0.2 % pts

Next 20.2 +0.5 % pts

Debenhams 18.9 -0.3 % pts

Tesco 17.4 -1.1 % pts

New Look 12.4 +0.2 % pts

John Lewis 10.1 +4.9 % pts

H&M 8.2 +0.6 % pts

Bhs 7.4 -0.4 % pts

River Island 4.0 +0.1 % pts

Topshop / Topman 3.9 +0.9 % pts

Zara 2.9 +0.7 % pts

ASOS 2.7 +0.6 % pts

Monsoon Accessorize 2.3 -0.3 % pts

When it comes to where we will shop for our holiday clothing this year, Asda leads the pack with almost a third of those intending to buy summer clothing saying they will shop there. M&S comes closely behind, followed by Primark. As the summary below shows, the value and fashion focused retailers have picked up share since last year, whereas the middle-market players are losing out.

Value retailers 61.9% share (+5.7 % pts since last year)

Mid-market retailers 68.4% share (-2.2 % pts since last year)

Fashion market retailers 18.9% share (+7.1 % pts since last year)

Summer 2014



On and offline buying

How will you be doing the majority of your pre-holiday shopping?

Over half will make extensive use of online for summer shopping

Online only

Mainly online

Both online and in-store

Mainly in-store

Only in-store

6.1% 10.7% 34.5% 26.6% 22.1% Numbers may not sum to 100%; residuals are accounted for by those saying ‘don’t know’.

Summer 2014



Essential kit

What could you not go on holiday without? All figures are percentages

Over a third could not go on holiday without their smartphone

36.1

15.1 14.4 13.5 11.5 10.5 9.5

34.7

14.0 11.7

3.0

13.1 11.3

1.0

37.3

16.1 16.6

22.3

10.1 9.8

16.6

Smartphone Tablet E-reader Hairdryer Laptop Portable music player

Hair straighteners

All

Male

Female

Over a third of people say that they could not go on holiday without their smartphone. However, for many women hairdryers and hair straighteners are also a priority.

Summer 2014



Duty-free shopping

What best describes your attitude to duty free shopping?

Over a quarter never buy duty-free goods

I always buy duty-free goods

I sometimes buy duty-free goods

I never buy duty-free goods

17.1% 57.2% 25.7%

Summer 2014



Duty-free shopping

Which of the following statements on duty free shopping do you agree with? All figures are percentages

Over a quarter feel that duty-free is a bit of a rip-off

31.8 27.9

22.4 20.1

8.6 8.5 8.0 6.7 6.6 4.3

I buy things for myself from duty-

free

Duty free is a bit of a rip-off

It’s great value I buy gifts for others from duty-

free

I find it hard to find the things I

need or want

I end up buying things from duty-free just because

they are there

I always find the products I need or

want

Duty-free goods are generic and

inauthentic

Duty-free shops have some good “authentic” local

products

Instead of buying souvenirs on

holiday I end up buying things

duty-free on the way home

Summer 2014



Forgetting to pack

Which of the following items do you most commonly forget to pack? All figures are percentages

A phone charger and toothbrush are the most often forgotten items

1 Phone charger 9.4

2 Toothbrush 8.5

3 Enough socks/underwear 5.1

4 Sunglasses 4.6

5 Sun cream 4.1

6 Shower gel/soap/shampoo 3.1

7 Camera 3.0

8 Book 1.9

9 Music 1.6

10 Flip-flips/appropriate footwear 1.6

69.9%

30.1% 30.1% of people usually forget to pack something, and this is what they most commonly forget to take

69.9% of people claim that they rarely forget anything when packing for holiday

Methodology About the research

Methodology



Methodologies and sources

•  A combination of consumer research, secondary research and market forecasting were used to compile this report.

•  Consumer research in this report is based on a survey conducted with a UK nationally representative poll of consumers. Over 2,000 consumers were interviewed during early May 2014 and questioned about their views on summer holidays and their likely shopping behaviour for this event. They were also asked about the World Cup and their intentions for this.

•  All numbers relating to expenditure and forecast expenditure of gadgets are taken from Conlumino’s own retail model. This is updated on an ongoing basis with inputs from official sources (such as the BRC and ONS), retailers’ results and trading updates, other secondary sources and industry surveys, Conlumino’s ongoing programme of research into consumer spending and habits, and underlying economic drivers and trends. Conlumino analysts both model and interpret this information to provide guidance on the likely future direction of retail expenditure at an overall, sector and category level.

•  Unless otherwise stated, all sources of information are derived from Conlumino’s own research and should be referenced to Webloyalty/Conlumino.

Conlumino

020 7936 6654 [email protected]

7 Carmelite Street, London EC4Y 0BS

Webloyalty

020 7291 8720 [email protected]

19-21 Great Portland Street, London

WEBLOYALTY & CONLUMINO LOOKING AHEAD… SUMMER, … · Webloyalty is a leading reward programme...

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