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The Shotfarm Product Information Report

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The Shotfarm Product Information Report

  1. 1. 2015/2016 The Shotfarm Product Information Report
  2. 2. Executive Summary Quality and completeness of product presentation in online retail has a quantifiable and direct impact on product sales. But often, data is inaccurate, inconsistent, incomplete, and even outdated, leading to increased returns, serious brand erosion, and lost sales—all of which have significant financial ramifications for both retailers and manufacturers. To better gauge the impact of product information on online retail sales, Shotfarm surveyed more than 1,500 consumers about their online shopping habits and the importance they place on content in making purchase decisions. The 2015/2016 Shotfarm Product Information Report shows that consumers place a significant value on high-quality product content, regardless of product type, price, or purchasing channel. Retail trading partners can maximize sales, minimize returns, optimize speed to market, and enhance their brands by improving the quality of product information they provide to digital shoppers. To achieve this goal, retailers and manufacturers will need to more efficiently develop, manage, and share this data—a decades-long problem that has proved difficult to solve.
  3. 3. 3 Key Findings Product information quality is an important factor in the success of online sales. Seventy-eight percent of consumers say the quality of product content is very important when making purchase decisions. Product information impacts brand equity and future purchase decisions. Eighty-seven percent of consumers say they would be unlikely to consider a retailer again if they provided incorrect information for a purchased product. Product information can play a significant role in reducing shopping cart abandonment. One in four consumers say they have abandoned a purchase because of poor product information. Consumer electronics offer the highest quality, most complete product content. Fifty-seven percent of respondents rank consumer electronics as the industry offering the best and most complete product information. 1 2 3 4
  4. 4. 4 Source: The 2015/2016 Shotfarm Product Information Report Importance of Product Information to Online Sales Product information plays a key role in online sales, according to the 2015/2016 Shotfarm Product Information Report. Ninety-five percent of those surveyed say product information is important when making a purchase decision, with nearly four in five indicating that it is very important. 78% Very important 17% Important 3% Slightly important Not at all important 2% The Importance of Product Information in Online Purchasing Decisions
  5. 5. 5 Source: Shotfarm In particular, product descriptions and images are critical, with the vast majority of consumers saying they are important (30 percent) or very important (63 percent). While product reviews are also important in the sales process, only 39 percent of consumers say they are very important, highlighting the value of information that comes directly from the seller or manufacturer. Product Information Quality and Completeness Impacts Product Sales Overall the type of product information that matters most to consumers varies, as does the path shoppers take in finding and consuming product content. In the end, products are purchased from retailers and brands whose product information makes shoppers feel confident in doing so. Item number and price -80% Base +35% Conversion Rate Content Completeness and Quality + + + + + +Product description Product specs 360° image VideoLow res image High res image
  6. 6. 6 The Challenge for Manufacturers While manufacturers may want to provide the highest quality and most complete content possible, they still face significant challenges in doing so. Historically, separate departments have dealt with product data, often resulting in discrepancies between in-store and online inventories. In addition, many of these organizations did not have the right tools and processes in place to ensure that data integrity and consistency were maintained. Fast forward to today. Manufacturing organizations of all sizes and across industries have worked hard to weed out inefficiencies, eliminate departmental siloes, and streamline processes. Yet within the realm of product content development, management, and exchange, they remain saddled with meeting ever-increasing and significantly varied retail partner requirements. Because of this, product content often remains inconsistent and incomplete, negatively impacting every facet of brands’ online sales efforts, the survey demonstrates.
  7. 7. 7 Product Information Impacts Return Levels Forty-two percent of consumers have returned an online purchase in the past year specifically because of poor product content. The clothing and apparel category sees the most returns as one in four consumers has returned an item due to inaccurate product information. The costs associated with each return can be significant. In addition to the hard costs of the actual returns, companies are also forced to overcome lower conversion rates and sales numbers. The returns can also hamper productivity because resources are diverted from fulfilling new, revenue-producing orders to processing revenue-killing returns for unhappy customers. 59% N/A 4% Office supplies 3% Pet supplies 3% Other 4% Consumer packaged goods 3% Sporting goods 9% Consumer electronics 4% Tools and home improvement 7% Household goods 25% Clothing and apparel 3% Luxury goods 2% Food/groceries “I have returned something in the past year I purchased online in this category because the product information did not match the product I received.” Source: The 2015/2016 Shotfarm Product Information Report
  8. 8. 8 Product Information Impacts Brand Trust The most significant impact to manufacturers and retailers of poor product content is arguably the resulting brand erosion. According to the survey, nothing directly impacts the experience of the individual customer like a product that doesn’t meet expectations. A single negative experience may not only result in a return, but it can cause long-term damage to the relationship between the brand and the customer. Eighty-seven percent of consumers say they would be unlikely or very unlikely to make a repeat purchase with a retailer that provided inaccurate product information, leaving just 13 percent who would likely shop with that same company again. Trust and loyalty are not built overnight, so this damage can take a long time to repair—if it can be repaired at all. Whether the customer’s negative perception of a retailer or brand is temporary or permanent, it is always costly. In many instances, say consumers, a less than optimal retail experience can be traced to poor quality, inaccurate, or incomplete product information. Very unlikely 53% 34% Slightly unlikely 10% Likely 4% Very likely “I would shop with a brand again after an experience with inaccurate product information.” Source: The 2015/2016 Shotfarm Product Information Report
  9. 9. 9 Product Information Impacts Online Shopping Cart Abandonment Ninety percent of online shoppers report leaving a purchase behind at one time or another. And while consumers list cost and delivery time as the top two reasons for not completing a purchase, poor product descriptions and low-quality images follow close behind, with more than 25 percent citing them as reasons for abandoning carts. In addition, a lack of quality content has a greater impact on whether a sale is made than a lack of product reviews. 61% Cost 26% Poor-quality images/too few images 30% Poor product description 25% Lack of overall trust of the seller (brand or retailer) 15% Lack of overall trust of the seller (third- party website) 33% Delivery time 25% Lack of reviews Reasons Consumers Have Abandoned Shopping Carts Source: The 2015/2016 Shotfarm Product Information Report
  10. 10. 10 Product Information Expectations Vary Consumers have different content expectations depending on the type of product being considered. The following chart compares each industry for information quality, customer expectations, current sales, and percentage of returns. Percentage of consumers who have shopped in this category online Product Category 57% 7 2 4 7%Household goods 18% 4 6 3 3%Luxury goods 22% 8 7 8 4%Consumer packaged goods 28% 3 5 5 4%Tools & home improvement 29% 6 10 7 3%Pet supplies 73% 10 3 1 26%Clothing & apparel 23% 9 4 10 2%Food/groceries 27% 2 9 6 3%Sporting goods 32% 5 8 9 4%Office supplies 49% 1 1 2 9%Consumer electronics Product content quality rank Importance of product content quality rank Importance of images with multiple angles rank Percentage of returns in this category due to poor content Source: The 2015/2016 Shotfarm Product Information Report The Importance of Product Content by Industry
  11. 11. 11 In no industry is the desire for quality product information greater than in consumer electronics. Not only did respondents rank consumer electronics as the category where product information is most important, but they also ranked the quality of product content as the highest of any industry. Clothing and apparel, on the other hand, ranked last in the quality of information provided, which is especially noteworthy since these products are the items consumers say they purchase online most often. Overall, the survey results indicate that manufacturers that improve the quality and breadth of their product assets, regardless of industry, are likely to realize significant digital business gains. 76% 24% Yes No 87% 13% Yes No Percentage of Consumers Who Have Noticed Inconsistent Product Content for the Same Product Across Channels (i.e. brand retailer or third-party websites such as Percentage of Consumers’ Purchasing Decisions Impacted by Inaccurate Product Information Across Channels Source: The 2015/2016 Shotfarm Product Information Report
  12. 12. 12 In addition to differences in content from industry to industry, consumers also see disparities in the quality, accuracy, and completeness of product information across retail channels. More than three in four consumers say they have noticed inconsistent information for the same product across channels (e.g., brand retailers such as Target versus third-party sellers such as Amazon). Eighty-seven percent of these consumers indicate that such discrepancies, at a minimum, delayed their purchase. In some cases, it kept them from buying a product altogether. 47% Manufacturer’s website 51% Manufacturer’s website 7.07% In-store sales person 9% In-store product box 9% Retailer’s website 17% Third-party retailer’s website 8% In-store sales person 11% Retailer’s website 10% In-store product box 17% Third-party retailer’s website 5% Other 3% Marketing, ads and commercials 3% Marketing, ads and commercials 5% Other Channels Offering the Most Complete Product Content, According to Consumers Channels Offering the Most Accurate Product Content, According to Consumers Source: The 2015/2016 Shotfarm Product Information Report
  13. 13. 13 A Significant Opportunity for Grocers With gross sales reaching $600 billion, the grocery industry is by far the largest retail sector in the country. But only one in four consumers (23 percent) currently shops for groceries online, and the industry ranks next to last for quality of digital content. Additionally, nearly 40 percent of consumers say they are uncomfortable shopping online for groceries. 19% Comfortable—I have done so in the past 21% Would think about it 14% Comfortable—but have not yet done so 37% Not comfortable 10% Comfortable only with consumer packaged goods/products, not fresh food How Comfortable are Consumers with Online Grocery Shopping? Source: The 2015/2016 Shotfarm Product Information Report
  14. 14. 14 Companies such as Amazon and Google seek to dominate this retail channel and are working to address well-documented hurdles that have historically kept grocery shoppers overwhelmingly inside traditional stores. These challenges run the gamut, from significant logistical and supply chain issues, to product pricing and delivery fee structures, to concerns about the delivery of perishable items, to creating value for the customer who lives just up the street from a grocery store. What has largely been missing from this digital distribution conversation, however, is another piece of the supply chain puzzle. In addition to moving physical products from the manufacturer into the hands of the consumer, retailers are challenged with getting the manufacturers’ product information in front of the consumer so an online sale can be made. According to survey respondents, product data attributes play an important role in fostering the kind of positive shopping experience that will help grocers secure the revenue and margin levels necessary to make this channel a winning proposition. When asked specifically why they do not shop for groceries online, 46 percent cite product content availability or a lack of trust in the content provided. First impressions mean a great deal, and nowhere is this more true than in the manner in which grocery products are presented and viewed, especially in the online world of food commerce that consumers have largely been reluctant to embrace to date. 20% Price difference 34% Delivery 17% Lack of product information 29% Lack of trust for product information 27% Other Consumer Barriers to Online Grocery Shopping Source: The 2015/2016 Shotfarm Product Information Report
  15. 15. 15 Consist of a cloud-based content network that allows any number of trade partners to begin requesting, sending, and receiving original product information and assets from a simple, low-cost, and centralized platform. Have the ability for all product information to come directly from the manufacturer so that trading partners always have access to data that is accurate, complete, and consistent. Provide a high adoption and participation rate among all trading partners—retailers and manufacturers, alike—that far exceeds the success rates of in-house solutions. Provide high data collection speeds that reduce time to market and opportunity costs. Have the ability for manufacturers, regardless of industry, to automatically deliver a perfectly formatted product feed directly to retailers. For example, the solution would support a CPG company that needs Universal Product Code (UPC) barcodes, the Global Trade Item Numbers (GTINs) and nutritional information a grocer requires, as well as item sizes, colors, and materials used in manufacturing that an apparel retailer desires. Offer a significant reduction in inefficiencies in the collection, management, and distribution of product information. Summary The quality of product data impacts all facets of the online retail business. In the eyes of the digital consumer, a product is only as good as the information associated with it. If that information is incomplete in any way, purchases are delayed, products are returned, and brand equity is lost. All are very costly propositions. Manufacturers have made great strides in streamlining processes that had historically hindered their content development and distribution efforts. Still, retailers’ desire for more and more product assets can offset gains made with these improvements. To meet the ever-growing requirements of their trading partners, to offer higher-quality content across channels, to provide a better online shopping experience to consumers, and to realize more digital sales, manufacturers need to address the shortcomings inherent in their current processes. One way is to employ a content management and distribution solution that moves product information from Point A to Point B in the simplest, most efficient, and most affordable way possible. Such a solution would: 1 5 2 63 4
  16. 16. 16 Methodology In August 2015, Shotfarm surveyed 1,542 consumers about their online shopping habits and product information preferences. The survey, which was conducted online, has a 2.5 percent margin of error at a 95 percent confidence level. The audience breakdown is as follows: Gender Online Shopping Frequency Age 47% 53% Male Female 18% 36–45 6% 18–21 28% 46–60 25% 22–35 24% 61+ 31% Once or more per month 9% More than twice per week 15% Once or twice per week 12% 1–3 times per year 13% 4–6 times per year 17% 7–12 times per year
  17. 17. About Shotfarm Shotfarm’s Product Content Network is the first end-to-end solution for the management and exchange of product information that meets the demands of the entire ecommerce industry. Free and simple core functionality, combined with a suite of affordable and powerful upgrade options, makes Shotfarm instantly useful and infinitely scalable. One system, any format, thousands of retailers and manufacturers. Shotfarm just makes sense.