How Britain Shops: Music & Video 2011

Introduction

How Britain Shops Music & Video provides a detailed overview of the shopping habits of consumers. It examines, who shops for music & video, where they shop, whether they are satisfied with their current store and what stores should do to satisfy customers more.

Features and benefits

• Thorough analysis of how customers shop for music & video. Profiles of 6 music & video retailers, including: HMV, Amazon, iTunes and Tesco.
• Visitor and main user share data, conversion rates, customer loyalty rates and reasons for loyalty/disloyalty.
• Data is segmented regionally and by demographic and socio-economic group.
• Historic data is provided so trends can be analysed over a five year period.

Highlights

After a period of growth caused by the introduction of downloads which did not carry digital rights management (DRM), and greater price competition, visitor share has fallen sharply for the second consecutive year, this time by 4.6 percentage points to 40.2%. Factors affecting this fall include piracy, streaming websites and customers cutting back.

While overall loyalty in music & video has slipped by 0.2 percentage points to 89.4%, it has overtaken personal care as the sector with the highest level of loyalty in the 2011 survey. This is testament to the retailers that have created an offer that has adapting customers migrating to digital product with their clear and easy-to-use websites.

The launch of the iPad tablet computer and the latest version of the iPhone in May and June 2010 are main factors behind improvements in visitor and main user shares in the latest survey. With the facility to download content directly on to their devices, many shoppers will have found iTunes the most convenient channel.

Your key questions answered

• How Britain Shops is one of the most comprehensive studies of its kind drawing on a nationwide survey of 6,000 shoppers.
• Use this report to understand what drives the loyalty of your customers and find out where else they are shopping - and why.
• Channel investment for maximum return by knowing which aspects of your retail proposition most need improving in the opinion of your customers.

Executive Summary
Verdict view
Key findings
Visitor share now at lowest level since 2001;
Shoppers aged between 16 and 24 make up the greatest share of music & video shoppers;
Penetration down across all demographic segments;
Not even half of any region's shoppers now buy music & video;
Music & video market consolidates rapidly;
Conversion improves for second consecutive year;
In spite of latest decline, loyalty remains high;
Pureplay retailers take Top Three spots for loyalty;
Range, price and convenience remain key drivers of loyalty and growth;
Amazon closes gap to HMV in main user share.
Main conclusions
Visitor share at lowest level since 2001
Shoppers aged between 16 and 24 make up the greatest share of music & video shoppers
Penetration down across all demographic segments
Not even half of any region's shoppers now buy music & video
Music & video market consolidates rapidly
Conversion improves for second year
In spite of latest decline, loyalty in the music & video sector remains high
Pureplay retailers take Top Two spots for loyalty
Range, price and convenience remain key drivers of loyalty and growth
Retailer highlights
Relaunch of standalone download offer boosts HMV
Amazon's strong performance continues
Asda suffers from lack of download offer
Heightened austerity hits Tesco
iTunes launch of new devices lifts share
Play.com's performance impacted by greater levels of competition

SECTOR SUMMARY
Share of shoppers
Falls to lowest level since 2001
Penetration of music & video shoppers
Market continues to be weighted towards a younger, more affluent customer
Retailer usage
While HMV continues to lead the way, Amazon gains fast in a rapidly consolidating market
Each region's breakdown of main user share between leading retailers
Conversion rates
Improve for second straight year
Shopping around
Shopping around remains higher among online specialists
Loyalty
Remains high as four of the Top 10 overall leaders come from music & video
Drivers of loyalty/ disloyalty
Range and price stay the main drivers for customer loyalty

AMAZON
Benefits from trend to digital downloads
Increases both visitor and main user shares
Despite declining on last year, Amazon has the highest level of loyalty among profiled retailers
Range has overtaken convenience as the second strongest driver of growth
Visitors
Continues to attract more customers
Main users
Increases main user share across all demographic segments
Conversion rates
Conversion reaches a new high
Loyalty
Handed lead in sector in spite of falling year-on-year
Competitors
Level of shopping around declines
ASDA
Lack of download offer hampers performance
Main user share drops – despite increase in footfall …
due to fall in conversion – the heaviest among profiled retailers
Loyalty takes heaviest knock, too
Greater proportion of Asda's shoppers want to buy music & video from Tesco
Visitors
Third consecutive rise in footfall – but limited to elderly and less affluent
Main users
Move into decline
Conversion rates
Sharpest decline among profiled retailers
Loyalty
Sharpest decline here, too
Competitors
Shopping around at lowest level in 10 years

HMV/ FOPP
New digital download site improves performance
Main user share increases despite fall in visitors …
thanks to greatest uplift in conversion among profiled retailers
Loyalty flat year-on-year but range, ambience and facilities show uplifts
Biggest potential gains
Visitors
Visitor share falls after three years of growth
Main users
Reach highest level in five years
Conversion rates
New standalone download service drives significant jump in conversion
Loyalty
Remains above 90.0% for the second consecutive year
Competitors
Shopping around stays low inline with high loyalty
ITUNES
Pace of share gain slows …
but visitor and main user shares continue to improve
Conversion rate declines
Loyalty flat on previous year
HMV continues to be the preferred choice for disloyal iTunes customers
Visitors
Launch of iPad and upgrade of iPhone drive growth
Main users
More customers spend the most at iTunes
Conversion rates
Conversion falters marginally
Loyalty
Remains flat on last year despite range falling sharply
Competitors
Less shopping around better for iTunes

PLAY.COM
Feels competitive strain
Visitor and main user shares down but Play.com gains older customers
Conversion down for fourth straight year
Lower convenience score drags down loyalty despite appreciation of its prices
Amazon a greater threat
Visitors
Visitor share declines for the first time
Main users
Loses ground among younger shoppers
Conversion rates
Continue to decline in more challenging market
Loyalty
Off the top but remains high
Competitors
Play.com's main users increasingly visit its competitors

TESCO
Despite download offer Tesco still struggles with tougher competition
Tesco's visitor and main user shares both down
Conversion rates remain low
Convenience boosts loyalty score …
but range scores even more poorly
Visitors
Falls back after strong uplift
Main users
Main user share eases off as less affluent shoppers prioritise spending elsewhere
Conversion rates
Struggles to boost conversion
Loyalty
Convenience drives loyalty improvement
Competitors
Shopping around continues to fall as customers one-stop shop in downturn

APPENDIX
Methodology
Selection of parliamentary constituencies
Selection of enumeration districts
Selection of respondents
Post survey weighting
Further reading
Ask the analyst
Global Retail FreeView
Verdict Research consulting
Disclaimer