UK direct-to-consumer report 2022

How much do people spend online currently?

To understand what that reduction might look like in monetary terms, let’s look at how much people are spending online at the moment. The single largest percentage of people (28.2%) spend between £26-50 per month, while 21.1% spend less than this. The remaining 49% spend in excess of £50 buying goods online each month (although only 17.7% spend more than £100).

Notably, it’s those highest spenders who are least likely to say they’ll be cutting back on spending in the next six months; a net 6.2% of people who spend £100+ say they’ll increase what they spend. In comparison, among those who spend between £11-25 per month, a net 21.1% will reduce spending in the next six months. We can conclude that those retailers selling smaller ticket items will take the biggest hit.

Likewise, those selling fast moving consumer goods may also suffer, if consumers start to shop online less frequently. Currently, Brits are shopping with high regularity; 46.4% buy items online at least once a week, while a further 21.4% shop fortnightly. People aged 35-44 are the most frequent online shoppers (22.8% shop more than once a week). But if consumers have less to spend online, it’s likely that they won’t shop with the same high frequency.

Which categories are most at risk?

Now the dust is settling on the pandemic, we wanted to know which categories people are most likely to be shopping for online – and which they prefer to buy in-store. There are several categories that Brits show a strong commitment to buying online; these are gifts (68.5%), technology (68.2%), clothing (61.4%), and health and fitness products (57.7%). 

This preference should go some way to helping these categories stay strong as people cut back on spending. On the other hand, there are things they clearly prefer to buy in-store, and this puts these categories at greater risk. Among these are groceries (67.7%) and pet products (47.2% versus 33.3% who prefer to buy online). 

Then there are the categories where people are equally likely to shop in both channels: beauty and grooming, baby and kids, furniture and homewares. Retailers in these “up for grabs” categories will have to work harder to capture customers and should focus on communicating how shopping direct can be cheaper than at brick and mortar stores. As we’re about to find out, value-related messaging will be all-important in the second half of 2022…

What else do shoppers want?

Behind price and quality, Brits ranked ‘choice’ as the third-most important factor when shopping D2C. This might seem like bad news for smaller brands, but you can play to this desire without growing your range. By letting shoppers know that your entire product range is available on your website – as opposed to a limited selection that might be offered by third party retailers – you can give consumers a bigger reason to shop with you directly.  

In fact, you might be surprised to learn that the main perceived benefit of shopping directly with a brand is being able to access their full range (44.1%). People aged 55-64 especially like being able to access a brand’s full range when they visit a D2C website (51.9%).

Discovery of other products is also a big plus; 30.8% of people say they like D2C shopping because they end up discovering other products they might like. People aged 18-24 over-index for liking D2C shopping for this very reason (38.9%). But younger consumers also believe D2C shopping offers a better customer experience (29.2%) and say it lets them feel closer to the brand (27.8%) – information that brands should absolutely capitalise on when devising marketing strategy for this age group.

What factors should take a back seat?

In leaner times, it can also be helpful to know what’s less important to consumers so you can focus your resources where it counts. When we asked people to rank the factors that influence their decision to buy from a brand’s website, they were least likely to say ‘ease/cost of returns’, ranking it 8/8. Returns policy is the type of thing that becomes a positive or negative factor after purchase, so it’s still important for brand reputation, but it doesn’t need to be a lead message for conversion.

Brand image and brand values are also deemed to be less important when weighed up against more practical considerations like price, quality and delivery. Likewise, only 15.6% of people say they like D2C shopping because it lets them support smaller or independent brands. And we know from other recent research that sustainability has also become less of a priority; 60% of Brits say they’re not willing to pay any extra for eco-friendly products right now. 

With this in mind, it’s clear that brands should put the consumer at the centre of their marketing campaigns. How can you help them to save money? How can you help them to care for their nearest and dearest? What extra value can you deliver? These factors become especially important when people have less disposable income.

Where have the D2C shoppers gone?

Search engines might be becoming increasingly dominant but that’s not the whole story. Social media has doubled in popularity as a starting point for online shopping journeys, rising from 3% to 6.1%. It’s still a small number, but it’s bigger when we hone in on the young demographic; 13.5% of those aged 18-25 habitually use social media as a starting point. This suggests it’s a growing trend so it makes sense for brands to enable shopping functions on their social media channels.

On the other hand, what we can say with confidence is that brands don’t need to worry about investing in voice search as a priority. Only 2% of people typically start a shopping journey using a voice assistant. This number has been static since 2019, which indicates all the hype around smart speakers heralding a new era in shopping, was just that. 

Smartphone shopping, however, continues to strengthen; 59.5% of Brits say they most frequently use their mobile to research or make purchases online, which is up from 51% in 2019. All other devices are trending downwards: laptops are down from 24% to 20.2%, tablets are down from 13% to 10.9%, desktop computers are down from 11% to 8%. Optimising your website for mobile and making the shopping experience as frictionless as possible is therefore a must.

What keeps people coming back to D2C?

While starting a shopping mission on a brand’s website has declined a little, actually buying from D2C retailers is more popular than ever. Nearly 88% of Brits have shopped D2C in the last 6 months, and they’ve made an average of 3.9 purchases. People are actually more likely to say they’ve shopped D2C 10 or more times than they are to say they’ve done it only once (11.4% versus 9.3%), showing they clearly enjoy the D2C experience.

And yet the memory of a good shopping experience with a brand may not always be enough to drive a repeat purchase. While 20.8% of respondents said the memory of a previous experience drove them to make their last D2C purchase, a larger 27.1% said it was driven by an online search.

Perhaps this means D2C brands are not doing enough to establish loyalty? But, on the plus side, if people head to a search engine every time they want to make a purchase, it also means there are more prospective customers for new brands. The important thing is for D2C brands to be visible – especially as word-of-mouth appears to lack its usual power in this sector (just 7.7% of people said their last purchase followed a recommendation from a friend). 

The effectiveness of other tactics also pale in comparison to search; 10.4% were driven to make a purchase by a social media post, 8.5% by a marketing email, 7.6% by an advert, and 5.3% by seeing the brand featured in the media. There were a few differences in drivers between the demographics that are worth pointing out. Shopping trips by those aged 18-24 were especially likely to be prompted by social media posts (17.5%) and media features (9.8%). Meanwhile, recommendations were most important for those aged 35-44 (11.2%).

How long will shoppers wait for delivery?

This year’s survey highlights a surprising trend; Brits are now prepared to wait longer for their goods than they were in 2019. The percentage of people who expect to wait no longer than a couple of days for delivery has decreased from 22% to 14.1%. Meanwhile, the number of people prepared to wait in excess of five days has grown from 21% in 2019 to 28.2% today. 

Why might this be? Perhaps the pandemic has taught us to have more patience? We all understand the pressure that COVID put on supply chains and delivery services. And having faced empty shelves and three-week grocery delivery slot wait times, maybe we’ve revised our expectations? Whatever the reason, brands shouldn’t be complacent about delivery; most people still expect their package in 3-5 days (57.7%).

Delivery time expectations do vary between demographics though; those aged 18-24 will wait the longest (36.2% will wait in excess of five days), while those aged 45-54 are the most likely to say they won’t wait longer than two days (18.1%).

What are shoppers prepared to pay for delivery?

There’s no denying that free delivery is a major plus for consumers, but is it a deal-breaker if D2C brands don’t offer it? The answer is no; only 14.6% of people would be deterred from making a purchase if delivery was not free. 

But the expectation for free shipping does differ depending on your age, and it‘s not necessarily in the way you would expect. It’s people aged 45-54 who are the most likely to say they’re deterred if delivery is not free (21.5%) – remember they wanted the fastest delivery too? Meanwhile those aged 18-24 – often thought to be the most demanding – are the least likely to care about free delivery (9%).

The good news is that most people are prepared to pay for delivery of their goods – albeit not huge amounts. The average price point where Brits will start to be deterred from ordering is £3.44. A decisive 76.5% of people would not pay over a fiver for delivery. However, very few people expect to pay less than one pound (2.7%), meaning that levying a reasonable charge for delivery shouldn’t affect your sales.