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Researching Purchases Online - UK - April 2011

Consumers use the internet for information to help their purchasing decisions on products and services ranging from films and home appliances to holidays, utilities and insurance. Internet users read consumer and professional reviews online to get a better understanding of technical specifications and performance of a product or service they are about to purchase. Prior to purchase, some will use online services such as price comparison, voucher, and cashback websites to get the best price.

  • Consumers generally trust consumer reviews, with 53% of internet users stating they trust reviews by consumers more than those by magazines or TV.
  • Female consumers are less likely to read professional reviews even though they are just as likely to conduct research online, if not more so, than their male counterparts. This presents an opportunity for professional reviews to target more female readers.
  • Only one in five consumers have submitted an online review, compared with three in five who have read reviews. Online services, retailers, and brands can encourage higher review participation rate by incentivising consumers to write, which could help provide a more balanced picture of the product or service.
  • Amongst the different price discovery methods available online, consumers are more likely to have used price comparison since this technology has been established for the longest time.
  • Mobile technology for price comparison and product information is nascent but is expected to grow. Mintel’s research finds 17% of consumers who don’t know how to use mobile price comparison curious about the service, with the numbers rising to one in four for the younger consumers aged 16-24.
  • Online shopping will become more social, ranging from group buying amongst strangers to recommendations within one's social network. Commerce through Facebook is a notable sales channel for retailers since close to 50% of the adult population having an account with this social networking site.

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Table of contents

  1. Introduction

      • Definitions
        • Abbreviations
        • Executive Summary

            • Online research for products and services
              • Reviews for products and services
                • Figure 1: Online reviews read, by products/services, February 2011
              • Price discovery
                • Figure 2: Price discovery methods used, by products/services, February 2011
              • Consumer attitudes towards online research
                • Figure 3: Attitudes towards online research tools, February 2011
              • Consumers rely on consumer reviews despite information overload
                • Online reviews dominated by one-way discourse by select few
                  • Changing price discovery behaviours
                    • Figure 4: Attitudes towards price research and purchasing online, February 2011
                  • Ignorance isn’t always blissful
                    • Mobile technology for saving money nascent but growing
                      • What we think
                      • Issues in the Market

                          • To what extent do consumers put their trust in other consumers to inform their purchasing decisions?
                            • Do consumers want to simply read reviews or would they rather engage in active discussion?
                              • What sort of demand is there to compare prices and get discounts on the go via mobile phone? How is the mobile market catering to this?
                                • Are comparison websites a ‘one-stop shop’ for consumers or part of a wider research and purchasing process?
                                  • Has the economic downturn changed the way consumers research and shop for products or services?
                                  • Future Opportunities

                                      • Trend: Affection
                                        • Trend: Life Hacking
                                        • Internal Market Environment

                                          • Key points
                                            • Who has broadband internet?
                                              • Figure 5: Broadband penetration, 2005-10
                                              • Figure 6: Hours spent using the internet in the last month, 2006-10
                                            • Who doesn’t have broadband internet?
                                              • Figure 7: Broadband penetration, by age, 2005-10
                                              • Figure 8: Broadband penetration, by socio-economic group, 2005-10
                                            • What do consumers (want to) do online?
                                              • Figure 9: Frequency of activities when using the internet, January 2010
                                              • Figure 10: Non-internet users’ consideration of the internet for various activities, January 2010
                                            • Rise of internet-enabled smartphones
                                              • Figure 11: Usage of mobile phone to browse the internet, by gender and age, December 2010
                                          • Broader Market Environment

                                            • Key points
                                              • GDP falls, as does consumer confidence
                                                • Figure 12: GDP quarterly percentage change, Q1 2004-Q4 2010
                                                • Figure 13: Gfk NOP Consumer Confidence Index, January 1988-February 2011
                                              • Faster internet – a broken promise?
                                                • Figure 14: Average download speed compared with advertised broadband speed by provider, November/December 2010
                                              • Employment trends
                                                • Figure 15: Employment and unemployment, by gender, 2005-15
                                              • Age structure
                                                • Figure 16: Trends in the age structure of the UK population, 2005-15
                                              • More aspirational consumers
                                                • Figure 17: Forecast adult population trends, by socio-economic group, 2005-15
                                            • Strengths and Weaknesses in the Market

                                                • Strengths
                                                  • Information at the fingertips
                                                    • Many reviews on many things
                                                      • Free analyses from real users
                                                        • Easy bargain hunting
                                                          • Crossover to offline uses
                                                            • Weaknesses
                                                              • Apple to orange comparisons
                                                                • Decentralised information
                                                                  • Comparisons ≠ sales
                                                                    • Substandard reviews
                                                                      • Review apathy
                                                                      • Who’s Innovating?

                                                                        • Key points
                                                                          • Incentives for reviews
                                                                            • Research on the go
                                                                              • In-your-face savings
                                                                                • Price comparisons for niche products
                                                                                  • In-store cashback, courtesy of the web
                                                                                    • Social buying – a new form of discount
                                                                                      • Social e-commerce space heating up
                                                                                        • Social shopping – arrival of F-Commerce?
                                                                                        • Market Overview

                                                                                          • Key points
                                                                                            • Reviews, reviews everywhere
                                                                                              • Saving money online
                                                                                                • Figure 18: Visitors to cashback websites as a percentage of all internet visits, January 2009-January 2011
                                                                                                • Figure 19: Visitors to voucher websites as a percentage of all internet visits, January 2009-January 2011
                                                                                                • Figure 20: Visitors to price comparison websites as a percentage of all internet visits, January 2009-January 2011
                                                                                                • Figure 21: Growth of unique visitors to cashback, voucher and comparison shopping websites, January 2009- January 2011
                                                                                              • Buying online
                                                                                              • Companies and Products

                                                                                                  • Review Centre
                                                                                                      • Figure 22: Demographics of visitors to ReviewCentre.com, February 2011
                                                                                                    • Moneysavingexpert
                                                                                                        • Figure 23: Demographics of visitors to MoneySavingExpert.com, February 2011
                                                                                                      • Groupon
                                                                                                          • Figure 24: Demographics of visitors to Groupon.co.uk, February 2011
                                                                                                        • Shopzilla
                                                                                                            • Figure 25: Demographics of visitors to Shopzilla.co.uk, February 2011
                                                                                                          • Just-Eat
                                                                                                            • Figure 26: Demographics of visitors to Just-Eat.co.uk, February 2011
                                                                                                          • Quidco
                                                                                                              • Figure 27: Demographics of visitors to Quidco.com, February 2011
                                                                                                            • AVForums
                                                                                                              • Figure 28: Demographics of visitors to AVForums.com, February 2011
                                                                                                          • Online Reviews

                                                                                                            • Key points
                                                                                                                • Figure 29: Products/services researched online, February 2011
                                                                                                                • Figure 30: Attitudes towards online research tools, February 2011
                                                                                                              • Who reads reviews?
                                                                                                                • General readership
                                                                                                                  • Figure 31: Types of consumer and professional reviews consulted, February 2011
                                                                                                                • Consumer vs. professional reviews
                                                                                                                  • Information overload, but consumers trust other consumers
                                                                                                                    • Gender differences
                                                                                                                      • Figure 32: Types of consumer and professional reviews consulted, by gender, February 2011
                                                                                                                    • Who Writes Reviews?
                                                                                                                      • Reasons for lack of reviews
                                                                                                                        • Figure 33: Reviews submitted vs reviews read, February 2011
                                                                                                                      • Getting paid for reviews
                                                                                                                          • Figure 34: Percentage of consumers who buy a product/service online having submitted reviews vs all internet users, February 2011
                                                                                                                        • Most probable reviewers
                                                                                                                          • Figure 35: Types of reviews submitted, by gender and age, February 2011
                                                                                                                        • Product discussions
                                                                                                                          • Figure 36: Types of products/services discussed on discussion forums online, February 2011
                                                                                                                          • Figure 37: Trends in agreement with selected lifestyle statements, 2006-10
                                                                                                                      • Price Discovery

                                                                                                                        • Key points
                                                                                                                            • Figure 38: Price research and purchasing online, February 2011
                                                                                                                            • Figure 39: Research/price comparison habits, February 2011
                                                                                                                            • Figure 40: Attitudes towards price research and purchasing online, February 2011
                                                                                                                          • Vouchers, cashback, and price comparisons
                                                                                                                            • How consumers save money online
                                                                                                                                • Figure 41: Money saving services used online, February 2011
                                                                                                                              • Bad reputation for price comparison websites
                                                                                                                                • Vouchers for cheap food
                                                                                                                                  • Figure 42: Voucher or cashback used for pubs, restaurants or takeaways, by age and gender, February 2011
                                                                                                                                  • Figure 43: Agreement with “I always use money off coupons and vouchers”, by age and gender, 2010
                                                                                                                                • Cashback pitfalls and triumphs
                                                                                                                                  • The ritual of saving money
                                                                                                                                    • Use of Mobile Technology for Money Saving
                                                                                                                                      • Figure 44: Agreement with “I’d like to use mobile apps to compare prices in shops but don’t know how” by age, February 2011
                                                                                                                                      • Figure 45: Agreement with “I research prices more thoroughly since the recession/economic downturn began”, by age, February 2011
                                                                                                                                  • Research Behaviours of Consumers

                                                                                                                                    • Key points
                                                                                                                                      • Target groups
                                                                                                                                        • Figure 46: Target groups for online purchase research, February 2011
                                                                                                                                      • Casual shoppers
                                                                                                                                        • Profile
                                                                                                                                          • Understanding the casual shoppers
                                                                                                                                            • Chatterboxes
                                                                                                                                              • Profile
                                                                                                                                                • Understanding the Chatterboxes
                                                                                                                                                  • Bargain Hunters
                                                                                                                                                    • Profile
                                                                                                                                                      • Understanding the Bargain Hunters
                                                                                                                                                        • Apathetic Shoppers
                                                                                                                                                          • Profile
                                                                                                                                                            • Understanding the Apathetic Shoppers
                                                                                                                                                            • Appendix – Online Reviews

                                                                                                                                                                • Figure 47: Most popular types of consumer reviews read online, by demographics, February 2011
                                                                                                                                                                • Figure 48: Next most popular types of consumer reviews read online, by demographics, February 2011
                                                                                                                                                                • Figure 49: Most popular types of professional reviews read online, by demographics, February 2011
                                                                                                                                                                • Figure 50: Next most popular types of professional reviews read online by demographics, February 2011
                                                                                                                                                                • Figure 51: Types of products/services discussed online, by demographics, February 2011
                                                                                                                                                                • Figure 52: Types of consumer reviews read online, by most popular agreement with attitudes towards online research tools, February 2011
                                                                                                                                                                • Figure 53: Types of consumer reviews read online, by next most popular agreement with attitudes towards online research tools, February 2011
                                                                                                                                                                • Figure 54: Types of professional reviews read online, by most popular agreement with attitudes towards online research tools, February 2011
                                                                                                                                                                • Figure 55: Types of professional reviews read online, by next most popular agreement with attitudes towards online research tools, February 2011
                                                                                                                                                                • Figure 56: Attitudes towards online research tools, by most popular agreement with attitudes towards online research tools, February 2011
                                                                                                                                                                • Figure 57: Attitudes towards online research tools, by next most popular agreement with attitudes towards online research tools, February 2011
                                                                                                                                                                • Figure 58: Types of reviews submitted, by demographics, February 2011
                                                                                                                                                                • Figure 59: Types of reviews submitted, by most popular agreement with attitudes towards online research tools, February 2011
                                                                                                                                                                • Figure 60: Types of reviews submitted, by next most popular agreement with attitudes towards online research tools, February 2011
                                                                                                                                                                • Figure 61: Percentage to buy a product/service online, by methods of online research used, February 2011
                                                                                                                                                                • Figure 62: Most popular agreement with attitudes towards online research tools, by demographics, February 2011
                                                                                                                                                                • Figure 63: Next most popular agreement with attitudes towards online research tools, by demographics, February 2011
                                                                                                                                                            • Appendix – Price Discovery

                                                                                                                                                                • Figure 64: Most popular types of comparison sites used, by demographics, February 2011
                                                                                                                                                                • Figure 65: Next most popular types of comparison sites used, by demographics, February 2011
                                                                                                                                                                • Figure 66: Most popular types of products/services used voucher codes/cashback for, by demographics, February 2011
                                                                                                                                                                • Figure 67: Next most popular types of products/services used voucher codes/cashback for, by demographics, February 2011
                                                                                                                                                                • Figure 68: Research/price comparison habits, by demographics, February 2011
                                                                                                                                                                • Figure 69: Agreement with lifestyle statement “I always use ‘money off’ coupons and vouchers, by demographics, 2010
                                                                                                                                                                • Figure 70: Most popular agreement with attitudes towards price research and purchasing online, by demographics, February 2011
                                                                                                                                                                • Figure 71: Next most popular agreement with attitudes towards price research and purchasing online, by demographics, February 2011
                                                                                                                                                                • Figure 72: Research/price comparison habits, by most popular research/price comparison habits, February 2011
                                                                                                                                                                • Figure 73: Research/price comparison habits, by next most popular research/price comparison habits, February 2011
                                                                                                                                                                • Figure 74: Research/price comparison habits, by most popular agreement with attitudes towards online research tools, February 2011
                                                                                                                                                                • Figure 75: Research/price comparison habits, by next most popular agreement with attitudes towards online research tools, February 2011
                                                                                                                                                                • Figure 76: Research/price comparison habits, by most popular agreement with attitudes towards price research and purchasing online, February 2011
                                                                                                                                                                • Figure 77: Research/price comparison habits, by next most popular agreement with attitudes towards price research and purchasing online, February 2011
                                                                                                                                                            • Appendix – Research Behaviours of Consumers

                                                                                                                                                                • Figure 78: Types of consumer reviews read online, by target groups, February 2011
                                                                                                                                                                • Figure 79: Types of professional reviews read online, by target groups, February 2011
                                                                                                                                                                • Figure 80: Types of reviews submitted, by target groups, February 2011
                                                                                                                                                                • Figure 81: Types of products/services discussed online, by target groups, February 2011
                                                                                                                                                                • Figure 82: Types of comparison sites used, by target groups, February 2011
                                                                                                                                                                • Figure 83: Types of products/services used voucher codes/cashback for, by target groups, February 2011
                                                                                                                                                                • Figure 84: Types of products/services bought online, by target groups, February 2011
                                                                                                                                                                • Figure 85: Research/price comparison habits, by target groups, February 2011
                                                                                                                                                                • Figure 86: Agreement with attitudes towards online research tools, by target groups, February 2011
                                                                                                                                                                • Figure 87: Agreement with attitudes towards price research and purchasing online, by target groups, February 2011

                                                                                                                                                            Companies Covered

                                                                                                                                                            • Amazon.co.uk
                                                                                                                                                            • Apple, Inc
                                                                                                                                                            • ASOS (UK retail sales)
                                                                                                                                                            • BT Group plc
                                                                                                                                                            • Facebook, Inc.
                                                                                                                                                            • Financial Services Authority (The)
                                                                                                                                                            • Foursquare
                                                                                                                                                            • Google UK
                                                                                                                                                            • Groupon, Inc.
                                                                                                                                                            • Kelkoo S.A.
                                                                                                                                                            • Moneysavingexpert
                                                                                                                                                            • Ofcom
                                                                                                                                                            • PlusNet Technologies Limited
                                                                                                                                                            • Quidco
                                                                                                                                                            • Research in Motion Uk Ltd.
                                                                                                                                                            • Shopzilla Inc.
                                                                                                                                                            • TalkTalk Telecom Ltd.
                                                                                                                                                            • The Sunday Times
                                                                                                                                                            • Travelzoo (Europe) Ltd
                                                                                                                                                            • TripAdvisor LLC
                                                                                                                                                            • Twitter, Inc.
                                                                                                                                                            • Virgin Media Ltd
                                                                                                                                                            • Warner Bros. Entertainment Inc.
                                                                                                                                                            • Yahoo! UK & Ireland

                                                                                                                                                            Researching Purchases Online - UK - April 2011

                                                                                                                                                            £1,750.00 (Excl.Tax)