IT'S TIME FOR A CONSUMER-CENTRED VISION - GLOBAL CONSUMER INSIGHTS SURVEY 2019 - PWC
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It’s time for a consumer-centred vision Global Consumer Insights Survey 2019
PwC believes it’s time to emphasise the importance of customer experience.”
Executive summary
It’s now been a full decade since the economic
crisis ushered in what’s often called the “new
normal”, a supposed recalibration of what’s
possible in terms of global economic growth. But
the world’s consumers have displayed
unexpected resilience, driven by technological
advances that have unleashed a Golden Age of
consumption, offering a worldwide bazaar of
goods and services — open day and night — to
anyone with a mobile phone.
Not only are consumers the strongest link in the
global economic chain, but PwC’s 10th annual
Global Consumer Insights Survey (GCIS) —
which gathers the sentiments of more than
21,000 online consumers in 27 territories —
shows that technology has put them in a position
to demand a tailored, channel-agnostic, socially
conscious and social media-powered
experience.
Because consumers today are so discerning and
Martijn Peeters powerful, it’s our perspective that most
Partner, Retail & Consumer organisations need to invest far more in the
Leader customer experience. Retail evolution is driven
by the need to adapt to a changing environment
and respond to these challenges. Organizations
that fail to do so will lag behind on the path to
winning the customer.
This report is divided into two sections to help
start you on the path towards understanding
your customer:
• Key trends and changes of Russian
consumers behavior
• How to adapt business to changing consumer
preferences?
3
Profile
696
participants
By federal districts
St Petersburg
North-West
8%
6%
Central
Moscow
24% 14%
Ural
10% Far-East
16% 9% 4%
9%
Siberia
South and North
Volga
Caucasian
By gender
47 % Male Female 53 %
4
By age
The Greatest Generation Z
Generation (52+) (17-22)
6%
18%
28% Young
Generation X 9% Millennials
(37-51) (23-26)
22%
17%
Mature Millennials Core Millennials
(32-36) (27-31)
Global consumer insights survey 2019 5
1 Key trends and changes
of Russian consumers
behavior
01 Rapid growth of online shopping Creating online channel and connecting it with
in-store shopping experience become crucial for
There is strong increase of online shopping in key development for most of product categories.
categories, mostly driven by young millennials Following the migration of consumers to mobile
with high income living in Moscow and devices, retailers should provide consumers
St Petersburg. Fast delivery becomes as with easy-to-use mobile facilities and expand
important for consumer as prices and assortment the delivery network of lockers and pick-up
when they choose a particular retailer. points considering the traceability of deliveries.
Demand for both digital and
02 human in-store experience Retailers should focus on smaller formats and
create right shopping atmosphere paying
Russian consumers tend to do more daily attention both to technological advancement
microtrips to nearest stores. They enjoy new and store personnel skills and motivation.
digital services in stores and indicate easy
payment, customization and helpful assistants as
key imperatives that improve their shopping
experience.
Growing influence of sustainability
03 issues Make sustainability a core part of a brand
strategy. Retailers have to support
Russian consumers care about sustainability sustainable practices and projects so that
and ready to pay premium for organic and local customers feel engaged when buying
products with eco-packaging. They actively use products.
online channels to learn about sustainable
products before purchase.
Strong shift to digital
04 communication channels TV advertising remains important for reaching
out to the broad audience but retailers start
Communications market indicate a strong shift to investing more in social media and
digital channels with personalized content, despite personalizing ads with help of different agile
the fact that TV advertisements remains valuable. metrics. Retailers need to encourage
Social media highly influence customers shopping feedback from customers and learn to deal
decisions in different categories and has great with negative reviews.
power
6
6
on consumer trust.How to adapt business
to changing consumer
2
preferences?
Understand your
Investing in employees
customers based on
experience
their behaviour
Customer experience exists in a Consumer insights enable far greater
feedback loop with employee experience. personalization than the old-school paid
An organisation trying to improve media approach of segmenting
customer experience without considering customers by demographics alone.
employees skills and motivation is
missing an integral part of the equation.
Building Treat consumers’ data
communities under with respect and deliver
your brand vision value in exchange for it
It’s important to figure out what Customers want the companies they
employees and customers care about and interact with to protect their personal data,
to communicate your shared values. and PwC research indicates that they’ll
shop elsewhere if they don’t trust that a
company is safeguarding it.
Building on Win the customer
“magic moments” journey
In an age of expanding digital options, There are more trips, more choices. You
consumer loyalty can vanish with the can win customers online by understanding
touch of a button. To minimise is, focus what they are trying to experience and then
on “magic moments” that earn loyalty making it easier for them through easy of
over time and create a relationship that navigation, breadth and quality of selection,
endures beyond the next product search. price, quality of advice or exclusivity.
7
7Rapid growth of online
shopping
Key insights
Who p. 10-11
• E-commerce market in Russia is constantly growing, reaching 1 150 B RUB in
How many of Russian
sales volume and 75 M online users in 2018
consumers shop online?
• The number of Russian consumers shopping online on a monthly basis
What e-commerce trends are
reached 69% in 2018
expected in the future?
• E-commerce market is expected to double by 2023
p. 11-12
• Central, Northwestern and Urals Federal regions provide a key contribution
What is the profile of the most over 70% to online shopping
active shopper online? • There is a direct correlation between consumers' income and online
How does online shopping consumption as more that 82% of residents with income higher that 70K
frequency vary by generation, actively shop online
income level and geography? • Most frequent online shoppers are millennials: more that 80% shop online
monthly
Where p. 14
• Russian e-Commerce market is not yet consolidated, top-6 national players
Who is leading on Russian e- account for 23% of the market
commerce market? • The trend for market consolidation will continue, resulting in 49% of national
What are the growth plans of players' market share to 2023, mostly driven by Yandex.Market and Beru
top companies? • Aliexpress Russia is estimated to take 14% of Russian e-commerce market to
2023
p. 15
• 21% of consumers shop only in Russian stores, whereas only 15% shop in
Where do shoppers make foreign stores and 19% shop in both Russian and foreign stores
purchases online - in Russian • Further regulation of Russian e-Commerce market puts pressure on foreign
or foreign market? retailers
8p. 16-17
What • Books and media entertainment is the leading category in on Russian e-
commerce market as 13% of consumers buy it exclusively online.
Which categories of goods do
Electronics devices sector is a runner-up with 9% of consumers buy it
customers buy exclusively online?
only in online stores
Which categories indicated biggest
• The fastest growing goods to be bought exclusively online are books,
growth in online sales?
media entertainment – 3,8% growth and clothing & accessories – both
3,0%
p. 18-19
• Russian consumers develop strong interest in adopting online grocery
How likely are customers to order
shopping. 54% of consumers are likely to purchase grocery online over
grocery online?
2019
What barriers do they see when
• Two main barriers for e-grocery shopping are the desire to see and touch
buying grocery online?
the products (67%) and concerns about quality (57%)
How
p. 20-21
What devices do consumers use • Mobile internet audience in Russia has grown up to 56% of total adult
for shopping? population in 2018
How often do they make • 79% of Russian consumers use smartphones for online shopping in 2018.
purchases online via gadgets? Daily shopping indicate 8% growth via mobile devices
How many customers currently p. 22-23
own or plan to buy a voice • Level of smart home voice assistants ownership is not quite high in
assistant? Russia - only 8%. Although 27% of Russian consumers have a stake in
What activities do consumers use purchasing a voice assistant
voice assistants for? • Currently 53% of consumers use voice assistant for searching products
How often do consumers shop via and 36% buy products via voice assistants
home voice assistants? p. 24-25
Why • Around 70% of Russian consumers name better price, fast delivery and
What does consumer expect of good assortment as three key successful online shopping factors
online shopping? • Youngsters are interested in best prices, returns and social media
What would make a successful content
online experience for different • Millennials want easy website and apps, unique assortment and helpful
genders and generations? associates. Matures seek for fast delivery, trusted brand and items in
stock
p. 26-27
• The speed of delivery is crucial for online retailer. 74% of consumers
What is good delivery experience
believe that the most important delivery experience is to get the product
for a customer?
as quickly as possible
How long consumers are willing
• Russia is among top-3 countries which residents want the products to be
to wait for a delivery?
delivered in a specific time slot (12%) or in a few hours (33%)
p. 28-29
How to meet customers delivery • Demand for fast delivery and specific time to borrow the purchase lead to
expectations? rapid growth of pick-up and locker delivery in Russia (+392% growth
What is the current trend on since 2016)
e-commerce delivery? • Leading online retailers opened more than 4500 pick-up points in 2018.
9Who Where What How Why
Russia is currently showing one of the
highest growth rates of online shopping
Figure 1. Percentage of respondents making an online purchase at least once a month, 2018
70%
67% 71%
82% 81%
57% 59%
75%
66% 57% 65%
67% 66%
More than 80%
From 70 to 80%
From 60 to 70%
From 50 to 60%
Tha
Out of survey
V
Q: On average, how often do
you buy products online? 63%
Respondents: 21,480
Source: PwC, Global Consumer
Insights Survey, 2019
South Africa,
Figure 2. Countries with fastest growing online shopping rates, p.p., 2018
22 19
Russia Poland
17 18
20 17
Malaysia Vietnam
18 29
10Who Where What How Why
E-commerce market in Russia is constantly
growing, reaching 1 150 B RUB in sales volume
in and 75 M Internet users in 2018.
On average, 67% of global consumers shop
online at least once a month. This is up to 5
p.p. more than in last year.
69% China, Germany, the UK and Vietnam are the
leading countries, the leadership remains the
same from the last year.
Russia has shown high growth in both online
shopping audience and order frequency. The
Japan, 58% number of consumers who buy goods online at
95% Hong Kong, 76%
least once a month increased by 22 p.p. and
reached 69% of all respondents in our 2019
survey.
Philippines, 60%
72% 87% Singapore, 69%
In addition, 27% of respondents indicated that
they made online purchases at least once a
Malaysia, 70% week, an increase by 17 p.p. from the previous
year.
Indonesia, 64% In 2018, Russia became one of the leading
countries in online shopping growth in terms of
both audience size and order frequency.
70% From 2013 to 2018, Russian e-commerce
turnover doubled and, according to Euromonitor
forecasts, it will double again by 2023.
This suggests that rapid growth will continue to
be a trend in Russia’s online retail market.
The e-commerce consumption keeps posting
14 double digit growth rates, this trend is set to
Hong Kong continue across all industries.
19
This grants good opportunities for retailers to
Once a month Once a week reach and acquire target audience and sustain
growth by creating online spaces, connecting
Q: On average, how often do you buy them with in-store shopping experience and
products online? turning to omnichannel business model.
Respondents:21,480 11
Source: PwC, Global Consumer Insights Survey, 2019Who Where What How Why
The most active online shoppers are
millennials with higher incomes, mostly
located in Russia’s central regions
Figure 3. Percentage of respondents who make an online purchase at least once a month
in Russia, by region, 2018
St Petersburg
78% + 42% weekly
More than 70%
73%
From 60 to 70% Moscow 72%
From 50 to 60% 74% + 33% weekly
Less than 50% 70%
68%
66%
49%
Q: On average, how often do you buy products online?
Respondents: 696
Source: PwC, Global Consumer Insights Survey, 2019
Figure 4. Percentage of respondents making an online purchase at least once a month in
Russia, by income, RUB, 2018
90%
82%
59% 56%
0
20,000 40,000 70,000 100,000
Q: On average, how often do you buy products online?
Respondents:696
Source: PwC, Global Consumer Insights Survey, 2019
12Who Where What How Why
The main hubs of e-commerce growth in Russia
are St. Petersburg and Moscow. More than 40%
in St. Petersburg and 30% in Moscow shop
online at least once a week. Other regions with a
high share of active shoppers include the
Central and North-West Federal Districts, where
more than 70% of consumers shop online at
least once a month.
The key audience for online shopping is still
concentrated among consumers with above
average monthly incomes. Growth in online
56% shopping rates tends to be restricted to
consumers who earn more than RUB 70,000.
Further growth is directly linked with income
levels. More than 90% of consumers who earn
more than RUB 100,000 shop online at least
once a month.
Most frequent online shoppers are Mature
Millennials with more than 38% buying online at
least once a week. However, in general, the core
online audience is younger. More than 80% of
respondents aged 23 to 31 shop online at least
once per month.
Figure 6. Profile of most active shopper of
Russian online retailers, 2018
Figure 5. Percentage of respondents who
make online purchases, by generational
groups, 2018 Once a month
Consumer profile
Once a week
23-26 years old
85
81 71
67
58
53 lives in Saint-Petersburg
37 28 38 27 self-employed
17 19
Generation
17 Z Young
37 Core Mature
38 Generation The Greatest
(17-22) millennials 28
Millennials Millennials 27X 19
Generation earns more than 100K RUB
(23-26) (27-31) (32-36) (37-51) (52+)
Q: On average, how often do you buy products Q. Do you shop at Russian online stores? (divided
online? by age, generation, income, geography,
Respondents: 696 employment status)
Source: PwC, Global Consumer Insights Survey, 2019 Respondents: 696
Source: PwC, Global Consumer Insights Survey, 2019
13Who Where What How Why
Russian e-commerce market will continue
to consolidate by national players
According to Euromonitor data, 16% of Figure 7. Companies’ value shares of the
the Russian online retailing market is Russian Internet retail market, %, 2018-2023
taken by the third-party merchants 100%
Alibaba, Amazon and eBay. Alibaba
stands out the most, as its audience
37
expanded to 20 million active users in 49
43
56
2018. Alibaba wants to increase its 67 63
presence in the Russian market by 7
creating a joint venture with Mail.ru 7
7 14
Group, Megafon and the Russian 7
11
8
Direct Investment Fund. 7 5 16
7 2 15
13
1 12
9 10
Russian e-Commerce market is not
22 24 25
consolidated yet, top-6 national players 16 18 20
account for 23% of the market. The
trend for market consolidation will 2018 2019 2020 2021 2022 2023
continue, resulting in 49% of national Yandex.Market + Beru Ozon
players' market share to 2023, mostly Aliexpress Russia (Tmall) Wildberries
driven by Yandex.Market and Beru. Other online stores
Aliexpress Russia is estimated to take
Source: Morgan Stanley, 2018
14% of Russian e-commerce market to
2023.
Figure 8. Companies’ value shares of the Russian Internet retail market, %, 2018
Alibaba,
Adidas Petshop.ru Amazon and eBay
Asos Pleer.ru 16
Bonprix, Otto Shoppinglive
Quelle, Witt Sportmaster
Wildberries
Detskiy Mir Svyaznoy 5
Dochki Synochki TsUM
E96.ru Ulmart.ru 5 Mvideo
Eldorado Utkonos
Euroset.ru Vseinstrumenti Others 3 DNS Group
Holodilnik.ru Yandex.
IKEA Market 62 3
Citilink
Korablik Yves Rocher 3
KupiVIP Zara 3 OZON
La Redoute Lamoda
Labirint.ru
Meggy Mall
Source: Euromonitor, Internet Retailing in Russia, 2019
14Who Where What How Why
Increased shopping at Russian retailers is
driving online traffic
Figure 9. Top 10 Russian online retailers, Russian online retailers are among the world
traffic, M visits, Q4 2018 leaders in traffic. In February 2018, Wildberries
was ranked first in terms of traffic among
international clothing and footwear retailers,
Wildberries 190
followed by H&M, Zara and Asos.
DNS-Shop/
159 Figure 10. Websites that Russians shopped
Technopoint
on, %, 2018
OZON 146
Mvideo 80
Citilink 73 21
19
15
Eldorado 72
Only in Only in Both
Lamoda 61
Russian stores foreign stores
Svyaznoy 42 Source: Data Insight, e-Commerce in Russia, 2018
Ulmart 31 Russians now tend to buy products in Russian
rather than international online stores, which
has helped to drive traffic growth.
Bonprix 27
Source: SimilarWeb, 2019 Russia is the last major emerging market
without a dominant e-commerce player. Huge
numbers of web-traffic of Russian retailers
confirm big demand for online shopping.
The leading Russian online retailers
registered 881 M website visits (mobile Russian retailers are planning aggressive
and desktop) in Q4 2018. campaigns in order to hold the leadership on the
market. Newly created joint ventures Beru and
The top three retailers in terms of traffic Bringly by Yandex (with Sberbank) or Aliexpress
are Wildberries, DNS-Shop and OZON, Russia by Mail (with Alibaba) give dominant
whose websites are visited by a total of players the access to capital and ability to
140-190 M consumers in Q4 2018. leverage existing platforms.
15Who Where What How Why
Books, media entertainment, clothing and
jewellery are fastest growing categories
for exclusively online purchases
Figure 11. EXCLUSIVELY ONLINE purchases by category, %, 2018 to 2017
3,8
Growth of EXCLUSIVELY ONLINE purchases by category, p.p.
2,0
2,0
1,1 3,0 3,0
12,5%
8,9%
6,6% 5,9% 5,7% 5,6%
Books, music, Consumer Household Health & beauty Jewelry/Watches Clothing and
movies and video electronics (incl. appliances (incl. (cosmetics) footwear (incl.
games cameras, TV, DVD freezers, sportswear, kids
players, etc.) and microwaves, etc.) and babies)
computers
Q. For each of the following product categories, how many purchases have you made exclusively online
Respondents: 696
Source: PwC, Global Consumer Insights Survey, 2019
Books and media entertainment is the fastest
growing category of goods that people
purchase exclusively online (3.8 p.p. growth).
Also clothing & accessories are the fastest
13%
growing product categories to be bought
exclusively online which indicate 3 p.p growth
from last year. More people also purchasing
groceries exclusively online (2 p.p. growth from
last year).
Books and media entertainment is the leading of respondents buy
category in on Russian e-commerce market as
13% of consumers buy books, music, media
and video games exclusively online. Electronics
devices sector is a runner-up as 9% of
9% tech & electronics only
in online stores
consumers buy tech & electronics only in online
stores.
16Who Where What How Why
Purchasing exclusively online indicate
growth across all categories of products
2,1
1,4 1,1 2,0 0,3
5,5% 4,6% 4,5% 4,2% 4,0%
Toys Do-it-yourself/home Sports Grocery Furniture and
improvement equipment/outdoor homeware
over the last 12 months?
Customers start to actively purchase online
product categories that do not require visual or
of respondents buy kinesthetic experience. However, traditional
books, music, media in-store products as jewellery and watches
and video games have made successful inroads to the e-
commerce market.
exclusively online
Retailers should take immediate actions as
their customers are coming to online
channels: as the time flows, pure offline
players will be close to extintion.
17Who Where What How Why
Most Russian consumers are ready for
online grocery shopping
Figure 12. Growth rate of the share of consumers that are likely to order groceries
online, p.p., 2018 to 2017
22 20 19
13 13 12 11
7 5
2 2
Canada
Brazil
Indonesia
Malaysia
Poland
Middle East
Russia
USA
Netherlands
China
Belgium
Q. Over the next 12 months, how likely are you to purchase groceries online?
Respondents: 21 480
Source: PwC, Global Consumer Insights Survey, 2019
54%
of respondents likely to purchase
As grocery shopping migrates online, traditional
brick-and-mortar stores will have to respond,
by turning shopping from a
simple transaction into a lifestyle activity.
groceries online
Traditional food retailers have to adapt to
customer needs by developing Click&Collect
Around 54% of Russian consumers are likely technologies, entering into partnerships with food
to buy groceries online, which represents 12 delivery services, installing in-fridge lockers.
p.p. growth over the previous year. Russia
ranks 7th in terms of people’s readiness to buy It may be hard for a customer to orient in online
groceries online. Number of those who are not grocery store without wandering by product
likely to buy groceries online fell by 24 p.p. in shelves, so make navigation through online
2018. store easy and understandable, include food
recipes to help choosing from wide product range.
About 4% of Russian consumers indicate that
they already buy groceries exclusively online To reassure customers, make quality a priority
and 12% indicate that they do most of their in transportation-to-home and storage stages.
grocery purchases online.
18Who Where What How Why
Figure 13. Key reasons not to purchase groceries online, %, 2018
I prefer to see and touch 67
products However, some key concerns are
holding people back from ordering
Concerns over quality 57 food online. Russian consumers
prefer to see and touch products
before buying to ensure their
Easier to compare prices 25 quality.
in-store
Food could be damaged In addition, 19% of consumers are
during delivery 23 not likely to order food online
because the delivery costs or
Delivery costs / minimum minimum order price are too high.
order price is too high 19
Figure 14. Main concerns on purchasing delivery online, in comparison with men/women,
p.p., 2018
Food could be Easier to compare prices
damaged during in-store + 11 p.p.
+ 13 p.p.
delivery
Need
Enjoy discovering new
+ 9 p.p. assistance + 6 p.p.
products in-store
from store staff
+ 7 p.p.
Concern over quality Websites are not easy to + 2 p.p.
use for grocery shopping
Q. Why would you be unlikely to purchase groceries online?
Respondents: 696
Source: PwC, Global Consumer Insights Survey, 2019
19Who Where What How Why
Russian consumers are shopping more
frequently using their PCs and
smartphones
Figure 15. PC as a shopping channel, %, 2018
+14 p.p.
40 42
29
26
19 -5 p.p.
10 11 10
5 5
2 3
Daily Weekly Monthly A few times Once a year Never
a year
2017 2018
Respondents: 696
Source: PwC, Global Consumer Insights Survey, 2019
Growing number of Russians are using their There is a continuing growth trend in using PCs
PCs to make weekly online purchases (up to 9 for online shopping. More than 40% of
p.p.). Still, most Russians (86%) shop on their consumers made orders via PC a few times a
digital devices once per month. However, there year in 2017. In 2018, about 40% of respondents
is a clear trend to shifting from monthly shopped on their PCs at least once a month and
shopping to weekly shopping, especially 19% do so on a weekly basis.
noticeable on mobile devices.
The percentage of consumers who have never
shopped online or have shopped a few times a
year dropped to 5%.
20Who Where What How Why
Figure 16. Smartphones as a shopping channel, %, 2018
-7 p.p.
27 27 27 27 28
+9 p.p.
21
16
7 8
6
2 3
Daily Weekly Monthly A few times Once a year Never
a year
Respondents: 696 2017 2018
Source: PwC, Global Consumer Insights Survey, 2019
Following the migration of consumers to
In 2018, the number of respondents who never mobile devices, retailers should adapt their
use their smartphone for shopping dropped by 7 websites to mobile version, design mobile
p.p. At the same time, there was a significant applications and luring notifications.
increase in the share of respondents who shop
on their phones at least once a week. Pay special attention to speed and security
of website to lower the cart abandonment
Both PCs and smartphones indicate 9 p.p. rate.
increase in weekly shopping: mobile devices
are close to catch up with computers in Add convenient payment options as
frequency of online shopping. Apple/Google Pay, e-wallets, etc., as
Young Millennials (23-26 years) are the most customers often do not remember payment
active shoppers via smartphones. More than card details.
60% make online orders on their mobiles at
least once a month.
North-West federal district residents shop via
smartphones more frequent than other regions’
citizens: 43% shop using smartphone at least
once a month, and 22% from Saint-Petersburg
shop via mobile phone on a weekly basis.
21Who Where What How Why
There is a growing interest in smart
home voice assistants in Russia
In 2018, the number of respondents who started
using smart home voice assistant systems for
online purchases increased by 17 p.p.
26
About 40% of Millennials currently use smart
home voice assistants for online purchases,
while 13% buy products via these devices at
%
least once a month and 11% at least once a
week.
of Russian consumers plan to
purchase a smart home voice
of Russian consumers
8% currently own home
voice assistant
assistant
Figure 17. Frequency of online shopping via smart devices, %, 2018
Smart home voice assistants Young Millennials representatives are leaders in
-17 p.p.
smart home voice assistants ownership as 13%
89 of them currently own such devices.
Moscow citizens are the clear leaders in Russia
in the use of smart home voice assistants. More
+6 p.p. than 11% claim that they make purchases with
72 the help of a voice assistant at least once a
month, while 8% do so on a weekly basis.
8 7
6 5
3 3 Men are more likely than women to use a voice
1 2 1 2
assistant to make an online purchase. More
than 10% of Russian men order products via
Daily Weekly Monthly A few Once a Never smart home voice assistants at least once a
times year month.
a year
2017 2018
Q. How often do you buy products (e.g. clothes, books, electronics) using the following
shopping channels?
Respondents: 696
Source: PwC, Global Consumer Insights Survey, 2019
22Who Where What How Why
More than half of smart home voice
assistants owners use devices for
searching products
Figure 18. Activities Russian consumers use smart home voice assistant for, %, 2018
Researching products 53
Streaming music 46
Entertainment
42
(trivia and games)
Controlling other smart
41
home devices
Accessing information
39
(current affairs, weather)
Calendar reminders 39
Purchasing products 36
Listening to audio books/
32
podcasts
Communications
27
(making phone calls)
Q. What are the main activities you use your smart home voice assistant device for?
Respondents:696
Source: PwC, Global Consumer Insights Survey, 2019
There is a great potential for
retailers on voice assistant Smart tech that communicates with you is the future. Global
channels, as more than half digital retailers as Amazon and Aliexpress have already
(53%) of consumers use their launched their own voice assistants; Yandex has developed
smart devices for searching Yandex.Station smart speaker with Alisa voice assistant.
products.
36% of smart home voice Adapting an online store to voice assistant requires an
assistant users make integrated approach. Customers search products via smart
purchases via their gadgets. device through related phrases, synonyms in natural language.
Retailers need to optimise traffic-driving pages and product
descriptions with proper content to become visible in voice
search results.
23Who Where What How Why
Price, delivery speed and assortment are
the key drivers of consumer decisions
Figure 19. Ten key elements of a successful online shopping experience, %, 2018
Better
75
prices
Fast, reliable
71
delivery
Good
67
assortment
Convenient
66
payment options
Easy website,
62
mobile app
Good return
60
policy
Unique
44
assortment
More than
Trusted
43
brand
FREE
Loyalty
programme
Test / try and free
return options
41
41
70%
of respondents believe
that online retailers
should have better
Q. Which of these attributes would significantly
prices and faster
improve your shopping experience with online
retailers? delivery
Respondents: 696
Source: PwC, Global Consumer Insights Survey, 2019
24Who Where What How Why
Figure 20. Gender differences on successful online shopping experiences, %, 2018
expect mobile site want to have convenient
65% to be easy to use payment options 67%
want to have are happy to
44% test/try and free
return options
deal with a
trusted brand
48%
44% are interested in
loyalty programmes
need help from 30%
on-site
associates
Q. Which of these attributes would significantly improve your shopping experience with online
retailers?
.
Respondents: 696
Source: PwC, Global Consumer Insights Survey, 2019
Consumers want to be sure that all of the “must Assortment is another important element. It
have” elements of a good online shopping should be easy for consumers to find the item
experience are present before they even start to they are looking for and cannot find in-store.
pay attention to loyalty programmes and trust
the brand.
Online presence and further development of
Most consumers choose retailers who offer ecommerce are crucial for retailer's growth.
better prices and fast delivery. These two Good price is number-one priority for an online
elements are key in the competition with in- retailer excluding premium segment. To win
store shopping. competitive advantage online, retailer should
Convenience is key to competing successful provide customer with easy-to use mobile
with other online retailers. Consumers will shopping facilities and expand delivery
choose easy-to-use websites and mobile apps network of pick-up point and lockers to
with convenient payment options ensure fast and convenient delivery options.
25Who Where What How Why
Fast delivery is a key determining factor
for online purchases
Figure 21. Important attributes for the delivery experience, %, 2018
Getting the product
74
as quickly as possible
Availability of
FREE 72
free returns
Knowing the delivery date
67
at the point of order
Being able to track
65
the delivery driver
Option to return items
59
to a store
Russian consumers like fast delivery and
believe it is more important than possibility of
free returns. To a greater degree than their
74
global counterparts, Russian consumers are
willing to pay more for same day delivery or for
specific 1-2 hour time slot for delivery.
Q. Considering the delivery process for online
orders, please rank the following statements in
order of importance.
Respondents: 696
%
Source: PwC, Global Consumer Insights Survey, 2019 of respondents think that
the most significant delivery
experience is to get the product
as quickly as possible
26Who Where What How Why
Figure 22. Longest delivery time residents are willing to pay for, %, 2018
A specific 1-2 hour time window of my choosing
Vietnam Australia
15% Russia 3%
12%
In a few hours or, maximum, the same day
Vietnam Ireland
36% Russia 14%
33%
1 3 27
Q. For the majority of your online purchases, what is the longest delivery lead time you are willing
to pay a charge for?
Respondents: 21,480
Source: PwC, Global Consumer Insights Survey, 2019
Choosing a specific delivery time is not Around 63% of the Greatest Generation (52+)
popular globally. However, 12% of Russian want to be able to reserve products online for
consumers prefer this option. Fast delivery in collection in-store.
a few hours or on the same day is the most
popular type of delivery in Russia. Overall, Companies that also have online and brick-
33% of Russian consumers are ready to pay and-mortar stores in addition to their e-
a charge for express delivery. commerce stores may be able to offer in-store
Along with speed, Russians also prefer to same-day pick-up. Organizations may also
have transparent delivery. Millennials are the want to consider the option of opening
most concerned about the delivery details. distribution centers to fasten logistics
They want to have visibility of the product processes.
throughout the delivery process, including
being able to track the delivery driver (76%), Retailers need to consider the traceability of
to return non-fitting items (76%) and to deliveries; besides, it reduces pressure on call
receive updates on the status of returns center. Among prevalent practices are sending
(65%). interactive SMS notifications on the status of
the delivery with clickable time and date
delivery options.
27
27Who Where What How Why
Pick-up and locker delivery is growing
quickly in Russia
Figure 23. E-commerce logistics market, by delivery channel, %, 2018
Self pick-up in store
29
Pick-up points/lockers 11 Self courier delivery
Since 2016: 17
+392% growth
+122% CAGR
26
17
Outsource courier delivery Russian Post Service
Source: E-Commerce logistics market, Data Insight, 2018
Consumer preferences for fast delivery and In addition, consumers like lockers because
specific delivery times have led to growing they are more convenient and there is no need
demand for pick-up points/lockers. to wait for the courier. Customers can pick up
the order at any convenient time.
According to the latest research of e-Commerce
logistics market by Data Insight, pick-up points In response to consumer demand, leading
and lockers account for 17% of total deliveries online retailers are opening new pick-up points
and show the highest growth rates. Delivering to on their own or in partnership with logistics
lockers or pick-up points is cheaper than using a companies.
courier, which is one of key reasons for the
popularity of this channel.
Figure 24. Number of pick-up points or lockers opened in 2018
Lamoda KupiVIP Yulmart Aliexpress Mvideo Wildberries Citilink Utkonos
+56 +1120 +500 +1800 +33 +555 +600 +10
Jan 18 Mar 18 Apr 18 Jun 18 Jul 18 Sep 18 Nov 18 Dec 18
Source: Retailers reports, 2018
28The growth of lockers and pick-
up points is one of the most
significant e-commerce trends of
2018.
Egor Pchelintsev
Advertising Director, Wildberries
Pick-up points and lockers delivery is a creditable alternative for
in-store pick-up or distribution center. Customers create demand
for locker delivery as it is close to home, easy-to-use and helps
to avoid time-consuming and unnecessary interaction.
29Demand for both digital
and human in-store
experience
Key insights
Where
p. 32-33
Where are customers more
• Russia is one of Top3 countries by the share of consumers who enjoy
likely to buy grocery?
microtrips to convenience stores
How often do customers do
• 40% of Russian consumers buy products in nearby grocery stores on a daily
trips to the convenience
basis
stores?
Why p. 34-35
What attributes will make in- • Both traditional and technological elements are important for creating a good
store experience successful? in-store experience for a customer
What do customers expect • More that 52% of Russian customers believe that quick and easy payments
from digital in-store and knowledgable associates are key for creating a good in-store experience
experience?
3031
Where Why
Russians tend to make microtrips to
nearby stores, which is driving the shift
towards smaller formats
Figure 25. The share of the population who buy products at nearby stores at least once a day,
%, 2018
Middle East 43%
Active grocery store
40%
Russia 40%
consumers
Vietnam 39%
Brazil 36%
Poland 35%
China 32%
Indonesia 32%
Hong Kong 28%
Hungary 28%
Thailand 28%
Spain 28%
Ireland 23%
Japan 23%
Switzerland 23%
40
South Africa 21%
Netherlands 20%
France 20%
Malaysia
Denmark
Germany
20%
19%
19%
%
UK 18% of respondents buy products at
Philippines 18% nearby grocery stores every day
Belgium 16%
USA 16%
Australia 15%
Singapore 13%
Canada 10%
Q. How often do you make microtrips (less than five minutes) to grocery stores?
Respondents: 21,480
Source: PwC, Global Consumer Insights Survey, 2019
32Where Why
Figure 26. Russian food retailers LfL traffic, %, 2018
Da! 9,5
Perekrestok 6,2
Lenta Super 1,6
Pyaterochka 0,4
O’KEY -4,8
Karusel -3,1
Lenta Hyper 0,4
Source: Retailers reports, PwC analysis
Russia is one of the top three countries in terms and planning about 170 new openings of this
of the share of consumers who take daily format.
microtrips to nearby grocery stores. Magnit has decided against the further
More than half of consumers in the Siberian development of its network of hypermarkets and
Federal District and Southern and North has reformatted some large-area stores into
Caucasian Federal Districts take regular large supermarkets.
microtrips to nearby stores.
Lenta plans to increase the number of
The most active generation is Core Millennials supermarkets and expand their retail space up
(27-31), 4% of whom take such microtrips more to eight times by 2020. Supermarkets will take
than once per day. 15-20% of total Lenta’s commercial space.
These consumer preferences are driving the
shifts towards smaller formats in Russia. Most Most hypermarkets are now experiencing
retailers report positive traffic growth at these negative LfL traffic. Retailers that traditionally
formats. relied on hypermarket format are now tending
O’KEY is developing a new compact city to shift their focus to smaller formats in
hypermarket format (3,000-7,000 sq m). They response to changing consumer behavior.
find such stores up to 10% more effective than Russian retailers experiment with new smaller
their traditional hypermarkets. In addition, they formats as mini- and micro- markets, vending
are actively developing the DA! discount chain machines, kiosks. 33
33Where Why
Easy payment, customisation and
knowledgeable associates are key for
creating a good in-store experience
Figure 27. Attributes that improve the in-store shopping experience for Russian
consumers, %, 2018
Digital experience Traditional experience
Quick and easy
Sales associates
payment methods
55 with a deep knowledge 52
(including mobile,
of the product range
contactless payment)
Ability to quickly Ability to quickly
and conveniently 48 and conveniently 48
navigate the store navigate the store
A fun experience A fun experience
via the store design 37 via the store design 37
or atmosphere or atmosphere
In-store Wi-Fi
35 Child-friendly area 22
with fast, simple login
Personalized offers Availability of
sent to mobile device 33 food & beverage 22
when in-store services in-store
Technology to assist
Exclusive services
the shopping experience
25 i.e personal shoppers 20
(mobile checkout,
and stylists
self-service scanners)
Virtual experience
of products and services 21 Inviting lounge/rest area 20
through AR technology
Q. Which of these attributes would significantly improve your in-store shopping experience?
Respondents: 696
Source: PwC, Global Consumer Insights Survey, 2019
In digital era, retailers have to meet technological demands of customers, but quality service
from assistants cannot be overlooked. Consumers interact with your brands through your
frontline employees, who embody your brand and the culture that shapes it.
In-store retail is no longer about simply selling products, it is about experience and
atmosphere. Retailers should look onto creating a retail-tainment atmosphere by merging
experiences with shopping. This could be achieved by adding cafeterias, music experiences
or complimentary services inside the store as well as blending digital and physical
34 experience to satisfy the needs of a modern customer.Where Why
It’s good to have sales associates
with a deep knowledge of the Figure 28. Non-cash payments for goods
product range and services, T RUB, 2016-2018
I want a fun experience
53%
via the store design or
atmosphere
38%
I like personalized 19,5
offers sent to my 14,6
36% mobile device when 11,2
in-store
25% I want the store to
2016 2017 2018
have child-friendly
23% area
Source: Central Bank of Russia statistics, 2018
I want to have a virtual
experience of products
and services through AR Figure 29. Mobile payment use when
technology shopping in-store, %, 2017-2018
I want to customise
products in-store
+18 p.p.
57%
45
I want payments to
be quick and easy 57% 27
I’d like the use of 2017 2018
technology to assist 26%
the shopping Q. Which of the following payment activities have
experience you undertaken using your mobile, smartphone
or wearable device when shopping in-store?
24%
It’s good to have Respondents: 696
food and beverage Source: PwC, Global Consumer Insights Survey, 2019
services in-store
35Growing influence of
sustainability
Key insights
p. 38-39
How • Global trend for sustainability highly influences Russian consumers as 83% of
Russian consumers claim to make purchases in a sustainable way
How do consumers purchase • Most common eco-shopping practices of Russian customers are to avoid the
in a sustainable way? use of plastic where possible (32%) and to protect the environment by
How do they learn about choosing sustainable products (31%)
sustainable products? • The majority of respondents use online channels to gain information about
sustainable product
• One of the most successful case of business model around sustainability is
VkusVill
p. 40-41
Why
• Majority of Russian consumers are concerned about food sustainability as
86% of consumers are ready to pay extra amount for sustainable food
Who is interested in food
products
sustainability?
• The most pro-active generation is Millennials: 20% are willing to pay extra for
What for are consumers willing
food sustainability
to pay a premium when
• Locally produced products attract customers the most (68%); more than 40%
purchasing food items?
of Russian consumers are ready to pay premium for sustainable packaging,
organic and eco-friendly food products
p. 42-43
Who is interested in non-food • 79% of Russian consumers are ready to pay premium for sustainable non-food
sustainability? products
What for are consumers willing • The main attractive practices of non-food sustainability is connected with
to pay a premium when methods of production: over 77% of Russian customers will pay premium for
purchasing non-food items? sustainable or ethical production of goods
How to attract pro-sustainability • Customers tend to pay premium for production of brands well-known for
customers? sustainable practices (42%) and retailers who make donations to charity (35%)
3637
How Why
There is growing interest for sustainable
products in Russia
Figure 30. Most common practices of sustainable purchasing in Russia, %, 2018
I avoid the use of plastic
32
where possible
I choose sustainable product
31
to help protect the environment
I choose products with a traceable
29
and transparent origin
I look for products with environmentally
29
friendly packaging
I buy brands that promote
27
sustainable practices
Q. Please indicate which statements best reflect how you purchase in a sustainable way.
Respondents: 696
Source: PwC, Global Consumer Insights Survey, 2019
Russian residents are increasingly concerned Russians tend to trust eco-bloggers and
with the irresponsible use of plastic and other influentals up to 3% more often than friends
unsustainable packaging. and relatives on sustainability agenda
83
Around 32% of Russian consumers actively
avoid plastic where possible and 29% either
look for eco-friendly packaging or try to find
%
less-packaged products. In addition, Russians
are more likely to care about the traceable
origin of products than their global counterparts
(29%).
of respondents care about
There is a growing interest in sustainable sustainability
products in Russia. Only 3% of consumers buy
eco-friendly products impulsively, whereas more
than 40% do some web research about eco-
friendly products and stores.
Most consumers use the Internet to find
information about sustainable products. Around
40% directly search for specific products, read
and watch reviews, and join healthy-lifestyle
communities.
38How Why
Figure 31. Sources respondents turn to for information about sustainable products, %,
2018
Search the web for specific products,
44
read reviews, buy in specialised stores
Watch reviews on online platforms,
read comments in healthy-lifestyle 37
communities
Look for a shelf
35
with eco-products in-store
Don’t search for eco-products
32
on purpose, if I see it - I buy
Follow advice
25
from eco-bloggers and influencers
Trust recommendations
22
from friends and relatives
I see that the product
3
is eco-friendly and buy it
Source: Ecological Union and Ecobureau GREENS – How do customers choose eco-products? 2018 (Moscow, Saint Petersburg)
Sustainability needs to become a core component of a strategy. Sustainable
practices are best to affect a whole value chain from producing and manufacturing, to
logistics and beyond. With the use of technologies organizations can upgrade majority
of business processes to sustainable network: AI can help changing product
development, blockchain can provide traceability, robotics and 3D modelling can
personalize unique models on-demand.
Businesses managing sustainability will not only build consumer loyalty but can also
command a price premium as consumers will pay a premium for a good experience.
39How Why
Making sustainable products a
cornerstone of a successful business
model
Figure 32. VkusVill sales profit, M RUB, 2013-2017
1 199
1 200
1 000 +74%
800 713
600
397
400
200
0
-14
-64
-200
2013 2014 2015 2016 2017
Source: Spark-Interfax, 2018
VkusVill grew out of Izbenka to fill a niche: Classical formats such as supermarkets and
Russia had few convenience stores selling fresh minimarkets do not work in such areas, because
eco-friendly products. The company became it is not cost effective. The concept of
profitable after two years and has performed micromarkets helps reduce costs & expenses
very well (CAGR of 74%) since 2015. VkusVill’s and increase operational efficiency. VkusVill
key to success was picking the right time to Micro has a smaller product range depending on
offer Russians fresh and farmer-quality food, the location. The company is planning to open
combined with a distinctively progressive micromarkets and vending machines not only in
approach to business. traditional urban locations, but also in offices,
business centers and even metro stations.
In March 2018, VkusVill began working with
online grocery services and started to deliver Coffee House filled a significant niche in this
their products via SaveTime and Instamart. market by placing coffee machines at Moscow
Moreover, VkusVill decided to experiment with Central Circle (MCC) metro stations. By the end
the micromarket format. This initiative covers of 2018, Vkusvill and Coffee House plan to
customers who live and work in remote or install their vending machines at every MCC
suburban areas. station.
40There are top two brands that respondents call
the most recognisable on the market for their
sustainable products: 4fresh (20% of
respondents) and VkusVill (also 20% of
respondents).
While 4fresh is a pure online retailer, VkusVill is
the leading eco-friendly in-store.
It promotes sustainable practices as:
• collection and recycling of batteries (10
tonnes per month);
• separated waste collection from customers
(800 kg of waste);
• paid plastic bags (57,000 customers bought
reusable bags, 15,000 stopped buying bags);
• installation of machines for PET bottles and
aluminium cans.
Source: VkusVill: Ecology summary, 2018
We are growing although our main idea has not yet been fully realised by us
or our competitors. We want to give customers the opportunity to buy fresh
products near their home, and there are many regions where this
opportunity is not yet available.
Business needs to be started in areas where the situation is deplorable. So
we originally started with dairy products. This is why people are waiting for
us in the regions. Many people in smaller towns do not have a single Dixy or
Pyaterochka store with fresh products near their home.”
Andrey Krivenko, owner and
CEO of VkusVill
41How Why
Consumers are ready to pay extra for
organic, locally produced food with eco-
friendly packaging
Figure 33. Respondents willing to pay a premium for sustainability when purchasing
food items: detailed, %, 2018
Locally produced 68
Sustainable packaging 46
Organic 46
Eco-friendly 43
Sustainably produced 38
Q. Which of the following are you willing to pay a premium for when purchasing food items?
Respondents: 696
Source: PwC, Global Consumer Insights Survey, 2019
Russian consumers are most likely to pay extra
86% of Russian consumers for locally-produced food, organic food and eco-
friendly packaging. Around 68% of Russians are
are ready to pay extra for willing to pay extra for locally grown products.
sustainable food products This is partly a consequence of Russia’s
continued urbanisation. Around 33% of Russian
consumers will pay a premium if retailers have a
strong reputation for sustainable practices.
Figure 34. Interest in sustainability among
generations (food), %, 2018
Young Millennials care about food sustainability
Young Millennials the most: they are interested in sustainably
20 packaged products (60%) and organic food
(23-26)
(57%).Young and Mature Millennials (44% and
Mature Millennials 41%) are more likely to trust brands well known
18
(32-36) for their sustainable practices.
Generation Z
17 Generation Z, more than others, is inspired
(17-22)
(38%) by retailers and brands that make
Core Millennials donations to charity. Generation X and the
16 Greatest Generation are the least interested in
(27-31)
food sustainability.
Generation X
15
(37-51) Russian customers are willing to invest in
The Greatest sustainable retailers. Transform sustainability
Generation 14 +2-3% efforts into a part of a brand identity. To meet
(52+) customer needs, retailers have to support
sustainable practices as switching to
Q. Which of the following are you willing to pay
sustainable packaging, developing
a premium for when purchasing food items?
environmental or charitable initiatives.
Respondents: 696
Source: PwC, Global Consumer Insights Survey, 2019
Many people want to engage with businesses
42 that align themselves with social values, such
as sustainability and local production.How Why
Russians tend to trust non-food brands
with strong reputations for sustainable
practices
Figure 35. Consumers willing to pay a premium for sustainability when purchasing non-
food items: detailed, %, 2018
Sustainably produced 43
Brands well known for their sustainable practices 42
Eco-friendly offering 36
Retailer/brand makes donation to charity 35
Ethically produced 34
Q. Which of the following are you willing to pay a premium for when purchasing non-food items?
Respondents: 696
Source: PwC, Global Consumer Insights Survey, 2019
Russians are more willing to pay extra for
sustainability when it comes to food products.
79% of Russian consumers are
However, for non-food items, Russians tend to ready to pay extra for sustainable
trust brands well-known for sustainable non-food products
practices (42%) more than for food items
(33%).
Figure 36. Interest in sustainability among
Likewise, Russians are interested in whether generations (non-food), %, 2018
their non-food retailers make a donations to
Generation Z
charity (35% against 28% for food products). 19
(17-22)
Russian consumers tend to base their opinions
on the retailer’s mission and values when Mature Millennials
buying non-food items, as it’s more difficult for (32-36)
19
them to track the sustainability of non-food
goods. Young Millennials
18
Generation Z is the one of most attentive (23-26)
generations to sustainability issues for non-food
Core Millennials
products. Most of all, they deeply trust brand 16
(27-31)
manufacturers who are well-known for their
sustainable practices (47%).
Generation X
16
(37-51)
Consumers trust brands with third-
party certifications and eco-labeled The Greatest
products. They can check Generation 11 +3-8%
sustainability of a product using brand (52+)
new Russian mobile app EcoGuide.
Q. Which of the following are you willing to pay a
premium for when purchasing non-food items?
Respondents:696
Source: PwC, Global Consumer Insights Survey, 2019
43Strong shift to digital
communication
channels
Key insights: advertising
Where p. 46-47
What types of advertisements • Russian consumers find both traditional and innovative advertising influential:
have an impact on the 39% indicate the impact of TV, whereas 27% are attracted by interactive social
consumers? media advertisement
p. 48
What
• Among personalized adverts Russian consumers mostly like interactive social
What types of personalized media ads (27%)
advertisement do Russian • 26% of respondents are influenced by personalized advertisements they get
consumers find the most via e-mail
influential? • 19% of respondents appreciate personalized direct ads of their favorite brands
or products
How p. 49
• Personalization leads retailers to increased conversion, average check and
How does personalization
revenue
influence retailer's operating
• By 2020, 15% increase of digital business profits will be caused by smart
performance?
personalization engines
44Key insights: social media
Who p. 51
• Russian consumers are "silent viewers" - they read reviews more often
How do customers use social
than share comments
media channels?
• More than 30% of Russian customers were influenced to buy a product
How does social media change
after reading positive reviews, finding shared offers/promotions, seeking
consumer behavior?
for inspiration
p. 50
• 94% of Russian customers use social media
How many consumers use social • Reviews have a great impact on customers: 50% of Young Millennials
media? aged 23-26 have been influenced to buy a product after reading positive
Who is easy-to-influence in social reviews on social media
media? • Men write reviews, but reach to them less often, while women rarely
write reviews but more influenced by them.
What p. 52-53
In which categories of goods
• 52% of Russian customers are sure that social media influenced their
social media influence purchase
purchase decisions in clothing and footwear category
decisions the most?
• Matures feel the impact of social media on purchase decisions in
Which categories are better
majority of categories: travel, food, recipes and dining-out, technology
perceived by different generations
and beauty and cosmetics
in social media?
p. 54-55
What online entertainment • 80% of Russian consumers are active users of online entertainment. Most
services do Russian users prefer? popular services are movies and music streaming platforms
How often customers use • The frequency of entertaining platforms usage in high in Russia: more
entertainment platforms? than 32% of consumers use them on a daily basis
45You can also read
