Today’s shoppers are savvy and informed, cynical and questioning. They have access to a wealth of brands and products at the touch of a button, and many now begin their research online, placing growing importance on user-generated content (UGC), including online reviews and ratings, and social media.
The home and garden sector faces all these challenges, and more. Globally, more people are renting rather than buying – particularly cashstrapped millennials – while urbanisation, coupled with a growing population, is creating a need for smaller homes with smaller gardens. Both human behaviours and needs are changing, and businesses must change too. People are more demanding of brands, increasingly craving authentic content. Retailers in this sector must engage consumers both online and offline, forging relationships with them at the start of their journey.
Physical stores still play a pivotal role in the final purchase, particularly when it comes to high-value items such as kitchens, bathrooms, sofas and beds, but building trust early in the customer journey is crucial.
London Research, in association with Trustpilot, has produced this report based on a survey of 1,000 UK and US consumers.
1. The Amazon effect
In 2018, Amazon became the UK’s fifth largest retailer by spending market share, accounting for £4 in every £100 spent on retail, with the top four spots held by Tesco, Sainsbury’s, Asda and Morrisons, according to Verdict. Figures from eMarketer also show that, in the US, Amazon accounts for 5% of all retail spend. With a sophisticated online presence and a huge profile, coupled with a comprehensive logistical infrastructure, Amazon can quickly and easily introduce new products to meet demand. It is an ongoing challenge for businesses in every sector, and the home and garden industry is no different.
As the pioneers of speed, convenience and personalisation, they have set the bar high across the board. “Companies like Amazon, Netflix and Spotify are spoiling us by treating us better and fulfilling our core needs for relevance and convenience by delivering the right content in front of us at the right time,” says Patrick Obolgogiani, Global Head of Customer Success at ecommerce personalisation platform Nosto. “These days if a brand is not relevant, the tolerance is really low — I will jump to other products really quickly.”
There is room for improvement in the home and garden sector. Our consumer survey of 1,000 consumers (including 500 in the UK and 500 in the US) shows that only 22% of all respondents ‘strongly agree’ that retailers in this sector personalise the online experience with relevant information and recommendations (Figure 1).
Another significant impact of Amazon has been to shine a spotlight on the power of ratings and reviews.
Customer reviews are a key part of what drives the Amazon machine, and positive customer reviews increase a product’s search ranking on the site. An Amazon User Study in 2018 revealed that almost 90% of Amazon customers said that they would not consider purchasing a product with less than three stars, and 79% said they often check third-party seller ratings before buying.
According to Simon Weigh, Head of Marketing at Swift Direct Blinds: “I often spend time looking at Amazon and figuring out ways that they do things. Not everything they do is applicable to us but there are certainly things we can learn from, particularly around reviews, recommended products and personalised content.”
Amazon has undoubtedly helped to ingrain the practice of reviewing products and services into the public consciousness. According to our research, over a third (34%) of both UK and US consumers have personally written consumer reviews for home and garden products (see appendix, Figure 7).
Retailers in the sector need to tap into consumers’ growing willingness to share in order to demonstrate their quality, trust and transparency.
2. The appetite for user-generated content
According to analyst firm IDC, more than 50% of commercial content will be created outside of the marketing function by 2020. The growth in UGC has been exponential in recent years, fuelled by a proliferation of social media platforms and increasingly sophisticated smartphones.
Sharing – opinions, experiences, recommendations – has become second nature. It is a shift that has impacted the home and garden sector, changing the way consumers shop for products.
Rachel Finn, Head of Customer Journey, Showroom Marketing at Wickes says: “We have seen online become much more an integral part of the journey. It is something we are thinking about more and more – the way people research and compare retailers online – and social media is particularly relevant.
“In particular, people are increasingly using Pinterest to search for kitchens because it’s very visual. They start that journey very idly almost, by loving someone else’s kitchen and pinning it, and it sows the seed of an idea. Before they know it, they want a kitchen — that is becoming more important for us.”
Angela Hsu, Senior Vice President, Marketing and Ecommerce for California-headquartered Lamps Plus has also seen this shift towards customers doing more research online. “As a result, when they come to our stores, they are asking more educated questions. We see the benefits of this because our customers are further in their buying process, more knowledgeable on the topic and have a clearer understanding of what they want to purchase when they enter our stores.”
Nosto’s Patrick Obolgogiani adds: “There is a big trend of UGC and people trusting the opinions of other people more than those of companies, which makes sense. Younger generations, in particular, tend to like to see what their peers think about something – it is about social proof.”
As can be seen in Figure 2, consumer ratings and reviews rank as the most important source of information when buying items for the home, with 69% of all respondents saying this source was ‘very important’ or ‘important’, while a quarter of respondents ascribed the same level of importance to social media.
Obolgogiani says UGC is a key data source for retailers looking to deliver an enhanced customer experience. “If you combine the social proof of UGC with behavioural insights — what people are actually buying and looking at — it can be a really big influencer in finally making a purchase.”
But while UGC often begins the journey, final sales – particularly of larger home items – are still made on the high street. More than three-quarters (77%) of respondents said they buy sofas mainly in-store, compared with 70% who said the same for beds and 56% for homeware/furnishings (see appendix, Figure 8).
3. Consumers turn to reviews for emotive purchases
Our research shows the importance of ratings and reviews in the purchase journey for a variety of home and garden-related purchases. This is particularly evident for beds, with consumers ascribing a particularly high level of importance to consumer sentiment for this category of purchase (Figure 3). Furthermore, three-quarters (75%) of all respondents said they agreed that positive reviews make them more likely to buy a bed from a retailer, increasing to a resounding 80% in the US.
Beds are a hugely emotive purchase, and with 92% of adults internationally viewing sleep as a crucial component of their overall health and wellbeing (according to the Philips Global Sleep Survey), it is easy to see why consumers so keenly seek others’ opinions on this prized piece of furniture.
Indeed, the mattress market has been disrupted by a slew of newcomers, with leading brands including Casper, Tuft and Needle, Purple and Leesa all selling direct to consumers online. According to Forbes, the online retail segment is now responsible for more than 5% of the mattress market and is expected to soon reach 10%.
4. Peers drive trust
Word-of-mouth recommendations have always been powerful. They bring the authenticity of someone impartial, rather than the loaded endorsements of a company itself – even if the company’s claims are true. The internet has supercharged this, empowering consumers to quickly and easily seek out the opinions, not just of friends and family, but of other like-minded individuals, reaching a wider network of ‘trusted’ sources.
Swift Direct Blinds taps into this human need to seek and share opinions, giving its customers a referral code that enables friends and family to benefit from a discount. “I don’t think people necessarily rush round to friends and say, ‘I have just had an amazing blind fitted’, but if someone visits a friend’s home and they remark on the new blind, you can see how the conversation evolves,” says Simon Weigh of Swift Direct Blinds. “Our ‘recommend a friend’ approach works really well and is a significant part of our revenue stream.”
Wickes also recognises the huge value of word-ofmouth recommendations. “People who are referred to Wickes as a result of seeing a friend’s kitchen are a really important part of our business,” says Rachel Finn, of Wickes. “They are the customers who are most likely to buy from Wickes. That close circle of friends who recommend us directly is really important.”
Of course, social media provides a platform for such word-of-mouth recommendations too. As highlighted earlier, a quarter of respondents said social media was at least ‘important’ as a source of information when buying home products.
As Angela Hsu says, Lamps Plus customers will regularly share a room they have remodelled or redesigned that includes the brand’s lighting. “It’s in those ‘micro-moments’ that we often earn our reputation and customer referrals.” As a result, the company encourages customers to share experiences and product recommendations on social media. “We have seen the positive impact of this as the number of customers coming to our website and purchasing from social media continues to increase.”
5. A valuable source of customer insight
The growth in consumers sharing feedback on brands, products and services – whether via ratings and reviews, in person or via social media for example – can provide a valuable source of data for retailers.
As Nosto’s Obolgogiani points out, the impact, not only of Amazon but of other digital disruptors in the home and garden sector, means companies have to make their data work hard to compete. “Every business needs to make sure they leverage whatever data they have to meet those changing expectations from the consumer.”
It is not just positive reviews which provide valuable insights. At Swift Direct Blinds, the company’s head of customer services monitors all reviews in order to deliver an optimum experience, but also to pinpoint potential problems.
“Not so long ago we noticed that a number of customer reviews were commenting negatively on the quality of one particular fabric we were using in one of our blinds,” says Simon Weigh of Swift Direct Blinds. “We flagged it up and the factory looked at it and noticed a minor problem, but it was an important thing to correct. We ended up changing fabric suppliers as a result of that insight.”
Monitoring reviews is an area Wickes is looking to improve. “The reviews will happen whether you read them or not, but from our side it is really important that our customer service team are looking at every single one and considering a response, whether someone has given a one or two star review and a problem needs a resolution, or whether someone is giving a four or five star review which needs to be acknowledged,” says Rachel Finn of Wickes.
There is a clear opportunity to provide real-time responses too. Lamps Plus puts a huge emphasis on feedback, receiving thousands of comments each month. “What sets us apart is that we act on that feedback in real time,” says Angela Hsu. “When we receive a negative review, our store managers are notified immediately and they reach out to that customer to try and address their concerns within minutes of the negative feedback being given. Similarly, when a customer gives us a glowing review (5 stars) our managers are also encouraged to contact the customer and thank them for their purchase and review.”
6. Emerging technologies impact consumer behaviour
Virtual reality (VR) and augmented reality (AR) have both become part of the lexicon. As the price of VR headsets comes down and AR becomes more familiar, these technologies are starting to find valuable uses within the home and garden sector.
Wayfair, Ashley Furniture and IKEA all launched AR apps in 2017. IKEA’s Place app allows consumers to scan items from its online store and place them virtually into their own homes, allowing them to visualise them in situ, true to scale. Launched in September 2017, it is the most popular free non-gaming app.
Nearly a fifth (18%) of all respondents to our research had already used both VR and AR to help them make a purchase decision for their home or garden, with this figure marginally higher in the US than the UK for both technologies (see appendix, Figure 9). There is also much talk about the connected home, or internet of things (IoT), a concept driven by yet more convenience and efficiency.
The technology is still in its infancy, but some areas are gathering pace quicker than others. Our figures show that connected speakers are the most common IoT device in the home, with 20% of all respondents owning these (Figure 4). This figure was higher in the US than in the UK, with nearly a quarter (24%) owning connected speakers stateside.
While prices might currently be prohibitive for many, and interoperability with other appliances is a concern, the appetite is clearly there, with Gartner predicting a sharp increase in the number of smart home devices in the average household over the next few years.
It creates an opportunity for retailers to integrate with smart speakers, and to invest in voice search. A study from InfoScout last year shows that people who buy an Amazon Echo increase their spending on Amazon by 29% after purchasing an Echo. Connected speakers are undoubtedly becoming part of the consumer buying journey
The retail sector is in a state of flux as digital continues to transform the way consumers research and make purchases, while the way people live globally is also changing.
There are huge opportunities for retailers who listen to what today’s audience really wants. In a tough climate, the companies who survive and thrive will be those who understand what consumers like – and dislike – and deliver accordingly. Retailers have an unprecedented opportunity to hear customers, through social media, UGC and ratings and reviews, effectively giving them a hotline to their audience’s innermost thoughts, wants and needs.
But it isn’t just about encouraging consumers to share their opinions – it is about brands reassuring audiences that these opinions are being listened to and considered, with key insights being fed back into the business.
There is no hiding place. Consumers today crave transparency, authenticity and honesty, and home and garden sector brands who can prove this will win out.
Appendix & Methodology
London Research was commissioned by Trustpilot to carry out a survey of 1,000 nationally representative consumers in January 2019. The sample comprised 500 respondents in the UK and 500 in the US. The survey was conducted using a Toluna research panel. London Research also carried out interviews for this report.
London Research and Trustpilot would like to thank the following people for their insights.
- Rachel Finn, Head of Customer Journey, Showroom Marketing, Wickes
- Angela Hsu, Senior Vice President, Marketing and Ecommerce, Lamps Plus
- Patrick Obolgogiani, Global Head of Customer Success, Nosto
- Simon Weigh, Head of Marketing, Swift Direct Blind