Instead of being entertained at cinemas, concerts, theatre shows, during sports and team activities and social gatherings, lockdown measures forced consumers to explore different ways to entertain themselves - at home.
How has this impacted online purchases in Media and Entertainment (books, movies, games, music)? Which consumers are more prone to buying Media and Entertainment online than others? What will happen once societies open up more? And how big is the impact of warmer temperatures and summer holidays on Media and Entertainment e-commerce? AfterPay Insights decided to find out.
Purchase behavior in the category Media and Entertainment shows some clear characteristics. First of all, the amount of online Media and Entertainment purchases is closely related to the amount of time that consumers spend at home. As a category it is more ‘nice to have’ than ‘need to have’. This is evident as the online Media and Entertainment purchase development (and market penetration, i.e. share of consumers having purchased in category) during the course of the corona crisis show an amplified effect of the growth or decline in other categories, as well as to online purchases in general. Online Media and Entertainment purchases often are spontaneous, convenient, and instant gratification is very important – of course, digital purchases play into this need very effectively.
The drivers for purchasing online Media and Entertainment are not specific to Media and Entertainment shoppers. More or less all consumers have the same reasons for increasing purchases since end of March: consumers spend more time at home and have less options to entertain themselves. In this sense, it seems like wanting to stay entertained is a need that consumers commonly flock to in large numbers.
Second, in line with other categories previously analyzed, a small segment of consumers stands for the majority of the category revenue: Weekly Media and Entertainment shoppers only comprise 3% of online shoppers, but they stand for 65% of all online Media and Entertainment purchases, according to AfterPay Insights’ recent research.
And third, since many of the products in the category are distributed digitally, Media and Entertainment shoppers have a higher demand on merchants when it comes to security. Here, the good news is that Media and Entertainment merchants perform better than merchants in other categories in satisfying these customer expectations. This is not surprising as Media and Entertainment is a well-established and mature online category where consumers know what they can expect.
Finally, the consumer base for weekly online Media and Entertainment purchases is male dominant. This contrasts to other online categories, for example Fashion, where the consumer base comprises more females.
In The Netherlands, online Media and Entertainment purchases started to decline one month ahead of the online sectors in general. In Germany, the growth and decline of the Media and Entertainment category has been very much at pace with the general purchasing trend during the corona pandemic. And in Norway, Media and Entertainment purchases grew considerably more rapid, compared to total online purchases up until the turn of April, and has since declined at a considerably more rapid pace up until the first half of June.
Comparing consumer behavior pre-corona vs the first half of June, and looking at the number of online purchases made across all categories, we see a noticeable shift in how consumers distribute their online purchases across categories.
An average online consumer in the Netherlands conducted 8% of all their online purchases within Media and Entertainment pre-corona, and at the first half of June this share has declined to 6%. In Germany and Norway this share has stayed stable at 10% and 8% respectively. The reason for Dutch consumers now making relatively less purchases within Media and Entertainment is not due to a decline in Media and Entertainment purchases, but rather that other online categories in the Netherlands have grown more (as seen in the graph above).
During the first half of June, the total share of online shoppers that have made at least one purchase within Media and Entertainment during a two-week period is 9% in The Netherlands, 14% in Germany and 7% in Norway. In line with the increase in Media and Entertainment purchases up until the turn of April and the since then decline (first graph of this blog), we see a similar ‘u-type curve’ pattern in the market penetration shares. I.e. the total share of online shoppers that have made at least one purchase within Media and Entertainment is approximately the same when comparing pre-corona and first half of June data, with an increase in between. This development also explains the relatively fickle customer base of the online Media and Entertainment category. Looking at the socio-demographic profile of the consumers that entered the category in the second half of April/first half of May, these had the same composition as the consumers that were in the category.
Weekly Media and Entertainment Shoppers (one or more online Media and Entertainment purchases per week) are over-represented among males, 35-54 year olds, no kids at home life stage, living in urban areas and holding a full-time job.
Bi-Weekly Media and Entertainment Shoppers (one online Media and Entertainment purchase per two weeks) are evenly split on gender and slightly younger than Weekly Media and Entertainment Shoppers (over-represented among 25-34 year olds). And as an effect these also comprise more consumers in the pre-family and kids at home life stages.
Non-Media and Entertainment Shoppers (no online Media and Entertainment purchases per two weeks) are from a socio-demographical perspective identical to that of the general online shopper. Not even disposable income differentiates non-Media and Entertainment shoppers from Media and Entertainment shoppers.
Weekly Media and Entertainment Shoppers is an important segment, seen across the three countries they only comprise 3% of all online shoppers, but they stand for 65% of all online Media and Entertainment purchases.
In the graph above, this development is depicted based on the average number of purchases done by Media and Entertainment shoppers across all category’s vs the average number of purchases made by Media and Entertainment shoppers within Media and Entertainment. When deep-diving into what other categories that Media and Entertainment shoppers buy, these are spread across the full spectrum – no specific category sticks out. I.e. outside Media and Entertainment, Media and Entertainment shoppers display a purchase pattern very similar to that of the general online shopper.
In The Netherlands, aside from being perceived as a secure merchant, Media and Entertainment shoppers here also express a higher need regarding a wide range of products as well as having used the merchant before.
In Germany, Media and Entertainment shoppers only express a significantly higher need for security. All other needs are on par with that of the average online shopper.
In Norway, Media and Entertainment shoppers do not only demand security to a larger extent than the average online shopper, they also express a higher demand regarding wide range of products.
Compared to the average merchant, Media and Entertainment merchants are performing quite well in satisfying Media and Entertainment Shoppers demands. A reason for this could be that online Media and Entertainment merchants, particularly the ones offering digital services, are fairly mature merchants who have optimized the digital delivery of their products and services, as well as the online customer experience. rteAcross all three countries, the one aspect where Media and Entertainment merchants are over-performing is having products in stock.
German Media and Entertainment Shoppers are overall very satisfied with their Media and Entertainment purchases. Shipping, payments and returns show some room for improvement but the one aspect where Media and Entertainment merchants’ are under-performing is regarding consumers perception of low price.
As people are forced to stay at home, and seek entertainment within four walls, Media and Entertainment grew. But, as lockdowns are eased, online Media and Entertainment purchases reduce. What does the nearby future look like for Media & Entertainment?
There are different forces at play here. First of all, as societies open up, consumers might take the opportunity to seek out-of-home entertainment, visiting newly organized concerts and theatre shows as well as re-opened venues like cinemas, clubs and restaurants. However, health-related concerns may throw a spanner in the works here, as some consumers could be uncomfortable with being among larger crowds of people. But how this – in the end – impacts the e-commerce share in Media and Entertainment is hard to predict.
Another aspect to keep in mind is the impact of warmer temperatures and summer holidays. Particularly purchases for digitally consumed Media and Entertainment may reduce as consumers prefer being entertained by more outside activities.
Coming up over the next few weeks are updated country deep dives about consumers’ e-commerce behavior in The Netherlands, Germany and Norway, with consumers’ financial outlook newly added to the research. Stay tuned for more insights!