prepare for a profitable 2014 holiday season: key online shopping trends and best practices
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1 © 2014 IBM Corporation
Prepare for a Profitable
Holiday Season
Key Online Shopping Trends
and Best Practices
2 © 2014 IBM Corporation
Today’s presenters
Sucharita Mulpuru Principal Analyst
Forrester
@smulpuru
Jay Henderson Strategy Director,
IBM ExperienceOne
@jay_henderson
#SmarterCommerce @smulpuru @jay_henderson
3 © 2014 IBM Corporation
Agenda
› Online Shopping Trends
› Holiday Opportunities
› Mobile’s Steady March to Ubiquity
› The State of Mobile Commerce
› Creating an Action Plan
#SmarterCommerce @smulpuru @jay_henderson
3
4 © 2014 IBM Corporation
Compare performance against industry peers with
IBM Digital Analytics Benchmark
IBM Digital Analytics Benchmark
Over 3,000 sites participated
Aggregate index
• Compare against industry
• Compare against peers
Geographic coverage
• US, UK, AU, Europe, World Wide
Industry specific
• Retail, Content, Financial Services, Travel
Segment specific
• Apparel, Department Stores, Health and Beauty,
and 12 others. . .
Free Resources
US holiday retail & sub-verticals
UK Mega Monday & Cyber Monday
AU Click Frenzy
www.ibm.com/benchmark
#SmarterCommerce @smulpuru @jay_henderson
5 © 2014 IBM Corporation
Reasonable and steady growth for online sales
15.10%
9.74% 10.34% 9.50%
Q2 2013 Q3 2013 Q4 2013 Q1 2014
U.S. Online Retail Sales Growth by Quarter
Dec 2013
Average Oder Value
$122.46
up 13.0% over 2 years
#SmarterCommerce @smulpuru @jay_henderson
Source: IBM Digital Analytics Benchmark
6 © 2014 IBM Corporation
Capturing - and keeping - consumer attention continues to be difficult
#SmarterCommerce @smulpuru @jay_henderson
Session length down
November 2013 ‘time on site’ was 7:39
Predicted to be 7:12 by Nov 2014
Cart abandonment remains high
Consistently ~70%
Bounce rate in 2011 was floating between
28 – 29%
Q1 2014 it’s risen slightly to ~33%
Pages per view declined from 9 to about 7
over the last 2 years
Source: IBM Digital Analytics Benchmark
7 © 2014 IBM Corporation
11/01/13 11/08/13 11/15/13 11/22/13 11/29/13 12/06/13 12/13/13 12/20/13 12/27/13
Day
US Retail Daily Sales 2013 November 1st to December 31st 2013
Thanksgiving 19.7% YoY
Black Friday 18.9% YoY
Cyber Monday 20.6% YoY
Boxing Day 8.6% YoY
Early promotions
The 2013 shopping season started earlier and key days still
performed strong
Dramatic spike Thanksgiving Day, starting at 5 PM PST, as retailers began Black Friday promotions early
Thanksgiving continues its growth year over year, but Black Friday still delivers considerably higher sales
Cyber Monday continues to be the biggest online shopping day of the year
#SmarterCommerce @smulpuru @jay_henderson
Source: IBM Digital Analytics Benchmark
8 © 2014 IBM Corporation
Similar postcards from around the globe….
• Online sales increased 31.6%
Australia’s Click Frenzy – November 19 – 20, 2013
• Online sales increased 16.3%
UK Cyber Monday- December 2, 2013
If you use this
chart…would
explain that BF in
the UK was
adopted for the first
time in 2013 and it
outpaced their
‘Cyber Monday’
which gained
greater consensus
from retailers over
other ‘Mega
Mondays’ seen in
previous years.
#SmarterCommerce @smulpuru @jay_henderson
Source: IBM Digital Analytics Benchmark
9 © 2014 IBM Corporation
Agenda
› Online Shopping Trends
› Holiday Opportunities
› Mobile’s Steady March to Ubiquity
› The State of Mobile Commerce
› Creating an Action Plan
#SmarterCommerce @smulpuru @jay_henderson
9
© 2014 Forrester Research, Inc. Reproduction Prohibited 10
The myth of holiday shopping is that it’s about gifts
Who were you shopping for today?
Pre-Thanksgiving Thanksgiving CyberMonday CyberWeek
Base: online consumers who purchased online during the given timeframe
Source: Bizrate Insights/Forrester Holiday Flash Survey, 2013
56%
42%
8%
4%
Myself
Gifts for others
Non-gifts forothers
Business
53%
52%
7%
3%
49%
57%
6%
4%
44%
56%
7%
4%
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 11
Retailers pushed hard at the last minute
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 12
Web shoppers continue to abandon stores during key time periods
Pre-Thanksgiving Thanksgiving CyberMonday CyberWeek
Base: online consumers who purchased online during the given timeframe
Source: Bizrate Insights/Forrester Holiday Flash Survey, 2013
69%
83%
I shopped in storesless because Ishopped online
instead
I prefer to shop onlinerather than go tocrowded stores
during Thanksgivingweekend
79%
87%
75%
82%
65%
81%
% agreeing with statement
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 13
Email still matters
4%
6%
8%
11%
9%
44%
41%
4%
5%
9%
11%
8%
43%
43%
Retailer's socialpresence
Deals or shoppingwebsite
Other email
Someone told meabout it
Through searchengines
Via email from theretailer
I visited the retail sitedirectly
3%
6%
8%
11%
10%
39%
44%
4%
6%
9%
10%
9%
40%
43%
Retailer's socialpresence
Deals or shoppingwebsite
Other email
Someone told meabout it
Through searchengines
Via email from theretailer
I visited the retail sitedirectly
4%
6%
9%
10%
11%
37%
43%
2%
5%
8%
10%
11%
33%
43%
Retailer's socialpresence
Deals or shoppingwebsite
Other email
Someone told meabout it
Through searchengines
Via email from theretailer
I visited the retail sitedirectly
How did you learn about these special deals [from today’s purchase]?
Pre-Thanksgiving Thanksgiving Weekend
Cyber Monday
2012 2013
3%
7%
9%
9%
13%
34%
45%
4%
8%
10%
12%
12%
35%
45%
Cyber Week
Source: Bizrate Insights/Forrester Holiday Flash Survey, 2012 and 2013
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 14
Shipping clubs picked up a lot of steam “Are you a member of a shipping club or program (i.e.
Amazon Prime, Shoprunner or Williams-Sonoma Reserve)?”
Source: Bizrate Insights/Forrester Research Holiday Flash Surveys, Q4 2010, Q4 2011, Q4 2012, Q4 2013
N: 809 shipping club members
“How does your membership in a shipping club or
program affect your shopping frequency?”
67%
29%
4%
I shop more (or plan toshop more) with the
retailer(s) whoseshipping club I have
joined
The shipping club hasnot changed my
shopping behavior withthat retailer
I shop less with theretailer after joining the
shipping club
9%
12% 14%
21%
2010 2011 2012 2013
#SmarterCommerce @smulpuru @jay_henderson
15 © 2014 IBM Corporation
Agenda
› Online Shopping Trends
› Holiday Opportunities
› Mobile’s Steady March to Ubiquity
› The State of Mobile Commerce
› Creating an Action Plan
#SmarterCommerce @smulpuru @jay_henderson
15
16 © 2014 IBM Corporation
First, some definitions (for the slides today)
≠
Phablets, yes
200MM smartphone subscribers
Mini tablets, yes
100MM tablet owners
Tablet Smartphone
MO
BIL
E
#SmarterCommerce @smulpuru @jay_henderson
17 © 2014 IBM Corporation
Mobile shopping soars
As a percentage of all online traffic and sales, Thanksgiving saw the
highest rates at at 42.6% and 25.8%, respectively
However, Cyber Monday saw the most growth year over year with
increases of 44.9% and 55.4% for percentage traffic and sales,
respectively
17
0%
10%
20%
30%
40%
50%
Thanksgiving Black Friday Cyber Monday
Mobile Performance 2013
Mobile % of Sales Mobile % of Site Traffic
Mobile % of Traffic and Sales
IBM Digital Analytics Benchmark
FYI: Christmas
Day stats were the
highest of the
holiday season:
Mobile % traffic
was 48.1%; mobile
% of sales was
28.9%
#SmarterCommerce @smulpuru @jay_henderson
Source: IBM Digital Analytics Benchmark
18 © 2014 IBM Corporation
mobile sales
FORECAST
43% Nov 2014
34% Nov 2013
mobile traffic
17% Nov 2013
FORECAST
20% Nov 2014
Mobile continues its steady march to ubiquity….
Source: IBM Digital Analytics Benchmark
#SmarterCommerce @smulpuru @jay_henderson
19 © 2014 IBM Corporation
0%
10%
20%
30%
40%
50%
AU Click Frenzy US Cyber Monday UK Cyber Monday
Mobile % of Traffic and Sales
Mobile % of Sales Mobile % of Site Traffic
Online Retail 2013
IBM Digital Analytics Benchmark
UK outpaced US and Australia in mobile percentage traffic and
sales at 44.3% and 33.2%, respectively
#SmarterCommerce @smulpuru @jay_henderson
Source: IBM Digital Analytics Benchmark
20 © 2014 IBM Corporation
Mobile is not all thumbs, fingers too.
Smartphones to Browse, Tablets to Buy
Smartphones Tablets
Performance by Device Type November-December 2013
Source: IBM Digital Analytics Benchmark
#SmarterCommerce @smulpuru @jay_henderson
21 © 2014 IBM Corporation
Smartphone to brows, tablets to buy….
0%
10%
20%
30%
AU Click Frenzy US Cyber Monday UK Cyber Monday
Mobile % of Sales by Device Type
Smartphone Tablet
Online Retail 2013 IBM Digital Analytics Benchmark IBM Digital Analytics
Benchmark
0%
10%
20%
30%
AU Click Frenzy US Cyber Monday UK Cyber Monday
Mobile % of Traffic by Device Type
Smartphone Tablet
Online Retail 2013
IBM Digital Analytics
Benchmark
Unlike US and UK,
traffic from tablets kept
pace with smartphones
in Australia
Tablets consistently
drove more sales
transactions than
smartphones
#SmarterCommerce @smulpuru @jay_henderson
Source: IBM Digital Analytics Benchmark
22 © 2014 IBM Corporation
iOS outpaces Android in most key metrics….
Average Order Value
Average Page Views
Average Session Length
Conversion Rate
% of Online Sales
% of Online Site Traffic
Performance by Mobile OS November-December 2013
Android iOS
IBM Digital Analytics Benchmark
10.8% 24.5%
2.8% 14.3%
1.2% 2.1%
4:56 4:49
5.7 6.4
$87.25 $116.13
• Android 50.6%
• iOS 43.8%
Source: IBM Digital Analytics Benchmark and Kantar Worldpanel, “Smartphone OS Sales Sales,” January 27, 2014
Performance by Mobile OS November-December 2013
Mobile OS Market Share Q4 2013
Android iOS
despite smaller market share
#SmarterCommerce @smulpuru @jay_henderson
23 © 2014 IBM Corporation
Agenda
› Online Shopping Trends
› Holiday Opportunities
› Mobile’s Steady March to Ubiquity
› The State of Mobile Commerce
› Creating an Action Plan
#SmarterCommerce @smulpuru @jay_henderson
23
© 2013 Forrester Research, Inc. Reproduction Prohibited 24
A few questions
› How big is m-commerce now?
› What are shoppers doing on different devices?
› What is important to know about retail apps?
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 25
How much will phones generate in commerce?
$16 $26
$32 $37 $42 $46
2013 2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
Source: Forrester’s Smartphone Commerce Forecast (do not distribute)
US Smartphone Commerce $B
(Physical goods and media)
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 26
Other m-commerce categories make the figure even higher
$16 $26
$32 $37 $42 $46 $12
$17
$21
$26
$31 $36
2013 2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
Source: Forrester’s Smartphone Commerce Forecast (do not distribute)
US Smartphone Commerce $B
Travel and other
services
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 27
How this fares relative to the overall retail pie
Source: Forrester Forecasts; only includes physical goods and media categories
$50 $82 $113 $148 $183 $222
2013 2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
Phone and tablet commerce ($B)
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 28
How this fares relative to the overall retail pie
Source: Forrester Forecasts; only includes physical goods and media categories
$50 $82 $113 $148 $183 $222
$213 $212 $212 $207 $202 $192
2013 2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
Other eCommerce($B)
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 29
How this fares relative to the overall retail pie
Source: Forrester Forecasts; only includes physical goods and media categories
$50 $82 $113 $148 $183 $222 $213 $212 $212 $207 $202 $192
$2,080 $2,136 $2,197 $2,259 $2,322 $2,389
2013 2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
Non eCommerce/mobile sales ($B)
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 30
A few questions
› How big is m-commerce now?
› What are shoppers doing on different devices?
› What is important to know about retail apps?
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 31
Mobile devices are used everywhere “Where do you use each of the following devices to access the Internet?”
Source: The State of Consumers and Technology, Benchmark 2013, US
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 32
Time on tablets is cannibalistic of PCs
With the addition of your iPad/tablet to the devices that
you already use to go online, do you spend more, less, or
the same amount of time online?
More time online Less time on PCs
With the addition of your iPad/tablet to the
devices that you already use to go online, how
is your desktop computer/laptop usage
affected?
49% 46%
2011 2014
47% 48%
2011 2014
Source: Bizrate Insights/Forrester Mobile Commerce Studies
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 33
This applies to phones too
Since getting your smartphone/small screen mobile
device, do you spend more, less, or the same total amount
of time online (including using your computer and other
devices you access to go online)?
More time online Less time on PCs
If you own both a smartphone/small screen
mobile device and a desktop computer/laptop,
then has the smartphone/small screen mobile
device decreased the amount of time you use
your desktop computer/laptop?
40% 47%
2011 2014
41% 49%
2011 2014
Source: Bizrate Insights/Forrester Mobile Commerce Studies
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 34
Top shopping activities on phones vs tablets
1 Read emails from retailers Browse or research products
2 Receive texts with special offers
from retailers Read emails from retailers
3 Locate retail
stores/hours/directions
Compare prices while shopping
online
4 Browse or research products Read product or store reviews
5 Download or redeem coupons Identify where products are sold
Source: Bizrate Insights/Forrester Mobile Commerce Studies
Please note which of the following you do with your mobile device(s) with
respect to any online retailer.
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 35
Source: A commissioned study conducted by Forrester Consulting on behalf of VISA, September 2013
26%
42%
54%
Email message from aretailer
I search for somethingspecific on a retailer's site
I search for somethingspecific using a search
engine
38%
60%
69%
Where the shopping journey starts on different devices
Base: 1003 smartphone shoppers (research or purchase)
27%
51%
57%
Search is important on all devices
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 36
Email is also essential
81% of web buyers read
emails on phones because
the phone is always with
them; 48% like that the
phone has no email login
67% of web buyers say that
they were inspired to buy
something after opening an
email on a mobile phone 22%
37%
75%
Tablet
Smartphone
Desktop
I read promotional emails from
[merchant X] on my…
Source: Bizrate Insights Industry Hot Topic Q4, 2013
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 37
A few questions
› How big is m-commerce now?
› What are shoppers doing on different devices?
› What is important to know about retail apps?
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 38
These are the most common retail apps
42%
8%
15%
33%
I have notdownloaded an
app
Fashion trendsor tech reviews
Comparisonshopping
Retailer-specific apps
2011 2012 2013 2014
41%
7%
15%
36%
37%
7%
16%
40%
33%
9%
14%
45%
Which of the following types of online shopping apps, if any, have you
downloaded to your smartphone/small screen mobile device?
Source: Bizrate Insights/Forrester Mobile Commerce Studies
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 39
Shoppers discover phone apps mainly through word of mouth
How do you learn about the apps that you install on your device?
14%
6%
11%
20%
21%
25%
59%
I don't install apps
Sign in a retail store
Retailer websites
An ad on TV/radio/print
The app store
Social media (e.g. Facebook)
Word of mouth (e.g. friends,family, colleagues)
12%
6%
11%
21%
26%
25%
55%
Base: recent online buyers who own smartphones or tablets
Source: Bizrate Insights/Forrester Mobile Commerce Studies
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 40
How do you learn about the apps that you install
on your device?
› “My husband does it”
› “My children”
› “What I need at a particular time”
› “I ask teenagers”
Source: Bizrate Insights/Forrester Mobile Commerce Studies
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited 41
Few customers say they need a retailer’s app
If you have interacted with [MerchantName] on a mobile device,
then which experience do you prefer?
37 %
7 %
6 %
19 %
30 %
Accessing the standard website (i.e. the sameview you would see on your computer)
Using the mobile version of the site (i.e. the sitemay have less content but is optimized to…
Using an app (if this retailer has one availablefor download)
I don't have a preference
I have never interacted with [Merchant] from amobile device
Source: Bizrate Insights/Forrester Mobile Commerce Studies
#SmarterCommerce @smulpuru @jay_henderson
© 2014 Forrester Research, Inc. Reproduction Prohibited
Yet, more than 40% of mobile phone transactions happen on apps
“Thinking of the last time you bought something on
your smartphone, how did you complete your
transaction?”
59%
41%
On a smartphonethrough a website
On a smartphonethrough anapplication
Source: A commissioned study conducted by Forrester Consulting on behalf of Amazon.com, January 2013
Base: 528 mobile phone buyers Base: 311 tablet and PC buyers
(of non-phone buyers)
“Thinking of the last time you bought something on
your [tablet or PC], how did you complete your
transaction?”
4%
14%
83%
On a tablet throughan application
On a tablet througha website
On a computer
Source: A commissioned study conducted by Forrester Consulting on behalf of VISA, September 2013
#SmarterCommerce @smulpuru @jay_henderson
43 © 2014 IBM Corporation
Agenda
› Online Shopping Trends
› Holiday Opportunities
› Mobile’s Steady March to Ubiquity
› The State of Mobile Commerce
› Creating an Action Plan
#SmarterCommerce @smulpuru @jay_henderson
43
44 © 2014 IBM Corporation
The mobile strategy you didn’t know you had:
mobile email and mobile websites
The email you imagine in your head
#SmarterCommerce @smulpuru @jay_henderson
45 © 2014 IBM Corporation
The bleak (or euphoric) reality, mandates optimizing emails to
render across mobile devices
Blackberry Android iPhone Windows Mobile 6
#SmarterCommerce @smulpuru @jay_henderson
50% of emails are opened on mobile devices
Source: IBM Email Benchmark, Six months December 2013 – May 2014
46 © 2014 IBM Corporation
Understand the mobile customer experience
Make it easy….start with digital analytics
Analyze your mobile traffic
Tealeaf Mobile
Heatmaps, Link Analytics,
and Gestures
IBM Digital Analytics
Device Stream
#SmarterCommerce @smulpuru @jay_henderson
Explore the customer’s mobile
experience
Understand the “why” behind mobile
47 © 2014 IBM Corporation
Rich Push Notifications
Mobile Web Notifications
Native Simple Push and SMS
Messaging
iOS and Android Wallets
Multiple opportunities for engaging customers in mobile
#SmarterCommerce @smulpuru @jay_henderson
48 © 2014 IBM Corporation
Broadcast Narrowcast 1:1 Cast
message all app users message some app
users based on rules &
segments
message individual users
Use multiple levels of messaging specificity and targeting
#SmarterCommerce @smulpuru @jay_henderson
49 © 2014 IBM Corporation
Event-based triggers connect with your consumers in the most
opportune moments
#SmarterCommerce @smulpuru @jay_henderson
50 © 2014 IBM Corporation
Arrival & Departure
Deliver content when customers
approach or leave your (or your
competitors) retails location.
Location Segments Deliver relevant content or
simply drive customers to your
stores using location data.
Indoor Messaging Use iBeacons, Wifi positioning,
LED, or any other technology to
identify customer location and
deliver relevant content.
Location is a key piece of context to drive relevant engagement
#SmarterCommerce @smulpuru @jay_henderson
51 © 2014 IBM Corporation
Understand Engage
Optimize
Leaders are shifting to continuous customer engagement
#SmarterCommerce @smulpuru @jay_henderson
52 © 2014 IBM Corporation
Understand and engage customers across channels
Better coordinate
ACROSS channels
Be more effective
WITHIN each channel
#SmarterCommerce @smulpuru @jay_henderson
53 © 2014 IBM Corporation
Digital Marketers
Merchandisers Marketers eCommerce Professionals
Customer Service
Understand and engage customers across departments
#SmarterCommerce @smulpuru @jay_henderson
54 © 2014 IBM Corporation
Additional holiday benchmark analysis & best practice guides
www.ibm.com/benchmark
#SmarterCommerce @smulpuru @jay_henderson
Get a copy of the NEW Online Retail Holiday Readiness report at:
https://ibm.biz/BdFBUY
55 © 2014 IBM Corporation
Questions?
Sucharita Mulpuru Principal Analyst
Forrester
@smulpuru
Jay Henderson Strategy Director,
IBM ExperienceOne
@jay_henderson
www.ibm.com/benchmark
#SmarterCommerce @smulpuru @jay_henderson
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