ecommerce summit atlanta state of ecommerce
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From the eCommerce Summit Atlanta June 3-4, 2009. Presented by Scot Wingo of Channel Advisor sharing the current trends and future projections on where eCommerce is heading. To find out more about eCommerce Merchants please visit http://www.ecmta.orgTRANSCRIPT
PESAState of E-commerce
Scot WingoCEO – ChannelAdvisortwitter.com/scotwingo
ebaystrategies.blogs.com, csestrategies.com, amazonstrategies, searchmarketing.com
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Agenda
• Economic backdrop
• Overall E-commerce Trends
• E-commerce Channel Trends
• Paid-search
• Comparison Shopping Engines
• Marketplaces
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US Consumer Confidence
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US Consumer Confidence Improving
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2008 E-Commerce Results
• Growth rate has come down from the 20%+ y/y to flat/down
• Personally, I think this will mirror consumer confidence
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Q408 Category Breakdown
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• Source: JP Morgan, Forrester, US Dept of commerce.
E-Commerce Forecast 2009-2011
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E-Commerce Category 08/09 Growth 2008 2009 Y/Y Growth
Pets 1.5 1.8 20.0% Personal Care/Health + Beauty 5 5.9 18.0% Food and Beverage 7.3 8.6 17.8% Apparel 23.6 27 14.4% Music/Video 5.5 6.2 12.7% Consumer Electronics 11.1 12.5 12.6% Furniture 1.6 1.8 12.5% Auto Parts 3.2 3.6 12.5% Appliances/Home Improvement 17.2 19.2 11.6% Movie Tickets 1 1.1 10.0% Jewelry 3.1 3.4 9.7% Flowers 2.2 2.4 9.1% Toys and Video Games 6.7 7.2 7.5% Sporting Goods 2.7 2.9 7.4% Computer 25.5 27.2 6.7% Books 5.1 5.4 5.9% Collectibles 1.7 1.8 5.9% Office Products 5.2 5.5 5.8% Event Tickets 5 5.2 4.0% Other 7.2 7.4 2.8%
* All amounts are $US Billions
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Consumer Behavior Has Changed
• Fewer consumers go ‘direct’ – over 80% of GMV driven by e-commerce channels
• If you aren’t on all of these channels, you are missing a material opportunity.
FBR Research based on publicly available GMV Information.
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2008 – Coupons Go Mainstream
• 35m visitors equates to 18% of the audience
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Challenges
• Recessionary head-winds
• Diversification takes time, resources and attention
• If you are eBay only, you are missing 75% of the pie
Opportunities
• Multi-channel e-commerce gives you an advantage over competitors
• Plenty of growth left in e-commerce, think of 08/09 as a minor speed bump
• Coupons are hitting the mainstream
• Everyone’s instinct is to ‘hunker down’, but this is probably the best time in our lifetimes to take share. But do so cautiously and with a measured approach
E-Commerce Trends - Summary
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E-Commerce Channel Trends
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Paid Search
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Huge Growing Market
• Paid-search market size
•
• Paid-search growth rates
2006 2007 2008 2009 2010 2011
US $8,602 $11,764 $14,518 $15,951 $20,102 $23,576
International $6,233 $10,235 $14,993 $17,208 $21,315 $25,701
Total $14,835 $21,999 $29,511 $33,159 $41,417 $49,277
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
US Y/Y Growth 37% 23% 10% 26% 17%
Intl Y/Y Growth 64% 46% 15% 24% 21%
Total Y/Y Growth 48% 34% 12% 25% 19%
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Search Share Trends
US Search Market Share
Oct-08 Nov-08 Dec-08 Jan-09 Feb-09
Google Sites 63.1% 63.5% 63.5% 63% 63.3%
Yahoo! Sites 20.5% 20.4% 20.5% 21% 20.6%
Microsoft Sites 8.5% 8.3% 8.3% 8.5% 8.2%
Ask Network 4.2% 4.0% 3.9% 3.7% 4.1%
AOL 3.7% 3.8% 3.8% 3.9% 3.9%
Source: ComScore data
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Search – Summary
Opportunities
• Many e-commerce players like CSEs and eBay have decreased their paid-search spend due to changes Google has made with quality score
• Don’t believe the naysayers, search still works
• Will Yahoo! and Microsoft merge or partner to create a ‘balance’ to Google?
• Google Product Search is a great ‘on-ramp’ to paid-search
Challenges
• Search is very different than a marketplace or CSE
• You have to generate keywords
• A great e-commerce site with advanced merchandising and high conversion rates is a requirement to be able to compete successfully in the world of paid-search
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Comparison Shopping
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• ChannelAdvisor – some customers see CSE as large as 40% of GMV
• 10-20% on average
• Forrester – 55% of online shoppers influenced by CSE
• ChannelAdvisor ‘assist’ technology shows this is the case.
% of Internet audience directly using CSEs by geography
CSE Trends
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CSE Y/Y growth 5%
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CSE 1.0
• Vintage <2000
• Product catalog driven
• Usually heavily electronics oriented
• CPC
• Stagnant, little to no innovation since 2006 timeframe
• Primarily acquire traffic from paid-search
CSE 2.0
• Vintage >2006
• Variety of models to enhance experience/business
• Reviews (Ciao)
• Social (Pronto)
• Traffic/fun (Jellyfish)
• BizModel (CPA )
CSE 1.0 vs. 2.0
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CSE Trends I
Rank Oct-2008 Nov-2008 Dec-2008 Jan-2009 Feb-2009 Mar-2009March Share
Total Internet : Total Audience 190,616 190,775 190,650 191,863 192,187 192,173 Comparison Shopping 71,175 76,321 80,323 71,599 66,384 66,265 34%1 Yahoo! Shopping 25,321 27,646 29,722 25,387 23,414 22,957 12%2 Shopzilla.com Sites 24,350 24,618 29,410 24,097 20,154 20,511 11%3 Shopping.com Sites 15,122 14,704 16,362 14,700 13,012 13,624 7%4 PRONTO.COM (w/ history) 11,675 11,025 13,759 12,141 10,635 11,085 6%5 ValueClick Sites 11,319 11,608 12,390 11,653 10,697 10,286 5%6 Google Product Search 11,753 11,841 13,864 12,466 11,382 9,993 5%7 Nextag.com Sites 6,985 8,200 9,657 8,396 7,117 7,531 4%8 MSN Shopping 8,229 10,760 10,429 7,400 6,079 5,499 3%9 SHOPLOCAL.COM 5,520 12,231 10,419 5,446 5,350 5,172 3%10 AOL Shopping (w/ history) 5,381 7,433 10,163 5,251 5,362 4,609 2%11 PriceGrabber 3,560 5,101 6,653 4,574 3,794 3,927 2%12 Become, Inc. N/A N/A N/A N/A N/A 3,888 2%
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CSE Trends II
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Amazon ProductAds
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Amazon ProductAds II
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Amazon ProductAds III
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ProductAds Categories and Pricing• Open categories
• Baby, Computer, Consumer Electronics, Health and Personal Care, Home and Garden, Office, Sports and Outdoors, Tools and Home Improvement and Toys
• Restricted categories
• Apparel and Accessories, Beauty, Jewelry and Watches and Shoes
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CSE - Summary
Opportunities
• Forrester – 55% of online shoppers influenced by CSE.
• Economics still ‘work’, niche sites highly effective.
• Next wave of innovation coming with CSE 2.0 – are you ready?
• Google Product Search! Did I mention that it’s FREE?
• In the US 34.5%+ consumers use a CSE
• Amazon ProductAds are an interesting new entrant in this space
Challenges
• Datafeeds are complicated.
• CSEs require a pretty sophisticated e-commerce site with .merchandising to hit ROI targets.
• ROI management is complex and requires datafeed manipulation.
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Marketplaces
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• eBay is losing share in e-commerce
• Q408 GMV was down 12% y/y (ex-vehicles)
• Q109 GMV was down 20% y/y (ex-vehicles)
eBay Faces Substantial Challenges
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eBay – Major Challenges
• Both auction and fixed-price GMV accelerating their decline
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Top eBay Seller Areas of Concern
• Demand
• DSRs
• Number of ‘unintended consequences’ is large
• Are Auctions in death spiral?
• Is the consumer abandoning them or is eBay effectively killing the format with decreased BestMatch Exposure
• Off-eBay advertising
• Fees/costs
• Search/BestMatch
• Did I mention demand?
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What are they doing to fix eBay?
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Amazon – Taking Share
• Q109:– Amazon: 21% (21% greater than e-commerce, 41% greater
than eBay)– E-Commerce: 0% – eBay: -20%
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Amazon – Why?• Prime Shipping
• Seller Business
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Amazon’s Seller Business
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eBay vs. Amazon
• What if the eBay/Amazon share change continues?
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eBay Changes – June 15• Smart FAQ
• Package Tracking
• Multi-sku – Biggest seller change since Fixed-Price introduced – link
• But not without complexity and some complex thinking…
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Marketplaces - SummaryOpportunities
• In face of eBay’s decline, you can take share on eBay if you are aggressive and early to the game with FP30, DSRs, RS.
• Catch the Amazon wave and hang on.
• New entrants like Buy.com give you an opportunity to establish a leadership role moving forward in your category.
Challenges
• Marketplaces are only 25% of e-commerce, don’t over-focus here.
• eBay is 13% of global e-commerce, but losing share.
• Diversification can be complex if you’ve built your processes around a single-marketplace world.
• Concerns over partnering with Amazon who is a retailer.