holiday predictions 2013
DESCRIPTION
The holiday season seems to start earlier each and every year. So, how early are retailers deploying holiday campaigns? And what strategies are they using to generate the highest ROI? Lauren Freedman, President of the eTailing group, and Baynote worked together to survey 77 retailers on their holiday predictions, readiness, promotions and spending in 2013. The results of the survey will be available in the coming weeks, but you can sign up now and we will send you the results as soon as they are available.TRANSCRIPT
Holiday Predictions Survey Results, July 2013
WHY WE CONDUCTED THE RESEARCH
• Check in on trends from previous research
• Understand what is most important to retailers today
• Hear from retailers on what they are doing that is new
• Learn from their feedback
• Provide consultative advice to our clients
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HOLIDAY PREDICTIONS 2013
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THE DEMOGRAPHICS: 77 RETAILERS
33%
13%
6%
10%
13%
9%
9%
7%
Less than $20 million
$21 to $50 million
$51 to $100 million
$101 to $200 million
$201 to $500 million
$501 million to $1 billion
$1 to $5 billion
More than $5 billion
Company's Annual Revenue
16%
17%
17%
4%
11%
35%
Less than 5%
6% to 10%
11% to 25%
26% to 50%
51% to 75%
More than 75%
eCommerce as a % of Business
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TOPLINE THOUGHTS
HOLIDAY SPENDING
• Strong growth projected for 2013 holidays projected increases in the 11-15% range (Note: in line with industry projections)
• Mobile is making significant inroads while retailers are challenged to see social’s revenue contribution
• Retailers are cautiously optimistic given customer confidence levels; promotions are likely to be in play
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TOPLINE THOUGHTS
READINESS
• Retailer investment has been significant from marketing (SEO/SEM) and platform upgrades with mobile and retargeting also top-of-mind
• Customer experience investment tends to be “tactical” starting with improving key pages, onsite search and enhancing content
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TOPLINE THOUGHTS
PROMOTIONS
• Retailers are split regarding deploying promotions likely based on category buying patterns with only 1/3 early birds (October or before)
• Selectivity is key: protect profitability rather than a blanket selling strategy
• Free shipping will also be deployed selectively most often associated with a minimum purchase
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HOLIDAY SPENDING
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60% of retailers forecast growth >10%
Almost 1-in-4 expect 21%+ increases
5%
9%
12%
14%
23%
15%
12%
10%
Down
Flat
+1% to +5%
+6% to +10%
+11% to +15%
+16% to +20%
+21% to +30%
More than 31%
Q. How do you expect your overall online sales to change during the 2013 holiday?
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60% of retailers allocate more than 1/5th of their marketing budget to holiday
12%
13%
15%
21%
22%
17%
0% to 10%
11% to 15%
16% to 20%
21% to 30%
31% to 40%
More than 41%
Q. What percentage of your annual online marketing budget is allocated to the holiday season?
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The Forecast: Retailers are cautiously optimistic, promotion-
minded and believe they will make their numbers
Top-2:
Strongly to
Somewhat Agree
Neither agree
nor disagree
Top-2:
Strongly to
Somewhat Disagree
We’re cautiously optimistic that it will be a strong online holiday season 80% 12% 8%
The holidays will be promotion-centric so we are planning accordingly to ensure we deliver
from a bottom-line perspective 73% 18% 9%
The holidays will start out slowly but eventually gather momentum, and we’ll make plan 53% 30% 17%
It’s going to be a strong online holiday season 52% 30% 18%
We’re a bit nervous that we won’t make our aggressive plan 47% 19% 34%
Consumers still lack “complete” confidence in the economy so it’s going to be a flat online
holiday season at best 35% 26% 39%
We are pessimistic and have adjusted our forecast accordingly 14% 17% 69%
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Q. Please note your level of agreement with the following statements.
Lack of customer confidence plays into caution & fear that aggressive plans
won’t be met
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MOBILE MATTERS
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Top-2 Strongly to Somewhat
Agree 53%
Neither agree nor disagree
9%
Top-2: Strongly to Somewhat Disagree
38%
Mobile will be a significant part of our revenue this holiday season
Mobile revenue expectations are high for the holidays
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1 in 3 retailers project mobile will be more than 10% of their holiday revenues
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8%
29%
29%
22%
7%
5%
0%
1-5%
6-10%
11-15%
16-20%
21%+
What percentage of your 2013 holiday revenue do you anticipate will come from the mobile channel?
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SYSTEMS READINESS
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Answer Options Significant Limited No
Investment N/A
SEO/SEM 46% 46% 6% 2%
ECommerce platform upgrades 43% 38% 15% 4%
Mobile enhancement (e.g. apps, mcommerce, in-store, SMS, QR codes, payment methods) 32% 50% 14% 4%
Retargeting/advertising 31% 59% 10% 0%
Logistical improvements (faster fulfillment, more delivery choices) 26% 53% 18% 3%
Testing 23% 64% 12% 1%
Cart abandonment strategies 19% 64% 14% 3%
Big data capture, retrieval and analytics capabilities 18% 50% 27% 5%
Social (e.g. Facebook, Twitter, Pinterest, social listening tools, blogs) 17% 62% 20% 1%
Paper catalog 16% 25% 35% 24%
Alternative payment methods (e.g. digital wallets, bit coin, touchless mobile-to-mobile
transactions, etc.) 10% 24% 57% 9%
Cross-channel logistics (e.g. in-store pickup, check in-store product availability, e-receipts) 7% 34% 29% 30%
SEO/ SEM and platform upgrades see
significant investment ahead of holiday
Mobile, retargeting and testing are also top-of-mind for retailers
Q. Please note your level of TECHNOLOGY investment in 2013 from no investment to
significant investment. If a particular feature or upgrade does not apply to your business,
please select N/A.
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Dedicated efforts to improve key pages,
enhanced site search and augmenting content
lead customer experience investments
Answer Options
Significant Limited No Investment N/A
Improved key pages (e.g. home page, category page, product page) 48% 46% 6% 0%
Enhanced site search 37% 40% 22% 1%
Streamlined shopping cart 30% 49% 18% 3%
Increased content (e.g. documents, videos, tips) 30% 57% 10% 3%
Overall site redesign 29% 53% 17% 1%
Initiated or evolved loyalty program 18% 29% 40% 13%
Personalized zones site-wide from home page to follow up emails 17% 36% 44% 3%
User-generated content and tools (e.g. reviews, Q&A) 14% 55% 28% 3%
Rich media or related tools (e.g. zoom, alternative views) 13% 39% 39% 9%
Expanded customer service (e.g. 24x7 access) 4% 38% 51% 7%
Q. Please note your level of CONSUMER EXPERIENCE investment in 2013 from no
investment to significant investment. If a particular feature or upgrade does not apply to
your business, please select N/A.
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GIFTING
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Retailers are making limited or no
investment in gifting: most already have
requisite feature set
Answer Options Significant Limited No Investment N/A
Ship to multiple addresses within a single checkout 4% 21% 58% 17%
Ability to hold gifts to ship later 5% 16% 57% 22%
Ability to store addresses of friends and family to access when sending gifts 2% 29% 52% 17%
Promotion of gift cards in personalization zones 4% 25% 52% 19%
Wish lists 6% 34% 45% 14%
Traditional gift certificates 1% 39% 42% 18%
egift or digital gift cards 9% 39% 38% 14%
Enhanced gift center/gift suggestions 7% 42% 34% 17%
Q. Please note your level of GIFTING investment in 2013 from no investment to
significant investment. If a particular feature or upgrade does not apply to your
business, please select N/A.
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TESTING
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Testing continues for 3 of 4 retailers yet only
a handful of retailers will increase frequency
Testing 71%
No Testing 17%
Test More Frequently
12%
Q. Which of the following best describes your approach to testing during the holiday season?
12%
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PROMOTIONAL STRATEGIES
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Retailers get a jump on the season: 1 in 3
deploy holiday campaigns in early October
……yet 40% will wait until November to initiate holiday marketing
30%
4%
7%
4%
16%
21%
5%
14%
Week of 10/1 or earlier
Week of 10/7
Week of 10/14
Week of 10/21
Week of 10/28
Week of 11/4
Week of 11/11
Week of 11/18 or later
Q. When do you plan to start your ONLINE holiday marketing and promotion campaigns (choose 1)?
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Retailer promotion budgets vary
substantially: driven by product category and
brand orientation
13%
25%
22%
18%
22%
0%-10%
11% to 20%
21% to 30%
31% to 40%
More than 40%
Q. What percentage of your total 2013 promotion budget is allocated to holiday?
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Marketing and promotion budgets are
aligned for the holiday season
12%
13%
15%
21%
22%
17%
13%
12%
13%
22%
18%
22%
0% to 10%
11% to 15%
16% to 20%
21% to 30%
31% to 40%
More than 41%
Budgets as a % of Revenue
Marketing
Promotion
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CORE STRATEGIES: MOBILE
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Mobile significantly impacts revenue:
social impact seen as marginal
0% 1%-5% 6%-10% 11%-15% 16%-20% 21%-30% 31%-40% 41%-50% 50%+
Mobile
8% 29% 29% 22% 7% 4% 1% 0 0
Social
33% 51% 7% 3% 3% 3% 0 0 0
In-Store
41% 6% 5% 3% 3% 1% 4% 3% 34%
Online
0% 7% 14% 2% 4% 9% 4% 7% 53%
Q. What percentage of your 2013 holiday revenue do you anticipate will come from each of the following channels?
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8%
29%
29%
22%
7%
5%
33%
51%
7%
3%
3%
3%
0%
1-5%
6-10%
11-15%
16-20%
21%+
What percentage of your holiday revenue do you anticipate will come from mobile and social channels?
Mobile
Social
Social revenue trends <5% while the
majority project mobile >5%
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CORE STRATEGIES:
CUSTOMER EXPERIENCE
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Answer Options Significant Limited No
Investment N/A
SEO/SEM 46% 46% 6% 2%
ECommerce platform upgrades 43% 38% 15% 4%
Mobile enhancement (e.g. apps, mcommerce, in-store, SMS, QR codes, payment methods) 32% 50% 14% 4%
Retargeting/advertising 31% 59% 10% 0%
Logistical improvements (faster fulfillment, more delivery choices) 26% 53% 18% 3%
Testing 23% 64% 12% 1%
Cart abandonment strategies 19% 64% 14% 3%
Big data capture, retrieval and analytics capabilities 18% 50% 27% 5%
Social (e.g. Facebook, Twitter, Pinterest, social listening tools, blogs) 17% 62% 20% 1%
Paper catalog 16% 25% 35% 24%
Alternative payment methods (e.g. digital wallets, bit coin, touchless mobile-to-mobile
transactions, etc.) 10% 24% 57% 9%
Cross-channel logistics (e.g. in-store pickup, check in-store product availability, e-receipts) 7% 34% 29% 30%
SEO/ SEM and platform upgrades see
significant investment ahead of holiday
Mobile, retargeting and testing are also top-of-mind for retailers
Q. Please note your level of TECHNOLOGY investment in 2013 from no investment to
significant investment. If a particular feature or upgrade does not apply to your business,
please select N/A.
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Dedicated efforts to improve key pages,
enhanced site search and augmenting content
lead customer experience investments
Answer Options Significant Limited No Investment N/A
Improved key pages (e.g. home page, category page, product page) 48% 46% 6% 0%
Enhanced site search 37% 40% 22% 1%
Streamlined shopping cart 30% 49% 18% 3%
Increased content (e.g. documents, videos, tips) 30% 57% 10% 3%
Overall site redesign 29% 53% 17% 1%
Initiated or evolved loyalty program 18% 29% 40% 13%
Personalized zones site-wide from home page to follow up emails 17% 36% 44% 3%
User-generated content and tools (e.g. reviews, Q&A) 14% 55% 28% 3%
Rich media or related tools (e.g. zoom, alternative views) 13% 39% 39% 9%
Expanded customer service (e.g. 24x7 access) 4% 38% 51% 7%
Q. Please note your level of CONSUMER EXPERIENCE investment in 2013 from no
investment to significant investment. If a particular feature or upgrade does not apply to
your business, please select N/A.
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CORE STRATEGIES:
PROMOTIONS &
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Promotion budgets vary substantially driven by product category and brand orientation
13%
25%
22%
18%
22%
0%-10%
11% to 20%
21% to 30%
31% to 40%
More than 40%
Q. What percentage of your total 2013 promotion budget is allocated to holiday?
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Retailers to be selective in timing promotions offered to shoppers: flash sales & social lead
Answer Options Select Times All the Time Will Not Use
Flash sales or limited time promotions 66% 16% 18%
Social promotions 64% 17% 19%
Other incentives (e.g. buy 1 get 1 free, buy more save more, save X if spend X,
post-sale rebate) 60% 21% 19%
Online-only sale 52% 30% 18%
Coupons ($ or % off) 52% 36% 12%
Mobile promotions 49% 10% 40%
Gift with purchase 45% 9% 45%
Store-only sale 38% 4% 58%
Outlet/clearance page 25% 43% 32%
Rewards points 19% 8% 73% Q11
Outlets and coupons are the standard bears that are omnipresent for 1-in-3 retailers
Q. Which of the following promotions will be part of your holiday plan?
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Retailers must decide on free shipping and divided on use with minimum purchase: most will use at “select”
times
Answer Options Select Times All Season Will Not Use
Free shipping – minimum purchase 45% 30% 25%
Free shipping – no minimum 44% 9% 47%
Free priority / 2-day shipping 40% 5% 55%
Free shipping – select products 38% 9% 53%
Free express / overnight shipping 23% 1% 76%
Free same-day delivery 8% 1% 91%
No free shipping offers 8% 8% 84%
Q. Which tactics and via what means will you employ shipping-related promotions
during the holidays?
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3 of 4 retailers will offer free shipping with a minimum purchase sometime during the holiday
season
Answer Options Select Times All Season Will Not Use
Free shipping – minimum purchase 45% 30% 25%
Free shipping – no minimum 44% 9% 47%
Free shipping – select products 38% 9% 53%
No free shipping offers 8% 8% 84%
44% will not require a minimum threshold but only at select times of the year
Q. Which tactics and via what means will you employ
shipping-related promotions during the holidays?
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<50% will selectively use free priority or 2-day shipping; only 1 in 5 will extend free
express/overnight shipping
Answer Options Select Times All Season Will Not Use
Free priority / 2-day shipping
40% 5% 55%
Free express / overnight shipping
23% 1% 76%
Free same-day delivery
8% 1% 91%
Q. Which tactics and via what means will you employ
shipping-related promotions during the holidays?
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• What % of your business is done during the holiday season?
• Which tactics are core to your gifting strategy?
• How will you leverage email over the holidays?
• When is the right time to begin your first holiday campaign?
• Have you developed a robust gift center that supports all of your gifting needs?
• Are gift cards both traditional and email integrated throughout the shopping experience?
• What plans do you have in place to ensure that gifting is visible throughout your site?
• Are there any last-minute changes you could make to your gifting strategy in anticipation of the season?
• Have you embraced newer technologies including mobile and social?
Retailer Holiday Readiness Checklist
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For More Information
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Lauren Freedman, President
773-975-7280
Marti Tedesco, Sr. Director of Marketing
650-255-4219
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