Converting Browsers Into Buyers Why is this critical in 2019?

UK MASTERCLASS | 2019

Agenda

1. Retail’s Golden Quarter: Was it all doom & gloom at the end of 2018?

2. Amazon’s Dominance: What was behind Amazon’s success?

3. Rethinking Market Share: How to use quality and audience metrics

4. Buyer & Audience Analytics in Action: Top 5 tips to get more product sales and buyers

5. Summary: Key takeaways

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Understanding the digital consumer for over 20 years.

Benchmark your performance against the competition by

audience, visits, and conversions.

MeasureUnderstand the online

behaviours of your consumers, and

pinpoint new segments to acquire.

DiscoverGet the best return on

investment for paid and organic search, content, media, and

affiliates.

OptimizeTrack and improve your

campaign performance through daily, audience-first

analytics.

Lift

About Us

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1.

Retail’s Golden QuarterWas it all doom & gloom?

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“Worst” was a common descriptor in retail headlines.

6* Source: Life-for-Like Sales and Non-Food Online Sales provided by BRC. ** Online Visits provided by Hitwise. Monthly reporting periods follow 4-5 week cycle, as used by ONS.

What did official figures say?

+0.6%Like-for-like sales

In Dec 2017:

-0.7%Like-for-like sales

In Dec 2018:

+7.6%Non-food online sales

+5.8%Non-food online sales

+7.3%Online visits

-0.7%Online visits

Retail categories faired differently in Q4.

* Source: Hitwise, UK. Visits to Shopping & Classifieds sub industries.

Department Stores40% Share; -1% YoY

Fashion16% Share; +5% YoY

House & Garden8% Share; +6% YoY

Electronics3% Share; -3% YoY

Health & Beauty3% Share; +2% YoY

Groceries3% Share; +9% YoY

Toys2% Share; -3% YoY

Flowers & Gifts1% Share; 0% YoY

The quarter had standouts across categories.

Reported Best Christmas in 10 years

Record Xmas sales, esp. premium range

Sold 12 pizzas / sec On “Black Eye Friday”

Sales up 8% In Dec YoY

Broke Cyber Week Sales Record

Visits up 142% YoY Over Black Friday

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2.

Amazon’s DominanceWhat was behind Amazon’s success?

Only 1 in every 5 people didn’t visit Amazon’s site over Q4.

* Source: Hitwise, UK. Reach = Share of visitors out of all Shopping & Classifieds visitors. Visit Share = Share of visits out of all Shopping & Classifieds visits. 13 weeks to 29th December 2018.

Top 10 Retailers in Q4 2018

79%

61%

40%

24%

15%

25%

12%18% 17% 15%

25.8% 7.3% 2.7% 1.3% 1.1% 1.0% 0.8% 0.8% 0.8% 0.7%

Amazon UK eBay UK Argos John Lewis Next Currys ASOS M&S Debenhams Screwfix

Reach (Visitor Share) Online Visit Share

Top 10 Retailers = 42% Visit Share

Amazon Key Categories Total Product Purchases By Month

* Source: Hitwise, UK. Total Amazon purchases, by parent category. Yellow bubble = relative difference from October to December.

-

5

10

15

20

Home, Garden& Pets

Books &Audible

Electronics Apparel &Accessories

Health &Beauty

Toys, Children& Baby

Groceries &Alcohol

AmazonDevices

October November December

44%

63%

62%

71% 49% 114%78%

152%

All key categories have grown from October to December.

3.0%3.4%

3.1%

6.4%

8.0%7.5%

3.2%3.7% 3.6%

7.2%

8.7% 8.8%

2.0%

4.0%

6.0%

8.0%

10.0%

06/10 13/10 20/10 27/10 03/11 10/11 17/11 24/11 01/12 08/12 15/12 22/12 29/12

2017 Average 2017 Amazon 2018 Average 2018 Amazon

Transactions and conversion rates peak

(26M and 8.8%)

Pre-Christmas

Visits peak at 313M

Black Friday Week

Amazon converted 2X more than the industry average.

Average Online Conversion vs. Amazon Weekly Conversion Rate

* Source: Hitwise, UK. Average daily conversion, calculated as a simple average across 30 top retailers.

We’ve come to expect deep discounts.

Amazon over Cyber Week (16/11 – 26/11)Other Top Products

SanDisk 128GB Oral B Pro Nintendo Switch Fitbit Charge Becoming

29.5K Purchases20% Purchase Rate

Up to 50% off

39.2K Purchases11% Purchase Rate

50%+ off range

22.0K Purchases4% Purchase Rate

10% off (cheapest inthe market)

19.7K Purchases3% Purchase Rate

40%+ off range

18.5K Purchases29% Purchase Rate

40% off

* Source: Hitwise, UK. Amazon Product Purchases, from 16th to 26th November 2018. Purchase Rate = Product Purchases / Product Page Views.

Amazon Key Categories Oct-Dec Purchase Rate

* Source: Hitwise, UK. Total Amazon purchases, by parent category. Purchase rate = total page views / total purchases per category, over October to December.

High conversions were also driven by Books, Health & Beauty and Groceries & Alcohol categories.

6.8%

13.9%

5.4%4.8%

10.4%

7.6%

14.0%

5.9%

Home, Garden& Pets

Books &Audible

Electronics Apparel &Accessories

Health &Beauty

Toys, Children& Baby

Groceries &Alcohol

AmazonDevices

Searches within Amazon grew 31% YoY.

* Source: Hitwise, UK. Search Sessions on Amazon and Traffic Occurrences from Google to Shopping & Classifieds Industry. 13 weeks to 29 December 2018 YoY.

Amazon vs. Google as a Search Engine

1.01 billion

5.77 billion

1.32 billion

3.93 billion

Amazon Searches Google Clicks to Retail

Q4 2017 Q4 2018

31% increase in search sessions

32% decreasein clicks to retail

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3.

Rethinking Market ShareHow to use quality & audience metrics

Online data can be disparate

Hitwise sees all online events(Search, browse, visit, purchase – mobile & desktop)

The digital consumer journey timeline

Hitwise tracks the entire consumer digital journey.

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www.amazon.co.uk/Garnier-Active-Daily-blemishes-shine/dp/B000RM7FWW/ref=sr_1_1_sspa?ie=UTF8&qid=1538996529&sr=8-1-spons&keywords=face+wash&psc=1Garnier-Active-Daily-blemishes-shine B000RM7FWW 8-1-spons face+wash

Product Name(brand, category)

ASIN Code

Search Rank & Sponsored

Search Term

We “unpack” the URL on a daily basis.

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Visitor

Buyer

Browser (Non-Buyer)

• Model audience segments using digital touchpoints, taken at a snapshot in time

• Buyers => Conducted a purchase or booking, tracked through the URL

• Browser => Visited site, but did not conduct purchase or booking

(Visited Amazon’s site)

(Purchased product)

(Viewed the product, did not receive purchase confirmation)

We model audiences to identify buyers, browsers and visitors.

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Search Marketing

Merchandising

Affiliates & Partnerships

• Identify product gaps – what do my Buyers & Browsers want?

• Grow and product category share

• Understand Buyers’ pathway to purchase

• Work with affiliates and partners that drives quality (over quantity)

We work with digital marketing and ecommerce functions.

• Identify how Buyers search – how is it different?

• Tailor keywords and content to grow Buyers

Media • Understand where Buyers spend their time online

• Strategically place media dollars where it is most impactful

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4.

Purchase & Buyer AnalyticsTop 5 tactics to get more product sales and buyers

1. Identify how your products go head-to-head on retailers

Philips vs. Oral B Purchase Rate on Retailers

22% 0%

19% 0%Top Tip:

Put your retailer sales into

perspective. Benchmark volume and purchase rates.

2. Track your direct vs. indirect buyer overlap

Visitors vs. Adidas Buyers Direct (on Adidas) and Indirect (on Foot Locker & Nordstrom)

Adidas Visitor

5.1M

Adidas Direct Buyer

592K (12%)

Foot Locker Visitor

3.2M

Foot Locker Adidas Buyer

45K (1.4%)

Nordstrom Visitor

12.2M

NordstromAdidas Buyer

43K (0.4%)

59% of Foot Locker Adidas buyers also

visited Adidas

36% of Nordstrom Adidas buyers also

visited Adidas

Top Tip:

Know both your indirect and direct buyers. Ensure that

they differ.

Search

On DELL’s site On AMAZON’s site

29% search share for Dell

21% paid rate

10% search share for Dell

6% paid rate

Browse 623K views of Dell’s laptops

8.5% visit-to-laptop rate

2.0M views of Dell’s laptops on Amazon

14% Dell’s share of Laptop views

Purchase 137K all purchases on Dell

1.9% visit-to-purchase rate

64K all Dell purchases on Amazon

1.2% Dell page view-to-purchase rate

3. Understand your buyers’ paths to purchase

Top Tip:

Track how your buyers discover your

brand. Ensure you aren’t doubling

efforts.

Zara’s Visitor Zara’s Buyer

“Zara Bags” (2.8X *) “Zara Dresses” (1.9X)“Zara Baby” (1.9X) “Zara Winter Coats” (1.8X)

“Velvet Purse” (5.8X)“Leather Boots” (5.7X)“Black Fur Coat” (5.7X) “Zara Denim Jacket” (4.4X)

Superdry (2.2X)Coast (2.0X)

& Other Stories (2.0X)Matches Fashion (1.9X)

Boohoo (1.2X) Argos (1.1X)

H&M (2.4X) ASOS (1.9X)

Top Tip:

Compare digital behaviours of your buyers vs. visitors. What makes your

buyers unique.

4. Know what differentiates your buyers

What were they looking for?

Where else are they browsing?

Where else do they buy?

5. Analyse the needs and interests of your potential buyers

Food & Drink Searches

Wider Groceries Searches

Wine & Alcohol

“zubrowka”“somersby cider”

“grey goose”

Treats

“dark chocolate”“Nutella”

“chocolate vegetarian”

Health Foods

“coconut milk”“gluten free bread”

“multivitamins”“green tea”

DeliverySearches

“tesco same day delivery”“hello fresh”

HouseholdProducts

“washing up liquid” “stain

remover” “nappies”

SeasonalSearches

“wine advent calendar”

Organic Food Shopper

Manchester Based

Target Audience

Top Tip:

These analytics can also apply to a

target audience. Identify product needs through

search.

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5.

SummaryKey Takeaways

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Key Takeaways

1. The Golden Quarter wasn’t all doom & gloom – online retail is still driving industry growth

2. The impact wasn’t felt across the board - Domino’s sold 12 pizzas per second!

3. Amazon’s dominance is clear - from sheer volume, category conversion to searches

Performance

1. Online metrics need to account for quality – volume isn’t the only success indicator

2. Measure each stage of consumers’ digital journey –from search to purchase

3. Dissect your audience –segment your buyers from your browsers

Metrics

1. Identify how your brand goes head-to-head on retailers –look within a site to compare

2. Measure your direct vs indirect buyers – understand risks, track path to purchase

3. Get to know your buyers and browsers – look at digital behaviours beyond your site

Tips

Thank You For Watching

For any questions email us at:

contact-uk@hitwise.comwww.hitwise.com

Lisa Luu | Global Head of Insights

UK MASTERCLASSS | 2019