E Holiday Recap

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recaps shop.org holiday survey

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E Holiday Recap

  1. 1. eHoliday Recap: Predictions, Results and Lessons Learned Chuck Davis Chairman, Shopzilla
  2. 2. Panel <ul><li>Chuck Davis </li></ul><ul><li>Chairman, Shopzilla </li></ul><ul><li>Moderator </li></ul><ul><li>Analysts Panelists </li></ul><ul><li>Heather Dougherty </li></ul><ul><li>Senior Retail Analyst </li></ul><ul><li>Nielsen/NetRatings </li></ul><ul><li>Zia Daniell Wigder </li></ul><ul><li>VP and Research Director </li></ul><ul><li>JupiterResearch </li></ul><ul><li>Gian Fulgoni </li></ul><ul><li>Chairman </li></ul><ul><li>ComScore Networks </li></ul><ul><li>Carrie Johnson </li></ul><ul><li>VP and Research Director </li></ul><ul><li>Forrester Research </li></ul><ul><li>Retailer Panelists </li></ul><ul><li>Steven Goldsmith </li></ul><ul><li>VP </li></ul><ul><li>Apparel/Footwear/Jewelry/Watches </li></ul><ul><li>Amazon.com </li></ul><ul><li>Andrea Gulli </li></ul><ul><li>Operating VP </li></ul><ul><li>E-Commerce & Credit Marketing </li></ul><ul><li>The J. Jill Group, Inc </li></ul><ul><li>Robert Myers </li></ul><ul><li>VP </li></ul><ul><li>Interactive Marketing & Business Dev. </li></ul><ul><li>QVC. Inc </li></ul>
  3. 4. About the Mood Study <ul><li>Objective - gauge online retailer success and consumer behavior during the holiday season </li></ul><ul><li>Merchant data provided by Shop.org merchant members </li></ul><ul><li>Consumer data provided from BizRate.com’s consumer panel </li></ul>
  4. 5. Methodology <ul><li>Study Dates </li></ul><ul><ul><li>Wave 1: September 23-27, 2005 </li></ul></ul><ul><ul><li>Wave 2: November 29-30, 2005 </li></ul></ul><ul><ul><li>Wave 3: December 12-14, 2005 </li></ul></ul><ul><ul><li>Wave 4: January 9-12, 2006 </li></ul></ul><ul><li>Shop.org Merchant Members </li></ul><ul><ul><li>Wave 1: 119 Merchants </li></ul></ul><ul><ul><li>Wave 2: 113 Merchants </li></ul></ul><ul><ul><li>Wave 3: 109 Merchants </li></ul></ul><ul><ul><li>Wave 4: 104 Merchants </li></ul></ul><ul><li>BizRate Research Online Consumer Panel </li></ul><ul><ul><li>Wave 1: 1,891 Online Buyers </li></ul></ul><ul><ul><li>Wave 2: 3,730 Online Buyers </li></ul></ul><ul><ul><li>Wave 3: 1,932 Online Buyers </li></ul></ul><ul><ul><li>Wave 4: 2,478 Online Buyers </li></ul></ul>
  5. 6. Key Holiday Insights
  6. 7. Women Continue To Shop More Online <ul><li>Almost two thirds of online shoppers are female. </li></ul><ul><li>The percentage of female shoppers has grown 67% since 1998. </li></ul>Consumer Survey Source: BizRate Research Holiday Studies 1998 - 2005 Male Female Male Female 1998 2005 65% 61% 61% 60% 56% 55% 49% 39% Female 35% 39% 39% 40% 44% 45% 51% 61% Male 2005 2004 2003 2002 2001 2000 1998 1998  
  7. 8. Type of Connection Speed <ul><li>Over three quarters (81%) of consumers have high speed Internet access. </li></ul><ul><li>Dial up access has dropped 11% points in one year. </li></ul>Consumer Survey Q. What kind of connection do you typically have when accessing the Internet? Source: Shopzilla Online Holiday Scoop, conducted by BizRate Research, a division of Shopzilla Inc., was based on a point-of-sale survey online buyers from Nov 26-Dec 24, 2004 and online buyers from Nov 25 – Dec 24, 2004.  
  8. 9. Number Of Years Buying Online <ul><li>Over 40% of online shoppers have been buying for over 5 years. </li></ul>Consumer Survey 1 to 3 years Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study More than 3 years and less than 5 years More than 5 years and less than 7 years More than 7 years Less than 1 year Q. How long have you been buying online?
  9. 10. Where/When Does Shopping Occur <ul><li>Over 8 out of 10 consumers shopped online at home during the holidays. </li></ul><ul><li>Almost two thirds of consumers shopped online at home on a weekday or night. </li></ul>Consumer Survey Q. When/where did you do the majority of your holiday shopping? Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study
  10. 11. Increases In Holiday Gifts Purchased <ul><li>Entertainment, Electronics, Apparel and Toys were the categories that consumers indicated they purchased more of compared to the last holiday season. </li></ul>Consumer Survey Q. For each of the following product categories please indicate whether you bought more , the same, or few holiday gifts in that category compared to one year ago. Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study
  11. 12. Top Revenue Days <ul><li>In 2005, one fifth of merchants reported Monday, December 12th as the day that represented their largest amount of revenue from sales. </li></ul>Merchant Survey Q. What day during the 2004 holiday season represented the largest amount of revenue from sales? Q. What day during the 2005 holiday season represented the largest amount of revenue from sales? Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study Mon Dec 13 Mon Dec 6 Before Nov 20 Wed Dec 15 Mon Dec 12 Mon Nov 28 Tue Dec 13
  12. 13. Prediction #1 <ul><li>In general, deals are deep offline, and gift cards are so much easier to buy offline, that online sales grow over last year, but only between 10% and 15%. (Forrester) </li></ul><ul><li>November and December sales in the US for holiday 2005 will be $26 billion, up 18% from 2004. (Jupiter) </li></ul><ul><li>However, online sales growth continues to increase overall, surpassing previous holiday seasons, driven by an increased share of spending shifting online and additional households accessing the Internet via broadband connection (Nielsen/NetRatings) </li></ul><ul><li>Initial forecast for holiday online sales growth = +23-26% vs. 2004. (ComScore) </li></ul>
  13. 14. Industry Data <ul><li>Forrester Research reports sales of $22 billion for the period between Thanksgiving and Christmas and includes travel and auctions and represents a 23% increase over last year. </li></ul><ul><li>According to Goldman Sachs, Nielsen/NetRatings and Harris Interactive online holiday sales totaled $30.1 billion, excluding travel during the 2005 holiday season (October 29-December 23). This is a 30% increase over the 2004 holiday season. </li></ul><ul><li>ComScore Networks has reported non-travel spending during the 2005 holiday season (November 1-December 31, 2005) totaled $19.6 billion, representing a 25% increase over 2004. </li></ul>
  14. 15. Optimism Continues To Increase <ul><li>Merchant optimism increased significantly in 2005. </li></ul>Merchant Survey Wave 4 Q. How did you feel about this year’s holiday season? Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study
  15. 16. Revenue Growth Continues <ul><li>Two thirds (67%) of merchants are reporting growth of 30% or more over the last holiday season. </li></ul><ul><li>Fewer merchants are reporting lower growth compared to last year. </li></ul>Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study Merchant Survey Q. Compared to the holiday season last year, please describe your company’s online revenue.
  16. 17. Prediction #2 <ul><li>Euphoria is a thing of the past (customer satisfaction lowers). (Jupiter) </li></ul><ul><li>Overall satisfaction rates remain consistently high, but with no major strides thanks to a lack of material investments on retailers’ websites. (Nielsen/NetRatings) </li></ul><ul><li>Customer satisfaction: Stays about the same, except when it comes to delivery times meeting expectations – that will drop. (Forrester) </li></ul>
  17. 18. Customer Satisfaction <ul><li>Consumer satisfaction hit record levels in 2005. </li></ul><ul><li>There was an 11% increase in customer satisfaction in Wave 4 2005 vs the same wave last year. </li></ul>Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study Consumer Survey Q. How satisfied were you with your online buying experience during the 2005 holiday season?
  18. 19. Prediction #3 <ul><li>Free shipping will be more important this year than it was last year – even if it is only a perception of importance in the consumer’s mind. (Jupiter) </li></ul><ul><li>Based on experience from past holiday seasons, retailers continued to rely on conditional free shipping promotions to drive sales and increase average order sizes. (Nielsen/NetRatings) </li></ul><ul><li>Free shipping offers will continue to be commonplace; though faced with higher costs some retailers may elect to increase minimum order thresholds to earn free shipping. (ComScore) </li></ul><ul><li>Free shipping rears its ugly head, but fewer retailers offer it this year than last year. (Forrester) </li></ul>
  19. 20. Promotional Offers That Influenced Purchase <ul><li>Free Shipping without conditions continues to be the most popular promotional offer for influencing consumers followed by free shipping with conditions. </li></ul>Consumer Survey Q. Which of the following promotional offers, if any, caused you to make an online purchase this holiday season form a particular retailer during the 2005 holiday season? Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study
  20. 21. Free Shipping Plans <ul><li>Almost three quarters (74%) of merchants have indicated they plan on having free shipping with conditions this year. </li></ul>Merchant Survey Q. What marketing promotions are you planning to add for the holiday season? Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study
  21. 22. Key Promotional Programs <ul><li>Free shipping continues to be a key promotional program for merchants. </li></ul><ul><li>Free shipping upgrade was also successful. </li></ul>Merchant Survey Q. Which of the following promotional efforts have been most successful in driving online holiday business this year? Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study
  22. 23. Prediction #4 <ul><li>Margins will suffer due to higher shipping costs and downward price pressure from increases in online comparison shopping; retailers look like Tofu (low price key because too much information online and not enough differentiation). (Jupiter) </li></ul><ul><li>Margin: Drops a little bit based on free shipping offers combined with high fuel prices and gas surcharges by the shipping companies. (Forrester) </li></ul>
  23. 24. Growth in Profit Margins <ul><li>Almost half of the merchants had increases in their profit margins during the holiday season. </li></ul>Merchant Survey Q. Compared to last year’s holiday season, which of the following best describes the profit margins of your online retail business this holiday season? Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study
  24. 25. Prediction #5 <ul><li>Game of chicken is won by consumers; retailers will break price early to encourage customer to shop rather than holding onto last minute; however consumers will do bulk of shopping later again this year. (Jupiter) </li></ul>
  25. 26. Holiday Shopping Patterns <ul><li>One third of consumers started their online shopping earlier than last year which is 6% points more when compared to the previous year. </li></ul>Consumer Survey Q. Compared to one year ago, when did you start your holiday shopping in 2005? Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study
  26. 27. When Did Mark Downs Start <ul><li>Over one quarter of the merchants indicated they took mark downs before Thanksgiving. Another quarter did mark downs starting Dec 18. </li></ul><ul><li>Another quarter did not take any mark downs. </li></ul>Merchant Survey Q. If you offered mark downs this holiday season, when did you begin? Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study
  27. 28. Prediction #6 <ul><li>Within search engine marketing, the real winners in the battle for search engine placement were the retailers that optimized organic search results due to rising keyword costs. During the 2005 Holiday season, paid search became a far less efficient means of customer acquisition than in previous. (Nielsen/NetRatings) </li></ul>
  28. 29. Successful Online Marketing Programs <ul><li>Over three quarters of the merchants pointed out that paid search is a successful marketing vehicle to drive sales. </li></ul>Merchant Survey Top Online Marketing Efforts Q. Which of the following online marketing efforts have been most successful in driving online holiday business this year? Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study
  29. 30. Rank 1 to 5 with “5” being the most successful Effectiveness of Online Marketing Tools <ul><li>Paid search is seen as a more successful marketing tool than organic search. </li></ul>Merchant Survey Q. Please rate the effectiveness of the online marketing efforts that have been most successful in driving online holiday business this year. Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study
  30. 31. Paid Search ROI Increases <ul><li>By the end of the holiday season half of the merchants indicated their Paid search ROI increased over last year. </li></ul><ul><li>Paid search ROI did show declines compared to waves 2 and 3. </li></ul>Merchant Survey Q. Compared to this time last year through Thanksgiving weekend, have the following online metrics increased or decreased? Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study Increased significantly Increased somewhat
  31. 32. Prediction #7 <ul><li>Pure online brands will hold their own, but multi-channel retailers will again post the highest overall growth in online sales, as newer online shoppers turn to the brands they trust, and the option of in-store service (e.g. returns) has significant appeal. (ComScore) </li></ul>
  32. 33. <ul><li>While multi-channel retailers were more optimistic than online-only retailers, there is a very small percentage that are pessimistic. </li></ul>Multi-channel Retailers More Optimistic Merchant Survey Q. How did you feel about this year’s holiday season? Source: 2005 Shop.org/BizRate Research Online Holiday Mood Study Wave 4 - 2005
  33. 34. Online-Only Has Stronger Revenue Growth <ul><li>Over three quarters of online only retailers reported growth of 30% or more. </li></ul>Q. Compared to the holiday season last year, please describe your company’s online revenue. Wave 4 - 2005
  34. 35. Prediction #8 <ul><li>The 2005 calendar impacted online sales, due to Christmas falling on a Sunday, which encouraged last minute shoppers to take advantage of an extra Saturday in the stores for additional purchases. (Nielsen/NetRatings) </li></ul>
  35. 36. Holiday Shopping Patterns <ul><li>In 2005, 10% of online shoppers had not started their shopping the last week before Christmas. </li></ul>Consumer Survey Source: Shopzilla Online Holiday Scoop, conducted by BizRate Research, a division of Shopzilla Inc., was based on a point-of-sale survey of 3,224 online buyers from December 19 - 24, 2005 and 4,566 online buyers from December 20-24, 2004.   Q. If you started your online holiday shopping already what was your primary reason for starting when you did?
  36. 37. Predictions 2006

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