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State Of The Us Online Retail Economy Q2 2012
 

State Of The Us Online Retail Economy Q2 2012

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    State Of The Us Online Retail Economy Q2 2012 State Of The Us Online Retail Economy Q2 2012 Presentation Transcript

    • State of the U.S. Online Retail Economy in Q2 2012August 2012Gian Fulgoni, Chairman, comScore, Inc.Andrew Lipsman, VP Industry Analysis, comScore, Inc.Note: A copy of this presentation will be sent to all attendees within two business days of today’s webinar
    • Data sourced from comScore’s global panel of 2 million Internetusers via behavioral tracking and custom surveys 2 million person panel Analysis Parameters360°View of Consumer Behavior  E-Commerce data includes all worldwide buying on U.S. sites  Unless explicitly stated otherwise, the term e-Commerce refers to online retail spending, as measured by comScore, which excludes travel, autos and auctions  Behavioral activity through June 2012  Survey conducted week of July 30, 2012 (n=2000)  Consumer Measurements: – Online Buying – Attitudes and Sentiment – Site Visitation – Demographic Segments – Mobile and Portable e-Commerce © comScore, Inc. Proprietary. 2
    • Topics for Today Review of Key Macroeconomic Trends Consumer Perceptions of the Economy Retailer and Product Category Overview The Digital Endcap: Retailers as Publishers The Impact of Mobile and Tablets on Shopping and Buying Social Commerce Trends Key Takeaways Q&A © comScore, Inc. Proprietary. 3
    • Validation of comScore Sales Data: Comparison of comScore data to U.S. Department of Commerce Quarterly U.S. e-Commerce Sales* ($ Billions) Source: comScore & U.S. Department of Commerce (DOC) Quarterly U.S. e-Commerce Growth* vs. YA Source: comScore & U.S. Department of Commerce (DOC) Dept. of Commerce (DOC) comScore Estimate of DOC Dept. of Commerce (DOC) comScore Estimate of DOC comScore Estimate of Mobile e-Commerce 50% Correlation: 0.93 40%Billions ($) % Growth vs. YA 30% 20% 10% 0% 2005 - Q1 2005 - Q2 2005 - Q3 2005 - Q4 2006 - Q1 2006 - Q2 2006 - Q3 2006 - Q4 2007 - Q1 2007 - Q2 2007 - Q3 2007 - Q4 2008 - Q1 2008 - Q2 2008 - Q3 2008 - Q4 2009 - Q1 2009 - Q2 2009 - Q3 2009 - Q4 2010 - Q1 2010 - Q2 2010 - Q3 2010 - Q4 2011 - Q1 2011 - Q2 2011 - Q3 2011 - Q4 2012 - Q1 -10% *Note: To be consistent with DOC, comScore estimate excludes travel and event tickets but includes auction fees and autos. © comScore, Inc. Proprietary. 4
    • State of the EconomyA Review of Key Macroeconomic Trends © comScore, Inc. Proprietary. 5
    • Retail e-Commerce spending is up +16% Y/Y, posting $87 billion in sales through June 2012 U.S. e-Commerce Dollar Sales Growth ($ Billions) Source: comScore e-Commerce Measurement +13% +12% +7% +9% $256 +17% -2% +19% $214 $209 $228 $200 $94 +11% +22% $171 $84 $85 +6% +26% +9% $80 -5% +29% $143 $77 +12% $141 $117 $69 +13% $93 $61 +20% $54 +9% $72 $51 +28% $40 +33% $162 +14% $142 +10%Travel $30 $123 +20% $130 +6% $130 0% $102 +24% $87 +16% +26% $67 +26% $82 +24%Retail $42 $53 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1-Q2 2012 © comScore, Inc. Proprietary. 6
    • The channel shift to online was particularly evident in Q2 2012, withonline retail growing nearly 4x the rate of total consumer spending or7x on an apples-to-apples basis Quarterly e-Commerce Sales Growth vs. YA Source: comScore e-Commerce Measurement 23% 23%17% 19% 17% 14% 13% 11% 12% 14% 10% 13% 15% 11% -3% 0% -1% -2% 3% 9% 9% 6% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q22007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 Quarterly Retail & Food Services Sales Growth* vs. YA *Note: The U.S. Department of Commerce calculation includes total Source: U.S. Department of Commerce (DOC) retail and food service sales, which also includes motor vehicles and parts dealers. 8% 8% 5% 6% 7% 4% 4% 3% 4% 2% 4% 1% 2% 5% 5% 7% 7% 7% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 -8% -7% -10% -9% Quarterly Retail & Food Services Sales Growth vs. YA (excluding autos, gas and food/beverage) 7% 6% 3% 3% 4% 5% 6% 6% 4% 3% 3% 2% 2% 4% 3% 1% 2% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 -5% -5% -6% -6% © comScore, Inc. Proprietary. 7
    • The shift of consumer spending to the Internet continues to accelerate, with the e-Commerce share of spending hitting 8.7% in Q2, up 1.6 points in only two years e-Commerce Share of Corresponding Consumer Spending* Source: comScore for e-Commerce & U.S. Department of Commerce (DOC) for Retail 10.0% 9.4% 8.6% 8.9% 8.7% 9.0% 8.1% 8.0% 7.7% 8.0% 7.6% 7.7%e-Commerce Share 7.4% 7.3% 7.0% 6.4% 6.7% 7.7% 7.6% 5.9% 6.9% 7.1% 7.1% 6.8% 6.0% 6.3% 6.5% 6.6% 5.1% 5.9% 5.0% 5.3% 5.3% 4.3% Q2 2012 share: +1.6 points 5.0% 4.0% 4.6% 4.5% vs. Q2 2010 4.3% 4.0% e-Commerce share peaks in 3.0% 3.7% colder seasons (Q4 & Q1) 2.0% 1.0% 0.0% *Note: e-Commerce share is shown as a percent of DOC’s Total Retail Sales excluding Food Service & Drinking, Food & Bev. Stores, Motor Vehicles & © comScore, Inc. Proprietary. 8 Parts, Gasoline Stations and Health & Personal Care Stores.
    • All income segments showed double-digit growth versus 2011, with mid and lower income consumers leading the way e-Commerce Sales by Income Segment ($ Billions) Growth vs. YA Source: comScore e-Commerce Measurement Under $50K $50K - $99K $100K or more (23% of Total) (43% of Total) (34% of Total) +6% +2% +8% +3% +9% +12% +19% +9% +7% +12% +15% +16% +21% +10% $20.0 $18.3 $17.5 $17.2 $17.3+26% +39% +28% +31% +22% +18% +17% $15.1 $15.0 $15.3 $15.4 $14.8 $14.6 $13.5 $12.2 $12.1 $12.4 $12.1 $11.0$10.0 $10.3 $9.4 $8.9Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q4 10Q1 11Q2 11Q3 11Q4 11Q1 12Q2 12 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 © comScore, Inc. Proprietary. 9
    • Consumer Perceptions of the Economy © comScore, Inc. Proprietary. 10
    • Overall consumer sentiment slid in July, with 56% of consumersrating the economy as poor, up from 49% in April Q. How would you rate economic conditions today? Source: comScore Surveys Percent of Consumers Who View The Economy as Poor Increase in negative sentiment driven by Under $50k (61%) and Baby Boomers (60%)77% 68% 66% 61% 61% 59% 62% 61% 59% 60% 62% 60% 54% 56% 52% 49%Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Aug-11 Oct-11 Jan-12 Apr-12 Jul-12 © comScore, Inc. Proprietary. 11
    • Concern over unemployment saw a +7 point swing from April,but continued to lag behind prices, the main economic concern Percent of Respondents Citing Their One Most Important IssueQ. Based on your current situation, which one of the following economic conditions most concerns you? Source: comScore Surveys 54% 50% 48% 46% 45% 44% 43% Unemployment / 42% 42% 44% 40% Job Security 37% 38% 42% Rising 33% 32% 32% 37% 37% Prices 30% 36% 33% 28% 31% Financial 29% 29% 27% 26% Markets Real Estate / Home 15% Values 13% 13% 13% 11% 12% 12% 10% 11% 7% 9% 10% 7% 10% 10% 11% 8% 8% 8% 10% 8% 9% 9% 8% 9% 7% 8% 7% Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 © comScore, Inc. Proprietary. 12
    • Retailer and Product Category Overview © comScore, Inc. Proprietary. 13
    • Compared to 2011, retail e-Commerce saw an increase in every key metric,including dollars per buyer, total buyers & transactions per buyer Key e-Commerce Buyer and Transaction Measures Q2 2012 vs. YA Source: comScore e-Commerce MeasurementMetric Q2 2011 Q2 2012 % changeDollar Sales ($ Billions) $38 $43 +15%Dollars per buyer $221 $242 +10%Buyers (Millions) 170 178 +5%Average Order Value $70 $74 +6%Transactions (Millions) 539 584 +8%Transactions per Buyer 3.2 3.3 +3%Buyer Penetration (Total Internet) 70% 72% +3% © comScore, Inc. Proprietary. 14
    • All product categories showed at least +10% growth, with digitalcontent and consumer electronics showing the highest growth Q2 2012 e-Commerce Sales Growth vs. YA by Retail Category Source: comScore e-Commerce Measurement Q2 2012 Growth Product Category vs. YADigital Content and Subscriptions Very StrongConsumer Electronics (x PC Peripherals) Very StrongFlowers, Greetings & Misc. Gifts Very Strong Q2 growth rates of 15% orComputers/Peripherals/PDAs Very Strong higherApparel & Accessories Very StrongEvent Tickets Very StrongConsumer Packaged Goods StrongJewelry & Watches StrongHome & Garden StrongBooks & Magazines Strong Q2 growth rates of 10-14%Sport & Fitness StrongOffice Supplies StrongVideo Games, Consoles & Accessories StrongFurniture, Appliances & Equipment Strong © comScore, Inc. Proprietary. 15
    • While Amazon remains the leader in unique visitors to retail sites,Apple and Wal-Mart each showed strong gains versus year ago Avg. Monthly UVs (MM) on Select Retail Sites in Q2 2012 Source: comScore Media Metrix, U.S. Y/Y Change +7% Amazon Sites 100.4 +24% Apple.com Sites 47.5 +23% Wal-Mart 41.4 -5% Netflix.com 27.3 +5% Target Corporation 23.2 Best Buy Sites +7% 18.3 Ticketmaster 14.9 +52% The Home Depot, Inc. 14.7 +51% Sears.com 12.4 +17% © comScore, Inc. Proprietary. 16
    • Compared to the overall retail e-Commerce market, Amazon.comheavily over-indexes for consumer electronics, toys and books Product Category Share at Amazon Indexed to Retail e-Commerce (Q2 2012) Index: 0-40 40-80 80-120 120-160 160+ Computers/Peripherals/PDAs Apparel & Accessories Consumer Electronics (x PC Peripherals) Office Supplies Books & Magazines Home & Garden Toys & Hobbies Index: 0-40 40-80 80-120 120-160 160+ Nodes indicate range of Amazon’s index to Total Internet share composition © comScore, Inc. Proprietary. 17
    • Groupon is still the leader in monthly unique visitors among couponsites. In June, visits to Groupon via mobile eclipsed PC visitors Avg. Monthly UVs (MM) on Select Coupon Sites in Q2 2012 Unique Visitors to Groupon in June 2012 Source: comScore Media Metrix, U.S. Source: comScore Media Metrix & Mobile Metrix, U.S., 18+ Y/Y Change Groupon 11.8 -5% GrouponWhaleShark Media 7.5 N/A (via PC) LivingSocial 6.7 -35% 11.9 million Coupons, Inc. 6.3 -10%DeedOrGreed.com 2.1 N/A DealsPL.US 2.0 +30% Groupon CouponAlert.com 1.8 +89% (via mobile*) MyPoints Sites 1.6 +29% 17.7 million BradsDeals.com 1.5 +116% FatWallet.com 1.3 +53% * - WhaleShark Media includes RetailMeNot.com, Deals2Buy.com, CouponShare.com and CouponsEven.com © comScore, Inc. Proprietary. 18 * includes mobile web and mobile app
    • When looking at the types of daily deals consumers are purchasing,Food/Drink and Beauty, Spa & Massage accounted for largest share Offers Published by Category Source: Local Offer Network / Dealradar.com 2010- 2010- 2011- 4Q Share 1Q 4Q 4Q (e) of $ Sold 1 Food & Drink 31% 26% 14% 16% 2 Beauty, Spa & Massage 20% 20% 13% 16% 3 Clothing & Accessories 2% 4% 10% 2% 4 Health, Medical & Dental 3% 5% 9% 14% 5 Travel & Hospitality 2% 2% 9% 13% 6 Photography & Photo Services 2% 4% 7% 5% 7 Kids 1% 2% 5% 1% 8 Home Products & Services 2% 6% 5% 4% 9 Fitness & Nutrition 6% 7% 4% 3% 10 Sports & Recreation 11% 5% 3% 4% All Other 16% 17% 20% 20% © comScore, Inc. Proprietary. 19
    • The average price per deal has been increasing as deal of the daysites offer higher-value offers to consumers Excluding Travel & Medical © comScore, Inc. Proprietary. 20
    • Most flash sale sites continue to see growth in unique visitors, withTotsy.com the fastest growing property Avg. Monthly UVs (000) on Select Flash Sale Sites in Q2 2012 Source: comScore Media Metrix, U.S. Y/Y Change Zulily.com 2,237 +9% Woot.com 2,185 +74% Gilt Groupe 1,137 +36% HauteLook.com 1,118 +40% OneKingsLane.com 1,098 +60% MyHabit.com 903 +82% Totsy.com 785 +881% Ideeli.com 638 -20% EBay Fashion Vault 590 +46% BeyondtheRack.com 545 +22% © comScore, Inc. Proprietary. 21
    • The percent of e-Commerce transactions with free shipping saw a seasonal pullback to 42%, down from all-time high of 52% in Q4 2011Percentage of e-Commerce Transactions with Free Shipping Source: comScore e-Commerce Measurement 51% 53% 48% 51%61% 60% 59% 57% 60% 58% 49% 47% 52% 49%39% 40% 41% 43% 40% 42% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q22010 2010 2010 2010 2011 2011 2011 2011 2012 2012 % Transactions with Paid Shipping % Transactions with Free Shipping 55% of consumers stated in a recent survey* that if they reached the end of an e-Commerce transaction and free shipping was not offered, they would cancel their purchase at that retailer *comScore survey – July 2012 © comScore, Inc. Proprietary. 22
    • Among online shoppers,* 61% would prefer to use in-store pickupthan pay for shipping to their home Q. When shopping online, are you more likely Q. Similar to the previous question, would to utilize free shipping to your home or you be more likely to pay for shipping to free in store pickup? your home, or utilize free in store pickup? Source: comScore Survey July 2012 Source: comScore Survey July 2012 95% 61% 39% 5% % of respondents % of respondents More likely to use free shipping More likely to pay for shipping More likely to use free in store pickup More likely to use free in store pickup © comScore, Inc. Proprietary. 23 * - those who shop online at least once a month
    • A lenient and clear returns policy is likely to lead to recommendationsand repeat business from online shoppers If an online retailer offers a lenient, easy-to-understand returns policy, I will … Source: comScore Custom Survey “Return policy has to be clear, easy and up front.” Shop more often with that retailer 48% Recommend the retailer to a friend 48%Drop another retailer with a less easy 35% returns process “[If] I cannot find the return policy or it is unclear I will never purchase or return to that site again” Focus less on prices and more on 32% their quality of service Agreement (Top 2 Box) Q60. How much do you agree with the following statements? © comScore, Inc. Proprietary. 24 If an online retailer offers a lenient, easy-to-understand returns policy, I will …
    • Free shipping was, by far, the factor considered most influential on theonline shopping experience Factors Influencing Total Purchasing Experience Source: comScore Custom Survey Average # of Chips Allocated out of 100 Free shipping on most items 6 Knowing what day my purchase will be delivered 7 Easy to understand returns process 8 37 Availability of express shipping choices 10 Offers environmentally-responsible products Ability to select a 2-hour delivery window 14 18 Ability to re-route packages to an alternate location while in transit Q29. Thinking of factors that would influence your total purchasing experience with a retailer, how influential is each of the following factors? Please distribute 100 points across these factors, allocating more points to factors that are more influential and fewer points to factors © comScore, Inc. Proprietary. 25 that are less influential.
    • Join us and UPS for a deeper dive into the online shopping experience – August 22 at 2 PM ETThe Online ShoppingCustomer Experience Studyprovides insights into consumers’online shopping behaviors andpreferences.Other online shopping surveyshave focused on purchase or webusability, but this particular surveybridges that gap with a view ofperceptions on customerexperience from pre-purchasethrough post-delivery.This study also provides a clearpicture of which shipping and post-purchase services enhancecustomer experience. www.comscore.com/OnlineShoppingWebinar © comScore, Inc. Proprietary. 26
    • The Digital Endcap: Retailers as Publishers © comScore, Inc. Proprietary. 27
    • The Digital Endcap: Manufacturer ad impressions delivered on Amazon.com tripled versus a year ago and remain far ahead of Walmart Impressions Delivered (in Millions) & Selected Leading Creatives on Amazon & Walmart Source: comScore Ad Metrix, U.S., Jan-2011 to June-2012 Amazon.com3,000 +341% vs. Jun ’11 Amazon.com2,500 Walmart.com2,0001,500 Walmart.com +103% vs. Jun ’111,000 500 0 © comScore, Inc. Proprietary. 28
    • The Digital Endcap: Reaching consumers at the bottom of the funnelAds on retailer websites reach consumers down-funnel, but sold at below average CPMs. Shouldn’t they be going for more? Standard Average CPM Display $2.91 Ads Digital Average CPM Endcaps $2.74 Source: comScore Ad Metrix, U.S., Apr-2012 to June-2012 © comScore, Inc. Proprietary. 29
    • The Digital Endcap: Friend or Foe? Friend Foe Ability to leverage available site  Shoppers might click away from the inventory retailer website Delivers competitive advantage due BUT, we know that display ad CTRs are to synergies created for retailer and low and the branding effect is strong manufacturer (vertical integration)  Retailers may not have an ad sales Inherently high margin offering, with force to leverage minimal costs CPM upside Why aren’t more retailers leveraging the Digital Endcap? © comScore, Inc. Proprietary. 30
    • The Impact of Mobile and Tabletson Shopping and Buying © comScore, Inc. Proprietary. 31
    • More than 4 million new smartphone subscribers activated in Q2, taking the audience over the 110 million mark Acquisition Trend for Smartphone Subscriber Base and Total Smartphone Subscriber Base Source: comScore MobiLens, U.S., 3 Mo. Avg. Sep-2009 to Jun-2012+7.0 +6.5 120,000 New Smartphone Acquisitions (In Millions)+6.0 100,000 Total Smartphone Subscriber Base (In Thousands)+5.0 80,000+4.0 +3.8 +3.3 +3.6 +3.5 +3.1 +3.3 60,000 +2.9+3.0 +2.7 +2.7 +2.9 +2.5 +2.6 +2.3+2.3 +2.2 +1.9 +2.1 +2.0 +2.1+2.2 +2.1 40,000+2.0 +1.8 +1.6 +1.3 +1.3 +1.3 +1.4 +1.1 +1.3 +1.0 +0.9 20,000+1.0 +0.7 +0.7+0.0 0 © comScore, Inc. Proprietary. 32
    • Nearly 1 in 10 e-Commerce dollars are spent via mobile device Percentage of Total e-Commerce Dollars Spent via Mobile or Tablet Device Source: comScore Mobile Measurements Spike in percentage of 9% 9% e-commerce sales via mobile coincides with 8% 8%surge in tablet ownership 6% 6% 3% 3% 2% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2010 2010 2010 2011 2011 2011 2011 2012 2012 © comScore, Inc. Proprietary. 33
    • Nearly 2 in 5 tablet owners have purchased something online via theirdevice in the past month, more than double smartphone owners Smartphone Owners Who Purchased Tablet Owners Who Purchased Item/services via Mobile (past month) Item/services via Tablet (past month) Source: comScore MobiLens Source: comScore TabLens Smartphone owners 18% Tablet owners 39% Tablet owners are generally more engaged overall – in addition to the above ‘purchased’ metric, 43% have researched items and 42% have compared product prices in the past month (compared to 21% and 22% for smartphones, respectively) © comScore, Inc. Proprietary. 34
    • When compared to overall tablet owners, iPad owners significantlyover index on every e-Commerce metric, including purchasing items Retail/e-Commerce Actions Taken by iPad and Kindle Fire Owners (Indexed Against All Tablet Owners) Source: comScore TabLens All tablet iPad Kindle FireMetric (took action in past month) owners Index Index Found store location 42% 122 85 Purchased goods or services online 39% 117 99 Made shopping lists 23% 115 106 Found coupons or deals 35% 115 96 Checked product availability 32% 113 93 Compared product prices 42% 113 92 Researched product features 42% 113 92 © comScore, Inc. Proprietary. 35
    • Social Commerce Trends © comScore, Inc. Proprietary. 36
    • Pinterest & Instagram among the two hottest growth sites over past year Pinterest & Instagr.am: U.S. Unique Visitor (000) Trend Source: comScore Media Metrix, May 2011 – July 2012 25,000 20,000 Pinterest.com +22x Y/Y 15,000 Instagram.com 10,000 +5x Y/Y 5,000 0 © comScore, Inc. Proprietary. 38
    • Social networkers tend to be heavier online buyers, but Pinterest hassignificantly higher propensity than average Buying Power Index (BPI)* for Selected Leading Social Networking Sites Source: comScore Media Metrix, U.S., June 2012 250 226 200 163 150 130 111 106 109 100 50 Facebook Twitter Linkedin Myspace Tumblr Pinterest *Buying Power Index = Average Spending per Buyer for Site / Average Spending per Buyer for Total Internet x 100; Index of 100 represents average spending behavior © comScore, Inc. Proprietary. 39
    • Pinterest users love, love, love shopping, making it a goldmine for marketers wanting to reach buyers Top 20 Site Categories with Highest Concentration (%) of Pinterest Visitors Source: comScore Media Metrix, U.S., June 2012 Retail - Jewelry/Luxury Goods/Accessories 22.8% Retail - Flowers/Gifts/Greetings 21.2% Retail - Fragrances/Cosmetics 20.1% Retail - Food 19.7% e-cards 19.0% Gay/Lesbian 18.8% Retail - Books 18.7% Travel - Transactions 18.6% Lifestyles - Green 18.3%Overall Pinterest Retail - Coupons 18.0% Internet Retail - Apparel 17.8%penetration: 10% Retail - Consumer Goods 17.8% Retail - Health Care 17.7% Retail - Home Furnishings 17.4% Retail - Toys 17.2% Incentives 17.2% Retail - Mall 16.8% Religion/Spirituality 16.7% Travel - Hotels/Resorts 16.6% Shipping 16.6% 16 of top 20 Pinterest users’ highest affinity categories are Retail-related © comScore, Inc. Proprietary. 40
    • Pinterest is carving out a big share of social media referral traffic toretail apparel category % of Social Networking Referral Visits to Retail Apparel Category Source: comScore Custom Metrix, U.S., May 2012 4% 4% Facebook 8% Pinterest Tumblr 54% Twitter 30% Other © comScore, Inc. Proprietary. 41
    • Quantifying the Effect of the Social Web © comScore, Inc. Proprietary. 42
    • Power of Like 2: Key FindingsAmplification: Brands can meaningfullyextend Facebook reach through amplificationto Friends of Fans and help drive salesEarned Media Lift: The causal effects ofFacebook earned media (non-paid) exposurecan be isolated, and show lifts in purchasebehaviorPaid Media Lift: Facebook paidadvertising also shows evidence of drivinglifts in purchase behavior Download full white paper at: www.comscore.com/like2 © comScore, Inc. Proprietary. 43
    • comScore Social Essentials™ complements and extends FacebookInsights’ functionality PAGE INSIGHTS SOCIAL ESSENTIALS™ Competitive Reach & Audience Insights Frequency for & Social Lift for Your Own Brand All Brands © comScore, Inc. Proprietary. 44
    • How Social Marketing Works: Brands control the three basic leversthat will determine social media marketing success Many brands don’t consider these intermediary steps Brand Fans “Talk News Feed Goal: Max Messages About” Content Get Fans Reach Fans News Feed Spreads to Reach, in News Feed Content Friends ROI 1. Fan Reach 2. Engagement 3. Amplification © comScore, Inc. Proprietary. 45
    • Quantifying Amplification: Top Facebook Brands tend to reach 0.5-2.0Friends for every Fan reached w/ earned media Fans & Friends of Fans Earned Impressions and Amplification Ratios for Selected Leading Facebook Brands Source: comScore Social Essentials, U.S., March 2012 70 2.5 Exposed Social Impressions (MM) 60 2.0 Amplification Ratio 50 40 1.5 30 1.0 20 0.5 10 0 - Exposed Fan Impressions Exposed Friend of Fan Impressions Amplification Ratio © comScore, Inc. Proprietary. 46
    • Earned Media Lift: Starbucks earned media impressions drove significant lifts in in-store purchase in 4 weeks following exposure Starbucks Fans & Friends of Fans In-Store Purchase Behavior: % of Exposed Group vs. Control Group Purchasing Starbucks Weeks 1-4 Following Earned Media Exposure Source: comScore Social Lift, U.S., February-March 2012% Reach of Exposed and Control 2.40% Nominal Lift Test Group Control Group 1.60 Nominal Lift in Purchase Incidence 2.12% 1.40 2.00% 1.80% +38% 1.20 Groups 1.60% 1.36% 1.54% 1.00 1.20% 1.30% 0.80 0.83% 1.00% 0.58 0.50 0.60 0.80% 0.66% 0.36 0.40 0.40% 0.17 0.20 0.00% 0.00 Week 1 Weeks 1-2 Weeks 1-3 Weeks 1-4 © comScore, Inc. Proprietary. 47
    • Paid Media Lift: Also evidence that Facebook paid ad campaigns candrive positive lifts in purchase behavior Retailer Premium Facebook Ad Lift: % of Exposed Group Purchasing Online and In-Store Weeks 1 - 4 Following Paid Media Exposure Source: comScore AdEffx Action Lift, U.S., September-December 2011 1.60% 1.47% 1.40% +16% 1.18% 1.27% 1.20% 1.00% 0.84% 1.00% 0.80% 0.60% 0.69% 0.61% 0.46% 0.49% +56% 0.38% 0.40% 0.39% 0.37% 0.20% 0.19% 0.32% 0.20% 0.11% 0.00% Week 1 Weeks 1-2 Weeks 1-3 Weeks 1-4 Online - Test Online - Control In-Store - Test In-Store - Control © comScore, Inc. Proprietary. 48
    • Five Ways to Achieve Social Marketing SuccessMove beyond just collecting Fans Use them as a leverage point to achieve marketing objectivesReach Fans effectively Use newsfeed to get them to engage and amplify your messagesKnow who you’re reaching & how often Tie these metrics back to your broader marketing strategiesQuantify value of earned media Compare earned to paid ads & put a $ value on exposures; measure ‘social lift’Cultivate the ‘virtuous cycle’ of Paid, Earned & Owned Media are intertwined and combine to help brands maximize impact © comScore, Inc. Proprietary. 49
    • Key Takeaways © comScore, Inc. Proprietary. 50
    • Key Takeaways The channel shift to online appears to be accelerating: online sales increased by +15% this quarter, while on a comparable category basis, offline sales increased only 2% Mobile and tablets accounted for 9% of all retail e-Commerce sales in Q2 All product categories showed strong (10% or higher) growth in Q2 Overall consumer sentiment weakened this quarter, with 56% of respondents viewing the economy as poor (versus 49% in Q1 2012). Unemployment increased in importance as a concern Leading deal-of-the-day sites are now seeing more visitors from mobile devices than from the fixed Internet and the value of offers has increased dramatically The rise of the visual web is the key social media trend this year and promises to be important for marketers and retailers Facebook and Pinterest are both important social media channels for influencing commerce but Linkedin attracts the heaviest online buyers © comScore, Inc. Proprietary. 51
    • QUESTIONS?Please contact us at learnmore@comscore.com ifyou have any additional questions or comments. © comScore, Inc. Proprietary. 52
    • Thank You!Note: A copy of this presentation will be sent to all attendees withintwo business days of today’s webinar.