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.org

Published in: Education, Business, Technology

eCommerce Summit Atlanta State Of eCommerce

  1. 1. PESA State of E-commerce Scot Wingo CEO – ChannelAdvisor twitter.com/scotwingo ebaystrategies.blogs.com, csestrategies.com, amazonstrategies, searchmarketing.com
  2. 2. Agenda <ul><li>Economic backdrop </li></ul><ul><li>Overall E-commerce Trends </li></ul><ul><li>E-commerce Channel Trends </li></ul><ul><ul><li>Paid-search </li></ul></ul><ul><ul><li>Comparison Shopping Engines </li></ul></ul><ul><ul><li>Marketplaces </li></ul></ul>
  3. 3. US Consumer Confidence
  4. 4. US Consumer Confidence Improving
  5. 5. 2008 E-Commerce Results <ul><li>Growth rate has come down from the 20%+ y/y to flat/down </li></ul><ul><li>Personally, I think this will mirror consumer confidence </li></ul>
  6. 6. Q408 Category Breakdown
  7. 7. E-Commerce Forecast 2009-2011 <ul><li>Source: JP Morgan, Forrester, US Dept of commerce. </li></ul>
  8. 8. E-Commerce Category 08/09 Growth * All amounts are $US Billions 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%
  9. 9. Consumer Behavior Has Changed <ul><li>Fewer consumers go ‘direct’ – over 80% of GMV driven by e-commerce channels </li></ul><ul><li>If you aren’t on all of these channels, you are missing a material opportunity. </li></ul>FBR Research based on publicly available GMV Information.
  10. 10. 2008 – Coupons Go Mainstream <ul><li>35m visitors equates to 18% of the audience </li></ul>
  11. 11. <ul><li>Challenges </li></ul><ul><ul><li>Recessionary head-winds </li></ul></ul><ul><ul><li>Diversification takes time, resources and attention </li></ul></ul><ul><ul><li>If you are eBay only, you are missing 75% of the pie </li></ul></ul><ul><li>Opportunities </li></ul><ul><ul><li>Multi-channel e-commerce gives you an advantage over competitors </li></ul></ul><ul><ul><li>Plenty of growth left in e-commerce, think of 08/09 as a minor speed bump </li></ul></ul><ul><ul><li>Coupons are hitting the mainstream </li></ul></ul><ul><ul><li>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 </li></ul></ul>E-Commerce Trends - Summary
  12. 12. E-Commerce Channel Trends
  13. 13. Paid Search
  14. 14. Huge Growing Market <ul><li>Paid-search market size </li></ul><ul><li>Paid-search growth rates </li></ul>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%
  15. 15. Search Share Trends Source: ComScore data 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%
  16. 16. Search – Summary <ul><li>Opportunities </li></ul><ul><ul><li>Many e-commerce players like CSEs and eBay have decreased their paid-search spend due to changes Google has made with quality score </li></ul></ul><ul><ul><li>Don’t believe the naysayers, search still works </li></ul></ul><ul><ul><li>Will Yahoo! and Microsoft merge or partner to create a ‘balance’ to Google? </li></ul></ul><ul><ul><li>Google Product Search is a great ‘on-ramp’ to paid-search </li></ul></ul><ul><li>Challenges </li></ul><ul><ul><li>Search is very different than a marketplace or CSE </li></ul></ul><ul><ul><li>You have to generate keywords </li></ul></ul><ul><ul><li>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 </li></ul></ul>
  17. 17. Comparison Shopping
  18. 18. <ul><li>ChannelAdvisor – some customers see CSE as large as 40% of GMV </li></ul><ul><ul><li>10-20% on average </li></ul></ul><ul><li>Forrester – 55% of online shoppers influenced by CSE </li></ul><ul><ul><li>ChannelAdvisor ‘assist’ technology shows this is the case. </li></ul></ul><ul><li>% of Internet audience directly using CSEs by geography </li></ul>CSE Trends
  19. 19. CSE Y/Y growth 5%
  20. 20. <ul><li>CSE 1.0 </li></ul><ul><ul><li>Vintage <2000 </li></ul></ul><ul><ul><li>Product catalog driven </li></ul></ul><ul><ul><li>Usually heavily electronics oriented </li></ul></ul><ul><ul><li>CPC </li></ul></ul><ul><ul><li>Stagnant, little to no innovation since 2006 timeframe </li></ul></ul><ul><ul><li>Primarily acquire traffic from paid-search </li></ul></ul><ul><li>CSE 2.0 </li></ul><ul><ul><li>Vintage >2006 </li></ul></ul><ul><ul><li>Variety of models to enhance experience/business </li></ul></ul><ul><ul><ul><li>Reviews (Ciao) </li></ul></ul></ul><ul><ul><ul><li>Social (Pronto) </li></ul></ul></ul><ul><ul><ul><li>Traffic/fun (Jellyfish) </li></ul></ul></ul><ul><ul><ul><li>BizModel (CPA ) </li></ul></ul></ul>CSE 1.0 vs. 2.0
  21. 21. CSE Trends I Rank   Oct-2008 Nov-2008 Dec-2008 Jan-2009 Feb-2009 Mar-2009 March 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%
  22. 22. CSE Trends II
  23. 23. Amazon ProductAds
  24. 24. Amazon ProductAds II
  25. 25. Amazon ProductAds III
  26. 26. ProductAds Categories and Pricing <ul><li>Open categories </li></ul><ul><ul><li>Baby, Computer, Consumer Electronics, Health and Personal Care, Home and Garden, Office, Sports and Outdoors, Tools and Home Improvement and Toys </li></ul></ul><ul><li>Restricted categories </li></ul><ul><ul><li>Apparel and Accessories, Beauty, Jewelry and Watches and Shoes </li></ul></ul>
  27. 27. CSE - Summary <ul><li>Opportunities </li></ul><ul><ul><li>Forrester – 55% of online shoppers influenced by CSE. </li></ul></ul><ul><ul><li>Economics still ‘work’, niche sites highly effective. </li></ul></ul><ul><ul><li>Next wave of innovation coming with CSE 2.0 – are you ready? </li></ul></ul><ul><ul><li>Google Product Search! Did I mention that it’s FREE? </li></ul></ul><ul><ul><li>In the US 34.5%+ consumers use a CSE </li></ul></ul><ul><ul><li>Amazon ProductAds are an interesting new entrant in this space </li></ul></ul><ul><li>Challenges </li></ul><ul><ul><li>Datafeeds are complicated. </li></ul></ul><ul><ul><li>CSEs require a pretty sophisticated e-commerce site with .merchandising to hit ROI targets. </li></ul></ul><ul><ul><li>ROI management is complex and requires datafeed manipulation. </li></ul></ul>
  28. 28. Marketplaces
  29. 29. <ul><li>eBay is losing share in e-commerce </li></ul><ul><ul><li>Q408 GMV was down 12% y/y (ex-vehicles) </li></ul></ul><ul><ul><li>Q109 GMV was down 20% y/y (ex-vehicles) </li></ul></ul>eBay Faces Substantial Challenges
  30. 30. eBay – Major Challenges <ul><li>Both auction and fixed-price GMV accelerating their decline </li></ul>
  31. 31. Top eBay Seller Areas of Concern <ul><li>Demand </li></ul><ul><li>DSRs </li></ul><ul><ul><li>Number of ‘unintended consequences’ is large </li></ul></ul><ul><li>Are Auctions in death spiral? </li></ul><ul><ul><li>Is the consumer abandoning them or is eBay effectively killing the format with decreased BestMatch Exposure </li></ul></ul><ul><li>Off-eBay advertising </li></ul><ul><li>Fees/costs </li></ul><ul><li>Search/BestMatch </li></ul><ul><li>Did I mention demand? </li></ul>
  32. 32. What are they doing to fix eBay?
  33. 33. Amazon – Taking Share <ul><li>Q109: </li></ul><ul><ul><li>Amazon: 21% (21% greater than e-commerce, 41% greater than eBay) </li></ul></ul><ul><ul><li>E-Commerce: 0% </li></ul></ul><ul><ul><li>eBay: -20% </li></ul></ul>
  34. 34. Amazon – Why? <ul><li>Prime Shipping </li></ul><ul><li>Seller Business </li></ul>
  35. 35. Amazon’s Seller Business
  36. 36. eBay vs. Amazon <ul><li>What if the eBay/Amazon share change continues? </li></ul>
  37. 37. eBay Changes – June 15 <ul><li>Smart FAQ </li></ul><ul><li>Package Tracking </li></ul><ul><li>Multi-sku – Biggest seller change since Fixed-Price introduced – link </li></ul><ul><ul><li>But not without complexity and some complex thinking… </li></ul></ul>
  38. 38. Marketplaces - Summary <ul><li>Opportunities </li></ul><ul><ul><li>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. </li></ul></ul><ul><ul><li>Catch the Amazon wave and hang on. </li></ul></ul><ul><ul><li>New entrants like Buy.com give you an opportunity to establish a leadership role moving forward in your category. </li></ul></ul><ul><li>Challenges </li></ul><ul><ul><li>Marketplaces are only 25% of e-commerce, don’t over-focus here. </li></ul></ul><ul><ul><li>eBay is 13% of global e-commerce, but losing share. </li></ul></ul><ul><ul><li>Diversification can be complex if you’ve built your processes around a single-marketplace world. </li></ul></ul><ul><ul><li>Concerns over partnering with Amazon who is a retailer. </li></ul></ul>

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