eCommerce Summit Atlanta State Of eCommerce

PESA State of E-commerce Scot Wingo CEO – ChannelAdvisor twitter.com/scotwingo ebaystrategies.blogs.com, csestrategies.com, amazonstrategies, searchmarketing.com

Agenda
Economic backdrop
Overall E-commerce Trends
E-commerce Channel Trends
Paid-search
Comparison Shopping Engines
Marketplaces

US Consumer Confidence

US Consumer Confidence Improving

2008 E-Commerce Results
Growth rate has come down from the 20%+ y/y to flat/down
Personally, I think this will mirror consumer confidence

Q408 Category Breakdown

E-Commerce Forecast 2009-2011
Source: JP Morgan, Forrester, US Dept of commerce.

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%

Consumer Behavior Has Changed
Fewer consumers go ‘direct’ – over 80% of GMV driven by e-commerce channels
If you aren’t on all of these channels, you are missing a material opportunity.
FBR Research based on publicly available GMV Information.

2008 – Coupons Go Mainstream
35m visitors equates to 18% of the audience

Challenges
Recessionary head-winds
Diversification takes time, resources and attention
If you are eBay only, you are missing 75% of the pie
Opportunities
Multi-channel e-commerce gives you an advantage over competitors
Plenty of growth left in e-commerce, think of 08/09 as a minor speed bump
Coupons are hitting the mainstream
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
E-Commerce Trends - Summary

E-Commerce Channel Trends

Paid Search

Huge Growing Market
Paid-search market size
Paid-search growth rates
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%

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%

Search – Summary
Opportunities
Many e-commerce players like CSEs and eBay have decreased their paid-search spend due to changes Google has made with quality score
Don’t believe the naysayers, search still works
Will Yahoo! and Microsoft merge or partner to create a ‘balance’ to Google?
Google Product Search is a great ‘on-ramp’ to paid-search
Challenges
Search is very different than a marketplace or CSE
You have to generate keywords
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

Comparison Shopping

ChannelAdvisor – some customers see CSE as large as 40% of GMV
10-20% on average
Forrester – 55% of online shoppers influenced by CSE
ChannelAdvisor ‘assist’ technology shows this is the case.
% of Internet audience directly using CSEs by geography
CSE Trends

CSE Y/Y growth 5%

CSE 1.0
Vintage <2000
Product catalog driven
Usually heavily electronics oriented
CPC
Stagnant, little to no innovation since 2006 timeframe
Primarily acquire traffic from paid-search
CSE 2.0
Vintage >2006
Variety of models to enhance experience/business
Reviews (Ciao)
Social (Pronto)
Traffic/fun (Jellyfish)
BizModel (CPA )
CSE 1.0 vs. 2.0

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%

CSE Trends II

Amazon ProductAds

Amazon ProductAds II

Amazon ProductAds III

ProductAds Categories and Pricing
Open categories
Baby, Computer, Consumer Electronics, Health and Personal Care, Home and Garden, Office, Sports and Outdoors, Tools and Home Improvement and Toys
Restricted categories
Apparel and Accessories, Beauty, Jewelry and Watches and Shoes

CSE - Summary
Opportunities
Forrester – 55% of online shoppers influenced by CSE.
Economics still ‘work’, niche sites highly effective.
Next wave of innovation coming with CSE 2.0 – are you ready?
Google Product Search! Did I mention that it’s FREE?
In the US 34.5%+ consumers use a CSE
Amazon ProductAds are an interesting new entrant in this space
Challenges
Datafeeds are complicated.
CSEs require a pretty sophisticated e-commerce site with .merchandising to hit ROI targets.
ROI management is complex and requires datafeed manipulation.

Marketplaces

eBay is losing share in e-commerce
Q408 GMV was down 12% y/y (ex-vehicles)
Q109 GMV was down 20% y/y (ex-vehicles)
eBay Faces Substantial Challenges

eBay – Major Challenges
Both auction and fixed-price GMV accelerating their decline

Top eBay Seller Areas of Concern
Demand
DSRs
Number of ‘unintended consequences’ is large
Are Auctions in death spiral?
Is the consumer abandoning them or is eBay effectively killing the format with decreased BestMatch Exposure
Off-eBay advertising
Fees/costs
Search/BestMatch
Did I mention demand?

What are they doing to fix eBay?

Amazon – Taking Share
Q109:
Amazon: 21% (21% greater than e-commerce, 41% greater than eBay)
E-Commerce: 0%
eBay: -20%

Amazon – Why?
Prime Shipping
Seller Business

Amazon’s Seller Business

eBay vs. Amazon
What if the eBay/Amazon share change continues?

eBay Changes – June 15
Smart FAQ
Package Tracking
Multi-sku – Biggest seller change since Fixed-Price introduced – link
But not without complexity and some complex thinking…

Marketplaces - Summary
Opportunities
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.
Catch the Amazon wave and hang on.
New entrants like Buy.com give you an opportunity to establish a leadership role moving forward in your category.
Challenges
Marketplaces are only 25% of e-commerce, don’t over-focus here.
eBay is 13% of global e-commerce, but losing share.
Diversification can be complex if you’ve built your processes around a single-marketplace world.
Concerns over partnering with Amazon who is a retailer.

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eCommerce Summit Atlanta State Of eCommerce

by eCommerce Merchants on Jun 16, 2009

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eCommerce Summit Atlanta State Of eCommerce — Presentation Transcript