eMarketer Webinar: Key Trends in Ecommerce

© 2015 eMarketer Inc.
Made possible by
Key Trends in Ecommerce
Yory Wurmser
Retail Analyst
January 22, 2015

Agenda
 Ecommerce forecast overview
 Mobile’s impact on the path to purchase
 How is ecommerce integrating with the physical world?
 Why is flexibility important for etailers?
 How can you personalize ecommerce without seeming
creepy?
Twitter – #eMwebinar

Ecommerce Overview

2015 will be a strong year for US total retail and
ecommerce sales
14.2%
4.3%
Total Retail Ecommerce

Despite a thriving ecommerce market, the US
lags other countries in some key metrics
US
2015 ecommerce sales: $349.1b
2015 sales growth: 14.2%
% of total retail: 7.1%
Digital buyer penetration*: 64.9%
*of population
UK
$93.9b
14.5%
14.4%
74.3%
China
$562.7b
32.0%
12.0%
31.8%

China is the global leader in ecommerce sales;
it will account for
35.4%
of worldwide ecommerce sales in 2015

Mobile:
The New Shopping Hub

Purchases made directly from mobile devices
will remain small: 1.6% of total US retail in 2015
 Mcommerce will
grow 32.2% year
over year in 2015
 Mcommerce will
account for 22%
of ecommerce
sales in 2015
$4.560 trillion
in offline retail sales
$76.79 billion
in mcommerce sales
$272.77 billion in
other ecommerce sales

The indirect effect of digital is huge; the majority
of ALL US retail sales are digitally influenced
 Ecommerce will
influence 55.6%
of total retail
sales in 2015

A quarter of all US retail sales are influenced by
mobile*
$1 trillion +
of retail sales are influenced by mobile
*Deloitte, New Digital Divide 2014
**Deloitte figures projected onto eMarketer retail estimates
**

Majority of US consumers will shop with their
mobile devices in 2015
 166.3 million
mobile shoppers
 81.2% of digital
shoppers
 65.4% of US
population ages
18 and older
Increase
in mobile
shoppers:
+20.4M
in 12 mo.

Smartphone shoppers continue to outnumber
tablet shoppers in the US
121.0 million145.3 million

But US tablet owners are far more likely than US
smartphone owners to buy via their device
 Average revenue
per smartphone
visit is roughly
one-third that
of a tablet visit*
*Bloomreach, June 2014

Tablet and smartphone shopping differ
Tablets
 At home
 Extended research
 General buying
Smartphones
 Everywhere
 Quick research
 Last-minute buying

The result: far more tablet sales
68%
of revenue from US mobile sales in 2015 will be on tablets

Mobile devices have pulled even with PCs as
search tools for shoppers
 42% of US
mobile users
cite mobile
devices as their
most important
media for finding
information
while shopping

Smartphones have tools for all types of shopping
During holiday 2014 alone:
 39% of US smartphone
owners planned to look up
items on search engines
 38% expected to take a
picture of a gift to text to a
friend
 Only 14% thought they would
use the phone to make a
purchase
Data from Placecast, Nov. 2014
Source: Victorinox via Royaldesign.com

A smartphone can’t open a bottle of wine, but it
can tell you all about it
Images from Google Play

Mobile Is Changing the
Path to Purchase

Ecommerce and physical shopping are less
distinct than they once were
Then Now

Consumers don’t distinguish ecommerce from
brick and mortar; it’s all just shopping

Transformed path to purchase has 3 major
attributes:
 Omnichannel
 Consumer-defined
 Individual

… And each attribute has an implication for
ecommerce
Path to Purchase
 Omnichannel
 Consumer-defined
 individual
Implications for Ecommerce
 Integration with physical world
 Channel flexibility
 Personalization

1. Integration with the
Physical World

More than 80% of US shoppers want the ability
to check for nearby product availability

Google is trying to serve location searches with
Local Inventory Ads (LIAs)
 Real-time
synchronization
of inventory still
elusive
 Advanced
retailers update
inventory feed
several times
a day
Image source: Google

LIAs still account for a small minority of product
listing ads, but some big brands are using them

Etailers also working to create tools to directly
link physical objects with mcommerce sites
Beacons Visual Search
Image source: Amazon

Beacons: Deployments are growing larger, but
some obstacles remain
Image source: Estimote

A majority of US smartphone owners are aware
of in-store beacons

Visual search: Still early days but starting to
power retailer apps, including Neiman Marcus’
“ From the moment of your inspiration
of seeing something that you like on
someone walking down the street
with a great bag, or in a magazine, or
wherever, you can take a
picture of it on our app, and
[get] immediate gratification.”
—Wanda Gierhart, CMO at Neiman Marcus
Image source: Estimote
Image source: iTunes

Current applications of visual search:
 Niche retail sectors: Identifying wine labels or spare
parts limits the library of images that a search tool
needs to identify
 Discovery engine: For products based on styles or
designs, a product similar to what a consumer seeks
may suffice
 General search: There are no consistently reliable
general visual search tools today, although several
aspire to become one

Channel Flexibility

Consumers want flexibility
“ One of the things we’re always trying to do at Barnes &
Noble is serve our customers in ways in which they want
to be served, in ways in which they’d like to consume
content. In the book world we’re used to dealing with not
just channels but formats, so the point is: We want to
mix and match those channels and formats so
that we can find the right customer experience
where someone’s going to go, ‘Oh, that’s
perfect.’
—Jaime Carey, chief merchandising officer at Barnes & Noble

In-store pickup: Customers can fulfill online
orders themselves
 40% of in-store
pickups lead to
additional in-store
purchases (Source: Shopatron)
 10% of Target’s
online orders are for
in-store pickup Image source: Target.com

Size of click and collect in the UK points to
possibilities for in-store pickup in the US

Amazon experimenting with new channels to
approximate real-world shopping
 Amazon locker
 Pop-up store in San
Francisco
 Refitted food truck selling
Kindles
 Same-day delivery
Source: @emilysteel, twitter via HuffingtonPost

Flexibility extends to fulfillment: More delivery
options
 Value of
same-day delivery
shipments in the US
will increase sixfold
in 2015 to more
than $620 million

Online pure plays open physical stores
“[Shoppers] buy almost 75% more if they
come in through the guide shop. The
reason is they’re getting a human
experience. The world has become
lonelier through technology and through
urbanization. Having a great
human one-to-one experience is
unique these days. And for me, it
builds enormous loyalty if I like the
people that I’ve transacted with.”
—Andy Dunn, CEO and founder of Bonobos

3. Personalization

Personalization is both more important and more
attainable
“ The smartphone is just not
going to work the same way
as your stores. You can
show me thousands of
products in your store.
You can only show me
five on the phone.
—Nicolas Franchet, head of retail
and ecommerce global vertical
strategy at Facebook
“ We have more data to
work with and more tools
that know how to take
advantage of that data.
We can do more, so
there’s really no
excuse to just use a
generic approach.”
—Kevin Lindsay, director of
product marketing at Adobe

Consumers rely on site recommendations
 50% of US smartphone
users listen to
personalized website
recommendations

A majority of
US consumers
value privacy
over relevance

How can you balance relevance with privacy?
 Add a human touch
 Focus on loyal customers
 Use relevant data

Human touch puts personalization in the context
of a conversation
“ You’re going to see a lot more brands bring more of their
brand into the online experience in very visceral ways.
We’re going to see more chat … and assisted
purchasing with a real human who can help
you figure out what’s best for you through the
computer interface.”
—David Edelman, partner and global co-leader of the digital
marketing and sales practice at McKinsey & Company

Sears offers personalized advice from online
associates
 Open to all
members of the
Shop Your Way
loyalty program
 Members can earn
commissions from
sales by becoming
a personal
shopper for
friends
Source: www.sears.com

User-generated content also humanizes
ecommerce
Source: www.urbanoutfitters.com

Loyal customers generally trust the retailer
already
“ If someone is already part of your loyalty
program, I think that person is going to be
much more open and receptive to much more
personalized information than someone who’s more of an
anonymous guest.”
—Mike McMurray, VP of business operations at Point Inside

Receiving
personalized
product and
service
experiences is
the top benefit
of joining a
loyalty program

Use data discreetly to minimize privacy
intrusions
“ People don’t need to know we’re sending them a
message because of where they actually are.
We just need to get them the right messages
at the right time in the right place, so it feels
magical.”
—Jennifer Kasper, group vice president for digital/new media and
multicultural marketing at Macy’s

Takeaways
 Ecommerce continues to grow rapidly in the US but innovations in
other countries point to areas of future growth
 Although mobile commerce directly generates only 1.6% of total US
retail sales, it influences up to a quarter of all sales
 The path to purchase is no longer linear
 Ecommerce is becoming more connected to the physical world through
local inventory information, beacons and visual search
 Consumers expect flexibility in all types of channels: sales, fulfillment
and consumption
 Personalization is important but needs to be weighed against privacy
concerns. Retailers can find the balance by adding a human touch,
focusing on loyal customers and by being discreet

Data-Driven Marketing and the Digital Enterprise
Marc Schroeder

INTEGRATED MARKETING CLOUD
Digital Marketing
Campaign Management
Marketing Operations
Marketing Analytics
Customer Data Management
33% OF THE FORTUNE 500
WORK WITH THE TERADATA
MARKETING CLOUD

Looking ahead to 2017
Digital represents a third
of total marketing spend
4 billion smartphones
are internet enabled
worldwide
Mobile commerce
reaches $1 trillion
Today’s major social
networks have all
monetized their user
bases
Several social networks
that haven’t been
created yet have 100+
million users
Big data is a $50B
market in the U.S. alone

Connect with
customers
Anticipate
Needs
Consistently
deliver on
quality
Relationship-
based
channels
Predictive
analytics
Multichannel
metrics
Data-DrivenMarketing
Data-Driven Marketing Drives Better Experiences
BrandLoyalty

A Data-Driven Marketing Approach
conversion path
customer
behavior
affinity
purchase
response
mobile/web
social
customer
attribution
spend
process
segmentatio
n
decision offer
governance
preference
compliance
delivery
demand responsive

THOSE WHO RIDE THE WAVE AND
INNOVATE ALONG THE WAY
WHO WILL DOMINATE THE DIGITAL AGE?

Learn more about digital marketing with an
eMarketer corporate subscription
Around 200 eMarketer reports are published
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Q&A Session
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To learn more: www.emarketer.com/products
800-405-0844 or webinars@emarketer.com
Yory Wurmser
Key Trends in Ecommerce
 Omnichannel Trends 2015: Mobile is the New Retail Hub
 Worldwide Retail Ecommerce Sales: eMarketer’s Estimates
and Forecast, 2013-2018
 Visual Search & Recognition: On the Cusp of a New Era in
Retail
 Product Listing Ads Google Dives into Comparison Shopping

eMarketer Webinar: Key Trends in Ecommerce

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