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Forrester Research eCommerce 2012
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Forrester Research eCommerce 2012

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  • 1. Monetizing Media CompaniesThrough eCommerceSucharita Mulpuru, VP & Principal AnalystDecember 4, 2012
  • 2. Yes, that worked…
  • 3. Forecast: US Online Retail Forecast2011 to 2016Estimated
  • 4. © 2012 Forrester Research, Inc. Reproduction ProhibitedThis story is true in nearly all categories557%32%20%12%10%2%PCsBooksConsumer electronicsApparel and accessoriesLarge appliancesGroceryCategory penetration online in 2012 (est) CAGR2012-167%15%12%11%11%11%Source: Forrester US eCommerce Forecast
  • 5. eCommerce is growing rapidly globally too€ -€ 50€ 100€ 150€ 2002011 2016Europe (€B)CAGR:12%$-$10$20$30$402011 2016CAGR:17%Latin America ($B)$-$100$200$300$400$500$6002011 2016CAGR:20%Asia-Pacific ($B)$-$100$200$300$4002011 2016CAGR:10%North America ($B)
  • 6. © 2012 Forrester Research, Inc. Reproduction ProhibitedAgenda!  What’s working in eCommercenow!  What media companies need to donext!  Recommendations7
  • 7. © 2012 Forrester Research, Inc. Reproduction ProhibitedOpportunity 1: Marketplaces8c
  • 8. © 2012 Forrester Research, Inc. Reproduction ProhibitedWhy marketplaces are so important:they’re profitable!9Source: Forrester estimates; GMV=gross merchandise value, the total value paid by shoppers in a transaction$359$631$467$4,1722005 2011Amazon global net incomeAmazon estimated marketplace revenue
  • 9. © 2012 Forrester Research, Inc. Reproduction ProhibitedHistory of marketplaces in eCommerce10Pre-2000 Early 2000s Mid-decade Post-decadeUncuratedSemi-curatedCuratedCurated andvertical???
  • 10. © 2012 Forrester Research, Inc. Reproduction ProhibitedA retailer-led apparel marketplace11
  • 11. © 2012 Forrester Research, Inc. Reproduction ProhibitedOpportunity 2: Discovery-driven selling12eCommerce in the past
  • 12. The web has really suited spearfishers134%10%36%36%3%9%34%42%I had neither a website nor a product inmindI had a web site inmind but not aproductI had a product inmind but not awebsiteI had both a web siteand product in mindWomenMenBase: Gen Y (18-27) and Gen X (28-41) women and menSource: Q3 2007 Forrester Consumer Technographics Online Survey“Thinking of your most recent online purchase, which of the following best describes how you found the product?”
  • 13. © 2012 Forrester Research, Inc. Reproduction Prohibited 14#1 place the smartphone isused: living room#2: car#3: office#1 place the tablet is used:living room#2: bedroom#3: airports/planesSource: Forrester-Bizrate Insights Flash Survey, Q3 2012“Lean backvs leanforwardbehavior”“Couchcommerce”
  • 14. © 2012 Forrester Research, Inc. Reproduction Prohibited39%70%73%81%84%Getting offers from retailers andbrandsInspiration on what to buyEntertaining myselfEnjoying what others shareDiscover new products, styles,ideas26%17%61%72%24%This is why image-based sites have somuch promise15Source: Forrester-Bizrate Insights Flash Survey, Q3 2012Base: 4,700 recent online buyers withFacebook accountsBase: 1,200 recent online buyers whohave visited Pinterest
  • 15. © 2012 Forrester Research, Inc. Reproduction ProhibitedAnd these guys may be even better thanPinterest16Zoomingo   Houzz   Kaleidoscope   Fancy  
  • 16. © 2012 Forrester Research, Inc. Reproduction ProhibitedMedia companies have the opportunityto drive more commerce17Better Homes & Gardens
  • 17. © 2012 Forrester Research, Inc. Reproduction ProhibitedOpportunity 3: Prepayments18SubscriptionsLocking in demandShifting wallet share away from other destinations
  • 18. © 2012 Forrester Research, Inc. Reproduction ProhibitedUrgency and scarcity are key successfactorsSource: Forrester Research Mobile Commerce Forecast, 2012 to 2017 (US)Note: Excludes tablet commerce and game/app downloads, auctions$2,192$4,060$6,005$8,003$10,072$12,104$14,116$1,025$1,990$2,572$3,199$3,990$5,005$6,3992011 2012 2013 2014 2015 2016 2017Retail Travel Daily DealsForecast for US eCommerce Sales ($MM) CAGR(12-17)35%28%26%9% of onlineretail sales
  • 19. © 2012 Forrester Research, Inc. Reproduction ProhibitedOpportunity 4: Market research20Crowdsourcing feedback can support your product development cycleor the cycles of your advertisers
  • 20. © 2012 Forrester Research, Inc. Reproduction ProhibitedWhat media companies have…!  Reach due to your brand(s); this canbe local or national!  Personalities who can shape demand!  Loyal audiences!  Sales teams21
  • 21. © 2012 Forrester Research, Inc. Reproduction ProhibitedDigital hasn’t killed traditional media…to the contrary…2224%19%9%6%17%8%6%25%21%20%31%20%19%21%35%41%55%57%60%65%66%Number of pages in print editionsPaid Print SubscriptionsPaid Digital SubscriptionsNumber of advertisersOverall advertising revenuesOverall reach or audience baseMarket sharePositive impactNo real changeNegative impact“To what extent have consumers use of web and mobile technologyto consumecontent impacted the following in your business?Base: 106 U.S based organizations with digital contentSource: A commissioned study conducted by Forrester Consulting on behalf of Group Commerce August 2012
  • 22. However, eCommerce is increasinglyviewed as table stakes2317%18%22%25%25%32%37%28%27%36%24%19%32%35%25%25%26%21%27%20%16%13%10%9%14%19%11%9%16%19%7%16%9%5%3%A separate daily deals siteAn online daily deals platform with offeringsembedded in the digital contentCurated digital contentAn online marketplace with offeringsembedded in the digital contentA separate online storeMore online advertisersAdvanced website functionalityVery importantImportantSomewhatimportantNot importantNot at allimportant“How importantdo you think the following are to increaseyour audience baseand drive revenue?”Base: 106 U.S based organizations with digital contentSource: A commissioned study conducted by Forrester Consulting on behalf of Group Commerce August 2012
  • 23. The reasons are variedDoes your organization care about enabling eCommerce? If so, whatwould you say is the primary driver behind this initiative?32%3%4%18%19%21%No, enabling eCommerce is notimportant to my businessYes, for another reasonYes, we need to keep up with ourcompetitorsYes, with eCommerce the onlineaudience is worth moreYes, it is the direction where the marketis headedYes, we are seeing a demand from ourcustomersBase: 101 US based organizations with digital contentSource: A commissioned study by Forrester Research on behalf of Group Commerce August 2012
  • 24. The promise of commerce is intriguingPlease indicate how your organization thinks eCommerce initiatives will impactthe following for your organization. (4/5 on a 5 point scale of impact)54%55%58%58%61%63%LoyaltyAmount of time spent on websiteReturn viewsUnique viewsBrand awarenessAmount of digital content consumedBase: 101 US based organizations with digital contentSource: A commissioned study by Forrester Research on behalf of Group Commerce August 2012
  • 25. © 2012 Forrester Research, Inc. Reproduction ProhibitedAgenda!  What’s working in eCommerce now!  What media companies need todo next!  Recommendations26
  • 26. © 2012 Forrester Research, Inc. Reproduction ProhibitedGet buy-in from the C-suite27How would a decision to launch an eCommerce marketplace (or daily deals) offering bemade?24%14%12%3%4%0%2%8%36%23%9%3%1%2%2%6%A decision would be made at the highest levels of the organizationand a team would be put together to implement the offeringA decision would be made at the highest levels of the organizationand we would work closely with a partner to develop an offeringA decision would be made at the highest levels of the organizationbut we would look for a partner to executeLine-of-business teams would decide and a team would be puttogether to implement the offeringLine-of-business teams would decide and we would work closelywith a partner to develop an offeringLine-of-business teams would decide but we would look for apartner to executeAn already established eBusiness team would make the decisionand implement the offeringWe would likely develop a small test to determine feasibility beforeproceedingDaily dealsMarketplaceBase: 101 US based organizations with digital contentSource: A commissioned study by Forrester Research on behalf of Group Commerce August 2012C-suitedecisions
  • 27. © 2012 Forrester Research, Inc. Reproduction ProhibitedGet appropriately staffed28IT developmentAnalyticsSalesCreativeCustomer serviceLow-hanging fruit… …but not self-service
  • 28. © 2012 Forrester Research, Inc. Reproduction ProhibitedLeverage 3rd parties for technology2918%22%24%24%24%26%26%28%33%33%39%37%20%37%28%32%37%37%25%30%30%30%26%26%27%27%22%20%29%22%10%8%16%8%17%10%10%8%8%8%3%3%14%5%4%4%5%7%5%7%Site operationsCommerce technology capabilitiesProduct (or deal) sourcingCommerce related content production &managementMerchandisingOrder management capabilitiesCustomer serviceOnline payments and fraud managementAbility to embed items for sale into relevantdigital contentOrder fulfillmentVerypreparedPreparedSomewhatpreparedNot preparedNot at allprepared“How prepared are you in each of the following areas to offer an eCommercemarketplaceon your website?”Base: 106 U.S based organizations with digital contentSource: A commissioned study conducted by Forrester Consulting on behalf of Group Commerce August 2012
  • 29. © 2012 Forrester Research, Inc. Reproduction ProhibitedInnovate on the user experience30
  • 30. © 2012 Forrester Research, Inc. Reproduction ProhibitedAgenda!  What’s working in eCommerce now!  What media companies need to donext!  Recommendations31
  • 31. © 2012 Forrester Research, Inc. Reproduction ProhibitedRecommendations!  “Upsell” your traffic!  Push the equity you have with yourcurrent audiences into new territories;experiment with new revenue models likemarketplaces!  Be open to creating an entirely newbusiness or brand!  Partner with others to incubate newopportunities32
  • 32. Thank youSucharita Mulpurusmulpuru@forrester.com@smulpuru