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2012 Internet Sales Trends

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  • 1. Michael Healey , President Yeoman Technology Group 800-667-6098mhealey@yeomantechnologies.com©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 2. OverviewCore Internet TrendsMajor Trends by ChannelQ&A ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 3. Provide consulting, research, and channelmanagement servicesMulti-Channel Distribution Approach Focus on entire web Segment into ‘channels’ Match customer buying patternsInternet focus is on Sales, not MarketingRely on usage statistics to support anyassumptions ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 4. Direct E-Tailer 8% 4% Bid 15% Supply Referral 32% 29% Social 12%Source: Yeoman study of US Dept of Commerce, Internet Retailer, IDC, & Gartner stats for product sales to consumers, businesses, and institutions. Overlap between channels has been removed. 2011 US Internet Revenue - $575b. Does NOT include Ad/App related revenue. ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 5. Manufacturer or PublisherDistributor Partners Direct Sales Team / Retail OEM Consultant Catalogs ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 6. Direct ETailers Manufacturer BidDistributor Partners Direct Supply Chain Retail OEM Consultant Sales Team Referral Social ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 7. 2011 Global average speed increased 23% to 2.1 Mbps ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 8. Total Internet visitor growth rate slowed but usage increased (more timeonline) US growth slowest Global visitors rising rapidlyMajor sites across all categories outpaced overall growthMajor traffic consolidation trends continue Source: Compete Web Data 2010-2011 ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 9. Major Supply Referral / Bid / Social Direct Chain E-Tailers Auction Associated Centric Systems There are groups of distinct sites and systems. Each has their own group ofcompetitors, sites, and systems. They ARE NOT searchable or accessible from one spot. ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 10. ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 11. 100 90 Go online 80 Use Social 70 Networking Use IM 60 Use Email 50 Use Search 40 Get news 30 Buy Prodcuts 20 Bank online 10 Rate things - Millennials (18- Gen X (34-45) Younger Boomers Older Boomers Silent Generation 33) (45-55) (55-64) (65-73) Time on social networks now surpasses time on search portals ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 12. Source: Pew Internet Trends Data: 2006 - 2011 ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 13. Steady rise in 60adoption, even with the 50 40economy 30 Cost is the major factor 20 2009 2010Steady increase in 10 0 2011services and functionality 2012NOTE: Usage is higherwhen asked aboutspecific usage of cloudBase: 4 year trend from IW surveys 2011-2012Data: InformationWeek Analytics State of Cloud Computing Survey of business technologyprofessionals ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 14. Really just the evolution ofthe core computing to Utilitiesleverage: Public Internet backbone Distributed computing power / Backup Functionality Virtualization Multi-tenant architecture RawClassic economies of scale Security •Database Computing •Programmingand scope Finished Value and technology now •Application CPU Storage •Suite make sense for business Monitor ingKEY POINT: Moves internalactivities online ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 15. Good News Bad News Continued heavy Will continue to investment by Internet dramatically increase traffic vendors and bottlenecks More competition and Sales/distribution centric lower prices vendors may lose focus on More integration of primary business Internet centric activity by The ‘cloud’ will still have the core business outages, poor planning will hurt businessRetail sites were already heavily cloud based but it is expected that most will abandoninternal or private hosting and go to cloud. 40% of Top 100 retailers currently leveragecloud based hosting. (Compuware research) ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 16. • Continued “Consumerization” of all Direct Internet transactions (including B2B) • Users are expecting a consumer-like ETailers experience for a business transaction • Expect speed and content Bid • Will access via any device • Continued influence of reviews and ratings Supply Chain • Major challenge of ‘rogue’ product information online Referral • Cannot rely on downstream channel or assume customers ‘are ok’ Social ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 17. • Google/Bing changes: Will have updated search and pay models that Direct will require revisiting of strategies 100% ETailers 90% 80% 70% Bid 60% 50% 2010* Supply 40% 2011 Chain 30% 20% Referral 10% 0% Social Search Social Email Referral Ads “How have you found a site in the last 12 months?” Forrester Dec 2011 Results - Summarized ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 18. US Search Engine Market ShareIt’s a Google vs Microsoft 70world 60 Core Bing engine now holds 50 30% of market 40 30Major changes in Google 20engines coming in 2012 10 Retooled results 0 Faster ‘instant’ Googl Bing Yahoo Ask AOL e Rebound from slagging revenue Nov-10 66.2 11.8 16.4 3.6 2 Nov-11 65.6 14.8 15.2 2.9 1.5 EXPECT ad biasing Source: Comscore Historical Rankings ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 19. • Amazon Influence Continues: 35% growth in Q4 2011 and a model to Direct invest heavily in cloud and tablets. Expect: ETailers • More marketplace models • More pressure on traditional retailers Bid • Amazon will continue to push into industrial and other channels Supply Chain • Major pressure on epub world Referral Social ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 20. Major players had big gains Amazon led EBay rebounded Wal-mart risingMarketplace model moving towards new norm Sears, Buy, Best Buy, B&N, Etsy, Ecrater, ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 21. • FaceBook IPO will disrupt market as the company will face new pressure to Direct produce revenue: • Difficult to prove ROI with existing ETailers campaign • Most valuable info stretches limits of Bid privacy Supply Chain• Will likely spur more Social Commerce Tests Referral Social ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 22. ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 23. ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 24. • Likely some major rules which will impact all sales Direct • Privacy Rules – EU will be first ETailers • Copyright – US measure ‘tabled’ but not Bid going away Supply Chain • Tax Changes – Compromise plan may be worked out this year Referral Social ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 25. • Continued ‘roll up’ of sites/platforms under one owner. Seen in all arenas Direct (search, ecommerce, news, etc) • Will limit the way users buy – restricting ETailers flow between properties • Manufacturers push harder in all channels Bid • Largely unregulated and misunderstood • Global Supply Chain Referral Social ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 26. • Reset for Mobile Commerce: Retooled for tablets Direct • Niche sales opportunity with smart phones • Low price point items ETailers • Tickets, services, music, and apps dominate • Little to no use for epub or higher ticket items Bid • Tablets change discussion • Better form factor Supply • Easier to use Chain • Will provide a major boost for electronic publications revenue growth Referral • NOT the same site design Social ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 27. Mobile E-Readers Heavy usage among adults Web based functionality at 83% of adults have cell phone low price point (42% classified as “smart”) Strong correlation with Ecommerce revenue digital publication sales lacking except Usage small (<12% US Tickets, Services Adults) but growing at rates Music similar to games and smart Apps / Games phones Growing usage as ‘comparison’ shopping tool Appx 20% used for price review while in retail store*Interesting note – average search length is 2.54 on mobile, 2.6 tablet, and 2.65 on desktop ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 28. • Reshaping of the referral site landscape Direct • Product details published freely to Google • Decline of ‘shopping’ listing services ETailers • Rise of ‘Groupon’ style services • Continued growth of affiliate Bid Supply Chain Referral Social ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 29. • Steady decrease in visits and revenue. • Flat to declining growth across market Direct • eBay’s rebound is not from bids • Finance / PayPal and as etailer with large set of ETailers new products (aka marketplace) Bid Supply Chain Referral Social ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 30. • Solid growth in online bid and RFP movement • Overall volume up 22% in 2011 Direct • City/Town and Mid-market provided growth ETailers• Rise of several niche players• Major players are pushing for new revenue Bid sources • Sterling rolled into IBM Supply Chain • Ariba’s marketplace has lackluster launch • Onvia still in turn-around mode Referral• There are now 100+ viable players with presales B2B transaction information. All Social restrict traffic between each other. ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com
  • 31. Identify Customer Behavior Patterns by Channels Presence – Are they there? Propensity – Are they there with a potential to buy (or be influenced)? Purchase – Is there evidence of purchasing behavior?Where are you? Direct Downstream channel or partner Absent (By Choice, By Mistake, By Accident) ©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com