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Holiday Predictions 2013

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The holiday season seems to start earlier each and every year. So, how early are retailers deploying holiday campaigns? And what strategies are they using to generate the highest ROI? Lauren Freedman, President of the eTailing group, and Baynote worked together to survey 77 retailers on their holiday predictions, readiness, promotions and spending in 2013. The results of the survey will be available in the coming weeks, but you can sign up now and we will send you the results as soon as they are available.

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Holiday Predictions 2013

  1. 1. Holiday Predictions Survey Results, July 2013
  2. 2. WHY WE CONDUCTED THE RESEARCH • Check in on trends from previous research • Understand what is most important to retailers today • Hear from retailers on what they are doing that is new • Learn from their feedback • Provide consultative advice to our clients Baynote, Inc. © 2013 2
  3. 3. HOLIDAY PREDICTIONS 2013 Baynote, Inc. © 2013 3
  4. 4. THE DEMOGRAPHICS: 77 RETAILERS eCommerce as a % of Business Company's Annual Revenue Less than $20 million 33% $21 to $50 million $51 to $100 million $101 to $200 million 13% Less than 5% 6% 6% to 10% 17% 13% $501 million to $1 billion $1 to $5 billion 26% to 50% 9% 9% More than $5 billion 17% 11% to 25% 10% $201 to $500 million 16% 51% to 75% More than 75% 7% Baynote, Inc. © 2013 4% 11% 35% 4
  5. 5. TOPLINE THOUGHTS HOLIDAY SPENDING • Strong growth projected for 2013 holidays projected increases in the 11-15% range (Note: in line with industry projections) • Mobile is making significant inroads while retailers are challenged to see social’s revenue contribution • Retailers are cautiously optimistic given customer confidence levels; promotions are likely to be in play Baynote, Inc. © 2013 5
  6. 6. TOPLINE THOUGHTS READINESS • Retailer investment has been significant from marketing (SEO/SEM) and platform upgrades with mobile and retargeting also top-of-mind • Customer experience investment tends to be “tactical” starting with improving key pages, onsite search and enhancing content Baynote, Inc. © 2013 6
  7. 7. TOPLINE THOUGHTS PROMOTIONS • Retailers are split regarding deploying promotions likely based on category buying patterns with only 1/3 early birds (October or before) • Selectivity is key: protect profitability rather than a blanket selling strategy • Free shipping will also be deployed selectively most often associated with a minimum purchase Baynote, Inc. © 2013 7
  8. 8. HOLIDAY SPENDING Baynote, Inc. © 2013 8
  9. 9. 60% of retailers forecast growth >10% Almost 1-in-4 expect 21%+ increases Q. How do you expect your overall online sales to change during the 2013 holiday? Down Flat 5% 9% +1% to +5% 12% +6% to +10% 14% +11% to +15% 23% +16% to +20% 15% +21% to +30% 12% More than 31% 10% Baynote, Inc. © 2013 9
  10. 10. 60% of retailers allocate more than 1/5th of their marketing budget to holiday Q. What percentage of your annual online marketing budget is allocated to the holiday season? 0% to 10% 11% to 15% 16% to 20% 12% 13% 15% 21% to 30% 21% 31% to 40% More than 41% Baynote, Inc. © 2013 22% 17% 10
  11. 11. The Forecast: Retailers are cautiously optimistic, promotionminded and believe they will make their numbers Lack of customer confidence plays into caution & fear that aggressive plans won’t be met Q. Please note your level of agreement with the following statements. Top-2: Strongly to Somewhat Agree Neither agree nor disagree Top-2: Strongly to Somewhat Disagree We’re cautiously optimistic that it will be a strong online holiday season 80% 12% 8% The holidays will be promotion-centric so we are planning accordingly to ensure we deliver from a bottom-line perspective 73% 18% 9% The holidays will start out slowly but eventually gather momentum, and we’ll make plan 53% 30% 17% It’s going to be a strong online holiday season 52% 30% 18% We’re a bit nervous that we won’t make our aggressive plan 47% 19% 34% Consumers still lack “complete” confidence in the economy so it’s going to be a flat online holiday season at best 35% 26% 39% We are pessimistic and have adjusted our forecast accordingly 14% 17% 69% Baynote, Inc. © 2013 11
  12. 12. MOBILE MATTERS Baynote, Inc. © 2013 12
  13. 13. Mobile revenue expectations are high for the holidays Mobile will be a significant part of our revenue this holiday season Top-2: Strongly to Somewhat Disagree 38% Neither agree nor disagree 9% Top-2 Strongly to Somewhat Agree 53% Baynote, Inc. © 2013 13
  14. 14. 1 in 3 retailers project mobile will be more than 10% of their holiday revenues What percentage of your 2013 holiday revenue do you anticipate will come from the mobile channel? 0% 8% 1-5% 29% 6-10% 29% 11-15% 16-20% 21%+ 22% 7% 5% Baynote, Inc. © 2013 14
  15. 15. SYSTEMS READINESS Baynote, Inc. © 2013 15
  16. 16. SEO/ SEM and platform upgrades see significant investment ahead of holiday Mobile, retargeting and testing are also top-of-mind for retailers Q. Please note your level of TECHNOLOGY investment in 2013 from no investment to significant investment. If a particular feature or upgrade does not apply to your business, please select N/A. Answer Options Significant Limited No Investment N/A 46% 43% SEO/SEM ECommerce platform upgrades Mobile enhancement (e.g. apps, mcommerce, in-store, SMS, QR codes, payment methods) Retargeting/advertising Logistical improvements (faster fulfillment, more delivery choices) Testing Cart abandonment strategies Big data capture, retrieval and analytics capabilities Social (e.g. Facebook, Twitter, Pinterest, social listening tools, blogs) Paper catalog Alternative payment methods (e.g. digital wallets, bit coin, touchless mobile-to-mobile transactions, etc.) Cross-channel logistics (e.g. in-store pickup, check in-store product availability, e-receipts) Baynote, Inc. © 2013 46% 38% 6% 15% 2% 4% 32% 50% 14% 4% 31% 26% 23% 19% 18% 17% 16% 59% 53% 64% 64% 50% 62% 25% 10% 18% 12% 14% 27% 20% 35% 0% 3% 1% 3% 5% 1% 24% 10% 24% 57% 9% 7% 34% 29% 30% 16
  17. 17. Dedicated efforts to improve key pages, enhanced site search and augmenting content lead customer experience investments Q. Please note your level of CONSUMER EXPERIENCE investment in 2013 from no investment to significant investment. If a particular feature or upgrade does not apply to your business, please select N/A. Answer Options Significant Limited No Investment N/A Improved key pages (e.g. home page, category page, product page) 48% 46% 6% 0% Enhanced site search 37% 40% 22% 1% Streamlined shopping cart 30% 49% 18% 3% Increased content (e.g. documents, videos, tips) 30% 57% 10% 3% Overall site redesign 29% 53% 17% 1% Initiated or evolved loyalty program 18% 29% 40% 13% Personalized zones site-wide from home page to follow up emails 17% 36% 44% 3% User-generated content and tools (e.g. reviews, Q&A) 14% 55% 28% 3% Rich media or related tools (e.g. zoom, alternative views) 13% 39% 39% 9% Expanded customer service (e.g. 24x7 access) 4% 38% 51% 7% Baynote, Inc. © 2013 17
  18. 18. GIFTING Baynote, Inc. © 2013 18
  19. 19. Retailers are making limited or no investment in gifting: most already have requisite feature set Q. Please note your level of GIFTING investment in 2013 from no investment to significant investment. If a particular feature or upgrade does not apply to your business, please select N/A. Answer Options Significant Limited No Investment N/A Ship to multiple addresses within a single checkout 4% 21% 58% 17% Ability to hold gifts to ship later 5% 16% 57% 22% Ability to store addresses of friends and family to access when sending gifts 2% 29% 52% 17% Promotion of gift cards in personalization zones 4% 25% 52% 19% Wish lists 6% 34% 45% 14% Traditional gift certificates 1% 39% 42% 18% egift or digital gift cards 9% 39% 38% 14% 7% 42% 34% Enhanced gift center/gift suggestions Baynote, Inc. © 2013 17% 19
  20. 20. TESTING Baynote, Inc. © 2013 20
  21. 21. Testing continues for 3 of 4 retailers yet only a handful of retailers will increase frequency Q. Which of the following best describes your approach to testing during the holiday season? 12% Test More Frequently 12% No Testing 17% Testing 71% Baynote, Inc. © 2013 21
  22. 22. PROMOTIONAL STRATEGIES Baynote, Inc. © 2013 22
  23. 23. Retailers get a jump on the season: 1 in 3 deploy holiday campaigns in early October ……yet 40% will wait until November to initiate holiday marketing Q. When do you plan to start your ONLINE holiday marketing and promotion campaigns (choose 1)? Week of 10/1 or earlier Week of 10/7 Week of 10/14 Week of 10/21 30% 4% 7% 4% Week of 10/28 16% Week of 11/4 Week of 11/11 21% 5% Week of 11/18 or later 14% Baynote, Inc. © 2013 23
  24. 24. Retailer promotion budgets vary substantially: driven by product category and brand orientation Q. What percentage of your total 2013 promotion budget is allocated to holiday? 0%-10% 13% 11% to 20% 25% 21% to 30% 31% to 40% More than 40% Baynote, Inc. © 2013 22% 18% 22% 24
  25. 25. Marketing and promotion budgets are aligned for the holiday season Budgets as a % of Revenue 0% to 10% 12% 13% 11% to 15% 13% 12% 16% to 20% 15% 13% 21% 22% 21% to 30% 31% to 40% More than 41% 22% 18% 17% 22% Marketing Promotion Baynote, Inc. © 2013 25
  26. 26. CORE STRATEGIES: MOBILE Baynote, Inc. © 2013 26
  27. 27. Mobile significantly impacts revenue: social impact seen as marginal Q. What percentage of your 2013 holiday revenue do you anticipate will come from each of the following channels? 0% 1%-5% 6%-10% 11%-15% 16%-20% 21%-30% 31%-40% 41%-50% 50%+ 8% 29% 29% 22% 7% 4% 1% 0 0 33% 51% 7% 3% 3% 3% 0 0 0 41% 6% 5% 3% 3% 1% 4% 3% 34% 0% 7% 14% 2% 4% 9% 4% 7% 53% Mobile Social In-Store Online Baynote, Inc. © 2013 27
  28. 28. Social revenue trends <5% while the majority project mobile >5% What percentage of your holiday revenue do you anticipate will come from mobile and social channels? 8% 0% 33% 29% 1-5% 6-10% 11-15% 16-20% 51% 29% 7% 22% 3% 7% 3% Mobile 21%+ 5% 3% Baynote, Inc. © 2013 Social 28
  29. 29. CORE STRATEGIES: CUSTOMER EXPERIENCE Baynote, Inc. © 2013 29
  30. 30. SEO/ SEM and platform upgrades see significant investment ahead of holiday Mobile, retargeting and testing are also top-of-mind for retailers Q. Please note your level of TECHNOLOGY investment in 2013 from no investment to significant investment. If a particular feature or upgrade does not apply to your business, please select N/A. Answer Options Significant Limited No Investment N/A 46% 43% SEO/SEM ECommerce platform upgrades Mobile enhancement (e.g. apps, mcommerce, in-store, SMS, QR codes, payment methods) Retargeting/advertising Logistical improvements (faster fulfillment, more delivery choices) Testing Cart abandonment strategies Big data capture, retrieval and analytics capabilities Social (e.g. Facebook, Twitter, Pinterest, social listening tools, blogs) Paper catalog Alternative payment methods (e.g. digital wallets, bit coin, touchless mobile-to-mobile transactions, etc.) Cross-channel logistics (e.g. in-store pickup, check in-store product availability, e-receipts) Baynote, Inc. © 2013 46% 38% 6% 15% 2% 4% 32% 50% 14% 4% 31% 26% 23% 19% 18% 17% 16% 59% 53% 64% 64% 50% 62% 25% 10% 18% 12% 14% 27% 20% 35% 0% 3% 1% 3% 5% 1% 24% 10% 24% 57% 9% 7% 34% 29% 30% 30
  31. 31. Dedicated efforts to improve key pages, enhanced site search and augmenting content lead customer experience investments Q. Please note your level of CONSUMER EXPERIENCE investment in 2013 from no investment to significant investment. If a particular feature or upgrade does not apply to your business, please select N/A. Answer Options Significant Limited No Investment N/A Improved key pages (e.g. home page, category page, product page) 48% 46% 6% 0% Enhanced site search 37% 40% 22% 1% Streamlined shopping cart 30% 49% 18% 3% Increased content (e.g. documents, videos, tips) 30% 57% 10% 3% Overall site redesign 29% 53% 17% 1% Initiated or evolved loyalty program 18% 29% 40% 13% Personalized zones site-wide from home page to follow up emails 17% 36% 44% 3% User-generated content and tools (e.g. reviews, Q&A) 14% 55% 28% 3% Rich media or related tools (e.g. zoom, alternative views) 13% 39% 39% 9% Expanded customer service (e.g. 24x7 access) 4% 38% 51% 7% Baynote, Inc. © 2013 31
  32. 32. CORE STRATEGIES: PROMOTIONS & PROFITABILITY Baynote, Inc. © 2013 32
  33. 33. Promotion budgets vary substantially driven by product category and brand orientation Q. What percentage of your total 2013 promotion budget is allocated to holiday? 0%-10% 13% 11% to 20% 25% 21% to 30% 22% 31% to 40% 18% More than 40% 22% Baynote, Inc. © 2013 33
  34. 34. Retailers to be selective in timing promotions offered to shoppers: flash sales & social lead Outlets and coupons are the standard bears that are omnipresent for 1-in-3 retailers Q. Which of the following promotions will be part of your holiday plan? Answer Options Select Times All the Time Will Not Use Flash sales or limited time promotions 66% 16% 18% Social promotions Other incentives (e.g. buy 1 get 1 free, buy more save more, save X if spend X, post-sale rebate) 64% 17% 19% 60% 21% 19% Online-only sale 52% 30% 18% Coupons ($ or % off) 52% 36% 12% Mobile promotions 49% 10% 40% Gift with purchase 45% 9% 45% Store-only sale 38% 4% 58% Outlet/clearance page 25% 43% 32% 19% 8% 73% Q11 Rewards points Baynote, Inc. © 2013 34
  35. 35. Retailers must decide on free shipping and divided on use with minimum purchase: most will use at “select” times Q. Which tactics and via what means will you employ shipping-related promotions during the holidays? Answer Options Will Not Use 45% 30% 25% 44% 9% 47% 5% 55% 38% 9% 53% 23% 1% 76% 8% 1% 91% 8% Free shipping – no minimum All Season 40% Free shipping – minimum purchase Select Times 8% 84% Free priority / 2-day shipping Free shipping – select products Free express / overnight shipping Free same-day delivery No free shipping offers Baynote, Inc. © 2013 35
  36. 36. 3 of 4 retailers will offer free shipping with a minimum purchase sometime during the holiday season 44% will not require a minimum threshold but only at select times of the year Q. Which tactics and via what means will you employ shipping-related promotions during the holidays? Answer Options Select Times All Season Will Not Use 45% 30% 25% 44% 9% 47% 38% 9% 53% 8% 8% 84% Free shipping – minimum purchase Free shipping – no minimum Free shipping – select products No free shipping offers Baynote, Inc. © 2013 36
  37. 37. <50% will selectively use free priority or 2-day shipping; only 1 in 5 will extend free express/overnight shipping Q. Which tactics and via what means will you employ shipping-related promotions during the holidays? Answer Options Select Times All Season Will Not Use 40% 5% 55% 23% 1% 76% 8% 1% 91% Free priority / 2-day shipping Free express / overnight shipping Free same-day delivery Baynote, Inc. © 2013 37
  38. 38. Retailer Holiday Readiness Checklist • • • • • • • • • What % of your business is done during the holiday season? Which tactics are core to your gifting strategy? How will you leverage email over the holidays? When is the right time to begin your first holiday campaign? Have you developed a robust gift center that supports all of your gifting needs? Are gift cards both traditional and email integrated throughout the shopping experience? What plans do you have in place to ensure that gifting is visible throughout your site? Are there any last-minute changes you could make to your gifting strategy in anticipation of the season? Have you embraced newer technologies including mobile and social? Baynote, Inc. © 2013 38
  39. 39. Baynote, Inc. © 2013 39
  40. 40. For More Information Lauren Freedman, President 773-975-7280 lf@e-tailing.com Marti Tedesco, Sr. Director of Marketing 650-255-4219 mtedesco@baynote.com Baynote, Inc. © 2013 40

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