IBM Online Retail Holiday Shopping Recap and 2014 Outlook

Holiday Recap and
2014 Outlook

1

© 2014 IBM Corporation

#SmarterCommerce

@smulpuru

@jay_henderson

Today’s presenters

Sucharita Mulpuru
Principal Analyst

Strategy Director,

Forrester

Enterprise Marketing Management

@smulpuru

2

Jay Henderson
@jay_henderson


#SmarterCommerce

@smulpuru

@jay_henderson

Agenda

›

2013 Recap

› Key US dates and trend
› Views from around the globe
› Shopper behavior

›

3

Insights for 2014


#SmarterCommerce

@smulpuru

@jay_henderson

Compare performance against industry peers with
IBM Digital Analytics Benchmark
 Over 3,000 sites participated
 Aggregate index
 Compare against industry
 Compare against peers

 Geographic coverage
 US, UK, AU, Europe, World Wide

 Industry specific





Retail
Content
Financial Services
Travel

 Segment specific





4

Apparel
Department Stores
Health and Beauty
And 12 others. . .


#SmarterCommerce

@smulpuru

@jay_henderson

Wide range of free holiday benchmark resources available
www.ibm.com/benchmark
 Benchmark Reporting
 Reports pulled on key dates and within key
date ranges for intra-day, DtD, WtW and YtY
comparisons
 Key Messages, Graphs and Tables included
in outputs including Press Alerts, Releases
and Reports

 US Retail & Retail sub-verticals
 Black Friday, Cyber Monday Reports

 UK Retail
 Nov 25 Mega Monday
 Dec 2 Cyber Monday

 AU Retail
 Nov 19-20 Click Frenzy

 For all three countries
 Post-Christmas
 Holiday Recap Reports
5


#SmarterCommerce

@smulpuru

@jay_henderson

Thanksgiving Day had a dramatic spike starting at 5 PM PST as
stores began early Black Friday promotions

19.7% increase in online retail sales Thanksgiving Day 2013 over last year

Source: IBM Digital Analytics Benchmark
6


#SmarterCommerce

@smulpuru

@jay_henderson

While Thanksgiving continues its growth year over year, Black
Friday still delivers considerably higher sales.

18.9% increase in online retail sales Black Friday 2013 over last year

7


#SmarterCommerce

@smulpuru

@jay_henderson

Cyber Monday continues to be the biggest online shopping day of
the year

20.6% increase in online retail sales Cyber Monday 2013 over last year

8


#SmarterCommerce

@smulpuru

@jay_henderson

Mobile shopping soars
 As a percentage of all online traffic and sales, Thanksgiving was the highest at 42.6% and
25.8%, respectively
 However, Cyber Monday saw the most growth year over year with increases of 44.9% and
55.4% for percentage traffic and sales, respectively

9


#SmarterCommerce

@smulpuru

@jay_henderson

Smartphones to Browse, Tablets to Buy

10


#SmarterCommerce

@smulpuru

@jay_henderson

Retailers “Push” Promotions to Mobile Shoppers
 Thanksgiving Day and Black Friday
 On average, retailers sent 37 percent more push notifications during the two
day period of Thanksgiving Day and Black Friday – when compared to daily
averages over the past two months.
 Average daily retail app installations also grew by 23 percent using the same
comparison.
 Retailers sent more notifications on Thanksgiving Day than Black Friday.

 Cyber Monday
 On average, retailers sent 77 percent more push notifications –– when
compared to daily averages over the past two months.
 Average daily retail app installations grew by 29 percent using the same
comparison.
11


#SmarterCommerce

@smulpuru

@jay_henderson

Agenda

›

2013 Recap


›

12

Insights for 2014


#SmarterCommerce

@smulpuru

@jay_henderson

Around the globe….
UK Cyber Monday- December 2, 2013
Online sales increased by 31.6% compared to the same Monday
in 2012 with mobile percent of sales growing by 94%, exceeding
33% of all online sales

Australia’s Click Frenzy – November 19 – 20, 2013
Online sales increased by 16.3% compared to the same Monday
in 2012 with mobile percent of sales growing by 43%, exceeding
17.7% of all online sales

13


#SmarterCommerce

@smulpuru

@jay_henderson

Mobile traffic and sales have reached a tipping point…across the
globe

14


#SmarterCommerce

@smulpuru

@jay_henderson

Smartphone to brows, tablets to buy….

Source: IBM Digital
Analytics Benchmark
15


#SmarterCommerce

@smulpuru

@jay_henderson

Agenda

›

2013 Recap


›

16

Insights for 2014


#SmarterCommerce

@smulpuru

@jay_henderson

Early November was strong

© 2013 Forrester Research, Inc. Reproduction Prohibited

17

#SmarterCommerce

@smulpuru

@jay_henderson

The myth of holiday shopping is that it’s
about gifts
Who were you shopping for today?
Pre-Thanksgiving

Myself

Business

7%

8%

3%

4%

49%

44%

57%

52%

42%

CyberWeek

CyberMonday

53%

56%

Gifts for others

Non-gifts for
others

Thanksgiving

6%

4%

56%

7%

4%

Base: online consumers who purchased online during the given timeframe

Source: Bizrate Insights/Forrester Holiday Flash Survey, 2013

18

#SmarterCommerce

@smulpuru

@jay_henderson

This could explain the soft early
December
Which of the following best characterizes your feelings about online deals, promotions, and specials around the holidays?

Pre-Thanksgiving

I love deals! The
more, the merrier

I will only buy if I
have a sale, deal or
promotion

17%

13%

Thanksgiving

23%

24%

20%

CyberWeek

CyberMonday

22%

22%

17%



19

#SmarterCommerce

@smulpuru

@jay_henderson

Deals were often the same on key dates…
CyberMonday 2012


CyberMonday 2013

20

#SmarterCommerce

@smulpuru

@jay_henderson

…in some cases there were higher hurdles


21

Disproportionate volume occurs toward
the end of the holiday season
Total days

Percent of
online sales
during peak

2012-2013
growth

Pre-11/25

24

26%

25%

11/25-12/7
(Thanksgiving, Cyber
Week)

13

25%

15%

12/8-12/24

17

40%

15%

Post 12/24

7

9%

10%

Timeframe

Average daily eCommerce package volume (non-peak): 7MM

Average daily eCommerce package volume (peak): 46MM


22

#SmarterCommerce

@smulpuru

@jay_henderson

Web shoppers continue to abandon
stores during key time periods
% agreeing with statement

Pre-Thanksgiving

I shopped in stores
less because I
shopped online
instead

I prefer to shop online
rather than go to
crowded stores
during Thanksgiving
weekend

Thanksgiving

69%

83%

CyberWeek

CyberMonday

79%

87%

75%

82%

65%

81%



23

#SmarterCommerce

@smulpuru

@jay_henderson

Agenda

›

2013 Recap


›

24

Insights for 2014


#SmarterCommerce

@smulpuru

@jay_henderson

1. The last mile wars are just beginning
Which types of deals did you take advantage of for today’s purchase?
Timeframe

Offer

2011

2012

2013

Free shipping no threshold

20%

20%

32%

Free shipping with threshold

25%

23%

18%


26%

24%

40%


29%

27%

21%


33%

29%

32%


26%

27%

28%


23%

23%

25%


25%

25%

25%

Pre-Thanksgiving

Thanksgiving
Weekend

Cyber Monday

Cyber Week

Base: recent online buyers

Source: Bizrate Insights/Forrester Holiday Flash studies

25

#SmarterCommerce

@smulpuru

@jay_henderson

But the postal service is in dire straits
Net Income/Loss for USPS in US$B

$0.90
2006

2014 (F)*

2016 (F)

$(15.10)

$(21.30)
* Includes retirement benefits pre-funding requirement

Source: USPS


26

#SmarterCommerce

@smulpuru

@jay_henderson

It is hard to match the postal service
Major carriers


Regional upstarts

27

#SmarterCommerce

@smulpuru

@jay_henderson

What happens next is well-documented


28

#SmarterCommerce

@smulpuru

@jay_henderson

Cost reduction is already in motion

√ Early retirement packages
√ Retail shared with other stores
? Clustered delivery boxes
? Fewer delivery days


29

#SmarterCommerce

@smulpuru

@jay_henderson

Cost increases for parcels are one of the
only levers
Revenue
source

This
means…

Elastic?

Profitable?

First class

Envelopes

Not so much

Very

Business
delivery

Catalogs,
magazines

Very

Not so much

Parcels

eCommerce
Not so much
shipments


Very

30

#SmarterCommerce

@smulpuru

@jay_henderson

Add to that, holiday crunches


31

#SmarterCommerce

@smulpuru

@jay_henderson

Omnichannel is now an imperative


32

#SmarterCommerce

@smulpuru

@jay_henderson

2. Mobile madness maddens
% of web revenue transacted on each device

79%

79%

77%

12%

13%

14%

13%

9%

8%

9%

10%

8%

$25-100MM

$100MM

Store-based
retailer

Pureplay

79%

8%

14%
5%

Average

<$25MM

13%

77%

72%

15%

81%

77%

89%

Smartphone

Tablet

81%

79%

12%
7%

13%

15%
8%
3%

13%

Manufacturer Catalog and <4 years old 4-10 years
other
old
multichannel

8%
>10 years

Other Web (e.g. PC)

Source: The State of Retailing Online 2014: Key Metrics


33

#SmarterCommerce

@smulpuru

@jay_henderson

Top eCommerce priority in 2014: mobile
Examples/Definitions

53%

Mobile

46%

Site overhaul

Responsive design, mobile site optimization, tablet redesign

Redesign (not specific to responsive design), personalization, site
usability, content management system integration, taxonomy
improvements

36%

Marketing

26%

Omnichannel efforts
Replatform

19%

Checkout overhaul

Brand marketing, search optimization, customer acquisition,
loyalty and CRM
In-store pickup, order management system overhaul

19%

New platform integration, site performance
Alternative payments, checkout optimization

International expansion

14%

Merchandising improvements

14%

Fulfillment

4%

Growth to key markets like BRIC
Videos, on-site selection improvement, enhancing marketplace
and drop ship capabilities
Speed to ship packages, order visibility

Social

3%

Integration with Instagram and Pinterest

Customer service

3%

Integration of live chat

Source: The State of Retailing Online 2014: Key Metrics

34

#SmarterCommerce

@smulpuru

@jay_henderson

Mobile investments are often still
modest


35

#SmarterCommerce

@smulpuru

@jay_henderson

This is a classic first mover dilemma
Faster
Mobile today

Loser box

Rough
waters

Pace of market
evolution

Faster

Calm waters

1st mover
wins

Pace of technology
evolution

Source: The Half-Truth of First Mover Advantage, HBR 2005

36

#SmarterCommerce

@smulpuru


@jay_henderson

37

#SmarterCommerce

@smulpuru

@jay_henderson

Here are some of the early winners


38

#SmarterCommerce

@smulpuru

@jay_henderson

3. EDLP dies…because the web always
has a lower price

35% use phones to research
prices IN STORES

32% of showroomers find it
easy vs 11% who find it difficult

35% of showroomers use
search to compare prices

37% of showroomers plan to
reesarch prices more on their
mobile devices in the future

Source: Forrester Life Cycle Survey, Q1 2013: Forrester-Aprimo Research


39

#SmarterCommerce

@smulpuru

@jay_henderson

The store “premium” isn’t large
How much more would you consider paying to purchase a product in a physical store rather than buying
it online so that you could have the product immediately rather than wait for it to be shipped to you?

1-5% higher in store

52%


18%

6%


4%


4%

More than 25% higher in store

3%

Source: Forrester Life Cycle Survey, Q1 2013

40

#SmarterCommerce

@smulpuru

@jay_henderson

For commodities, this type of price
difference gets tougher

Source: 360pi

41

#SmarterCommerce

@smulpuru


@jay_henderson

42

#SmarterCommerce

@smulpuru

@jay_henderson

Summary of Insights for 2014
›

There probably won’t be a reprieve in shipping
expenses, but omnichannel investments can insulate
retailers from unwelcome suprises

›

We are just beginning to see “mobile unique”
solutions; if you can create one, you will amplify
your mobile success

›

Dynamic pricing is here to stay and will become
standard for the most commoditized categories;
ultimately, merchandising strategies change a lot


43

#SmarterCommerce

@smulpuru

@jay_henderson

Customers know more
Customers demand more
Your business expects more

Marketing must re-imagine its role
44


#SmarterCommerce

@smulpuru

@jay_henderson

It’s awfully hard to re-imagine customer engagement when the
technology infrastructure looks like this…
SMS
Marketing

App/Widget
Creation

Mobile Push
Notifications

Files

Files

Email Service
Provider

Transactions

Lead
Management

Website
Behavioral
Targeting

Social
Marketing
Files

Mobile
Marketing

Files

Files

Files
Files

Customer
Database

Campaign
Management
Contact
Optimization

Files

Call Center /
Inbound Decisioning

Digital Asset
Mgmt

Customer
Insight Tool

Files

Data
warehouse
Marketing
Operations
Management

Search Bid
Management
Predictive
Analytics

Marketing
Finance Mgmt

45

Web Analytics
Provider

SEO

Files
Local Marketing

Product &
Content
Recos

Marketing Mix
Modeling


#SmarterCommerce

@smulpuru

@jay_henderson

Choosing the right technology for marketing
Preferably an integrated

suite that has multiple
entry points
A modular solution - so
you only have to buy and adopt
what you need, that you can

expand over time
Open solution so you can
integrate it into your
existing infrastructure
46


#SmarterCommerce

@smulpuru

@jay_henderson

IBM Marketing and Merchandising solutions empower clients to
understand and engage customers in context across channels

Understand

Engage

Optimize
47


#SmarterCommerce

@smulpuru

@jay_henderson

IBM Marketing and Merchandising solutions empower clients to
understand and engage customers across departments

Marketers

48

Digital
Marketers

eCommerce
Professionals

Merchandisers

Customer
Service


#SmarterCommerce

@smulpuru

@jay_henderson

IBM continues to build out an industry leading portfolio of technologies

Marketers

Digital
Marketers

Omni-Channel Marketing
& Digital Marketing

eCommerce
Professionals

Omni-Channel
Commerce

Merchandisers

Omni-Channel
Merchandise
Optimization

Customer
Service

Customer
Experience for
Service

Real-time Personalization

Customer Analytics

49


#SmarterCommerce

@smulpuru

@jay_henderson

IBM continues to build out an industry leading portfolio of technologies
to enable retailers

50

50


#SmarterCommerce

@smulpuru

@jay_henderson

Additional holiday benchmark analysis & best practice guides

51


#SmarterCommerce

@smulpuru

@jay_henderson

Questions?
Sucharita Mulpuru
Principal Analyst
Forrester
@smulpuru

Jay Henderson
Strategy Director,
IBM, Enterprise Marketing
@jay_henderson

52


Be a part of Smarter Commerce Global Summit 2014
Customers expect instant gratification, and a single moment can create a lasting impression.
To gain customer loyalty—and to differentiate yourself from the competition—you need to
exceed expectations and make those moments count. At the 2014 Smarter Commerce Global
Summit, you’ll discover innovative ways to become essential to your customers, partners,
and suppliers by integrating intelligence into every commerce process and making every
interaction personal, memorable, and valuable.
Jay Baer, marketing
strategist, speaker,
author and President of
the social media and
content marketing
consultancy Convince &
Convert, returns as
host of the SCGS
General Sessions

Share your expertise
in Tampa!
Submit your proposal
to present at Smarter
Commerce Global
Summit 2014 and tell
your story.

www.ibm.com/commerce-summit

IBM Online Retail Holiday Shopping Recap and 2014 Outlook

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to IBM Online Retail Holiday Shopping Recap and 2014 Outlook

Similar to IBM Online Retail Holiday Shopping Recap and 2014 Outlook (20)

Recently uploaded

Recently uploaded (20)

IBM Online Retail Holiday Shopping Recap and 2014 Outlook