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J U N E 2 1, 2 0 1 2




                       Retail Ecommerce
                       Forecast—Challenging
                       Economy Drives
                       Online Shopping


                                      Sponsored by:
Jeffrey Grau
Principal Analyst
                                           ©2011 eMarketer Inc.
Questions we will answer today


  What is the outlook for online retail
   sales?
  Which product categories have the
   most growth potential?
  What mega-trends will drive
   ecommerce growth?
  Who shops online?
 Q & A

Twitter – #eMwebinar                       ©2012 eMarketer Inc.
eMarketer forecasts double-digit growth
rates for ecommerce sales through 2016




                                    ©2012 eMarketer Inc.
Ecommerce has steadily outperformed
overall retail sales growth




                                  ©2012 eMarketer Inc.
Ecommerce’s share of total retail sales
has grown—and will continue to do so




                                      ©2012 eMarketer Inc.
Consumers are shifting purchases from
 stores to the web



                        Break Out by Income (2012)

                        Annual Income           Purchase more
                        $100,000>                   63%
                        <$100,000                   44%

                        Source: Deloitte, as cited in Internet
                        Retailer, April 6, 2012




Twitter – #eMwebinar                                     ©2012 eMarketer Inc.
Let’s compare analysts’ forecasts




                                    Benchmarks
                                      US DoC

                                      comScore




                                          ©2012 eMarketer Inc.
Is eMarketer bullish or are other analysts
being too conservative?




                                       ©2012 eMarketer Inc.
Analysts tend to underestimate
ecommerce growth rates




 “Chronically over the course of the 15 year history of ecommerce, the growth of
 the ecommerce market has been underestimated.” —Eric Best, CEO of Mercent,
 in an interview with eMarketer, February 14, 2012

                                                                       ©2012 eMarketer Inc.
How are online sales doing thus far in
2012?

Online sales were strong in Q1 2012




                                         ©2012 eMarketer Inc.
Keep in mind that the internet is much
more than a sales channel

It strongly influences store sales


                         Share by Segment, 2012

                         Category                               Share
                         Online sale                            7.2%
                         Web-influenced offline sales           38.2%
                         Web-influenced sales                   45.4%

                         Non web-influenced offline sales       54.6%

                         Source: Forrester Research, as cited by Business
                         Insider, June 12, 2012




                                                               ©2012 eMarketer Inc.
Questions we will answer today


  What is the outlook for online retail
   sales?
  Which product categories have the
   most growth potential?
  What mega-trends will drive
   ecommerce growth?
  Who shops online?
 Q & A

Twitter – #eMwebinar                       ©2012 eMarketer Inc.
Ecommerce’s share of total retail sales is
growing

In 2011, the internet accounted for
6.6% of total retail sales




                                      ©2012 eMarketer Inc.
Ecommerce’s share of total retail sales
varies greatly by category
Consumer packaged goods (CPG) is an
online sales category with high potential




                                      ©2012 eMarketer Inc.
Electronics and apparel dominate
ecommerce—and will continue to do so




                                   ©2012 eMarketer Inc.
Together they will account for 40% of
retail ecommerce sales in 2012




                                        ©2012 eMarketer Inc.
What are the fastest growing categories?




                                     13.3%




Twitter – #eMwebinar                  ©2012 eMarketer Inc.
Questions we will answer today


 What is the outlook for online retail
  sales?
 Which product categories have the
  most growth potential?
 What mega-trends will drive
  ecommerce growth?
 Who shops online?
Q & A


                                          ©2012 eMarketer Inc.
1. Portable devices power anytime,
anywhere commerce




Smartphones satisfy   Tablets spur product
 immediate product       discovery and
      needs             impulse buying

                                       ©2012 eMarketer Inc.
Smartphones promote showrooming by
bringing the internet to the store




                                 ©2012 eMarketer Inc.
Showrooming diverts sales from stores to
the web



                         6 in 10 ‘showroomers’ said
                         they originally planned to
                         purchase at the store but
                         changed their mind while
                         there and instead bought
                         online

                         Source: comScore, “State of the
                         US Online Retail Economy in Q1
                         2012,” May 2012




                                                 ©2012 eMarketer Inc.
Tablets help people discover products
   they did not know they wanted

                                                                                   “Our general
                             “With the iPad app,
                                                                                   belief is that
                             we focus on how we
                                                                                 tablet sales are
                            provide this discovery
                                                                                    significantly
                                 experience.”
                                                                                     additive.”
                                   Source: eMarketer
                                  interview, May 2012                             Source: eMarketer
                                                              Paul Cousineau     interview, April 2012
Yonatan Feldman
VP, Mobile & Global Engineering                               VP, Mobile Products
Gilt Groupe                                                   Wal-Mart Global Ecommerce


                                     “I would say that the tablet is
                                   creating more incremental traffic
                                  than it is taking it away or shifting.”
Matt Jones                          Source: eMarketer interview, April 2012
General Manager of Mobile
Home Depot


                                                                                             ©2012 eMarketer Inc.
Tablet commerce is having a noticeable
   impact on web sales
                     “We do more than 20% of
                    our revenue on mobile, and
                    tablets make up about 10%
                          of our revenue.”

                    Source: eMarketer interview, May
                                 2012                                       “Tablet commerce
Yonatan Feldman
                                                          Julie Bornstein       is certainly
VP, Mobile & Global Engineering
                                                          SVP               growing, but it’s still
Gilt Groupe
                                                          Sephora Direct     small—in the low
                       “We are definitely seeing continual                     double-digits.”
                     growth of people using tablets—mobile
                                                                               Source: eMarketer
                       is our fastest growing channel. We                     interview, May 2012
                      expect traffic on tablets to continue to
                                     increase.”
                          Source: eMarketer interview, May 2012
  Ed Deutscher
  Operating VP, Digital Commerce and Emerging
  Platforms
  HSN
                                                                                        ©2012 eMarketer Inc.
2. Ecommerce is helping consumers make
 strong connections with products




     Personalized          Curated
   recommendations        selection

Twitter – #eMwebinar                  ©2012 eMarketer Inc.
Personalization brings products of interest
to the consumer’s attention

               Present
               75% of the videos people watch on Netflix are the result
               of seeing one of its recommendations

               The Container Store’s conversion rates are about three
               times higher for customers who interact with
               recommendations than for a regular visit to the same page


               Future
               Shopycat, a social gift-finding Facebook app that came out
               of Walmart Labs, aims to convert consumer insights
               captured via social media into practical shopping tips

               eBay acquired recommendation engine Hunch’s prediction
               technology to surface more quality recommendations from
               eBay’s “long tail” of product listings.


                                                                 ©2012 eMarketer Inc.
Curated sites harness the power of social
recommendations



                           32% of online buyers
                           have made a purchase
                           as a result of seeing an
                           image on a social
                           image-sharing site like
                           Pinterest or Polyvore




                                              ©2012 eMarketer Inc.
Pinterest has become a powerful source
  of traffic during its short life

                      “We just launched on
                     Pinterest probably two
                                                                            “Pinterest is a growing
                     months ago, and we are                                   source of traffic for
                    seeing a huge response.”                                        Etsy.”

                    Source: eMarketer interview,                               Source: AdAgeDigital,
                             May 2012                                            December 2011

Martine Reardon                                    Adam Brown
Chief Marketing Officer                            Press Manager
Macy’s Inc.                                        Etsy


                                   In the past month, 3.36% of Gemvara’s traffic
                                   came directly from Pinterest, outpacing Twitter,
                                    Google+ and every other social network save
                                       Facebook, which accounted for 7.38%.”

                                             Source: Internet Retailer, February 2012
Brian Kalma
Chief Experience Officer
Gemvara
                                                                                             ©2012 eMarketer Inc.
Questions we will answer today


 What is the outlook for online retail
  sales?
 Which product categories have the
  most growth potential?
 What mega-trends will drive
  ecommerce growth?
 Who shops online?
Q & A


                                          ©2012 eMarketer Inc.
Online shoppers and buyers defined




Twitter – #eMwebinar                  ©2012 eMarketer Inc.
Most people who want to buy online are
already doing so




                                    ©2012 eMarketer Inc.
Internet users across all age groups are
buying online




                                      ©2012 eMarketer Inc.
Older consumers will account for a
greater share of online buyers




                                     ©2012 eMarketer Inc.
Online
buying has
become a
mainstream
activity,
where age,
race and
income
matter less




              ©2012 eMarketer Inc.
Lower-income shoppers now account for
a quarter of online sales




                                  ©2012 eMarketer Inc.
Millennials use new shopping channels




                                    ©2012 eMarketer Inc.
Takeaways


  Ecommerce’s share of total retail sales
   could easily approach 15% by 2020.
  Key growth engines:
     o Low prices, convenience and broad
       selection online
     o Mobile and tablet commerce
     o Personalization and curated websites
     o CPG
     o Mainstreaming of online buying

Twitter – #eMwebinar                          ©2012 eMarketer Inc.
Drive Conversions and Revenue



 Built for commerce: Conversions,
transactions and revenue
Highly personal, relevant email
and cross-channel marketing
   Sophisticated made simple




    Susan Wall | VP, Marketing
Abandoned Carts

From Abandon to Conversion: Why Shoppers
Abandon Carts and What Merchants Can Do
About It

• Top reasons shoppers abandon online
purchases

• Analysis of post-abandonment email
strategies

• Recommendations for maximizing
conversions




                                           bronto.com/resources
Triggered Messages

Automate, Increase Engagement & Drive
Revenue with Triggered Messages

• Content and creative best practices

• 7 Triggered message program examples

• A guide to defining business rules




                                         bronto.com/resources
Cross-Channel Marketing

Taking A ‘Crawl, Walk, Run’ Approach to
Cross-Channel Marketing


• How retailers build long-lasting relationships
with shoppers.

• How SMS can get shoppers to complete
purchases.




                                                   bronto.com/resources
Tips & Tricks

• Expertise from the field

• White papers

• Customer success stories

• Blog posts




                             bronto.com/resources
Q&A Session
                             Learn more about digital advertising with
                               an eMarketer corporate subscription
  Retail Ecommerce
Forecast—Challenging
   Economy Drives             Over 120 reports are published each year.
   Online Shopping            Following are a few recent ones you may
                              be interested in:

                              How Retailers Are Leveraging 'Big Data' to
                               Personalize Ecommerce

                              US Retail Ecommerce Forecast: Entering the Age
    Jeffrey Grau               of Omnichannel Retailing


 You will receive an email    Curated Ecommerce: How Less Can Be More for
  tomorrow with a link to      Shoppers
    view the deck and
    webinar recording.        Globalizing Ecommerce: What Retailers Need to
                               Know About Entering Foreign Markets
       Sponsored by:
        Bronto                 To learn more: www.emarketer.com/products
bronto.com/resources             800-405-0844 or webinars@emarketer.com
                                                                            ©2012 eMarketer Inc.

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eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

  • 1. J U N E 2 1, 2 0 1 2 Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping Sponsored by: Jeffrey Grau Principal Analyst ©2011 eMarketer Inc.
  • 2. Questions we will answer today  What is the outlook for online retail sales?  Which product categories have the most growth potential?  What mega-trends will drive ecommerce growth?  Who shops online? Q & A Twitter – #eMwebinar ©2012 eMarketer Inc.
  • 3. eMarketer forecasts double-digit growth rates for ecommerce sales through 2016 ©2012 eMarketer Inc.
  • 4. Ecommerce has steadily outperformed overall retail sales growth ©2012 eMarketer Inc.
  • 5. Ecommerce’s share of total retail sales has grown—and will continue to do so ©2012 eMarketer Inc.
  • 6. Consumers are shifting purchases from stores to the web Break Out by Income (2012) Annual Income Purchase more $100,000> 63% <$100,000 44% Source: Deloitte, as cited in Internet Retailer, April 6, 2012 Twitter – #eMwebinar ©2012 eMarketer Inc.
  • 7. Let’s compare analysts’ forecasts Benchmarks US DoC comScore ©2012 eMarketer Inc.
  • 8. Is eMarketer bullish or are other analysts being too conservative? ©2012 eMarketer Inc.
  • 9. Analysts tend to underestimate ecommerce growth rates “Chronically over the course of the 15 year history of ecommerce, the growth of the ecommerce market has been underestimated.” —Eric Best, CEO of Mercent, in an interview with eMarketer, February 14, 2012 ©2012 eMarketer Inc.
  • 10. How are online sales doing thus far in 2012? Online sales were strong in Q1 2012 ©2012 eMarketer Inc.
  • 11. Keep in mind that the internet is much more than a sales channel It strongly influences store sales Share by Segment, 2012 Category Share Online sale 7.2% Web-influenced offline sales 38.2% Web-influenced sales 45.4% Non web-influenced offline sales 54.6% Source: Forrester Research, as cited by Business Insider, June 12, 2012 ©2012 eMarketer Inc.
  • 12. Questions we will answer today  What is the outlook for online retail sales?  Which product categories have the most growth potential?  What mega-trends will drive ecommerce growth?  Who shops online? Q & A Twitter – #eMwebinar ©2012 eMarketer Inc.
  • 13. Ecommerce’s share of total retail sales is growing In 2011, the internet accounted for 6.6% of total retail sales ©2012 eMarketer Inc.
  • 14. Ecommerce’s share of total retail sales varies greatly by category
  • 15. Consumer packaged goods (CPG) is an online sales category with high potential ©2012 eMarketer Inc.
  • 16. Electronics and apparel dominate ecommerce—and will continue to do so ©2012 eMarketer Inc.
  • 17. Together they will account for 40% of retail ecommerce sales in 2012 ©2012 eMarketer Inc.
  • 18. What are the fastest growing categories? 13.3% Twitter – #eMwebinar ©2012 eMarketer Inc.
  • 19. Questions we will answer today  What is the outlook for online retail sales?  Which product categories have the most growth potential?  What mega-trends will drive ecommerce growth?  Who shops online? Q & A ©2012 eMarketer Inc.
  • 20. 1. Portable devices power anytime, anywhere commerce Smartphones satisfy Tablets spur product immediate product discovery and needs impulse buying ©2012 eMarketer Inc.
  • 21. Smartphones promote showrooming by bringing the internet to the store ©2012 eMarketer Inc.
  • 22. Showrooming diverts sales from stores to the web 6 in 10 ‘showroomers’ said they originally planned to purchase at the store but changed their mind while there and instead bought online Source: comScore, “State of the US Online Retail Economy in Q1 2012,” May 2012 ©2012 eMarketer Inc.
  • 23. Tablets help people discover products they did not know they wanted “Our general “With the iPad app, belief is that we focus on how we tablet sales are provide this discovery significantly experience.” additive.” Source: eMarketer interview, May 2012 Source: eMarketer Paul Cousineau interview, April 2012 Yonatan Feldman VP, Mobile & Global Engineering VP, Mobile Products Gilt Groupe Wal-Mart Global Ecommerce “I would say that the tablet is creating more incremental traffic than it is taking it away or shifting.” Matt Jones Source: eMarketer interview, April 2012 General Manager of Mobile Home Depot ©2012 eMarketer Inc.
  • 24. Tablet commerce is having a noticeable impact on web sales “We do more than 20% of our revenue on mobile, and tablets make up about 10% of our revenue.” Source: eMarketer interview, May 2012 “Tablet commerce Yonatan Feldman Julie Bornstein is certainly VP, Mobile & Global Engineering SVP growing, but it’s still Gilt Groupe Sephora Direct small—in the low “We are definitely seeing continual double-digits.” growth of people using tablets—mobile Source: eMarketer is our fastest growing channel. We interview, May 2012 expect traffic on tablets to continue to increase.” Source: eMarketer interview, May 2012 Ed Deutscher Operating VP, Digital Commerce and Emerging Platforms HSN ©2012 eMarketer Inc.
  • 25. 2. Ecommerce is helping consumers make strong connections with products Personalized Curated recommendations selection Twitter – #eMwebinar ©2012 eMarketer Inc.
  • 26. Personalization brings products of interest to the consumer’s attention Present 75% of the videos people watch on Netflix are the result of seeing one of its recommendations The Container Store’s conversion rates are about three times higher for customers who interact with recommendations than for a regular visit to the same page Future Shopycat, a social gift-finding Facebook app that came out of Walmart Labs, aims to convert consumer insights captured via social media into practical shopping tips eBay acquired recommendation engine Hunch’s prediction technology to surface more quality recommendations from eBay’s “long tail” of product listings. ©2012 eMarketer Inc.
  • 27. Curated sites harness the power of social recommendations 32% of online buyers have made a purchase as a result of seeing an image on a social image-sharing site like Pinterest or Polyvore ©2012 eMarketer Inc.
  • 28. Pinterest has become a powerful source of traffic during its short life “We just launched on Pinterest probably two “Pinterest is a growing months ago, and we are source of traffic for seeing a huge response.” Etsy.” Source: eMarketer interview, Source: AdAgeDigital, May 2012 December 2011 Martine Reardon Adam Brown Chief Marketing Officer Press Manager Macy’s Inc. Etsy In the past month, 3.36% of Gemvara’s traffic came directly from Pinterest, outpacing Twitter, Google+ and every other social network save Facebook, which accounted for 7.38%.” Source: Internet Retailer, February 2012 Brian Kalma Chief Experience Officer Gemvara ©2012 eMarketer Inc.
  • 29. Questions we will answer today  What is the outlook for online retail sales?  Which product categories have the most growth potential?  What mega-trends will drive ecommerce growth?  Who shops online? Q & A ©2012 eMarketer Inc.
  • 30. Online shoppers and buyers defined Twitter – #eMwebinar ©2012 eMarketer Inc.
  • 31. Most people who want to buy online are already doing so ©2012 eMarketer Inc.
  • 32. Internet users across all age groups are buying online ©2012 eMarketer Inc.
  • 33. Older consumers will account for a greater share of online buyers ©2012 eMarketer Inc.
  • 34. Online buying has become a mainstream activity, where age, race and income matter less ©2012 eMarketer Inc.
  • 35. Lower-income shoppers now account for a quarter of online sales ©2012 eMarketer Inc.
  • 36. Millennials use new shopping channels ©2012 eMarketer Inc.
  • 37. Takeaways  Ecommerce’s share of total retail sales could easily approach 15% by 2020.  Key growth engines: o Low prices, convenience and broad selection online o Mobile and tablet commerce o Personalization and curated websites o CPG o Mainstreaming of online buying Twitter – #eMwebinar ©2012 eMarketer Inc.
  • 38. Drive Conversions and Revenue  Built for commerce: Conversions, transactions and revenue Highly personal, relevant email and cross-channel marketing  Sophisticated made simple Susan Wall | VP, Marketing
  • 39. Abandoned Carts From Abandon to Conversion: Why Shoppers Abandon Carts and What Merchants Can Do About It • Top reasons shoppers abandon online purchases • Analysis of post-abandonment email strategies • Recommendations for maximizing conversions bronto.com/resources
  • 40. Triggered Messages Automate, Increase Engagement & Drive Revenue with Triggered Messages • Content and creative best practices • 7 Triggered message program examples • A guide to defining business rules bronto.com/resources
  • 41. Cross-Channel Marketing Taking A ‘Crawl, Walk, Run’ Approach to Cross-Channel Marketing • How retailers build long-lasting relationships with shoppers. • How SMS can get shoppers to complete purchases. bronto.com/resources
  • 42. Tips & Tricks • Expertise from the field • White papers • Customer success stories • Blog posts bronto.com/resources
  • 43. Q&A Session Learn more about digital advertising with an eMarketer corporate subscription Retail Ecommerce Forecast—Challenging Economy Drives Over 120 reports are published each year. Online Shopping Following are a few recent ones you may be interested in:  How Retailers Are Leveraging 'Big Data' to Personalize Ecommerce  US Retail Ecommerce Forecast: Entering the Age Jeffrey Grau of Omnichannel Retailing You will receive an email  Curated Ecommerce: How Less Can Be More for tomorrow with a link to Shoppers view the deck and webinar recording.  Globalizing Ecommerce: What Retailers Need to Know About Entering Foreign Markets Sponsored by: Bronto To learn more: www.emarketer.com/products bronto.com/resources 800-405-0844 or webinars@emarketer.com ©2012 eMarketer Inc.