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APRIL 2012


eMarketer
Commerce Roundup
Given the continual changes online and mobile shopping have
brought to the retail industry and the robust growth projected for
online shopping and buying as well as online ad spending by the
industry, eMarketer has curated a roundup of key trends, statistics
and information from industry insiders relevant to retail marketers.
We hope this brief will help you navigate the growing complexity
facing all retail- and commerce-oriented marketers.




                                                                           sponsored by




                                                                       ATG WEB COMMERCE
Commerce Roundup                                                                                 APRIL 2012



Ecommerce Overview
eMarketer expects US retail ecommerce sales to reach $224.2 billion this year, up 15% from 2011.
Online sales continue to see growth despite ever-increasing penetration rates of online shoppers and
buyers. These figures exclude travel and event tickets sales, but include sales made on mobile devices
and tablets.
The apparel and accessories category        US Retail Ecommerce Sales, 2010-2016
will lead ecommerce sales growth            billions and % change
throughout the forecast period, with                                                                      $361.9
growth of 20% predicted for this year. By
                                                                                                $325.2
2016 the category will account for just
                                                                                      $289.8
over one in five of all US online                                           $256.0
retail dollars.                                                   $224.2
                                                        $194.3
Retailers continue to increase the            $167.3
scale of their ecommerce operations—
particularly by investing in online sales
platforms that display products and           15.2%     16.1%     15.4%
                                                                            14.2%     13.2%     12.2%     11.3%
convert shoppers more effectively—
and apparel sales have benefited more
than any other category. Apparel has           2010      2011      2012      2013      2014      2015      2016
become an online success due largely          Retail ecommerce sales         % change
to easy and free returns, innovative        Note: eMarketer benchmarks its retail ecommerce sales figures against US
visualization tools and the presence of     Department of Commerce data, for which the last full year measured was
                                            2011; excludes travel and event tickets
customer reviews.                           Source: eMarketer, March 2012
                                            137800                                               www.eMarketer.com
eMarketer estimates that 184.3 million
US consumers ages 14 and older will browse and research products online this year, and nearly 150
million of them will go on to make at least one purchase on the web. In addition, almost 73 million
mobile users will shop on their phones this year, with just over half making at least one purchase.




   Commerce Roundup	                                     Copyright ©2012 eMarketer, Inc. All rights reserved.	2
Commerce Round-Up
‘Showrooming’ Is a Valid Concern for Retailers                                                                         APRIL 2012



Researching by smartphone while in-store is on the rise
“Showrooming,” the practice of researching merchandise in a store, then buying it elsewhere—online,
by phone or from another brick-and-mortar business—has retailers nervous, and rightly so. Price-con-
scious consumers are inclined to defect when presented with a better deal.

Shoppers armed with smartphones, though, have been causing                 Ways that US Online Shoppers Use Mobile Phones
the most commotion. The number of individuals who have                     While In-Store, 2009-2011
checked prices using mobile devices while in a store varies                % of respondents
depending on the source and methodology, but it is fair to say             Access that store's website
                                                                                                                             52%
that a significant number have engaged in the activity.
                                                                                                                                        69%
                                                                                                                                    65%
Several researchers have surveyed the number of US mobile
                                                                           Access a competitor's website
phone users who have comparison-shopped via phone while                                           25%
in-store. Their research has found a comparison-shopping rate                                                          46%
ranging from 59% of US smartphone owners (InsightExpress,                                                           43%

2011) to 25% of US mobile phone owners (Pew Internet and                   Access a shopping comparison website (Shopzilla,
                                                                           Shopping.com)
American Life Project, January 2012).                                                   15%
                                                                                                            32%
ForeSee Results findings from between 2009 and 2011 are                                               26%
consistent with this trend toward using mobile phones for in-              Access that store's mobile shopping application
                                                                              4%
store research; however, in 2011, the shoppers surveyed were
                                                                                               19%
more likely to access the website or app of the store they were
                                                                                                21%
actually in than a competitor’s website or app. This means that            Access a competitor's mobile shopping application
retailers need to not only be concerned about how their pricing               4%
stacks up against others’, but also about pricing consistency                        10%

across their own channels.                                                               14%

                                                                             2009                           2010                          2011
The rise in smartphone adoption and the visibility of shoppers        Source: ForeSee, "Mobile Satisfaction: Apple and Amazon Excel," Jan 12,
using phones to scan barcodes or take photos has drawn                2012
                                                                      136199                                                www.eMarketer.com
attention to the potential problems with consumers using
stores as showrooms. And yet, for as long as there have been shops and ecommerce sites, this multichannel behavior has
existed. A February 2012 ClickIQ survey discovered that nearly half (45.9%) of US online shoppers researched products in-
store—not necessarily using smartphones—only to ultimately buy online.

Retailers are coming up with solutions to combat fickle window-shoppers, however, like providing better customer service
through well-informed sales associates. Nordstrom, for example, recently began offering perks such as free shipping on in-store
purchases, while Target has taken more of a stopgap approach and is exploring offering more items made exclusively for the
retailer, which would make comparison shopping more difficult.

On the upside, most in-store researchers stay put. According to Pew, 35% bought from the retailer’s store location where they
were comparison-shopping, 19% bought online and only 8% went to another store. If approached the right way, immediacy can
work wonders for conversion.




    Commerce Roundup	                                                      Copyright ©2012 eMarketer, Inc. All rights reserved.	3
Commerce Roundup
Mcommerce Sales Shoot Up as More Consumers Buy via Mobile 2012
                                                    APRIL



Sales will nearly double this year and more than quadruple again by 2015
US mcommerce sales are on a steep upward trajectory, thanks in part to ever-increasing adoption of
smartphones and the mobile internet among the US mobile population.

eMarketer estimates mobile commerce sales will reach $6.7              US Mcommerce Sales, 2010-2015
billion this year—a tiny fraction of overall retail sales, to be       billions and % change
sure, but a 91.4% increase over 2010. Next year, sales will rise         118.8%                                                           $31.0

another 73.1%, to $11.6 billion.
                                                                                        91.4%                                  $23.7
“There’s no question that mobile commerce is growing at a fast
                                                                                                     73.1%
clip,” said eMarketer principal analyst Jeffrey Grau, author of a                                               $17.2
forthcoming report on mobile buying. “And mobile acts as an
engine of overall ecommerce growth, by converting potential                                        $11.6
brick-and-mortar sales to digital sales as consumers use their                                                  48.3%
                                                                                       $6.7                                    37.8%
smartphones while shopping in-store.”                                                                                                    30.8%
                                                                          $3.5

eMarketer’s estimates of mobile sales are based on a meta-
                                                                          2010         2011        2012         2013           2014       2015
analysis of data from research firms as well as overall trends in
                                                                         M-commerce sales          % change
mobile ownership and usage. Mcommerce sales include sales
                                                                       Note: includes travel and event ticket sales but excludes digital download
of physical goods as well as travel and event tickets purchased        sales; excludes sales made on tablets
                                                                       Source: eMarketer, Nov 2011
via mobile, but exclude digital downloads and usage of mobile
                                                                       134540                                                    www.eMarketer.com
phones as a point-of-sale payment mechanism.

eMarketer forecasts 37.5 million US consumers ages 14 and up           US Mobile Buyers, 2010-2015
will make at least one purchase on their mobile phone this year,                                        2010    2011    2012    2013   2014   2015
up from 26.8 million in 2011. The vast majority of that group will     Mobile buyers (millions)         17.5    26.8    37.5    46.1   53.8   61.8
be smartphone owners, at 97% in 2012. Overall, 72.8 million            —% of mobile phone users         8.0% 12.0% 16.5% 20.0% 23.0% 26.0%
                                                                       Smartphone buyers (millions)     13.7    25.6    36.4    44.9   52.9   61.1
mobile users will research or browse items on their phone next
                                                                       —% of smartphone users          23.0% 29.0% 35.0% 38.5% 41.0% 42.5%
year, but not necessarily make a purchase.                             —% of mobile buyers             77.8% 95.3% 97.0% 97.3% 98.3% 98.9%
                                                                       Note: ages 14+
Auction sites like eBay and flash sales sites like HauteLook           Source: eMarketer, Nov 2011
                                                                    134542                                                       www.eMarketer.com
benefit significantly from rising mobile commerce, since the
immediacy of their offers attracts shoppers to the mobile channel to grab a limited-time deal while on the go.

At the same time, brick-and-mortar retailers run an ever-greater risk of becoming showrooms for Amazon.com and other online
retailers—though the shift to mobile shopping can benefit them as well.

“If a retailer has robust mobile offerings, it can steer in-store shoppers to look online for more information or find out-of-stock
sizes and items on its own mobile site or app,” noted Grau, “retaining the sale via a different channel.”




    Commerce Roundup	                                                  Copyright ©2012 eMarketer, Inc. All rights reserved.	4
Commerce Roundup
Retail Becomes Fastest-Growing Mobile Category                                                                              APRIL 2012



More than one-third of smartphone users access retail sites
As smartphones become more mainstream, mobile is becoming more pervasive in all aspects of
consumers’ lives. And online shopping is quickly becoming a popular activity.

Mobile content tied to services like travel, dining and movies—          Change in Mobile Content Categories Accessed by US
more established mobile categories—is still on an uptick, but            Mobile Subscribers, Sep 2011
online retail experienced the largest increase vs. 2010, with 95%        % change vs. same period of prior year
growth in the number of subscribers accessing this content year          Online retail                                                        95%
over year in September 2011, according to comScore. That works           Classifieds                                                       82%
out to 21.2 million mobile users, 17% of whom accessed mobile            Auction sites                                                  77%
retail sites almost daily. Twenty-eight percent did so at least once a
                                                                         Shopping guides                                            74%
week while 55% reported doing so one to three times per month.
                                                                         Real estate listings                                     71%

                                                                         Movie info                                         65%
Among those surveyed by comScore, the leading mobile
retail activity was finding a store location, performed by 33%.          Restaurant info                                    65%

Twenty-one percent compared product prices and 20% looked                Search                                      57%

for coupons or deals. Smartphone users in a Hipcricket survey            Travel service                      46%
followed a similar pattern, but with higher involvement. Nearly half     Source: comScore Inc., "State of the US Online Retail Economy in Q3 2011,"
had researched prices on a retailer’s mobile site and more than a        Nov 15, 2011
                                                                         134559                                                   www.eMarketer.com
third had looked for coupons and promotions.

Retailers should not only be prepared to provide the content             Reasons that US Smartphone Users Have Visited a
that mobile searchers seek, but also on the platforms they use.          Retailer's Mobile Website, Oct 2011
According to comScore, smartphone users in general favored               % of respondents

browsers over apps (48% vs. 26%) with iPhone users being the             Research prices                                                        46%
most likely to use apps; only 4 percentage points separated              Look for coupons/promotions                                36%
browsers (40%) from app users (36%) among iPhone owners. To              Research new products                        28%
reach the broadest shopping base, retailers would be wise to                                  13%    Purchase a product
offer both modes of access.
                                                                           1%     Other

                                                                         Source: Hipcricket, "2011 Mobile Marketing Survey Research Brief," Oct 20,
                                                                         2011
                                                                         133678                                                   www.eMarketer.com




    Commerce Roundup	                                                    Copyright ©2012 eMarketer, Inc. All rights reserved.	5
Commerce Roundup
Browsers Beat Out Apps for Mcommerce                                                                                APRIL 2012



Tablet shopping on the rise as frequency of use grows
Apps aren’t always the answer to engaging with consumers on mobile devices—especially
when it comes to mcommerce. According to research from rich media company Zmags, very few
Americans prefer to use mobile apps for shopping activities. Instead, consumers strongly prefer
purchasing through web and mobile browsers.

When Zmags surveyed US consumers who owned a PC or                   Preferred Shopping Methods According to US
laptop computer about their shopping methods, 87% said they          Consumers*, Nov 2011
preferred using websites and mobile sites, compared to 14%           % of respondents

who most liked shopping from websites via smartphone and             Website on PC/laptop
                                                                                                                                   87%
just 4% who preferred to shop using mobile or tablet apps.
                                                                     In-store
                                                                                                                            71%
Although smartphone and tablet owners display a preference
                                                                     Website on smartphone
for browser-based mobile purchases, a significant number                       14%
of US retailers have created mobile apps that enable                 Website on tablet
commerce activities. Survey data from mobile-shopping                      9%
company AisleBuyer showed in December 2011 that 19% of               Phone call with a service agent
                                                                          7%
US retailers had a mobile app to connect consumers to their
                                                                     App on tablet
ecommerce site.
                                                                        4%
                                                                     App on smartphone
Retail apps may be of greater value to smartphone users,                4%
for whom the browsing experience is more limited in nature.
                                                                     Note: *who own a PC or laptop
There’s also opportunity for tablet commerce apps to                 Source: Zmags, "Meet the Connected Consumer: How Tablets,
                                                                     Smartphones and Facebook are Changing the Way Consumers Shop Across
provide a more catalog-style approach, giving users more             Retail Categories" conducted by Equation Research, Jan 16, 2012
interactive features.                                                136219                                            www.eMarketer.com



Meanwhile, the tablet commerce category as a whole is                Frequency with Which US Tablet Owners Use Their
growing significantly. According to Zmags, during the 2011           Tablets to Shop, Nov 2011
                                                                     % of total
holiday shopping season, 87% of tablet owners used their
device for shopping. Not only do users report better buying                              Less than
                                                                                                        Every day
                                                                                          monthly
experiences than with smartphones, but tablet owners are                        Once per       10%
                                                                                                        12%
using their devices frequently for mcommerce. According to                      month
                                                                                                                  More than
                                                                                13%
Zmags, half of tablet owners are using tablets for shopping on                                                    once per week
                                                                                                                  21%
at least a weekly basis.                                                             2-3 times
                                                                                     per month
                                                                                     24%               Once per week
eMarketer projects that mcommerce sales will grow more than                                            20%
fourfold over the next few years, from $6.7 billion in 2011 to $31
billion in 2015. If consumers continue to prefer browsers over       Source: Zmags, "Meet the Connected Consumer: How Tablets,
                                                                     Smartphones and Facebook are Changing the Way Consumers Shop Across
mobile apps for shopping, retailers should consider investing        Retail Categories" conducted by Equation Research, Jan 16, 2012
more in mobile-optimized ecommerce sites. Moreover,                  136221                                            www.eMarketer.com

marketers should consider designing engaging, tablet-specific
ecommerce experiences for tablet users.




    Commerce Roundup	                                                Copyright ©2012 eMarketer, Inc. All rights reserved.	6
Commerce Roundup
The Effect of Mobile on the Path to Purchase                                                                         APRIL 2012



Retailers should view mobile sites as a gateway for in-store
and online purchases
While consumer usage of smartphone and tablet devices for shopping purposes is on the rise, the devices’
place in the purchase path is varied. According to several pieces of research by Google, ForeSee Results and
Nielsen, shoppers may start in the mobile channel for product research but then purchase in-store. They also
may use mobile for product research on the go, then later purchase online on a PC or tablet.

Nielsen’s Q3–Q4 2011 “US Digital Consumer Report” indicates         Cross-Channel Shopping Behavior During 2011
that 29% of smartphone owners use their phone for shopping-         Holiday Season Among US Smartphone Users,
                                                                    Jan 2012
related activities. The top mobile shopping activities include      % of respondents
in-store price comparisons (38%), browsing products through
                                                                    Researched on smartphone, went to store to purchase
the mobile web or apps (38%), and reading online product                                                                                46%
reviews (32%).                                                      Researched on smartphone, purchased on smartphone
                                                                                                                                     41%
A 2011 post-holiday shopping study by Google and Ipsos OTX          Researched on smartphone, then purchased online on computer
also depicts consumers using their smartphones at many                                                               37%

different points in the purchase path. For instance, 46% of         Researched on smartphone, visited store to check out products,
                                                                    then purchased online on computer
smartphone users who used their mobile device for holiday                                     19%
shopping said they researched an item on their smartphone           Researched on smartphone, visited store to check out products,
                                                                    then purchased on smartphone
then went to a store to make their purchase. And 37% said
                                                                                            18%
they researched an item on their smartphone then made               Visited the store first, then purchased on smartphone
their purchase online on a computer. No matter the purchase                     8%
channel, smartphone users are likely to find a role for their
                                                                    Note: n=208 who used a smartphone to do their holiday shopping
mobile device in the purchase process.                              Source: Google and Ipsos OTX, "Post Holiday Shopping Intentions Study" as
                                                                    cited in Google, "2011 Post-Holiday Recap," Jan 2012
                                                                    137177                                                 www.eMarketer.com
The Google study also shows that 41% of smartphone users
researched with their mobile device and went on to actually purchase on the smartphone. That data point is higher than in
some other mobile commerce studies. For example, a study released in January 2012 by customer experience management
firm ForeSee indicates that during the 2011 holiday season only 15% of online shoppers used their phones to make purchases.
The phone was most commonly used as a research and price comparison tool. However, Google/Ipsos OTX studied only
smartphone owners while ForeSee looked at online shoppers as a whole, a group that includes many feature phone owners.

Whether a consumer makes a purchase via mobile or elsewhere, Google’s industry director for retail, Todd Pollak, told
eMarketer that retailers need to improve the way they connect the mobile experience with the in-store or web-based shopping
experience. “You would think retailers would be hugely invested in ensuring you’d have an optimized experience on the mobile
device, as well as trying to understand how people use it,” he said. “But consumers are way ahead of retailers in terms of their
investment in mobile and how that plays into the purchase process.”

Although the path to purchase may appear unclear as consumers conduct the shopping process across multiple channels,
Pollak encouraged mobile marketers to think about factors such as a consumer’s distance from a store and the days and times
when mobile usage spikes. For example, tablet usage peaks during after-work hours and smartphone usage spikes during
weekend days. Connecting and strategizing based on those statistics will help mobile marketers provide more targeted and
personalized campaigns akin to the marketing experiences consumers are accustomed to on the web.



    Commerce Roundup	                                               Copyright ©2012 eMarketer, Inc. All rights reserved.	7
Commerce Roundup
Consumer Products Brands Maintain Multichannel Harmony
                                                     APRIL 2012



Direct-to-consumer selling complements retail
Traditionally, retailers have been the middlemen between consumers and brand manufacturers, but
these roles are becoming more fluid with the rise of ecommerce. Consumer goods companies have
started selling to shoppers through direct online channels, and in the process are gaining access to
valuable market research data.

In an IDC survey from June 2011, a majority of North American        Consumer Goods Executives in North America Whose
consumer goods executives said their companies were selling          Companies Sell Directly to Consumers, April 2011
directly to consumers in some form. Distributing through third-      % of respondents

party websites like Alice.com was the most popular approach,         Yes, through third party internet sites
                                                                                                                                        39%
and more than a third were also selling through their own sites.
                                                                     Yes, through our website
                                                                                                                                        36%
The trend toward selling direct online was further illustrated
                                                                     Yes, through our physical retail outlets
in an October 2011 Economist Intelligence Unit survey of                                                  21%
consumer products executives worldwide. Twenty-nine percent          Not currently, but plan to do so in the next two years
of respondents’ companies’ total sales were attributed to their           3%
own websites, social media sites or direct-to-consumer third-        Not currently, and no plans to do so
                                                                                                                                        36%
party sites. However, the largest amount of sales were still
coming from retail partners (41%).                                   Note: approximately 60% of respondents sell products directly to
                                                                     consumers
                                                                     Source: IDC Manufacturing Insights survey as cited in Consumer Goods
Even though they are expanding channels, most consumer               Technology (CGT), "2011 Sales and Marketing Report," June 8, 2011
                                                                     133705                                                www.eMarketer.com
brands are being careful to avoid conflict with their established
retail partners. Fewer than 10% of those surveyed saw                Ways that Consumer Products Executives View Their
themselves as battling with retailers’ other brands or private       Consumer Engagement Relationship with Retailers,
                                                                     Oct 2011
labels. Many saw themselves as collaborating with retailers
                                                                     % of respondents
(41%), and nearly a quarter saw themselves as taking a
                                                                     Work together to serve consumers through a variety of
two-pronged approach—branching into direct selling while             marketing, sales and service programs
simultaneously sticking with retailers.                                                                                                 41%
                                                                     Continue to work with retail partners but we are also committed
                                                                     to expanding our competing direct-to-consumer strategies
For many CPG brands, gaining consumer insights is an                                                     23%
important additional benefit of direct sales. Sixty-one percent      Share consumer data and insights to enable better planning,
cited purchase data as the most valuable type of consumer            though we act on those insights separately
                                                                                                       22%
insight, and it is a metric that is much easier to obtain when a
                                                                     Battle for shelf space with other brands
brand is handling its own ecommerce. The future still lies with                      9%
retailers, though; consumer products executives predicted            Compete with retailers' private-label offerings
the largest share of their sales over the next three years (40%)           5%
would come from retail partners, just one percentage point
                                                                     Source: Economist Intelligence Unit (EIU), "New directions: Consumer
lower than the current breakdown. Consumer products brands           goods companies hone a cross-channel approach to consumer marketing"
                                                                     sponsored by Oracle, Feb 7, 2012
may be stepping up their game in terms of ecommerce and              137671                                                www.eMarketer.com
social initiatives, but, based on the data, they won’t be stepping
on any retailers’ toes in the process.




    Commerce Roundup	                                                Copyright ©2012 eMarketer, Inc. All rights reserved.	8
Commerce Roundup
Gilt’s Device-Agnostic Strategy Powers Mobile Growth                                                                APRIL 2012


                                                                   Feldman: Absolutely. We’re always looking to offer consumers
                                                                   more of a competitive advantage, because when people come
                                                                   onto Gilt, it’s like a sport. They’re competing for products. It’s really
                     Yon Feldman
                                                                   exciting, but it could be nerve-wracking as well.
                     Vice President, Mobile & Global Engineering
                                                                   We’re working on making it easier to browse what you’re
                     Gilt Groupe
                                                                   interested in without looking at everything. We’re looking
                                                                   to filter products by your particular sizes, so you don’t have
eMarketer: What percentage of Gilt’s sales come from               to waste time looking at products that aren’t even available
mobile phone users, excluding tablets?                             in your size. We’re making search and filtering functionality
Yon Feldman: We tend to see about 10% coming from                  faster. I like to call it “flattening the experience”—you don’t
mobile, not including tablets. It’s another 5% that’s coming       have to dive into a sale, a list of products or a product details
from tablets. So it’s about 15% in total coming from mobile        page and see if the item is available in your size, try to add it to
devices and it goes as high as 25%.                                cart and then notice it’s already been reserved by somebody
                                                                   else. We want to make it easier to get in and get out.
eMarketer: When do you tend to see spikes in terms of
mobile sales on Gilt?                                              “A lot of mobile devices are difficult to
Feldman: On weekends, when people aren’t at their office            shop on because the screens are small,
computers. Because our sales are timed, we get a bump               but we can still try to give customers
every time people aren’t at their computers. Mobile sales           more information and control and to make
can come on the weekends, when people are in parks or               things faster.”
out having brunch or things like that.
                                                                   With mobile screens, we want customers to really get
“With tablets, we see sales spikes at night,                       a feel for what the fabric and the buttons are like on an
 when people are kind of lounging about,                           item and to give them all the tools they need to make a
 laying in bed or on the sofa, leisurely                           purchasing decision. A lot of mobile devices are difficult
 perusing Gilt.”                                                   to shop on because the screens are small, but we can still
                                                                   try to give customers more information and control and to
                                                                   make things faster.
Plus, mobile ties into the normal spike of the Gilt business.
So every day at noon, there’s a huge spike. Then we see            eMarketer: Are there any specific features of your mobile
different spikes depending on the platform. With tablets, we       offering that customers are finding particularly useful or
see sales spikes at night when people are kind of lounging         that they appreciate?
about, laying in bed or on the sofa, leisurely perusing Gilt.
                                                                   Feldman: With the tablet and the iPad app, the experience
eMarketer: What is it about your business model that               is really speedy and flat. On one screen, you can essentially
makes it ideal for mobile shopping?                                do everything from looking at the different views of a
                                                                   product—the front, back, the details—directly from
Feldman: The whole flash-sale business is ideal for mobile
                                                                   the cart. You can tap and hold to drag items directly to
shopping, because you have access no matter where you
                                                                   your cart.
are. It’s one of the reasons we see such strong members
and mobile revenues. When you see an email from Gilt,              Our customers appreciate that we make the process
you’re going to want to open it.                                   speedy because they are competing against other people.
                                                                   They can get in and out in 3 minutes. They appreciate our
eMarketer: Are there some features that you’d like to
                                                                   push notifications that come at noon, when our sales start.
introduce to make mobile shopping even easier?


    Commerce Roundup	                                              Copyright ©2012 eMarketer, Inc. All rights reserved.	9
Cabela’s Defines Roundup in Global Ventures
Commerce Best Practices                                                                                 APRIL 2012


                                                               It was a three-step process: The first step was to shore-
                                                               up customer service internationally. The second piece
                                                               was to overcome the major obstacles that international
                     Derek Fortna
                                                               customers had in ordering from us here in the US. One
                     Marketing Manager                         of the obstacles for international customers was when a
                     Cabela’s                                  package arrived in their country from a particular shipping
                                                               company, the customer had no idea what they would
                                                               have to pay in terms of taxes and duties. That’s dangerous
In his seven years with outdoor adventure
                                                               for an international consumer, especially in places such
retailer Cabela’s, Derek Fortna has spearheaded                as Mexico that have really high duties on items made
various digital marketing programs, including                  in China. Cabelas.com doesn’t always specify when a
the brand’s entrée into social media, it’s paid                product is made in China, so sometimes the customer
search campaigns and its global ecommerce                      won’t know how much a duty is until the product arrives.
strategy. Cabela’s, which has sold internation-                FiftyOne now calculates those taxes and duties ahead of
ally since the late 1990s, fine-tuned its global               time, so consumers know the full amount when they place
                                                               their order.
ecommerce approach a few years ago with a
new vendor partnership and a global market-                    Our third step was to start doing some international
ing push. Fortna told eMarketer’s Lauren McKay                 marketing, which we hadn’t really done before.
about Cabela’s experience selling internationally,             eMarketer: What digital tactics did you implement to
and where the brand plans to pay special                       target international consumers?
attention in the future.
                                                               Fortna: The major effort was with our paid search program,
                                                               and we’re complementing that with banner ads on websites
eMarketer: In 2009, Cabela’s began working with                where we expect our international customers to spend
international ecommerce platform FiftyOne to expand its        time. That really boils down to international fishing and
global selling capabilities. Can you describe the company’s    hunting websites. We’re also doing some social marketing on
strategy for expansion?                                        Facebook to bring about brand trust and awareness in certain
                                                               target markets.
Derek Fortna: We’ve been shipping internationally since
the late ’90s. Prior to turning to FiftyOne three years ago,
                                                               “We’re not driving a lot of our international
we had already shipped to over 200 countries. One of our
                                                                business through our branding; instead,
executives saw the business we were doing internationally
                                                                we’re driving most of that business
without really trying, and he just asked the question, “What
                                                                through nonbrand terms.”
if we try?” So we did some research around international
business and came up with a recommendation
for expanding.                                                 Our international paid search expansion is going well, but
                                                               one of the challenges we’ve found is that we’re not driving
                                                               a lot of our international business through our branding;
“One of the obstacles for international
                                                               instead, we’re driving most of that business through
 customers was when a package arrived
                                                               nonbrand terms. International consumers don’t necessarily
 in their country from a particular shipping
                                                               recognize our name like they do here in the States, so we
 company, the customer had no idea what
                                                               realized we needed to supplement our paid search with
 they would have to pay in terms of taxes
                                                               some branding tactics to position our brand name and
 and duties.”
                                                               what we sell.


    Commerce Roundup	                                          Copyright ©2012 eMarketer, Inc. All rights reserved.	10
Commerce Roundup
Cabela’s Defines Best Practices in Global Ventures (Continued)                                           APRIL 2012


eMarketer: As you’re identifying your international
targets, are you finding that certain product categories are
more popular or that they are responding better to certain
messages than others?

Fortna: From a product perspective, our hard goods
perform well internationally. Our soft goods, like clothing,
aren’t as popular because international companies and
countries have their local retailers for clothing. However,
there’s a pretty fragmented market internationally for
hunting and fishing hard goods. There’s no one out
there as strong as we are in terms of that assortment of
products. There are a lot of mom-and-pop shops, but no big
companies with vast product selections.

eMarketer: Based on your global commerce experience,
can you offer a few best practices?


“We have looked to local partners in
 international markets to help make us
 aware of societal aspects.”

Fortna: We’ve learned to be careful and conservative in
terms of growing our business internationally. We have
looked to local partners in international markets to help
make us aware of societal aspects. We’re working with
Performics in London for our paid search programs. We did
this specifically because they have a better understanding
of that part of the world than we do here in the States.

That’s paid off, without a doubt. They understand when
camping season starts and ends, and boating season
starts and ends, and the type of products that people look
for. For example, we Americans call a fishing reel used
for saltwater fishing a “saltwater reel,” but in the United
Kingdom, they call that a “sea reel.” It’s a slight difference,
but if we were buying search ads in the UK listing a
“saltwater reel,” we’d get far less traffic than listing it as
a “sea reel.” Having an international office has definitely
been advantageous.




    Commerce Roundup	                                             Copyright ©2012 eMarketer, Inc. All rights reserved.	11
#                      1
Retail
                10 of the 10 Top Grocers

                10 of the 10 Top Fashion Retailers

                10 of the 10 Top Hardline Retailers




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                                   oracle.com/goto/retail
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 Copyright © 2012, Oracle. All rights reserved. Oracle is a registered trademark of Oracle Corporation and/or its affiliates.
                                Other names may be trademarks of their respective owners.
About eMarketerRoundup
Commerce                                                                                                    APRIL 2012


eMarketer publishes data, analysis and insights on digital marketing, media and commerce.
We do this by gathering information from many sources, filtering it, and putting it into perspective.
For more than a decade, leading companies have trusted this approach, and have relied on
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    Commerce Roundup	                                               Copyright ©2012 eMarketer, Inc. All rights reserved.	12

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E marketer commerce_roundup

  • 1. APRIL 2012 eMarketer Commerce Roundup Given the continual changes online and mobile shopping have brought to the retail industry and the robust growth projected for online shopping and buying as well as online ad spending by the industry, eMarketer has curated a roundup of key trends, statistics and information from industry insiders relevant to retail marketers. We hope this brief will help you navigate the growing complexity facing all retail- and commerce-oriented marketers. sponsored by ATG WEB COMMERCE
  • 2. Commerce Roundup APRIL 2012 Ecommerce Overview eMarketer expects US retail ecommerce sales to reach $224.2 billion this year, up 15% from 2011. Online sales continue to see growth despite ever-increasing penetration rates of online shoppers and buyers. These figures exclude travel and event tickets sales, but include sales made on mobile devices and tablets. The apparel and accessories category US Retail Ecommerce Sales, 2010-2016 will lead ecommerce sales growth billions and % change throughout the forecast period, with $361.9 growth of 20% predicted for this year. By $325.2 2016 the category will account for just $289.8 over one in five of all US online $256.0 retail dollars. $224.2 $194.3 Retailers continue to increase the $167.3 scale of their ecommerce operations— particularly by investing in online sales platforms that display products and 15.2% 16.1% 15.4% 14.2% 13.2% 12.2% 11.3% convert shoppers more effectively— and apparel sales have benefited more than any other category. Apparel has 2010 2011 2012 2013 2014 2015 2016 become an online success due largely Retail ecommerce sales % change to easy and free returns, innovative Note: eMarketer benchmarks its retail ecommerce sales figures against US visualization tools and the presence of Department of Commerce data, for which the last full year measured was 2011; excludes travel and event tickets customer reviews. Source: eMarketer, March 2012 137800 www.eMarketer.com eMarketer estimates that 184.3 million US consumers ages 14 and older will browse and research products online this year, and nearly 150 million of them will go on to make at least one purchase on the web. In addition, almost 73 million mobile users will shop on their phones this year, with just over half making at least one purchase. Commerce Roundup Copyright ©2012 eMarketer, Inc. All rights reserved. 2
  • 3. Commerce Round-Up ‘Showrooming’ Is a Valid Concern for Retailers APRIL 2012 Researching by smartphone while in-store is on the rise “Showrooming,” the practice of researching merchandise in a store, then buying it elsewhere—online, by phone or from another brick-and-mortar business—has retailers nervous, and rightly so. Price-con- scious consumers are inclined to defect when presented with a better deal. Shoppers armed with smartphones, though, have been causing Ways that US Online Shoppers Use Mobile Phones the most commotion. The number of individuals who have While In-Store, 2009-2011 checked prices using mobile devices while in a store varies % of respondents depending on the source and methodology, but it is fair to say Access that store's website 52% that a significant number have engaged in the activity. 69% 65% Several researchers have surveyed the number of US mobile Access a competitor's website phone users who have comparison-shopped via phone while 25% in-store. Their research has found a comparison-shopping rate 46% ranging from 59% of US smartphone owners (InsightExpress, 43% 2011) to 25% of US mobile phone owners (Pew Internet and Access a shopping comparison website (Shopzilla, Shopping.com) American Life Project, January 2012). 15% 32% ForeSee Results findings from between 2009 and 2011 are 26% consistent with this trend toward using mobile phones for in- Access that store's mobile shopping application 4% store research; however, in 2011, the shoppers surveyed were 19% more likely to access the website or app of the store they were 21% actually in than a competitor’s website or app. This means that Access a competitor's mobile shopping application retailers need to not only be concerned about how their pricing 4% stacks up against others’, but also about pricing consistency 10% across their own channels. 14% 2009 2010 2011 The rise in smartphone adoption and the visibility of shoppers Source: ForeSee, "Mobile Satisfaction: Apple and Amazon Excel," Jan 12, using phones to scan barcodes or take photos has drawn 2012 136199 www.eMarketer.com attention to the potential problems with consumers using stores as showrooms. And yet, for as long as there have been shops and ecommerce sites, this multichannel behavior has existed. A February 2012 ClickIQ survey discovered that nearly half (45.9%) of US online shoppers researched products in- store—not necessarily using smartphones—only to ultimately buy online. Retailers are coming up with solutions to combat fickle window-shoppers, however, like providing better customer service through well-informed sales associates. Nordstrom, for example, recently began offering perks such as free shipping on in-store purchases, while Target has taken more of a stopgap approach and is exploring offering more items made exclusively for the retailer, which would make comparison shopping more difficult. On the upside, most in-store researchers stay put. According to Pew, 35% bought from the retailer’s store location where they were comparison-shopping, 19% bought online and only 8% went to another store. If approached the right way, immediacy can work wonders for conversion. Commerce Roundup Copyright ©2012 eMarketer, Inc. All rights reserved. 3
  • 4. Commerce Roundup Mcommerce Sales Shoot Up as More Consumers Buy via Mobile 2012 APRIL Sales will nearly double this year and more than quadruple again by 2015 US mcommerce sales are on a steep upward trajectory, thanks in part to ever-increasing adoption of smartphones and the mobile internet among the US mobile population. eMarketer estimates mobile commerce sales will reach $6.7 US Mcommerce Sales, 2010-2015 billion this year—a tiny fraction of overall retail sales, to be billions and % change sure, but a 91.4% increase over 2010. Next year, sales will rise 118.8% $31.0 another 73.1%, to $11.6 billion. 91.4% $23.7 “There’s no question that mobile commerce is growing at a fast 73.1% clip,” said eMarketer principal analyst Jeffrey Grau, author of a $17.2 forthcoming report on mobile buying. “And mobile acts as an engine of overall ecommerce growth, by converting potential $11.6 brick-and-mortar sales to digital sales as consumers use their 48.3% $6.7 37.8% smartphones while shopping in-store.” 30.8% $3.5 eMarketer’s estimates of mobile sales are based on a meta- 2010 2011 2012 2013 2014 2015 analysis of data from research firms as well as overall trends in M-commerce sales % change mobile ownership and usage. Mcommerce sales include sales Note: includes travel and event ticket sales but excludes digital download of physical goods as well as travel and event tickets purchased sales; excludes sales made on tablets Source: eMarketer, Nov 2011 via mobile, but exclude digital downloads and usage of mobile 134540 www.eMarketer.com phones as a point-of-sale payment mechanism. eMarketer forecasts 37.5 million US consumers ages 14 and up US Mobile Buyers, 2010-2015 will make at least one purchase on their mobile phone this year, 2010 2011 2012 2013 2014 2015 up from 26.8 million in 2011. The vast majority of that group will Mobile buyers (millions) 17.5 26.8 37.5 46.1 53.8 61.8 be smartphone owners, at 97% in 2012. Overall, 72.8 million —% of mobile phone users 8.0% 12.0% 16.5% 20.0% 23.0% 26.0% Smartphone buyers (millions) 13.7 25.6 36.4 44.9 52.9 61.1 mobile users will research or browse items on their phone next —% of smartphone users 23.0% 29.0% 35.0% 38.5% 41.0% 42.5% year, but not necessarily make a purchase. —% of mobile buyers 77.8% 95.3% 97.0% 97.3% 98.3% 98.9% Note: ages 14+ Auction sites like eBay and flash sales sites like HauteLook Source: eMarketer, Nov 2011 134542 www.eMarketer.com benefit significantly from rising mobile commerce, since the immediacy of their offers attracts shoppers to the mobile channel to grab a limited-time deal while on the go. At the same time, brick-and-mortar retailers run an ever-greater risk of becoming showrooms for Amazon.com and other online retailers—though the shift to mobile shopping can benefit them as well. “If a retailer has robust mobile offerings, it can steer in-store shoppers to look online for more information or find out-of-stock sizes and items on its own mobile site or app,” noted Grau, “retaining the sale via a different channel.” Commerce Roundup Copyright ©2012 eMarketer, Inc. All rights reserved. 4
  • 5. Commerce Roundup Retail Becomes Fastest-Growing Mobile Category APRIL 2012 More than one-third of smartphone users access retail sites As smartphones become more mainstream, mobile is becoming more pervasive in all aspects of consumers’ lives. And online shopping is quickly becoming a popular activity. Mobile content tied to services like travel, dining and movies— Change in Mobile Content Categories Accessed by US more established mobile categories—is still on an uptick, but Mobile Subscribers, Sep 2011 online retail experienced the largest increase vs. 2010, with 95% % change vs. same period of prior year growth in the number of subscribers accessing this content year Online retail 95% over year in September 2011, according to comScore. That works Classifieds 82% out to 21.2 million mobile users, 17% of whom accessed mobile Auction sites 77% retail sites almost daily. Twenty-eight percent did so at least once a Shopping guides 74% week while 55% reported doing so one to three times per month. Real estate listings 71% Movie info 65% Among those surveyed by comScore, the leading mobile retail activity was finding a store location, performed by 33%. Restaurant info 65% Twenty-one percent compared product prices and 20% looked Search 57% for coupons or deals. Smartphone users in a Hipcricket survey Travel service 46% followed a similar pattern, but with higher involvement. Nearly half Source: comScore Inc., "State of the US Online Retail Economy in Q3 2011," had researched prices on a retailer’s mobile site and more than a Nov 15, 2011 134559 www.eMarketer.com third had looked for coupons and promotions. Retailers should not only be prepared to provide the content Reasons that US Smartphone Users Have Visited a that mobile searchers seek, but also on the platforms they use. Retailer's Mobile Website, Oct 2011 According to comScore, smartphone users in general favored % of respondents browsers over apps (48% vs. 26%) with iPhone users being the Research prices 46% most likely to use apps; only 4 percentage points separated Look for coupons/promotions 36% browsers (40%) from app users (36%) among iPhone owners. To Research new products 28% reach the broadest shopping base, retailers would be wise to 13% Purchase a product offer both modes of access. 1% Other Source: Hipcricket, "2011 Mobile Marketing Survey Research Brief," Oct 20, 2011 133678 www.eMarketer.com Commerce Roundup Copyright ©2012 eMarketer, Inc. All rights reserved. 5
  • 6. Commerce Roundup Browsers Beat Out Apps for Mcommerce APRIL 2012 Tablet shopping on the rise as frequency of use grows Apps aren’t always the answer to engaging with consumers on mobile devices—especially when it comes to mcommerce. According to research from rich media company Zmags, very few Americans prefer to use mobile apps for shopping activities. Instead, consumers strongly prefer purchasing through web and mobile browsers. When Zmags surveyed US consumers who owned a PC or Preferred Shopping Methods According to US laptop computer about their shopping methods, 87% said they Consumers*, Nov 2011 preferred using websites and mobile sites, compared to 14% % of respondents who most liked shopping from websites via smartphone and Website on PC/laptop 87% just 4% who preferred to shop using mobile or tablet apps. In-store 71% Although smartphone and tablet owners display a preference Website on smartphone for browser-based mobile purchases, a significant number 14% of US retailers have created mobile apps that enable Website on tablet commerce activities. Survey data from mobile-shopping 9% company AisleBuyer showed in December 2011 that 19% of Phone call with a service agent 7% US retailers had a mobile app to connect consumers to their App on tablet ecommerce site. 4% App on smartphone Retail apps may be of greater value to smartphone users, 4% for whom the browsing experience is more limited in nature. Note: *who own a PC or laptop There’s also opportunity for tablet commerce apps to Source: Zmags, "Meet the Connected Consumer: How Tablets, Smartphones and Facebook are Changing the Way Consumers Shop Across provide a more catalog-style approach, giving users more Retail Categories" conducted by Equation Research, Jan 16, 2012 interactive features. 136219 www.eMarketer.com Meanwhile, the tablet commerce category as a whole is Frequency with Which US Tablet Owners Use Their growing significantly. According to Zmags, during the 2011 Tablets to Shop, Nov 2011 % of total holiday shopping season, 87% of tablet owners used their device for shopping. Not only do users report better buying Less than Every day monthly experiences than with smartphones, but tablet owners are Once per 10% 12% using their devices frequently for mcommerce. According to month More than 13% Zmags, half of tablet owners are using tablets for shopping on once per week 21% at least a weekly basis. 2-3 times per month 24% Once per week eMarketer projects that mcommerce sales will grow more than 20% fourfold over the next few years, from $6.7 billion in 2011 to $31 billion in 2015. If consumers continue to prefer browsers over Source: Zmags, "Meet the Connected Consumer: How Tablets, Smartphones and Facebook are Changing the Way Consumers Shop Across mobile apps for shopping, retailers should consider investing Retail Categories" conducted by Equation Research, Jan 16, 2012 more in mobile-optimized ecommerce sites. Moreover, 136221 www.eMarketer.com marketers should consider designing engaging, tablet-specific ecommerce experiences for tablet users. Commerce Roundup Copyright ©2012 eMarketer, Inc. All rights reserved. 6
  • 7. Commerce Roundup The Effect of Mobile on the Path to Purchase APRIL 2012 Retailers should view mobile sites as a gateway for in-store and online purchases While consumer usage of smartphone and tablet devices for shopping purposes is on the rise, the devices’ place in the purchase path is varied. According to several pieces of research by Google, ForeSee Results and Nielsen, shoppers may start in the mobile channel for product research but then purchase in-store. They also may use mobile for product research on the go, then later purchase online on a PC or tablet. Nielsen’s Q3–Q4 2011 “US Digital Consumer Report” indicates Cross-Channel Shopping Behavior During 2011 that 29% of smartphone owners use their phone for shopping- Holiday Season Among US Smartphone Users, Jan 2012 related activities. The top mobile shopping activities include % of respondents in-store price comparisons (38%), browsing products through Researched on smartphone, went to store to purchase the mobile web or apps (38%), and reading online product 46% reviews (32%). Researched on smartphone, purchased on smartphone 41% A 2011 post-holiday shopping study by Google and Ipsos OTX Researched on smartphone, then purchased online on computer also depicts consumers using their smartphones at many 37% different points in the purchase path. For instance, 46% of Researched on smartphone, visited store to check out products, then purchased online on computer smartphone users who used their mobile device for holiday 19% shopping said they researched an item on their smartphone Researched on smartphone, visited store to check out products, then purchased on smartphone then went to a store to make their purchase. And 37% said 18% they researched an item on their smartphone then made Visited the store first, then purchased on smartphone their purchase online on a computer. No matter the purchase 8% channel, smartphone users are likely to find a role for their Note: n=208 who used a smartphone to do their holiday shopping mobile device in the purchase process. Source: Google and Ipsos OTX, "Post Holiday Shopping Intentions Study" as cited in Google, "2011 Post-Holiday Recap," Jan 2012 137177 www.eMarketer.com The Google study also shows that 41% of smartphone users researched with their mobile device and went on to actually purchase on the smartphone. That data point is higher than in some other mobile commerce studies. For example, a study released in January 2012 by customer experience management firm ForeSee indicates that during the 2011 holiday season only 15% of online shoppers used their phones to make purchases. The phone was most commonly used as a research and price comparison tool. However, Google/Ipsos OTX studied only smartphone owners while ForeSee looked at online shoppers as a whole, a group that includes many feature phone owners. Whether a consumer makes a purchase via mobile or elsewhere, Google’s industry director for retail, Todd Pollak, told eMarketer that retailers need to improve the way they connect the mobile experience with the in-store or web-based shopping experience. “You would think retailers would be hugely invested in ensuring you’d have an optimized experience on the mobile device, as well as trying to understand how people use it,” he said. “But consumers are way ahead of retailers in terms of their investment in mobile and how that plays into the purchase process.” Although the path to purchase may appear unclear as consumers conduct the shopping process across multiple channels, Pollak encouraged mobile marketers to think about factors such as a consumer’s distance from a store and the days and times when mobile usage spikes. For example, tablet usage peaks during after-work hours and smartphone usage spikes during weekend days. Connecting and strategizing based on those statistics will help mobile marketers provide more targeted and personalized campaigns akin to the marketing experiences consumers are accustomed to on the web. Commerce Roundup Copyright ©2012 eMarketer, Inc. All rights reserved. 7
  • 8. Commerce Roundup Consumer Products Brands Maintain Multichannel Harmony APRIL 2012 Direct-to-consumer selling complements retail Traditionally, retailers have been the middlemen between consumers and brand manufacturers, but these roles are becoming more fluid with the rise of ecommerce. Consumer goods companies have started selling to shoppers through direct online channels, and in the process are gaining access to valuable market research data. In an IDC survey from June 2011, a majority of North American Consumer Goods Executives in North America Whose consumer goods executives said their companies were selling Companies Sell Directly to Consumers, April 2011 directly to consumers in some form. Distributing through third- % of respondents party websites like Alice.com was the most popular approach, Yes, through third party internet sites 39% and more than a third were also selling through their own sites. Yes, through our website 36% The trend toward selling direct online was further illustrated Yes, through our physical retail outlets in an October 2011 Economist Intelligence Unit survey of 21% consumer products executives worldwide. Twenty-nine percent Not currently, but plan to do so in the next two years of respondents’ companies’ total sales were attributed to their 3% own websites, social media sites or direct-to-consumer third- Not currently, and no plans to do so 36% party sites. However, the largest amount of sales were still coming from retail partners (41%). Note: approximately 60% of respondents sell products directly to consumers Source: IDC Manufacturing Insights survey as cited in Consumer Goods Even though they are expanding channels, most consumer Technology (CGT), "2011 Sales and Marketing Report," June 8, 2011 133705 www.eMarketer.com brands are being careful to avoid conflict with their established retail partners. Fewer than 10% of those surveyed saw Ways that Consumer Products Executives View Their themselves as battling with retailers’ other brands or private Consumer Engagement Relationship with Retailers, Oct 2011 labels. Many saw themselves as collaborating with retailers % of respondents (41%), and nearly a quarter saw themselves as taking a Work together to serve consumers through a variety of two-pronged approach—branching into direct selling while marketing, sales and service programs simultaneously sticking with retailers. 41% Continue to work with retail partners but we are also committed to expanding our competing direct-to-consumer strategies For many CPG brands, gaining consumer insights is an 23% important additional benefit of direct sales. Sixty-one percent Share consumer data and insights to enable better planning, cited purchase data as the most valuable type of consumer though we act on those insights separately 22% insight, and it is a metric that is much easier to obtain when a Battle for shelf space with other brands brand is handling its own ecommerce. The future still lies with 9% retailers, though; consumer products executives predicted Compete with retailers' private-label offerings the largest share of their sales over the next three years (40%) 5% would come from retail partners, just one percentage point Source: Economist Intelligence Unit (EIU), "New directions: Consumer lower than the current breakdown. Consumer products brands goods companies hone a cross-channel approach to consumer marketing" sponsored by Oracle, Feb 7, 2012 may be stepping up their game in terms of ecommerce and 137671 www.eMarketer.com social initiatives, but, based on the data, they won’t be stepping on any retailers’ toes in the process. Commerce Roundup Copyright ©2012 eMarketer, Inc. All rights reserved. 8
  • 9. Commerce Roundup Gilt’s Device-Agnostic Strategy Powers Mobile Growth APRIL 2012 Feldman: Absolutely. We’re always looking to offer consumers more of a competitive advantage, because when people come onto Gilt, it’s like a sport. They’re competing for products. It’s really Yon Feldman exciting, but it could be nerve-wracking as well. Vice President, Mobile & Global Engineering We’re working on making it easier to browse what you’re Gilt Groupe interested in without looking at everything. We’re looking to filter products by your particular sizes, so you don’t have eMarketer: What percentage of Gilt’s sales come from to waste time looking at products that aren’t even available mobile phone users, excluding tablets? in your size. We’re making search and filtering functionality Yon Feldman: We tend to see about 10% coming from faster. I like to call it “flattening the experience”—you don’t mobile, not including tablets. It’s another 5% that’s coming have to dive into a sale, a list of products or a product details from tablets. So it’s about 15% in total coming from mobile page and see if the item is available in your size, try to add it to devices and it goes as high as 25%. cart and then notice it’s already been reserved by somebody else. We want to make it easier to get in and get out. eMarketer: When do you tend to see spikes in terms of mobile sales on Gilt? “A lot of mobile devices are difficult to Feldman: On weekends, when people aren’t at their office shop on because the screens are small, computers. Because our sales are timed, we get a bump but we can still try to give customers every time people aren’t at their computers. Mobile sales more information and control and to make can come on the weekends, when people are in parks or things faster.” out having brunch or things like that. With mobile screens, we want customers to really get “With tablets, we see sales spikes at night, a feel for what the fabric and the buttons are like on an when people are kind of lounging about, item and to give them all the tools they need to make a laying in bed or on the sofa, leisurely purchasing decision. A lot of mobile devices are difficult perusing Gilt.” to shop on because the screens are small, but we can still try to give customers more information and control and to make things faster. Plus, mobile ties into the normal spike of the Gilt business. So every day at noon, there’s a huge spike. Then we see eMarketer: Are there any specific features of your mobile different spikes depending on the platform. With tablets, we offering that customers are finding particularly useful or see sales spikes at night when people are kind of lounging that they appreciate? about, laying in bed or on the sofa, leisurely perusing Gilt. Feldman: With the tablet and the iPad app, the experience eMarketer: What is it about your business model that is really speedy and flat. On one screen, you can essentially makes it ideal for mobile shopping? do everything from looking at the different views of a product—the front, back, the details—directly from Feldman: The whole flash-sale business is ideal for mobile the cart. You can tap and hold to drag items directly to shopping, because you have access no matter where you your cart. are. It’s one of the reasons we see such strong members and mobile revenues. When you see an email from Gilt, Our customers appreciate that we make the process you’re going to want to open it. speedy because they are competing against other people. They can get in and out in 3 minutes. They appreciate our eMarketer: Are there some features that you’d like to push notifications that come at noon, when our sales start. introduce to make mobile shopping even easier? Commerce Roundup Copyright ©2012 eMarketer, Inc. All rights reserved. 9
  • 10. Cabela’s Defines Roundup in Global Ventures Commerce Best Practices APRIL 2012 It was a three-step process: The first step was to shore- up customer service internationally. The second piece was to overcome the major obstacles that international Derek Fortna customers had in ordering from us here in the US. One Marketing Manager of the obstacles for international customers was when a Cabela’s package arrived in their country from a particular shipping company, the customer had no idea what they would have to pay in terms of taxes and duties. That’s dangerous In his seven years with outdoor adventure for an international consumer, especially in places such retailer Cabela’s, Derek Fortna has spearheaded as Mexico that have really high duties on items made various digital marketing programs, including in China. Cabelas.com doesn’t always specify when a the brand’s entrée into social media, it’s paid product is made in China, so sometimes the customer search campaigns and its global ecommerce won’t know how much a duty is until the product arrives. strategy. Cabela’s, which has sold internation- FiftyOne now calculates those taxes and duties ahead of ally since the late 1990s, fine-tuned its global time, so consumers know the full amount when they place their order. ecommerce approach a few years ago with a new vendor partnership and a global market- Our third step was to start doing some international ing push. Fortna told eMarketer’s Lauren McKay marketing, which we hadn’t really done before. about Cabela’s experience selling internationally, eMarketer: What digital tactics did you implement to and where the brand plans to pay special target international consumers? attention in the future. Fortna: The major effort was with our paid search program, and we’re complementing that with banner ads on websites eMarketer: In 2009, Cabela’s began working with where we expect our international customers to spend international ecommerce platform FiftyOne to expand its time. That really boils down to international fishing and global selling capabilities. Can you describe the company’s hunting websites. We’re also doing some social marketing on strategy for expansion? Facebook to bring about brand trust and awareness in certain target markets. Derek Fortna: We’ve been shipping internationally since the late ’90s. Prior to turning to FiftyOne three years ago, “We’re not driving a lot of our international we had already shipped to over 200 countries. One of our business through our branding; instead, executives saw the business we were doing internationally we’re driving most of that business without really trying, and he just asked the question, “What through nonbrand terms.” if we try?” So we did some research around international business and came up with a recommendation for expanding. Our international paid search expansion is going well, but one of the challenges we’ve found is that we’re not driving a lot of our international business through our branding; “One of the obstacles for international instead, we’re driving most of that business through customers was when a package arrived nonbrand terms. International consumers don’t necessarily in their country from a particular shipping recognize our name like they do here in the States, so we company, the customer had no idea what realized we needed to supplement our paid search with they would have to pay in terms of taxes some branding tactics to position our brand name and and duties.” what we sell. Commerce Roundup Copyright ©2012 eMarketer, Inc. All rights reserved. 10
  • 11. Commerce Roundup Cabela’s Defines Best Practices in Global Ventures (Continued) APRIL 2012 eMarketer: As you’re identifying your international targets, are you finding that certain product categories are more popular or that they are responding better to certain messages than others? Fortna: From a product perspective, our hard goods perform well internationally. Our soft goods, like clothing, aren’t as popular because international companies and countries have their local retailers for clothing. However, there’s a pretty fragmented market internationally for hunting and fishing hard goods. There’s no one out there as strong as we are in terms of that assortment of products. There are a lot of mom-and-pop shops, but no big companies with vast product selections. eMarketer: Based on your global commerce experience, can you offer a few best practices? “We have looked to local partners in international markets to help make us aware of societal aspects.” Fortna: We’ve learned to be careful and conservative in terms of growing our business internationally. We have looked to local partners in international markets to help make us aware of societal aspects. We’re working with Performics in London for our paid search programs. We did this specifically because they have a better understanding of that part of the world than we do here in the States. That’s paid off, without a doubt. They understand when camping season starts and ends, and boating season starts and ends, and the type of products that people look for. For example, we Americans call a fishing reel used for saltwater fishing a “saltwater reel,” but in the United Kingdom, they call that a “sea reel.” It’s a slight difference, but if we were buying search ads in the UK listing a “saltwater reel,” we’d get far less traffic than listing it as a “sea reel.” Having an international office has definitely been advantageous. Commerce Roundup Copyright ©2012 eMarketer, Inc. All rights reserved. 11
  • 12. # 1 Retail 10 of the 10 Top Grocers 10 of the 10 Top Fashion Retailers 10 of the 10 Top Hardline Retailers Get Better Results With Oracle oracle.com/goto/retail or call 1.800.633.0544 Copyright © 2012, Oracle. All rights reserved. Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.
  • 13. About eMarketerRoundup Commerce APRIL 2012 eMarketer publishes data, analysis and insights on digital marketing, media and commerce. We do this by gathering information from many sources, filtering it, and putting it into perspective. For more than a decade, leading companies have trusted this approach, and have relied on eMarketer to help them make better business decisions. Benefits Companies rely on eMarketer to: ■■ Save time and resources by getting the right information, quickly. ■■ Validate media decisions with reliable data to ensure productive investments. ■■ Educate teams and senior executives on the latest digital marketing topics. ■■ Evaluate emerging trends instantly and maintain competitive advantage. ■■ Deliver impactful presentations with facts, figures and charts in a variety of downloadable formats. Make your business smarter and more efficient. Become an eMarketer client today by calling 800-405-0844 (outside of the US and Canada, call 001-212-763-6010) or emailing sales@emarketer.com. eMarketer, Inc. www.emarketer.com 75 Broad Street Phone: 212-763-6010 Floor 31 Toll-free: 800-405-0844 New York, NY 10004 Email: sales@emarketer.com Commerce Roundup Copyright ©2012 eMarketer, Inc. All rights reserved. 12