IBM 2013 improving holiday readiness presentation

© 2013 IBM Corporation
Improving 2013
Holiday Readiness:
Key Online Shopping Trends
and Best Practices
IBM Enterprise Marketing Management

© 2013 IBM Corporation© 2013 IBM Corporation
Sucharita Mulpuru
Principal Analyst
Forrester
@smulpuru
Jay Henderson
Strategy Director,
Enterprise Marketing Management
@jay_henderson
Today’s presenters
2

Agenda
 Holiday 2012 refresher
 Things to keep in mind for 2013
 Q&A
#SmarterCommerce @smulpuru @jay_henderson
3

Agenda
 Q&A
4

Last year was a bit of a yawner
5

© 2013 Forrester Research, Inc. Reproduction Prohibited 6
30%29%29%29%30%32%
201220112010200920082007
Source: Forrester Research
15% year-
over-year
growth in
2012 over
2011
Online sales are disproportionately
critical for web retailers
November-December online sales as a %
of total online sales for the year

There don’t appear to be many new
shoppers shopping online at this time
Pre-Thanksgiving
Source: Bizrate Insights/Forrester Holiday Shopping Flash Surveys, Q4 2011 and Q4 2012
Thanksgiving
Weekend
Cyber Monday
66%
78%
65%
76%
I shopped in stores
less because I
shopped online
instead
I shopped online
instead of in stores
for this purchase
because there were
better deals online
72%
73%
70%
71%
77%
81%
76%
81%
2011 2012
7

In 2012…
Monday after
Cyber Mon
Green
Monday
Free Shipping Friday
Tues after
Cyber Mon
Last chance
shopping
Pre-Thanksgiving
Promotion
Cyber Monday
Promotions launched earlier,
buying started sooner,
peaks were higher,
and deals lasted longer
Source: IBM Digital Analytics Benchmark
8

Shoppers may be showing signs of
promotional fatigue, especially pre-holiday
Pre-Thanksgiving
Thanksgiving
Weekend
Cyber Monday
Which of the following best characterizes your feelings about online deals, promotions, and
specials around the holidays?
6%
15%
23%
17%
16%
19%
15%
12%
Deals are so frequently
offered that it is easy to
always buy with a sale or
promotion
Taking advantage of
deals is even more
important to me now
than in previous years
I love deals! The more,
the merrier
I will only buy if I have a
deal, sale or promotion
6%
15%
23%
21%
7%
13%
22%
20%
5%
16%
23%
22%
5%
15%
24%
21%
2011 2012
9

Promotions were lackluster
“[Decide.com] looked at more than 500
doorbusters advertised in Black Friday circulars
by big-box and department stores …and found
that nearly one-third of the products had been
sold at lower prices this year.”
10

Bright Spots?
11

© 2013 IBM Corporation© 2013 IBM Corporation© 2013 IBM Corporation
12
Is Cyber Monday obsolete?

13
Not yet…. 2012
biggest online shopping day
30.3% year over year
ever

Online sales growth was fueled by a strong
holiday weekend
Nov
1
Nov
8
Nov
15
Nov
22
Nov
29
US Daily Sales
November 1 - 30
2011 2012
Thanksgiving day sales up: 17.4%
Black Friday sales up: 20.7%
Cyber Monday sales up: 30.3%
Cyber Monday
14

15
…But promotions were consistent….
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Marketing Driven Site Traffic Current Period (2013/12)
Prior Period (2011/12)
consistently
driving
~30% of
traffic

Email continues to be a big driver of
holiday traffic
5%
6%
8%
9%
8%
46%
39%
4%
6%
7%
11%
9%
44%
41%
Retailer's social
presence
Deals or shopping
website
Other email
Someone told me
about it
Through search
engines
Via email from the
retailer
I visited the retail site
directly
3%
7%
9%
10%
10%
39%
44%
3%
6%
7%
11%
10%
39%
44%
Retailer's social
presence
Deals or shopping
website
Other email
Someone told me
about it
Through search
engines
Via email from the
retailer
directly
4%
6%
8%
9%
11%
37%
44%
4%
6%
8%
10%
11%
37%
43%
Retailer's social
presence
Deals or shopping
website
Other email
Someone told me
about it
Through search
engines
Via email from the
retailer
directly
How did you learn about these special deals [from today’s purchase]?
Pre-Thanksgiving Thanksgiving
Weekend
Cyber Monday
2011 2012

Online shopping
is upwardly
mobile
17

18
over 15%of all online
sales come from
mobile devices1
Mobile (including tablet) continues to increase
dramatically… Sales, traffic, and even email
over 25% of all site
traffic comes
from mobile devices2
47% of all emailis
opened on mobile devices
(more than
apps or web)3
Sources:
1 IBM Digital Analytics Benchmark (consistently Nov 2012 – March 2013)
2 IBM Digital Analytics Benchmark (as of March 2013)
3 Email Optimization benchmark

19
Is mobile really on the move?
…the rise of couch commerce…

iPad now consistently leads all devices with
more overall traffic & more growth
4.07%
5.16%
4.30%
6.09%
8.21%
8.82%
Android
iPhone
iPad
US Mobile Traffic by Device
December 2011 vs December 2012
Dec-12
Dec-11
20

Tablets consistently drive higher conversion
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
Conversion % by Mobile Device More pronounced
during heavy
shopping periods
Black Friday,
2012, iPad
conversion rate
was 4.4%
iPhone & Android
conversion rates
were 1.7%
21

Social is a
tough nut to crack
22

Social…. has yet to make a significant impact
on “same session” traffic or sales
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
% sales from social
% traffic from social
23

Agenda
 Q&A
24

1. Traditional web marketing still matters
a lot
25

26

© 2012 Forrester Research, Inc. Reproduction Prohibited
2. Smartphone revenue is growing but is
only part of the picture
27

Mobile open-rate figures vs focus on
customized content
28

Richest
experience; links
and images on
by default.
Rich graphics;
user may need to
side-scroll to view
full message.
Shows text part of
HTML as well as
URLs for links and
images.
HTML supported, but
images-off under default
settings.
BlackberryAndroidiPhone Windows Mobile 6
Rendering can vary wildly across devices
29

30
Understand the customer experience across
websites and mobile
 Capture and replay customer
interactions
 Discover “why” mobile customers
succeed or fail
 Automatically detect customer
struggles, obstacles or issues
 Drill down into actual user
behavior, complete with gestures
Native Apps
Hybrid Apps HTML5
Mobile Site
Cover all mobile channels

The phone supports the cross-channel
experience
Activity On smartphones On tablets
Read emails from retailers 65 % (1) 65% (2)
Locate retail stores/store hours/directions 55 % (2) 51 % (5)
Receive texts with special offers from retailers 53 % (3) 36 % (10)
Browse or research products 50 % (4) 68 % (1)
Identify where products are sold (online, store, etc.) 40 % (5) 51 % (5)
Compare prices while shopping online 40 % (6) 62 % (3)
Read product or store reviews 39 % (7) 54 % (4)
"Check in" via Yelp, Foursquare, Facebook Places, etc. 36 % (8) 29% (11)
Compare prices while in a retail store 35 % (9) 26% (12)
Scan QR codes 34% (10) 12% (14)
Place orders for digital media (e.g. books, music, apps) 24% (12) 42 % (8)
Gather product/style advice and information from retailers 25% (11) 41 % (9)
Place orders for physical goods (e.g. apparel, electronics) 24% (12 44 % (7)
Review store layout 11 % (14) 21% (13)
Source: Forrester-Bizrate Insights Flash Survey, Q2 2013
Base: recent online shoppers with mobile devices
31

Tactic Key facts
Endless aisle
Also called “web enabled POS”; provides ability to
capture store out-of-stocks
Ship from store
Fulfilling web orders from stores, particularly slow-
moving or aged inventory
In-store pickup (including ship to store)
Enabling shoppers to pick up web orders at local stores
either immediately or after shipping products from DCs;
consumers select this to avoid paying freight
Inventory visibility across channels
Enabling “know before you go” features in which
customers can check in-store availability of items
Same-day delivery
Providing shoppers with delivery of packages to their
homes or offices; transfers the value chain to retailers
from shoppers
3. Omnichannel is a big investment area:
it all comes down to real-time inventory
lookup
32

Caveat: don’t overhype same-day
delivery

A number of omnichannel efforts are
less discussed but should be prioritized
› E-receipts in stores/email collection in
stores
› Scheduling store visits
› Mobile self-checkout and m-pos (QSRs
have the best business case)
› Texting from stores

35
To deal with omnichanel retail, marketer’s need to
create a “system of engagement” across channels
customer
System of
engagement:
Coordinates
all decisions across all channels
to create an engaging relationship
with each customer and prospect
ad
social
search
display ad
Web
mobile
email
ATM/kiosk
phone
branch
POS
mail

4. Personalization is an opportunity
36

37
Personalization: Lots of different ways to treat
different people differently

38
Identity
Information that sits in a
typical customer
database:
• Demographics
• Psychographics
• Account details
• Purchase history
• etc.
Types of information that can be used for personalization:

39
Behavior
Information about what the person is doing during the moment of interaction:
• Where a person has been on a Web site during this visit
• Location as identified by a mobile device
• Reason for calling as explained to a call center agent
• Products about to be purchased in a store
Identity
typical customer
database:
• Demographics
• Psychographics
• Account details
• etc.

40
Behavior
Identity
typical customer
database:
• Demographics
• Psychographics
• Account details
• etc.
Product
recommendation
engines
Online behavioral
advertising
SEMDisplay adsSPAM
Pre-calculated
offers
Personalized
email

41
Behavior
Identity
typical customer
database:
• Demographics
• Psychographics
• Account details
• etc.
Product
recommendation
engines
Online behavioral
advertising
SEMDisplay adsSPAM
Pre-calculated
offers
Personalized
email
Most
personalization
approaches use
more of one than
the other

42
Behavior
Identity
typical customer
database:
• Demographics
• Psychographics
• Account details
• etc.
Product
recommendation
engines
Online behavioral
advertising
SEMDisplay adsSPAM
Pre-calculated
offers
Personalized
email Best option:
use both
fully
Most
personalization
approaches use
more of one than
the other

39%
70%
73%
81%
84%
Getting offers from retailers and
brands
Inspiration on what to buy
Entertaining myself
Enjoying what others share
Discover new products, styles,
ideas
26%
17%
61%
72%
24%
5. Social can come alive during the
holidays
Source: Forrester-Bizrate Insights Flash Survey, Q3 2012
Base: 4,700 recent online buyers with
Facebook accounts
Base: 1,200 recent online buyers who
have visited Pinterest
43

“History” of image-rich/sharing sites
Several attempts at outfitting and rich sharing have been tried without
much success to date
1st dot-com
boom (late
90s)
Retailers
and brands
(early 2000s)
Style CSEs
(2004)
Social
commerce
players
(2009)
Photo sites
44

6. Benchmark yourself relative to your peers
IBM Digital Analytics Benchmark
• Over 1,300 online brands
• Aggregate index
– Compare against industry
– Compare against peers
• Geographic coverage
– US, UK, AU, Euro
• Industry specific
– Retail
– Content
– Financial Services
– Travel
• Segment specific
– Apparel
– Department Stores
– Health and Beauty
– And 12 others. . .
45

7. The “fringes” have great ideas
46

“Mystery bag” shopping is the Black
Friday of Japan
47

Swapping is a crucial component
of this
48

We’re not done innovating in payments
49

A preference center can make a difference
when there’s overemail in Q4
50

Promote your app in mobile search

52
http://ibm.co/1bKCL4h
More benchmark analysis & best practices from IBM

Questions?
Suchirita Mulpuru
Principal Analyst
Forrester
@smulpuru
Jay Henderson
Strategy Director,
IBM, Enterprise Marketing
@jay_henderson
http://ibm.co/1bKCL4h
53

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