e-Retail Industry + Landscape
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This document provides an overview of the e-retail industry, highlighting trends in consumer behavior, including increased price consciousness and the growing importance of online research before purchases. It discusses the role of web properties in influencing offline spending and the necessity for brands to engage consumers through various online interactions to boost customer loyalty. Additionally, it emphasizes the need for optimization of mobile platforms and incentives like free shipping to enhance sales performance.
e-Retail Industry + Landscape
- 1. eRETAIL INDUSTRY PROFILE + LANDSCAPE
- 2. 2 WHY DO I CARE? Glad you asked… In this report you will find a high-level overview of the eRetail landscape. It is important that we keep a pulse on the industry and CONSUMER BEHAVIORS in order to identify OPPORTUNITIES that transform our businesses. At Levelwing, we specialize in analyzing the paths that contribute to meaningful BUSINESS OUTCOMES. These paths are illuminated through the analysis of data collected via website analytics, customer relationship databases, consumer research, phone call logs and even recruitment application databases (yes, we actually enjoy working with the HR folks in addition to the marketing teams). Our team of analysts, statisticians and strategists are obsessed with data and more importantly are experts at TRANSLATING THE DATA INTO A MEANINGFUL STORY that has real business applications and implications. Please enjoy some of the insights contained within.
- 4. 4 eRETAIL INDUSTRY TRENDS 56% of U. S. online ad pper will spend average US sho e more price -conscious ults say the y are The than they w $419 onlin a year ago ere 2% boost from this h oliday season, a 1 N Retail Onli orth American Techn last year ne Benchm o ark Recont graphics act Survey, Q3 2012 12 (US). tail Forecast, 20 line Holiday Re Forreste r Research On Cross-channel* sales will By 2016, $327 b i l l i o n w i l l be account for $1.660 trillio n spent online in t he US, 9% of of total US retail sales by 2 016. overall US retail sales. Forrester Research US Cross-Channel Retail Fo recast, 2011 To o 2016 st, 2011 T 2016, June 2012 arch Onlin e Retail Foreca Forrester Rese Not only are shoppers spending more money online than last year, they are increasingly more price-conscious and using online research methods before making purchases, both online and offline. *The volume of sales that happen in physical stores as a result of web research
- 5. 5 WEB-INFLUENCED SPENDING 4000 3500 3000 (In billions) 2500 2000 1500 $1,552 $1,660 1000 $1,320 $1,429 $1,103 $1,206 500 0 2011 2012 2013 2014 2015 2016 Online retail sales Web-influenced offline spending Non-web-influenced offline retail sales U.S. shoppers are increasingly using web shopping research (e.g., using a store locator, reading customer reviews) and ultimately converting offline. Web-influenced offline spending is projected to increase to $1.660 trillion; 44% of total US retail sales. Web properties play an essential role in the research phase for consumers who purchase both online and offline, emphasizing the importance of optimizing digital assets to meet the needs of these research-seeking consumers. Source: Forrester Research Web-Influenced Retail Sales Forecast, 2011 To 2016 (US)
- 6. 6 SEARCH ENGINE RESULTS FOR PRODUCTS SEARCH ENGINE RESULTS PAGE FOR ‘LAPTOP’ Retailers (both online and with brick-and-mortar stores) make up the majority of search engine results pages for product searches across multiple categories. In addition to PAID SEARCH PLACEMENTS and ORGANIC SEARCH RESULTS consumers are often seeing a GOOGLE SHOPPING sponsored box in the search engine results page for their product search. Google Shopping product highlights are based on product listing ads and allow consumers to easily compare and purchase products. *paid placements are paid advertising available through search engines, organic search results are the listings that are free and do not require a hard media investment
- 8. 8 REASONS FOR BRAND ENGAGEMENT 54% Receive deals, discounts, or special promotions Get free samples Earn customer loyalty points or rewards Learn about the latest product or service offerings I just like them (i.e., favorite brands) and like being associated with Gain access to exclusive content or events not available to other I want to show my support for their mission or cause So I can share interesting content with my family or friends 0% 10% 20% 30% 40% 50% 60% U.S. online consumers like to interact or keep in touch with the brands they like or purchase regularly in order to get deals, discounts, or special promotions. The second and third most popular reasons consumers interact with brands online are to receive free samples and earn customer loyalty rewards. Aligning with consumer expectations allows brands to better retain customers, keeping them brand loyal. Source: North American Technographics Consumer Deep Dive: Investigating The Customer Life Cycle, Q2 2012
- 9. 9 BRAND ENGAGEMENT METHOD OF INTERACTION Follow the brand on Twitter Become a fan of the brand on Facebook 53% Browse the brand's website Join the brand's mailing list Visit the brand's physical store or location Join the brand's customer loyalty program 60% Join the brand's email list 0% 10% 20% 30% 40% 50% 60% 70% Of the 54% of U.S. online consumers engaging with brands to receive deals, discounts, and special promotions, 60% join the brand’s email list and 53% browse the brand’s website. These interaction habits indicate the need for visibility on each of these platforms during this critical purchase consideration period. Source: North American Technographics Consumer Deep Dive: Investigating The Customer Life Cycle, Q2 2012
- 10. 10 SMARTPHONE + TABLET USAGE More than 110 MILLION Americans own a smartphone and 78 MILLION Americans own a tablet As smartphone and tablet ownership increases so does the necessity of having a mobile website for consumers using these devices for product research and purchase. Source: comScore, June 2012; Pew Research Center, ”25% of American Adults Own Tablet Computers”, October 2012
- 11. 11 MOBILE + TABLET AS RESEARCH TOOL 31% 41% of US mobile of U.S. tablet owners research owners products for researched a purchase on product in the their phone past month The average revenue generated from a purchase made on a mobile phone is $70.00 and shoppers using the iPad have a 5.2% conversion rate to e-purchase, the highest of any device. Ensuring mobile sites are optimized for easy purchase is critical to online revenue streams. Sources: North American Technographics Online Benchmark Survey (Part 1), Q2 2012; IBM Coremetrics Benchmark Reports: Springmetrics, August 2012; Google/OTX Consumer Pulse Check, Q4 2010
- 12. 12 INCENTIVES INCREASE SALES FIFTY-SEVEN PERCENT of US online adults say they shop more with retailers that offer free shipping than with retailers that don’t, and 27% have BOUGHT ADDITIONAL UNPLANNED ITEMS to meet free shipping thresholds. Offering a free shipping incentive can help increase sales + overall revenue. Source: North American Technographics Retail Online Benchmark Recontact Survey, Q3 2012 (US)
- 13. 13 REASONS FOR SWITCHING RETAILERS 85% Had a lower price 61% Had lower shipping costs Had a product in stock Offered coupons and promotions Had a better-quality product Had additional items I intended to purchase in stock Had product reviews Had more product information 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% The top two reasons U.S. online consumers switch retailers are for lower prices and lower shipping costs. This further illuminates the opportunity for increasing sales by incentivizing online purchasing. Source: North American Technographics Retail Online Benchmark Recontact Survey, Q3 2012
- 14. 14 DATA CAPTURE Data capture of information input on a consumer website allows organizations to not only develop comprehensive prospect and customer profiling from previous purchases but ultimately assign true ROI to marketing initiatives. Non e- commerce sites that have on-site key performance indicators can be matched back to in-store purchases with the use of custom databases and sales data.
- 15. 15 OPERATIONAL EFFICIENCY Effectively tracking, collecting and analyzing data captured by on-site widgets can reveal business-changing insights. Intelligent analytics can uncover purchase behavior, including trends in product category searches and spikes in particular SKU searches based on the data consumers input into these data captures. Using historical data, past trends and predictive analytics can determine future demand, ultimately leading to OPERATIONAL EFFICIENCY.
- 16. 16 LIKE WHAT YOU SEE? WANT TO SEE MORE? This is just the beginning of what we can tap into, imagine what we could do with the data you have internally… At Levelwing, we specialize in interpreting your data and providing you with applications (and not just graphs) that can impact your MARKETING, MERCHANDISING, INVENTORY or even TALENT RECRUITMENT. We help companies utilize data to OPERATE WITH GREATER CLARITY + PROFITABILITY. Bottom line, we move your business forward by helping you make sense of your data so that you can ACHIEVE WHAT COULD BE. For additional information, please contact: CHAD ETHRIDGE LUKE FROST Business Analyst Business Analyst cethridge@levelwing.com lfrost@levelwing.com 1+843.628.5887 1+843.647.7314
- 17. 17 THANK YOU Want to learn more about Levelwing? Just keep reading.
- 19. 19 WE ARE LEVELWING GLOBAL REACH We currently serve clients throughout North America, Europe, China and Japan UNIQUE APPROACH Levelwing is the leader in business intelligence and marketing solutions with data mining + analytics at the core FULLY INTEGRATED We employ a matrix organization of marketers, analytics design experts, statisticians, researchers and creatives MEASURED SUCCESS Levelwing has experienced 10 consecutive years of growth with industry leading client satisfaction results
- 20. 20 OUR BELIEFS The Right Data Changes Everything Marketing Budgets Should Be Smaller, Not Larger Accountability is Essential Success Should Pay For Itself Leverage Existing Demand First
- 21. 21 SOME OF OUR PARTNERS “Some of the most innovative and strategic minds in the industry” - Novartis “Some of the most sophisticated things I’ve seen being done with analytics and ROI measurement” - Adobe