IBM Online Retail Holiday Shopping Recap and 2014 Outlook

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Information about IBM Online Retail Holiday Shopping Recap and 2014 Outlook
Technology

Published on February 12, 2014

Author: lajohnso1

Source: slideshare.net

Description

Get an overview of the 2013 holiday online retail performance. See real–time data from Black Friday and Cyber Monday—and discover the trends that can help you prepare your omni–channel approach in the year ahead. Visit www.ibm.com/benchmark to learn more.

Holiday Recap and 2014 Outlook 1 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Today’s presenters Sucharita Mulpuru Principal Analyst Strategy Director, Forrester Enterprise Marketing Management @smulpuru 2 Jay Henderson @jay_henderson © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Agenda › 2013 Recap › Key US dates and trend › Views from around the globe › Shopper behavior › 3 Insights for 2014 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Compare performance against industry peers with IBM Digital Analytics Benchmark  Over 3,000 sites participated  Aggregate index  Compare against industry  Compare against peers  Geographic coverage  US, UK, AU, Europe, World Wide  Industry specific     Retail Content Financial Services Travel  Segment specific     4 Apparel Department Stores Health and Beauty And 12 others. . . © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Wide range of free holiday benchmark resources available www.ibm.com/benchmark  Benchmark Reporting  Reports pulled on key dates and within key date ranges for intra-day, DtD, WtW and YtY comparisons  Key Messages, Graphs and Tables included in outputs including Press Alerts, Releases and Reports  US Retail & Retail sub-verticals  Black Friday, Cyber Monday Reports  UK Retail  Nov 25 Mega Monday  Dec 2 Cyber Monday  AU Retail  Nov 19-20 Click Frenzy  For all three countries  Post-Christmas  Holiday Recap Reports 5 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Thanksgiving Day had a dramatic spike starting at 5 PM PST as stores began early Black Friday promotions 19.7% increase in online retail sales Thanksgiving Day 2013 over last year Source: IBM Digital Analytics Benchmark 6 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson While Thanksgiving continues its growth year over year, Black Friday still delivers considerably higher sales. 18.9% increase in online retail sales Black Friday 2013 over last year Source: IBM Digital Analytics Benchmark 7 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Cyber Monday continues to be the biggest online shopping day of the year 20.6% increase in online retail sales Cyber Monday 2013 over last year Source: IBM Digital Analytics Benchmark 8 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Mobile shopping soars  As a percentage of all online traffic and sales, Thanksgiving was the highest at 42.6% and 25.8%, respectively  However, Cyber Monday saw the most growth year over year with increases of 44.9% and 55.4% for percentage traffic and sales, respectively Source: IBM Digital Analytics Benchmark 9 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Smartphones to Browse, Tablets to Buy Source: IBM Digital Analytics Benchmark 10 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Retailers “Push” Promotions to Mobile Shoppers  Thanksgiving Day and Black Friday  On average, retailers sent 37 percent more push notifications during the two day period of Thanksgiving Day and Black Friday – when compared to daily averages over the past two months.  Average daily retail app installations also grew by 23 percent using the same comparison.  Retailers sent more notifications on Thanksgiving Day than Black Friday.  Cyber Monday  On average, retailers sent 77 percent more push notifications –– when compared to daily averages over the past two months.  Average daily retail app installations grew by 29 percent using the same comparison. Source: IBM Digital Analytics Benchmark 11 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Agenda › 2013 Recap › Key US dates and trend › Views from around the globe › Shopper behavior › 12 Insights for 2014 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Around the globe…. UK Cyber Monday- December 2, 2013 Online sales increased by 31.6% compared to the same Monday in 2012 with mobile percent of sales growing by 94%, exceeding 33% of all online sales Australia’s Click Frenzy – November 19 – 20, 2013 Online sales increased by 16.3% compared to the same Monday in 2012 with mobile percent of sales growing by 43%, exceeding 17.7% of all online sales Source: IBM Digital Analytics Benchmark 13 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Mobile traffic and sales have reached a tipping point…across the globe Source: IBM Digital Analytics Benchmark 14 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Smartphone to brows, tablets to buy…. Source: IBM Digital Analytics Benchmark 15 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Agenda › 2013 Recap › Key US dates and trend › Views from around the globe › Shopper behavior › 16 Insights for 2014 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Early November was strong Source: IBM Digital Analytics Benchmark © 2013 Forrester Research, Inc. Reproduction Prohibited 17

#SmarterCommerce @smulpuru @jay_henderson The myth of holiday shopping is that it’s about gifts Who were you shopping for today? Pre-Thanksgiving Myself Business 7% 8% 3% 4% 49% 44% 57% 52% 42% CyberWeek CyberMonday 53% 56% Gifts for others Non-gifts for others Thanksgiving 6% 4% 56% 7% 4% Base: online consumers who purchased online during the given timeframe Source: Bizrate Insights/Forrester Holiday Flash Survey, 2013 © 2013 Forrester Research, Inc. Reproduction Prohibited 18

#SmarterCommerce @smulpuru @jay_henderson This could explain the soft early December Which of the following best characterizes your feelings about online deals, promotions, and specials around the holidays? Pre-Thanksgiving I love deals! The more, the merrier I will only buy if I have a sale, deal or promotion 17% 13% Thanksgiving 23% 24% 20% CyberWeek CyberMonday 22% 22% 17% Base: online consumers who purchased online during the given timeframe Source: Bizrate Insights/Forrester Holiday Flash Survey, 2013 © 2013 Forrester Research, Inc. Reproduction Prohibited 19

#SmarterCommerce @smulpuru @jay_henderson Deals were often the same on key dates… CyberMonday 2012 © 2013 Forrester Research, Inc. Reproduction Prohibited CyberMonday 2013 20

#SmarterCommerce @smulpuru @jay_henderson …in some cases there were higher hurdles © 2013 Forrester Research, Inc. Reproduction Prohibited 21

Disproportionate volume occurs toward the end of the holiday season Total days Percent of online sales during peak 2012-2013 growth Pre-11/25 24 26% 25% 11/25-12/7 (Thanksgiving, Cyber Week) 13 25% 15% 12/8-12/24 17 40% 15% Post 12/24 7 9% 10% Timeframe Average daily eCommerce package volume (non-peak): 7MM Average daily eCommerce package volume (peak): 46MM © 2013 Forrester Research, Inc. Reproduction Prohibited 22

#SmarterCommerce @smulpuru @jay_henderson Web shoppers continue to abandon stores during key time periods % agreeing with statement Pre-Thanksgiving I shopped in stores less because I shopped online instead I prefer to shop online rather than go to crowded stores during Thanksgiving weekend Thanksgiving 69% 83% CyberWeek CyberMonday 79% 87% 75% 82% 65% 81% Base: online consumers who purchased online during the given timeframe Source: Bizrate Insights/Forrester Holiday Flash Survey, 2013 © 2013 Forrester Research, Inc. Reproduction Prohibited 23

#SmarterCommerce @smulpuru @jay_henderson Agenda › 2013 Recap › Key US dates and trend › Views from around the globe › Shopper behavior › 24 Insights for 2014 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson 1. The last mile wars are just beginning Which types of deals did you take advantage of for today’s purchase? Timeframe Offer 2011 2012 2013 Free shipping no threshold 20% 20% 32% Free shipping with threshold 25% 23% 18% Free shipping no threshold 26% 24% 40% Free shipping with threshold 29% 27% 21% Free shipping no threshold 33% 29% 32% Free shipping with threshold 26% 27% 28% Free shipping no threshold 23% 23% 25% Free shipping with threshold 25% 25% 25% Pre-Thanksgiving Thanksgiving Weekend Cyber Monday Cyber Week Base: recent online buyers Source: Bizrate Insights/Forrester Holiday Flash studies © 2013 Forrester Research, Inc. Reproduction Prohibited 25

#SmarterCommerce @smulpuru @jay_henderson But the postal service is in dire straits Net Income/Loss for USPS in US$B $0.90 2006 2014 (F)* 2016 (F) $(15.10) $(21.30) * Includes retirement benefits pre-funding requirement Source: USPS © 2013 Forrester Research, Inc. Reproduction Prohibited 26

#SmarterCommerce @smulpuru @jay_henderson It is hard to match the postal service Major carriers © 2013 Forrester Research, Inc. Reproduction Prohibited Regional upstarts 27

#SmarterCommerce @smulpuru @jay_henderson What happens next is well-documented © 2013 Forrester Research, Inc. Reproduction Prohibited 28

#SmarterCommerce @smulpuru @jay_henderson Cost reduction is already in motion √ Early retirement packages √ Retail shared with other stores ? Clustered delivery boxes ? Fewer delivery days © 2013 Forrester Research, Inc. Reproduction Prohibited 29

#SmarterCommerce @smulpuru @jay_henderson Cost increases for parcels are one of the only levers Revenue source This means… Elastic? Profitable? First class Envelopes Not so much Very Business delivery Catalogs, magazines Very Not so much Parcels eCommerce Not so much shipments © 2013 Forrester Research, Inc. Reproduction Prohibited Very 30

#SmarterCommerce @smulpuru @jay_henderson Add to that, holiday crunches © 2013 Forrester Research, Inc. Reproduction Prohibited 31

#SmarterCommerce @smulpuru @jay_henderson Omnichannel is now an imperative © 2013 Forrester Research, Inc. Reproduction Prohibited 32

#SmarterCommerce @smulpuru @jay_henderson 2. Mobile madness maddens % of web revenue transacted on each device 79% 79% 77% 12% 13% 14% 13% 9% 8% 9% 10% 8% $25-100MM $100MM Store-based retailer Pureplay 79% 8% 14% 5% Average <$25MM 13% 77% 72% 15% 81% 77% 89% Smartphone Tablet 81% 79% 12% 7% 13% 15% 8% 3% 13% Manufacturer Catalog and <4 years old 4-10 years other old multichannel 8% >10 years Other Web (e.g. PC) Source: The State of Retailing Online 2014: Key Metrics © 2013 Forrester Research, Inc. Reproduction Prohibited 33

#SmarterCommerce @smulpuru @jay_henderson Top eCommerce priority in 2014: mobile Examples/Definitions 53% Mobile 46% Site overhaul Responsive design, mobile site optimization, tablet redesign Redesign (not specific to responsive design), personalization, site usability, content management system integration, taxonomy improvements 36% Marketing 26% Omnichannel efforts Replatform 19% Checkout overhaul Brand marketing, search optimization, customer acquisition, loyalty and CRM In-store pickup, order management system overhaul 19% New platform integration, site performance Alternative payments, checkout optimization International expansion 14% Merchandising improvements 14% Fulfillment 4% Growth to key markets like BRIC Videos, on-site selection improvement, enhancing marketplace and drop ship capabilities Speed to ship packages, order visibility Social 3% Integration with Instagram and Pinterest Customer service 3% Integration of live chat Source: The State of Retailing Online 2014: Key Metrics © 2013 Forrester Research, Inc. Reproduction Prohibited 34

#SmarterCommerce @smulpuru @jay_henderson Mobile investments are often still modest © 2013 Forrester Research, Inc. Reproduction Prohibited 35

#SmarterCommerce @smulpuru @jay_henderson This is a classic first mover dilemma Faster Mobile today Loser box Rough waters Pace of market evolution Faster Calm waters 1st mover wins Pace of technology evolution Source: The Half-Truth of First Mover Advantage, HBR 2005 © 2013 Forrester Research, Inc. Reproduction Prohibited 36

#SmarterCommerce @smulpuru © 2013 Forrester Research, Inc. Reproduction Prohibited @jay_henderson 37

#SmarterCommerce @smulpuru @jay_henderson Here are some of the early winners © 2013 Forrester Research, Inc. Reproduction Prohibited 38

#SmarterCommerce @smulpuru @jay_henderson 3. EDLP dies…because the web always has a lower price 35% use phones to research prices IN STORES 32% of showroomers find it easy vs 11% who find it difficult 35% of showroomers use search to compare prices 37% of showroomers plan to reesarch prices more on their mobile devices in the future Source: Forrester Life Cycle Survey, Q1 2013: Forrester-Aprimo Research © 2013 Forrester Research, Inc. Reproduction Prohibited 39

#SmarterCommerce @smulpuru @jay_henderson The store “premium” isn’t large How much more would you consider paying to purchase a product in a physical store rather than buying it online so that you could have the product immediately rather than wait for it to be shipped to you? 1-5% higher in store 52% 6-10% higher in store 11-15% higher in store 18% 6% 16-20% higher in store 4% 21-25% higher in store 4% More than 25% higher in store 3% Source: Forrester Life Cycle Survey, Q1 2013 © 2013 Forrester Research, Inc. Reproduction Prohibited 40

#SmarterCommerce @smulpuru @jay_henderson For commodities, this type of price difference gets tougher Source: 360pi © 2013 Forrester Research, Inc. Reproduction Prohibited 41

#SmarterCommerce @smulpuru © 2013 Forrester Research, Inc. Reproduction Prohibited @jay_henderson 42

#SmarterCommerce @smulpuru @jay_henderson Summary of Insights for 2014 › There probably won’t be a reprieve in shipping expenses, but omnichannel investments can insulate retailers from unwelcome suprises › We are just beginning to see “mobile unique” solutions; if you can create one, you will amplify your mobile success › Dynamic pricing is here to stay and will become standard for the most commoditized categories; ultimately, merchandising strategies change a lot © 2013 Forrester Research, Inc. Reproduction Prohibited 43

#SmarterCommerce @smulpuru @jay_henderson Customers know more Customers demand more Your business expects more Marketing must re-imagine its role 44 © 2013 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson It’s awfully hard to re-imagine customer engagement when the technology infrastructure looks like this… SMS Marketing App/Widget Creation Mobile Push Notifications Files Files Email Service Provider Transactions Lead Management Website Behavioral Targeting Social Marketing Files Mobile Marketing Files Files Files Files Customer Database Campaign Management Contact Optimization Files Call Center / Inbound Decisioning Digital Asset Mgmt Customer Insight Tool Files Data warehouse Marketing Operations Management Search Bid Management Predictive Analytics Marketing Finance Mgmt 45 Web Analytics Provider SEO Files Local Marketing Product & Content Recos Marketing Mix Modeling © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Choosing the right technology for marketing Preferably an integrated suite that has multiple entry points A modular solution - so you only have to buy and adopt what you need, that you can expand over time Open solution so you can integrate it into your existing infrastructure 46 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson IBM Marketing and Merchandising solutions empower clients to understand and engage customers in context across channels Understand Engage Optimize 47 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson IBM Marketing and Merchandising solutions empower clients to understand and engage customers across departments Marketers 48 Digital Marketers eCommerce Professionals Merchandisers Customer Service © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson IBM continues to build out an industry leading portfolio of technologies Marketers Digital Marketers Omni-Channel Marketing & Digital Marketing eCommerce Professionals Omni-Channel Commerce Merchandisers Omni-Channel Merchandise Optimization Customer Service Customer Experience for Service Real-time Personalization Customer Analytics 49 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson IBM continues to build out an industry leading portfolio of technologies to enable retailers 50 50 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Additional holiday benchmark analysis & best practice guides www.ibm.com/benchmark 51 © 2014 IBM Corporation

#SmarterCommerce @smulpuru @jay_henderson Questions? www.ibm.com/benchmark Sucharita Mulpuru Principal Analyst Forrester @smulpuru Jay Henderson Strategy Director, IBM, Enterprise Marketing @jay_henderson 52 © 2014 IBM Corporation

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