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

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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 storesless because Ishopped online

instead

I shopped onlineinstead of in storesfor this purchase

because there werebetter 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 frequentlyoffered that it is easy to

always buy with a sale orpromotion

Taking advantage ofdeals is even more

important to me nowthan in previous years

I love deals! The more,the merrier

I will only buy if I have adeal, sale or promotion

6%

15%

23%

21%

7%

13%

22%

20%

5%

16%

23%

22%

5%

15%

24%

21%

2011 2012


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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

Nov1

Nov8

Nov15

Nov22

Nov29

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 socialpresence

Deals or shoppingwebsite

Other email

Someone told meabout it

Through searchengines

Via email from theretailer

I visited the retail sitedirectly

3%

7%

9%

10%

10%

39%

44%

3%

6%

7%

11%

10%

39%

44%



Other email





4%

6%

8%

9%

11%

37%

44%

4%

6%

8%

10%

11%

37%

43%



Other email





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





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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 email is

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




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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.

Blackberry Android iPhone 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


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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


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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


typical customer

database:

• Demographics

• Psychographics

• Account details


• etc.






40







typical customer

database:

• Demographics

• Psychographics

• Account details


• etc.

Product

recommendation

engines

Online behavioral

advertising

SEM Display ads SPAM

Pre-calculated

offers

Personalized

email






41







typical customer

database:

• Demographics

• Psychographics

• Account details


• etc.

Product

recommendation

engines

Online behavioral

advertising


Pre-calculated

offers

Personalized

email

Most

personalization

approaches use

more of one than

the other






42








typical customer

database:

• Demographics

• Psychographics

• Account details


• etc.

Product

recommendation

engines

Online behavioral

advertising


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 andbrands

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


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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. . .



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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



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IBM 2013 improving holiday readiness presentation

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