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The State of Retailing Online 2013
Sucharita Mulpuru, VP & Principal AnalystForrester Research
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Online retail is the pawn that is now queen
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Online retail: double-digit growth
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201220112010200920082007
30%29%29%29%30%32%
Online November-December sales as a % of total web sales
Source: Forrester Research
15% year-over-year growth in 2012 over
2011
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Base: 60 retailers
Source: State of Retailing Online 2013, a Shop.org study conducted by Forrester Research
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State of Retailing Online Study
• 10 years+ of data gathered with the goal of benchmarking
• A survey of retailers primarily drawn from the Shop.org and NRF community
• Extensive details, typically long surveys, 50-100 respondents on average
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Agenda
• Recap of 2012• Implications for 2013 and beyond
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1. “Mobile first”
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Source: Monetate (aggregated session data)
Total phone and tablet sessions: Holiday 2012
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Source: Forrester Research Mobile Commerce Forecast, 2012 to 2017 (US)Note: Excludes tablet commerce and game/app downloads, auctions
2012 2017 $5.5
$24.5 $4.1
$14.1
$2.0
$6.4
Retail Travel Daily DealsUS Mobile Commerce (excludes tablets) $B
Top M-Commerce Categories
MediaConsumer electronics
Apparel
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Retailers seem to be a little gun-shy about hype
Groupon
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Which is why companies are actually thinking “site first”
Multichannel efforts
International growth
Site redesign
Mobile and tablet
Site conversion
15
16
16
26
31Examples/Definitions
Checkout optimization, alternative payments, user experience, testing, analytics investments, product detail page enhancement
Mobile-optimized sites, mobile analytics, mobile traffic and conversion growth
Core site “look and feel” overhaul, responsive design changes
Shipments abroad
Cross-channel analytics, ship from store, endless aisle
Top Digital Initiatives for 2013 (# of Retailers Responding)
Source: State of Retailing Online 2013, a Shop.org study conducted by Forrester
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2. “Holding out for a (social) hero”
“…And e-commerce will become increasingly important to Facebook, as it
builds its recently launched Gifts business. The e-commerce platform—which lets users send goods, like…gift cards and cookies, to friends—poses a threat to
Amazon, especially as Facebook adds more retail partners.”
Wall Street Journal, December 25, 2012
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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
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
I visited the retail site directly
4%
6%
8%
9%
11%
37%
44%
4%
6%
8%
10%
11%
37%
43%
How did you learn about these special deals [from today’s purchase]?Pre-Thanksgiving Thanksgiving Weekend
Cyber Monday)
Source: Bizrate Insights/Forrester Holiday Shopping Flash Surveys, Q4 2011 and Q4 2012
2011 2012
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This is the low-hanging fruit that still gets ignored
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Social is a tool more than a weapon
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3. The last-mile obsession
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But the smart retailers are “castling”
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That’s why “multichannel” still makes the list
Multichannel efforts
International growth
Site redesign
Mobile and tablet
Site conversion
15
16
16
26
31Examples/Definitions
Checkout optimization, alternative payments, user experience, testing, analytics investments, product detail page enhancement
Mobile-optimized sites, mobile analytics, mobile traffic and conversion growth
Core site “look and feel” overhaul, responsive design changes
Shipments abroad
Cross-channel analytics, ship from store, endless aisle
Top Digital Initiatives for 2013 (# of Retailers Responding)
Source: State of Retailing Online 2013, a Shop.org study conducted by Forrester Research
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26%United States
27%
26%
16%
15%
14%
10%
12%
UK
Sweden
Germany
Italy
France
Spain
Netherlands
% = % of respondents who have purchased from online retailers outside the US
% = % of respondents who have purchased from online retailers outside of Europe
Base: 2,000 UK online adults, 2,000 Swedish online adults, 2,000 Dutch online adults, 2,000 German online adults, 2,065 Spanish online adults, 2,122 Italian online adults, 2,000 French online adults, n/a; Source: European Technographics Retail, Customer Experience, And Travel Online Survey, Q3 2010; North American Technographics Retail Online Survey, Q3 2009 (US)
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Agenda
• Recap of 2012• Implications for 2013 and beyond
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What to expect moving forward• With mobile, it will get a lot worse before it gets
better• Whatever is up Amazon’s sleeve will keep you
up at night• Relentless innovation will continue• Be prepared for the party to end
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Base: 942 smartphone owners
Q: Do you think you will use your smartphone to research prices more or less in the future?
Source: Forrester-Aprimo Showrooming Research, October 2012
More
37%About the same
59%
Less
4%
Future “showrooming” intentionIntent among men 18-34
Intent among women 18-34
More
47%
About the same
49%
Less
4%
More
31%About the same
67%
Less
2%
Base: 187 male smartphone owners
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Q: Which of the following might have persuaded you to have purchased the product/brand you were researching on a smartphone while shopping in a physical store from the store or from its website. Please
select all that apply. .
A price match for the item
A personalized coupon to purchase at that time in the store
Loyalty points for purchasing from the retailer
Better customer service in the store
The opportunity to have the item shipped to my home directly
A more generous return policy
57%
36%
30%
29%
23%
19%
Base: 153 smartphone owners who purchased products at other stores or did not purchaseSource: Forrester-Aprimo Showrooming Research, October 2012
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Consumer electronics (e.g. digital cameras, TVs)
Grocery (e.g. food, diapers, grooming)
Apparel, accessories, footwear
Housewares/small appliances (e.g. vacuum cleaners, window treatments)
Movie/event tickets
Video games
Books (including eBooks)
Cars or auto parts (including tires)
Computers (including tablets) and peripherals
39%
37%
33%
31%
30%
27%
25%
25%
24%
Home improvement (e.g. lumber, tools)
Sporting goods (e.g. equipment)
Music/videos (including digital)
Furniture (including mattresses)
Toys
Large appliances (e.g. dishwashers)
Office products
Baby care (e.g. strollers, feeding bottles)
Other
23%
20%
19%
18%
17%
14%
14%
11%
9%
Source: Forrester-Aprimo Showrooming Research, October 2012Base: 415 smartphone owners who recently researched prices in stores
Q: In which categories were the products you were researching or checking prices on your smartphone while shopping in a physical store? Please select all that apply.
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What to expect moving forward • With mobile, it will get a lot worse before it gets
better• Whatever is up Amazon’s sleeve will keep you
up at night• Relentless innovation will continue• Be prepared for the party to end
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Source: Forrester estimates; GMV=gross merchandise value, the total value paid by shoppers in a transaction
2005 2011
$359 $631 $467
$4,172 Global net income Estimated marketplace revenue
US$MM
Amazon’s global marketplace revenue dwarfs its profit
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“Are you a member of a shipping club or program (i.e. Amazon Prime, Shoprunner or Williams-Sonoma
Reserve)?”
Source: Bizrate/Forrester Holiday Shopping Flash Surveys, Q4 2010, Q4 2011 and Q4 2012N: 776 shipping club members
“How does your membership in a shipping club or program affect your shopping frequency?”
I shop more (or plan to shop more) with the retailer(s) whose shipping club I have joined
The shipping club has not changed my shopping behavior with that retailer
I shop less with the retailer after joining the shipping club
66%
31%
3%
2010 2011 2012
9%
12%14%
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vs. a competitor
“2-day shipping”
6 days away
$13$20 for next day!
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What to expect moving forward• With mobile, it will get a lot worse before it gets
better• Whatever is up Amazon’s sleeve will keep you
up at night• Relentless innovation will continue• Be prepared for the party to end
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2008 2010 2012
Flash sales Daily deals Subscriptions
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Curated commerce? Distributed commerce? Crowdsourced commerce?
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What to expect moving forward• With mobile, it gets a lot worse before it gets
better• Whatever is up Amazon’s sleeve will keep you
up at night• Relentless innovation will continue• Be prepared for the party to end
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Source: Chase Paymentech Solutions
November 2012 December 2012
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2010 2011 2012
49%
70% 72%
% agreeing with statement: “I shopped in stores less because I shopped online instead.”
Source: Bizrate Insights/Forrester Holiday Shopping Flash Surveys, Q4 2010, Q4 2011 and Q4 2012
Base: online shoppers during Thanksgiving weekend
Shopper saturation?? Deal fatigue??
I love deals, the more the merrier!
I will only buy if I have a deal, sale or promotion
Deals are so frequently offered it's easy to buy with a sale or promotion
23%
17%
6%
15%
12%
16%
2012 2011
-8%
-5%
+10%
Base: pre-Thanksgiving online buyers
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“…no one was hurt, but many were disappointed.”
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Wrap up• Responsive design for now, the next chapter may
take a little while to be written• Learn from the innovators, they are often just
product features anyway• Be prepared for tougher times• But for physical stores, that’s actually good news…
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…so long as we see less of this
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