emarketer webinar: holiday shopping 2014—online trends and forecast
DESCRIPTION
Holiday sales are known to make or break retailers, and 2014 is shaping up to be even stronger than last year. Topics in this webinar include: How much will holiday ecommerce and overall sales grow? Is mobile eclipsing desktop in ecommerce? Are beacons and visual search ready for primetime? Will supply chain troubles plague retailers again this year?TRANSCRIPT
© 2014 eMarketer Inc.
Made possible by
Holiday Shopping 2014
Online Trends and Forecast
Yory Wurmser
Retail Analyst
September 18, 2014
© 2014 eMarketer Inc.
Agenda
US ecommerce forecast for 2014 holiday season
Mobile’s expanding role in US ecommerce
Emerging technology trends this season
Fulfillment: Are last year’s shipping issues resolved?
Key takeaways
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© 2014 eMarketer Inc.
eMarketer’s
US Holiday Ecommerce
Forecast for 2014
© 2014 eMarketer Inc.
US retail
ecommerce
will grow
16.6% this
holiday
season, up
from last
year’s
15.3% rise
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© 2014 eMarketer Inc.
Ecommerce
accounts for
a growing
share of US
retail sales
during the
holiday
season
© 2014 eMarketer Inc.
What’s driving this year’s strong ecommerce
growth?
1. Greater comfort with mobile buying
2. Improved retail sales overall
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© 2014 eMarketer Inc.
1. More consumers are getting comfortable with
buying on their mobile devices …
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… leading to more mobile sales
US retail
mcommerce sales
will grow 37.3%
in 2014
Mcommerce’s
share of US retail
ecommerce
will reach 19.0%
in 2014
© 2014 eMarketer Inc.
Mobile shopping plays an even bigger role during
the holiday season
In 2013, Black Friday was the
season’s biggest mobile sales
day
People bought with their
phones and tablets while
waiting in line
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© 2014 eMarketer Inc.
2. A strong year for ecommerce will mirror an
improved season for US retail sales overall
Source: eMarketer, Sep 2014
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Despite solid sales growth, three factors will
keep retail from excelling this holiday season
Image source: Shutterstock
© 2014 eMarketer Inc.
1. Slow real-income growth
Real income in
the US is up 2.3%
since Jan. 2014
But it’s down
2.0% overall
since Dec. 2012
Per capita real
income is down
8% since 2007
Source: BEA, Aug. 2014 Twitter – #eMwebinar
© 2014 eMarketer Inc.
Slow real-income growth leaves consumers
cautious
“The big issue is the economy. You’re
not going to see big sales growth
until you see real-income growth.”
—Craig Johnson, president of Consumer
Growth Partners
© 2014 eMarketer Inc.
2. Retailers overestimated consumer demand in
2013
Image source: Shutterstock
© 2014 eMarketer Inc.
Retailers are making conservative inventory
choices in 2014
“ [Last year], the conversion rates were
starting to fall below plans, the pricing
pressure started to get significant, and the
promotional levels started to elevate.…
[This year], we’re seeing very, very lean
levels of inventory going into the back half
[of the year]. Retailers would rather
compromise sales for better profitability.”
—Stephanie Wissink, co-director of research and
senior research analyst at Piper Jaffray
© 2014 eMarketer Inc.
3. 2014 has a short holiday season
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A short season will only marginally affect total
sales but shift retailer and shopper behavior
“ We are going to start seeing
much more aggressive ads a lot
sooner in the year. People tend to
procrastinate and there will just
be fewer days to buy items.”
—Clay Olivier, CEO of Volusion
© 2014 eMarketer Inc.
Recap: Despite challenges, US retail ecommerce
will have a stellar holiday season
Sales will grow 16.6%, boosted by:
1. More mobile commerce
2. 5.0% year-over-year growth in overall US retail sales
Three factors will hold spending back:
1. Slow real-income growth
2. Cautious retailers
3. Short season
© 2014 eMarketer Inc.
Mobile’s Ever-Expanding
Role in Holiday Sales
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Mobile sales are still relatively small …
1.2%
of US retail sales occur on mobile devices
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… but mobile’s impact on shopping is much
larger
In 2014:
145.9 million US mobile
shoppers
74% of US digital
shoppers shop with their
phones
23 million more
US mobile shoppers
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The majority of US smartphone owners in all age
cohorts shop in-store with their phones
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The influence of mobile shopping on total retail
sales is huge
In the 2014 holiday
season, mobile
shopping (i.e.,
research) before or
during in-store trips will
influence between a
quarter and a half of all
US retail sales,
eMarketer estimates
© 2014 eMarketer Inc.
Recap:
Mcommerce sales are still only a small part of total US
retail sales
The majority of US shoppers are mobile shoppers
Mobile will influence between a quarter and half of all
US in-store retail sales this holiday season
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Emerging Technologies
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Ubiquitous mobile shopping is spurring retailers
to test two emerging technologies this season
1. Beacons
2. Visual search
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1. Beacons
Image source: Estimote.com
© 2014 eMarketer Inc.
Beacons will be more common this year
“ More than half of the top 100 retailers are
actively working with beacon technology
now. They’re in different stages, but all of
them are evaluating, testing, piloting,
trying it out. We’re going to see at least
several retailers announce very large-
scale, public rollouts to support holiday
campaigns.”
—Rob Murphy, VP of marketing at Swirl
© 2014 eMarketer Inc.
HBC is one of the first major retailers to deploy
beacons system-wide
HBC will cover 130 of its
Hudson’s Bay Co. and Lord &
Taylor stores with beacons
Each store will have multiple
beacons
Offers will come via HBC apps
and third-party coupon app
SnipSnap
Image source: HBC.com
© 2014 eMarketer Inc.
Third-party apps overcome the limits of branded
retailer apps
Beacon provider Swirl
announced a partnership with
Epicurious
Epicurious app holders will
receive messages when
entering stores of partnering
retailers Image source: iTunes
© 2014 eMarketer Inc.
eMarketer’s view on beacons this holiday
season:
Retailers will expand experiments with beacons
Direct effect on sales this season will be limited
Beacon’s biggest impact will come via third-party apps
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© 2014 eMarketer Inc.
2) Visual
search
Image courtesy of Slyce
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Amazon.com’s Firefly jumpstarted visual search
Image source: Yory Wurmser
© 2014 eMarketer Inc.
Retailers see opportunity in visual search
“ We’re hearing a lot of brands say
that they want to be able to
capitalize on impulse purchasing
at the moment of inspiration
when they see something.”
—Mark Elfenbein, CEO of Slyce
© 2014 eMarketer Inc.
Target’s In a
Snap, an early
branded visual
search tool:
Works with Target
advertising
Does not need QR or
bar codes
More examples
should follow this
season
Image source: In a Snap
© 2014 eMarketer Inc.
eMarketer’s view on visual search:
Firefly has ushered in an era of visual search
experimentation
Firefly and other early versions have limited
functionality, but newer search tools show promise
Until visual search can readily identify objects in the
wild, and from various angles, consumers will not use
it widely
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© 2014 eMarketer Inc.
Fulfillment:
Will Retailers Avoid Last
Year’s Problems?
© 2014 eMarketer Inc.
2013: Missed deliveries made headlines
Midwest snowstorms hit
FedEx and UPS hubs
Roughly 33% of major
etailers tracked by Stella
Service missed deliveries
Amazon, Kohl’s and
Nordstrom were among
the retailers affected
Image source: Shutterstock
© 2014 eMarketer Inc.
Consumers depend on reliability of cutoff dates
96%
deem guaranteed delivery dates important
46%
will look elsewhere after a late delivery Source: CFI Group
© 2014 eMarketer Inc.
2014: Shippers
are building
networks to avoid
last year’s issues
UPS will hire 90K to 95K
seasonal employees, up
10K from last year
UPS has invested an extra
21% in new technology
and manpower (Source: WSJ)
FedEx also expects to hire
more seasonal workers
Image source: UPS
© 2014 eMarketer Inc.
It won’t be enough
“ Consumers are increasingly taking
advantage of two-day shipping and
waiting until the last minute to do their
holiday shopping. … The trend is
growing faster than the logistics that
are there to keep up with it.”
—Chris Mason, co-founder of Branding
Brand
© 2014 eMarketer Inc.
Retailers are overcoming the limits of the
shipping network in 3 ways:
1. Distributive
shipping
2. In-store pickup
3. A commitment to
removing shipping
bottlenecks
Image source: UPS
© 2014 eMarketer Inc.
1. Distributive
fulfillment
Image source: Shopatron
Online Order
Order management system
© 2014 eMarketer Inc.
Shipping from stores gives multichannel retailers
a way to fight back against pure plays
“ Distributed technology
is fundamentally the
most resilient and most
diverse system that can
exist. You have two
hands. If you lose one,
you’ve got another
one.”
—Ed Stevens, CEO of
Shopatron
‘Zone-skipping’
Increased
productivity
of store staff
Reduced shipping
times
© 2014 eMarketer Inc.
Distributive fulfillment: Modell’s
Harmonized online and in-store
inventory
Began drop-shipping to
increase available styles
and sizes
Added ship-from-store, and
continues to add stores to the
system
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Image source: Modell’s.com
© 2014 eMarketer Inc.
2. In-store pickup: Customers can fulfill online
orders themselves
40% of in-store
pickups lead to
additional in-store
purchases (Source: Shopatron)
10% of Target’s
online orders are for
in-store pickup
In-store pickup can
serve last-minute
orders
Image source: Target.com
© 2014 eMarketer Inc.
Consumers who default to in-store pickup remain
the exception
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3. Successful etailers make it easy for the
shipping companies
Image from Zappos.com
© 2014 eMarketer Inc.
Zappos.com: Few problems last year despite late
cutoff date
“ Inventorying all product is one
variable of [our success]. We also
have a great relationship with UPS
and are committed within our
company and all of our fulfillment
centers to meet those deadlines and
get those packages out as soon as
possible to our customers.”
—Maura Dailey, senior manager of customer
loyalty at Zappos.com
© 2014 eMarketer Inc.
Zappos minimizes potential breakdowns
All products in-stock
No drop-shipping
Priority relationships with shippers
Phone reps focus on serviceImage source: Zappos.com
Twitter – #eMwebinar
© 2014 eMarketer Inc.
eMarketer’s viewpoint on fulfillment:
Shippers are better prepared this year
Problems will persist nonetheless, because shoppers
expect quick delivery
Multichannel retailers have an opening to capture
last-minute shoppers via in-store pickup
Forward-looking etailers are simplifying fulfillment
processes and building relationships with shippers
© 2014 eMarketer Inc.
Takeaways
US retail ecommerce sales will grow 16.6% year-over-year in
the 2014 holiday season
US retail sales overall will have a good season, with sales up
5.0%. But slow income growth and retailer caution will keep
that figure from being even higher
The ubiquity of mobile shopping will convince retailers to test
new technologies that bring the physical and virtual shopping
worlds together (e.g., beacons and visual search)
Fulfillment will remain a challenge, but retailers will turn to
distributive fulfillment, in-store pickup and better coordination
with shippers to mitigate problems
Twitter – #eMwebinar
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Bronto’s Holiday Resource Center
Visit Bronto’s Holiday
Resource Center to find
everything a retail marketer
needs for the holidays.
• 2014 Holiday Planning Guide
• Top 12 Marketing Tips for the Holidays
• Interactive plans, checklists and guides
• On-demand holiday webinars, plus much more!
resources.bronto.com/holidays
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Yory Wurmser
Holiday Shopping 2014
Online Trends and Forecast
Holiday Shopping Preview: Ecommerce Grows as Brick-and-
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