Search and Social Commerce IndexInaugural Report

Published July 17, 2014

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INAUGURAL REPORT

OVERVIEWThis is the first in a series of research reports by DataPop and Kenshoo to be released prior to the 2014 holiday shopping season. The reports aim to help retailers improve consumer engagement through search and social commerce, the most important digital advertising channels leading into Q4. The Search and Social Commerce Index is based on analyzing nearly 3MM products from 40 retailers’ catalogues, and identifies key trends and actions that can be taken by retailers to take advantage of the growing social commerce opportunity.

54% OF RETAIL SITE TRAFFIC DRIVEN BY SEARCH AND SOCIAL

According to the latest digital marketing analysis by Experian, search and social drive 54% of visits to retailer sites, making them the top two traffic sources for retailers. Search Product Listings Ads (PLA) saw a 618% growth in Q4 of 2013 when compared to the previous year. This year, while search PLA from sites such as Google and Bing continues to drive major volume for retailers, large gains in traffic and sales are also coming from social commerce sites such as Pinterest, Polyvore, Houzz and Wanelo. Today, 42% of marketers are already pursuing social commerce, with continued adoption expected.

54OF TRAFFIC TORETAILER SITESIS FROMSEARCH& SOCIAL

%

2.9MM PRODUCTS ANALYZEDFor our Search and Social Commerce Index (SSCI), we leveraged a relevant subset of DataPop’s proprietary Product Knowledge GraphTM to analyze over 40 retailers and their accompanying 2.9MM published products. The retailers and products analyzed covered categories with deep social engagement including fashion, consumer electronics, and home and garden. The SSCI is designed to help retailers benchmark their progress in driving deeper consumer engagement in search and social commerce.

1 Johnston, Ashley. Tancer, Bill (2014). “The 2014 Digital Marketer”. Experian Marketing Services.2 Enright, Allison (2014). “The rise of Google’s Product Listing Ads”. Internet Retailer.3 Polk, Jennifer (2013). “How to Turn Social Marketing Activities Into Social Commerce”. Gartner, Inc.

40 RETAILERS 2.9MM PRODUCTS

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INAUGURAL REPORT

Based on the SSCI, we found that only 1.7% of the 2.9MM products analyzed were posted by retailers across social commerce channels, showing a missed opportunity for retailers to both brand and merchandise at the very moment that potential customers are actively discovering brands and products. Beyond driving brand engagement and e-commerce transactions, there is potential to leverage social analytics to understand which products, titles, and images resonate best with consumers in search and social.

FINDING #1: GREATER OPPORTUNITY FOR BRANDING, MERCHANDISING AND ANALYSIS

FINDING #2: OPPORTUNITY REMAINS, EVEN IN TOP ENGAGING CATEGORIESLeveraging DataPop’s Product Knowledge GraphTM we were able to analyze which categories consumers engage with most in search. Against this analysis, SSCI found that retailers only post 7.2% of the products in these top categories to social commerce sites. This data suggests that there is opportunity for greater product coverage and merchandising in social commerce, even in retailers’ top engaging categories.

FINDING #3: ACTIVE RETAILERS ARE NOT ALIGNING SOCIAL POSTS WITH CONSUMER ENGAGEMENT

A deeper analysis of retailers that are actively posting on social commerce channels points to further opportunity to deliver more engaging consumer experiences. By identifying the key attributes that consumers care about in each retail category, such as colors or materials, we were able to determine how well retailers address consumer interests. On average, 70% of retailers use product

names for social post titles. While consumers at times search for specific products names, more often they are searching for products using descriptive terms such as color, style and material. Retailers should tailor their content to better engage with consumers by testing which attributes to emphasize in social commerce posts. Social commerce channels now allow retailers to tailor product post images and titles, manually but also often through feed based updates, and retailers who take advantage of the opportunity will be able to better engage with consumers.

OF PRODUCTS

SOCIALCOMMERCE

ONLY 1.7%

ARE POSTED ON

POST TITLES

SOCIAL

70%

DON’T CUSTOMIZE

FOR

OF RETAILERS

OF TOP PLA

SOCIALCOMMERCE

7.2%

ARE POSTED ONPRODUCTS

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INAUGURAL REPORT

INCREASING SUPPORT FOR SOCIAL DISCOVERY AND SHOPPING

With data suggesting consumer tendency to discover and shop simultaneously, social commerce sites have started to introduce features to help retailers provide more engaging social experiences with their brands and products. Most social commerce sites now support full creation and management of content via feeds, and enable rich information so that consumers can search for products, save products that they are interested in tracking, share

ORGANIZATION AND AWARENESS GAPSIn surveying retailers about the reasons behind the low representation of products across social commerce, several themes emerged. The first is the separation between brand and e-commerce teams, with brand teams typically owning social media and little to no budget allocated for testing social e-commerce. The second theme is the lack of awareness of the expanding toolset available for e-commerce via social channels, both in terms of rich, informative, and sometimes promoted posts as well as in analytics. Finally, retailers who have minimal resources dedicated toward social commerce find themselves in a classic chicken-and-egg dilemma. Posts need to be optimized with more engaging titles, images and promotions to generate greater revenue from social, but significant gains that point to optmization resources will not be realized without a dedication to the effort.

TOP 31REASONS

COMMERCE GAPSFOR SOCIAL SOCIAL AND

ECOMMERCESILOS

TOOLS AND ANALYTICSAWARENESS

CHICKENAND EGG

2 3

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INAUGURAL REPORT

GETTING STARTED WITH CROSS CHANNEL DATAAs retailers set out to solve the challenges outlined above and kick start social commerce tests, applying analysis gained from the most successful products in search PLA to a social commerce strategy is extremely useful. Using search PLA data is instrumental in determining which products and categories to feature in social commerce, which variations of parent products to post, and which attributes to emphasize in images and titles of a social commerce post. A question echoed among many retailers in planning a social commerce catalog is whether or not posting multiple color or size variations of a parent product is redundant. Retailers can address this question through leveraging existing data sets from PLA. One approach is to focus on posting products with attributes that consumers already deem important, such as trending and classic colors. Additionally, analyzing retailer specific and category level data can point retailers towards the right attributes and products to highlight. Using both social commerce data and cross channel data will help retailers better understand consumers and what ultimately matters to them in each channel.

SUMMARYThe findings from this first report suggest a number of new opportunities for marketers going into this year’s holiday season. While PLA will continue to grow, retailers can also look to fast-growing social commerce sites to significantly broaden their audience and sales. Search and social commerce together can, and should, serve as a real-time focus group to help retailers better engage with consumers across all of their marketing channels.

3 KEY STEPS TO BETTER SOCIAL COMMERCE

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Retailers with the most products on social sites get the most tra�c

Social sites use product data to match products and consumers

Social engagement factors into better visibilty on social sitesDEEPER SOCIAL ENGAGEMENT

HIGHER QUALITY PRODUCT POSTS

MORESALES

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ABOUT DATAPOPDataPop is the leading provider of technology solutions enabling optimal product merchandising across all channels and devices. Its patented Semantic Advertising technology allows retailers & brands to enhance legacy product catalogs with revolutionary multi-dimensional Product Knowledge Graphs. By leveraging semantics to fully understand consumer intent, DataPop connects retail products to what consumers really want when they are searching for and discovering products. As a result, DataPop clients get dramatically better performing campaigns, statistically relevant test results, and valuable insights into how consumers engage with retail products. For more information, visit www.datapop.com or follow DataPop on Twitter @DataPop.

ABOUT KENSHOOKenshoo is a global software company that engineers cloud-based digital marketing solutions and predictive media optimization technology. Brands, agencies and developers use Kenshoo Search, Kenshoo Social, Kenshoo Local, Kenshoo SmartPath, and Kenshoo Halogen to direct more than $200 billion in annualized client sales revenue through the platform. Kenshoo is the only Facebook strategic Preferred Marketing Developer with native API solutions for ads across Facebook, FBX, Twitter, Google, Yahoo, Yahoo Japan, Bing, Baidu and CityGrid. Kenshoo powers campaigns in more than 190 countries for nearly half of the Fortune 50 and all 10 top global ad agency networks. Kenshoo clients include CareerBuilder, Expedia, Facebook, KAYAK, Havas Media, iREP, John Lewis, Resolution Media, Sears, Starcom MediaVest Group, Tesco, Travelocity, Walgreens, and Zappos. Kenshoo has 23 international locations and is backed by Sequoia Capital, Arts Alliance, Tenaya Capital, and Bain Capital Ventures. Please visit www.Kenshoo.com for more information.

info@datapop.com | (323) 813-8228 | @datapop | www.DataPop.com

info@kenshoo.com | (877) 536-7462 | @kenshoo | www.Kenshoo.com