Welcome to Atlanta Shop.org! As is typical with Shop.org, it has been a great event with world class speakers. They kicked off the event with the eHoliday Recap. The following is a quick summary, but nothing replaces the real thing. See you at FirstLook 2007.
Mood Study – Interesting Statistics
- 2/3 online shoppers are female (65% / 35%) - in fact women shoppers have grown 67% since 1998
- Connection speed has increased – 81% of consumers have high speed Internet access - which many retailers are starting to take advantage of with more advanced tools and technology
- 40% of consumers have been buying online for 5 years
- Over 8 out of 10 consumers shopped online at home during the holidays - There is still a Monday spike, but with increase in broadband at home means more buying at home, smoothing the numbers over time. Not to mention, no one wants to admit they shop at work
- Women are more likely to respond to surveys
- Broadband customers are more likely to contact customer service vs. dial up customers
- Largest revenue gains seen in 2005 are from 6 pm to 10 pm
- Top revenue days – Monday December 12th
- Amazon December 12th was biggest day for them
- QVC – traffic depended on multi-channel synergy – TV driving online
- J.Jill – sales were based on when catalogs mailed
Prediction #1
Sales would grow 18-25%
Actual
30% increase (Nielsen/Net Ratings). It was a wildly promotional holiday season which posed a challenge. J.Jill said gift cards were up this year. QVC said it was by far the best year ever with volume and new customers.
Funny comment of the morning was about gift card breakage - “I’d tell ya, but I’d have to kill ya.”
Prediction #2
Overall satisfaction will remain high
Actual
Consumer satisfaction hit record levels in 2005 – an 11% increase in customer satisfaction
Prediction #3
Free shipping will be more important this year than last year.
Actual
Free shipping without conditions continues to be the most popular promotional offer for influencing consumers followed by free shipping with conditions
- Amazon – price, selection, and convenience. Covet free shipping. Great lever. Have been doing this for 10 years.
- QVC – quality, value, convenience. Free shopping all the time doesn’t make sense, because they are lowest price guaranteed… no sales. Instead chose free shipping upgrades
- J.Jill – Free shipping with conditions through email only (not site wide). Their challenge is the store – doesn’t resonate for those who want to shop in the store. Instead takes more of a multi-channel approach allowing the person to shop from catalog, store, or online store
Prediction #4
Margins will suffer due to higher shipping costs and downward price pressure.
Actual
Almost half of the merchants had increases in profit margins during the holiday season. Note: 40% said margins stayed the same
- QVC – better
- J.Jill – the same
- Amazon – would not say
Prediction #5
Retailers will break price early, but consumers will continue to wait until last minute
Actual
1/3 of consumers started their online shopping earlier than last year. 29% of retailers cut before Thanksgiving, 24% no mark downs (every day low value price), 26% 12/18-12/25
- J.Jill – Observed Thanksgiving as a much more promotional versus last year
- Nielsen – Very heavy promotional activity this year, because so much fear about gas prices and heating costs
- Shop.org – started in advance of Thanksgiving with email promotions. Used Wal-Mart as an example of starting late last year, but starting really, really early this year
Prediction #6
Real winners are those who optimized for organic search results instead of PPC (rising keyword costs)
Actual
Most successful programs in ascending order: Email to house list, SEM – paid, Affiliate programs, SEO was 4th, but did go up 10%, comparison shopping was 5th, but definitely grew
- J.Jill – majority of sales come from branded keywords. Natural search they are still looking for more benefit.
- Amazon – optimize both paid and organic. Greatly depend on partners to drive traffic
- QVC – user analytics tools to really understand what paying for. Now that the holidays have ended still spending as much, but really focus on ROI
Prediction #7
Pure online brands will hold their own
Actual
8-9 of the top 10 growing sites were multi-channel retailers. Multi-channel retailers were more optimistic than online-only retailers. Over three quarters of online only retailers reported growth of 30% or more.
Prediction #8
Christmas falling on Sunday will affect sales – the extra Saturday giving people time for last minute shopping
Actual
Retailers took full advantage of this – i.e. free shipping upgrades
- Amazon, J.Jill – moved their shipping days, which was a company expense, but benefited in additional sales
- Amazon – great growth in categories where men would buy last minute for women – i.e. brand name watches
- QVC – merchandising efforts targeted the typical last minute shoppers – i.e. jewelry
Predictions for 2006 Holidays
- Nielsen/NetRatings – Tighter integration with offline/online stores. Better product presentation. Take advantage of broadband to improve merchandising
- Shop.org – 23-26% growth and tighter integration
- JupiterResearch – Growth. Margins will continue to be squeezed. Continued reliance on search
- QVC – Specialty retailers with the largest growth. Big online brands because of the work they are doing right now to improve their conversion rates.
- J.Jill – Correlation with customer satisfaction with broadband connection means more unique applications can be created. Purchasing and in-store pick up will improve
- Amazon – Ways to make it easier to navigate while on Amazon. Make the search experience more relevant.
