The State of Retailing Online
2013
Sucharita Mulpuru, VP & Principal Analyst
Forrester Research
Online retail is the pawn that is now queen
Online retail: double-digit growth
Online November-December sales as a
15% year% of total web sales
over-year
32%
30%
29%
29%
29%
30%
2007
2008
2009
2010
2011
2012
Source: Forrester Research
growth in
2012 over
2011
Base: 60 retailers
Source: State of Retailing Online 2013, a Shop.org study conducted by Forrester Research
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, 50100 respondents on average
Agenda
• Recap of 2012
• Implications for 2013 and beyond
1. “Mobile first”
Total phone and tablet sessions: Holiday 2012
Source: Monetate (aggregated session data)
US Mobile Commerce (excludes tablets) $B
Retail
Travel
Daily Deals
$6.4
$14.1
$2.0
$4.1
$5.5
$24.5
2012
2017
Source: Forrester Research Mobile Commerce Forecast, 2012 to 2017 (US)
Note: Excludes tablet commerce and game/app downloads, auctions
Top M-Commerce Categories
Media
Consumer electronics
Apparel
Retailers seem to be a little gun-shy
about hype
Facebook
Groupon
Which is why companies are actually
thinking “site first”
Top Digital Initiatives for 2013 (# of Retailers Responding)
Examples/Definitions
Site conversion
31
Mobile and tablet
26
Checkout optimization, alternative payments, user experience,
testing, analytics investments, product detail page enhancement
Mobile-optimized sites, mobile analytics, mobile traffic and
conversion growth
Site redesign
16
Core site “look and feel” overhaul, responsive design changes
International growth
16
Shipments abroad
Multichannel efforts
15
Cross-channel analytics, ship from store, endless aisle
Source: State of Retailing Online 2013, a Shop.org study conducted by Forrester
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
How did you learn about these special deals [from today’s purchase]?
I visited the retail site
directly
Via email from the
retailer
Thanksgiving Weekend
Pre-Thanksgiving
I visited the retail
I visited the44%
retail site
43%site
44%
44%
directly
directly
Via email37%
from the
Via email
39%from the
39%
37%
retailer
retailer
Cyber Monday)
44%
46%
Through search engines
11%
Through
11% search engines
10%
Through search engines
10%
9%
8%
Someone told me about
it
Someone
10% told me about
9%
it
Someone told me about
11%
10%
it
11%
9%
Other email
8%
8%
Other email
Deals or shopping
website
6% Deals or shopping
6%
website
Retailer's social presence
4%
Retailer's
social presence
4%
2011
7%
9%
Other email
7%
8%
Deals or shopping
website
6%
6%
3%Retailer's social presence
3%
4%
5%
6%
7%
41%
39%
2012
Source: Bizrate Insights/Forrester Holiday Shopping Flash Surveys, Q4 2011 and Q4 2012
This is the low-hanging fruit that still gets ignored
Social is a tool more than a weapon
3. The last-mile obsession
But the smart retailers are “castling”
That’s why “multichannel” still makes the list
Top Digital Initiatives for 2013 (# of Retailers Responding)
Examples/Definitions
Site conversion
31
Mobile and tablet
26
Checkout optimization, alternative payments, user experience,
testing, analytics investments, product detail page enhancement
Mobile-optimized sites, mobile analytics, mobile traffic and
conversion growth
Site redesign
16
Core site “look and feel” overhaul, responsive design changes
International growth
16
Shipments abroad
Multichannel efforts
15
Cross-channel analytics, ship from store, endless aisle
Source: State of Retailing Online 2013, a Shop.org study conducted by Forrester Research
26%
Sweden
16%
26%
Netherlands
UK
United States
Germany
France
27%
Spain
%
= % of respondents who have purchased from online retailers outside the US
%
= % of respondents who have purchased from online retailers outside of Europe
14%
15%
10%
Italy
12%
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)
Agenda
• Recap of 2012
• Implications for 2013 and beyond
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
Future “showrooming” intention
Intent among men 18-34
Less
4%
Less
4%
About the same
More
49%
47%
More
37%
About the same
59%
Base: 187 male smartphone owners
Intent among women 18-34
Less
2%
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
About the same
67%
More
31%
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. .
57%
A price match for the item
A personalized coupon to purchase at that time in
the store
36%
30%
Loyalty points for purchasing from the retailer
29%
Better customer service in the store
The opportunity to have the item shipped to my
home directly
A more generous return policy
23%
19%
Base: 153 smartphone owners who purchased products at other stores or did not purchase
Source: Forrester-Aprimo Showrooming Research, October 2012
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.
Consumer electronics (e.g. digital
cameras, TVs)
Grocery (e.g. food, diapers,
grooming)
39%
37%
33%
Apparel, accessories, footwear
Home improvement (e.g. lumber,
tools)
Furniture (including mattresses)
Movie/event tickets
30%
Toys
18%
17%
Large appliances (e.g.
dishwashers)
14%
14%
Books (including eBooks)
25%
Office products
Cars or auto parts (including tires)
25%
Baby care (e.g. strollers, feeding
bottles)
Computers (including tablets) and
peripherals
24%
Other
Base: 415 smartphone owners who recently researched prices in stores
Source: Forrester-Aprimo Showrooming Research, October 2012
19%
Music/videos (including digital)
31%
27%
20%
Sporting goods (e.g. equipment)
Housewares/small appliances (e.g.
vacuum cleaners, window…
Video games
23%
11%
9%
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
Amazon’s global marketplace revenue dwarfs its profit
Global net income
Estimated marketplace revenue
$4,172
US$MM
$359
2005
$467
$631
2011
Source: Forrester estimates; GMV=gross merchandise value, the total value paid by shoppers in a transaction
“Are you a member of a shipping club or program (i.e.
Amazon Prime, Shoprunner or Williams-Sonoma
Reserve)?”
14%
12%
9%
“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…
66%
The shipping club has not
changed my shopping
behavior with that retailer
2010
2011
2012
I shop less with the
retailer after joining the
shipping club
Source: Bizrate/Forrester Holiday Shopping Flash Surveys, Q4 2010, Q4 2011 and Q4 2012
31%
3%
N: 776 shipping club members
vs. a competitor
“2-day shipping”
6 days away
$20 for next day!
$13
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
2008
Flash sales
2010
Daily deals
2012
Subscriptions
Curated commerce? Distributed commerce?
Crowdsourced commerce?
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
November 2012
Source: Chase Paymentech Solutions
December 2012
Shopper saturation??
Deal fatigue??
% agreeing with statement: “I shopped in stores
less because I shopped online instead.”
70%
72%
49%
2010
2011
Deals are so frequently
offered it's easy to buy
with a sale or
promotion
16%
6%
I will only buy if I have
a deal, sale or
promotion
12%
17%
I love deals, the more
the merrier!
15%
23%
2012
Base: online shoppers during Thanksgiving weekend
2012
2011
Base: pre-Thanksgiving online buyers
Source: Bizrate Insights/Forrester Holiday Shopping Flash Surveys, Q4 2010, Q4 2011 and Q4 2012
+10%
-5%
-8%
“…no one was
hurt, but many
were
disappointed.”
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…
…so long as we see less of this
Sucharita Mulpuru
smulpuru@forrester.com
Twitter: @smulpuru