the e-tailing group & neustar webinar
Countdown to a Creative
& Profitable Selling Season
August 17, 2010
The Voice of Cross-Channel Merchandising
Straight talk from “in-the-trenches” online
merchandising experts
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15 years e-commerce consulting
Author, It’s Just Shopping
50+ years traditional retail and
catalog experience
Fortune 500 client projects
ranging from strategic planning,
merchandising, marketing, to
technology development and
messaging
Cross-category projects spanning
specialty retail to departments
Proprietary research studies on
mystery shopping, merchandising
and consumer behavior
Holiday Forecast-Cautious Optimism
• Q1 ecommerce sales grew by 6%1 while forecasts suggest annual
growth of 10% a year through 2013 2
• US retail sales are only poised to see 3-4% gains3
• Consumers will still be frugal this holiday season so deal seekers
will be on the prowl
• Christmas falls on a Saturday so retailers have 29 days to market
post Thanksgiving
• Consumers shop across a range of retailers online from Amazon to
Zappos so competition will remain fierce where multi-channel
merchants will likely have an edge due to their significant
investments
• Today’s consumers are increasingly choosing to both research and
shop via the web so cross-channel investments will continue to pay
off where mobile and social will begin to take hold
1) comScore 2)eMarketer 3)NRF
3
The primary reasons for shopping online are still
convenience and savings
Rate the reasons you buy gifts online from 1-5 with "5" being the most important reason and "1" the
least important. (TOP 2 - VERY TO SOMEWHAT IMPORTANT)
85%
88%
Saving time
82%
84%
Locating hard to find products
82%
83%
Avoid the crowds at the mall
78%
80%
Saving money
Mindset of a
Multichannel Shopper
Study; 2009
77%
Greater selection
83%
76%
Shipping ease
81%
60%
Save on gas by not driving to the store
74%
50%
50%
Finding more personalized gifts
40%
37%
Ability to purchase from recipients pre-established wish list
2009
Online peer recommendations or reviews
Q17
4
38%
32%
2008
the e-tailing group 100 4Q09
1-800-flowers
Aeropostale
Amazon .com
American Girl
Apple
Armani Exchange
Aveda
Bare Necessities
Barnes & Noble
Bass Pro
Bath & Body Works
Bed Bath & Beyond
BEST BUY
Blue Nile
Bluefly
Borders
Brooks Brothers
Brookstone
Buy.com
Cabela’s
Clinique
Coach
Cooking.com
Crate & Barrel
Crutchfield
Diapers.com
King Arthur Flour
Dick’s Sporting Goods Kohl’s
Discovery Channel
L.L. Bean
Drs Foster & Smith
Lamps Plus
Drugstore.com
Lancôme USA
eBags.com
Lands’ End
EBGames
Lego
eToys
Lowes
Famous Footwear
Macy’s
Forever 21
MoMa
Frontgate
New Egg
Gaiam
Nordstrom
Gap
Office Depot
Gardener’s Supply
Orvis
Garnet Hill
Overstock
Giggle
PetSmart
Godiva
Polo
Golfsmith
Pottery Barn
Green Mountain
QVC
Harry & David
Radio Shack
HP Home & Home Office RedEnvelope
HSN
REI
iRobot
Road Runner Sports
J.Crew
Saks Fifth Avenue
JCPenney
Sears
5
Sephora
Shop NBC
Shop PBS
Skecher’s
Solutions
Sony Style
Staples
Sundance
Target
The Avenue
The Children’s Place
The Container Store
The Home Depot
Things Remembered
Toys ‘R Us
Under Armour
Urban Outfitters
Victoria’s Secret
Vitamin Shoppe
Walgreen’s
Wal-Mart
Williams-Sonoma
Wine.com
Zales
Zappos
Employ Essentials
Feature
Gift Certificate/Card
Gift Center
Gift Message Available
Holiday Shipping Deadline
% Penetration
EG100 4Q09
EG100 4Q08
EG100 4Q07
90%
87%
74%
74%
92%
91%
78%
89%
95%
91%
69%
90%
• One-stop shopping for gift giving
• Price-point links
• Recipient segmentation
• Gift card touted as “the gift that always fits”
• Holiday delivery timing
6
Suggestively Sell Your
Products &
Provide Promotional
Offers To Close The Sale
• Selection and value with, “Hundreds of
gifts under $50!” messaging
• Gift card sweepstakes
• Free shipping designated on holiday
décor and specified product
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The Gift Card Should Keep on Giving
• 90% of the EG100 currently making them available on their sites
• Consumers prefer choice relative to type and redemption option
• 90% offer to mail the card
• 60% offer digital delivery (unfortunately)
• Cross-channel redemption optimal so merchants should strive to
accommodate both format and channel flexibility
Feature
Gift Certificate/Card
Mailed Certificates
Electronic Certificates
Redeemable online
Redeemable in store
Ability to Personalize/Customize
% Penetration
EG100 4Q09
EG100 4Q08
EG100 4Q07
90%
90%*
60%*
98%*
91%*
19%*
92%
90%*
53%*
96%*
85%*
N/A
95%
91%*
56%*
94%*
91%*
N/A
*Subset of 100 merchants
N/A = not tracked in that survey edition
8
Personalize and Customize Gift Cards
1 in 5 merchants offered
custom capability in 2009
1/3 of consumers spent
between $50 and $200 total
on gift cards purchased
online-BigResearch-4Q09
•An array of engaging
house designs available
•Design your own card
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Enable Group Gifting
• Best Buy gets creative
with their Pitch In™ Card.
It’s a hybrid between a gift
card and a wish list that
enables group gifting.
• Shoppers simply sign up
for a free card
• Friends/family can add
funds at any time
• Recipient can draw from
for purchases on the site
10
Innovation via Mobile
GiftCards and GiftCoins
Target’s customers can
take advantage of two
more innovative gift card
options:
• Mobile GiftCardssave their gift card to
their phone to check
balances and make instore purchases
• GiftCoins in
denominations of $5 sold
in-store only in bags of
five for $25 making them
ideal as “small gifts,
rewards or prizes.”
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Give Clear Directions for Wish List Use
Relative to value ranking of website
gifting features consumers gave wish
lists 2nd billing behind only gift centers
4Q09 Mystery Shopping penetration
up from 49% to 56%
• One can quickly find, create or update
a wish list
• Tips are wisely shared including crosschannel wish list creation capabilities
• Helpful links are merchandising-driven
beginning with top sellers
• Subsequent options help find the right
product by age and category
12
Showcase Top Sellers & Top Rated
Customer ratings/ reviews were the most important capability for retailers to have on
their websites when it comes to selecting and purchasing product
PowerReviews/e-tailing group 2010 Social
Shopping Study
13
Inspire with Creative Promotions
• Out-of-the box thinking is mandatory to compete with the savviest of
merchants
• Test and Tweak in the 4th Quarter to see what resonates with your
customers
Feature or Functionality
% Penetration
Limited Hour Specials (Lunch Time, 4 Hour)
Internet Only Sales/Specials
In-Store Only Sales/Specials
Online Outlet/Clearance Area
Gift with Purchase
Sweepstakes/Contests
Other (PWP, Other Promotions)
Buy More/Save More
*Subset of 100 merchants
EG100 4Q09
EG100 4Q08
40%
24%*
23%*
83%
46%
42%
36%
27%
42%
19%*
N/A
86%
44%
43%
35%
20%
N/A = not tracked in that survey edition
14
EG 100 4Q07
18%
23%*
N/A
72%
62%
32%
26%
N/A
An Array of Promotional Tactics is Sure to Appeal
Bath&BodyWorks : $10 and Under
Stocking Stuffers + Santa’s Secret Sale
• 6 value-priced products with links to
more
• Prime real estate devoted to holiday
shipping cut-off dates
• Online only sale with rotating offers
• $3 shipping on orders of $50 or more
• Purchase-with-purchase
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Daily Deals Generate Impulse Buying
• Over a 4-day campaign
Discovery Store’s home page
presents 3 deals a day
• Sneak peak of tomorrow’s
deals fosters return visits
• Floorline links facilitate easy
shopping for holiday gifts
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Buy More/Save More – In Time For Christmas
• Bluefly: 12/19/09 email
SAVE Up to 65% + $2 Two-Day
Shipping – In Time for Christmas!
• Guaranteed delivery by Christmas
• 2-day shipping only $2.00
• Enticement of new designer shoes
starting at 20% off
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Optimize Outlets & Clearance Events
• Frontgate: 12/11/09 email
Save up to 50%: All New Holiday
Reductions!
• Over 100 holiday items just added
• Reductions to 50%
• Organized by department
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Free Shipping Likely to Be Shoppers Tactic of Choice
Why don't you to plan to buy more online this holiday season?
Check all that apply.
62%
Shipping charges are too high
78%
20%
16%
Being in the stores is part of the holiday season and puts me in the spirit
I find it easier to research and compare products in physical stores than online
and employees are available if I need assistance
10%
16%
I am not sure what I want to buy and browsing online is too difficult
14%
12%
I buy last minute so the web is not ideal for my shopping behavior
13%
14%
The products I want are typically not in-stock online
7%
13%
The sites do not give enough product information to make me feel comfortable
buying online
Shopping in a store provides social opportunities (i.e. the ability to ask others
around me for their opinion, etc.)
10%
6%
I prefer to pay cash
8%
10%
I don’t like giving my credit card information to retailers/brands online
7%
10%
Mindset of a
Multichannel Shopper
Study; 2009
10%
12%
2009
2008
7%
5%
I find it easier and more convenient to shop in a store during the holidays
Q13
Insert MarketLive Logo
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Tout Free Shipping Benefits
40% of 4Q09 EG100 merchants
offered free shipping tying it to a
dollar threshold (i.e. free shipping on
orders over $100)
47% made that same offer based
on a pre-designated product
selection
• Urban Outfitters Creative Free
Shipping Email
• Free Returns and Exchanges
highlighted
•Stocking Stuffer link for impulse
buying
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Put a Promotional Calendar in Place
Around Key Dates
•
•
•
•
From Black Friday to Cyber Monday
and post-Christmas have a calendar
of promotions ready to put in to
action
Include promotions for early-bird
selling through holiday clearance
sales which are an important source
of year-end traffic
Early January is an opportune time to
showcase new products in hopes of
maintaining margin during this heavy
markdown period
Augment gifting tactics with targeted
onsite placement during the fourthquarter
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4Q09 Top Revenue Days
Date Day
Nov 30 Cyber Monday
Dec 14 Monday
Nov 27 Black Friday
Dec 5 Tuesday
Dec 7 Monday
Dec16 Wednesday
Big Research/Shop.org
Choose Visibility Tactics Based on the
Importance of Gifting to Your Overall Business
Visibility tactics can include any or all of the following:
• Gift certificate positioned in universal navigation and select
other locations
• Top navigation link with holiday color or with holiday design
treatment
• Recommendations of gift product, services or tools from the
home page to the product page or via shopping cart
22
After Early-bird October Tactics, Post-thanksgiving
Cyber Monday Kicks Off The Online Season
• Online-only exclusive deals
• Limited-time offers kick-off a 25-day
customer communication program
• Traditional standards from Buy
More/Save More to take an extra
percentage off one’s total purchase
• Gift center access
23
Reinforce Year-round Opportunities
Secure visibility onsite via navigation and key page placement
24
Add Timely “Last Minute” Messaging from the
Home Page to the Gift Center to Checkout
• Lego’s gift center is a prime example of
how to incorporate this information
• Holiday shipping cut-off dates top the page
• A holiday countdown re-enforces the
urgency to buy now
• A gift card feature provides excellent
suggestive selling for the undecided
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Last Minute
Selling Strategies
Drive Revenues
• Forever 21 aggregates value prices
with gifts under $20
• Message to timely delivery
• Supported with Free standard
shipping
• Free upgrade to expedited shipping
when orders are placed by 12/21
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Extend Shipper Options at the Last Minute
• Crate & Barrel extends shipper options
with a “2-day gift countdown”
• Free shipping, a gift card promotion, and a
link to last minute gifts
• Holiday and gift card links are visible in
seasonal colors
• Annual furniture clearance starting the day
after Christmas noted
• Localized effort with closest store to
encourage shoppers to visit before and after
the holidays
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Plant the Idea of Sending
Gift Cards with
Reminders Throughout
the Site and via Email
• Crutchfield boldly expresses the
need and the solution in this email
sent on 12/23/09 with the subject line,
“There’s still time: e-mail gift cards
still available”
• Execution is clear from the headline
“Need a present? Problem solved”
Headline
• December 24th deadline for e-gift
cards
• Card visual showing available
denominations
•Express shipping cut-off dates
accompany a link for last minute gifts
•Toll-free phone number for personal
touch
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When In Doubt Drive Traffic In-store
42% of US retail sales were accounted for or influenced by the web
Incentivize on total
Purchase
Reinforce rewards
Highlight social links
Forrester Research
29
Include Merchandising in Post-Order
Communications To Boost Year-End Sales
• HSN’s comprehensive onsite order
confirmation includes a right-hand
column with three product suggestions
based on “customers who bought this
item also bought…”
• At the bottom of the page 3 banners
in holiday red/green offer 3 more
suggestive selling messages to
promote a charity tie-in, gift cards, and
a contest.
30
Circle Back with Post-Christmas Cheer
• Reminding recipients to use gift
cards particularly post-Christmas
31
Customer Service Should be a Differentiator
• Strong customer service starts with onsite tools that can be self-service in
nature starting with comprehensive contact information coupled with
complete details delineated by FAQs
• Ensure that your customer service representatives respond swiftly to all
email queries and are well trained in both product knowledge and corporate
protocol
• Customers have heightened expectations that often stem from last minute
purchasing; communicate quickly and clearly when out-of-stock situations
arise
• Deliver in a timely fashion; 4Q09 delivery time on orders placed via
standard delivery was 4.05 days and sophisticated sellers will push this time
32
Customer assistance “top 2 ratings” for importance when
buying gifts online find that accessible contact information
(ideally toll free) and access to one’s cart at all times
smooth shopping experiences
Thinking about a website's customer assistance, rate each feature from 1-5 with "5" being the most
important and "1" the least important when buying gifts online.
(TOP 2 – VERY TO SOMEWHAT IMPORTANT)
70%
Accessible contact information (phone, email)
81%
Perpetual Shopping Cart (ability to add an item to your cart or view cart
contents without leaving the page that you are on)
66%
72%
65%
800 or toll-free telephone #
75%
45%
Click to Chat (live text chat help available)
48%
41%
Click to Call (live phone help available)
Q20
2009
44%
2008
Insert MarketLive Logo
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Supply a stellar service destination
34
Marry Customer Service & Merchandising
• Williams-Sonoma’s order
confirmation
• Clear links to track one’s order
• Visible 800#
• Customer service hours of operation
• All occasion Gift Card touted
• What’s New in Store drives crosschannel traffic and preserves margin
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the e-tailing group Holiday Readiness Checklist
1. Review your current 4Q plan including performance metrics from last holiday season
2. Brainstorm with your entire team and re-prioritize your promotions and gifting
strategies based on current business trends
3. Get creative developing compelling tactics that inspire customers to spend freely
4. Build-out a calendar that includes all key selling dates and associated merchandising
strategies from early-bird to post-holiday
5. Evaluate all potential marketing tools taking advantage of traditional tactics including
email to more forward thinking social strategies that foster reach
6. Test tactics early in order to revisit as the season swings into full gear
7. Focus on having products in-stock and when that is not possible communicate with
customers about back-order status
8. Institute and/or upgrade your gift card offerings to ideally offer them electronically as
well as via mail with redemption in all selling channels
9. Assess if wish list functionality is appropriate for your site and your customers
10. Make delivering best-in-class customer service a priority year-round
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Thank You
• Lauren Freedman
• President, the e-tailing
group
• LF@e-tailing.com
• 773-975-7280