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©2011 eMarketer Inc. J U N E 2 1, 2 0 1 2 Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping Jeffrey Grau Principal Analyst Sponsored by:

eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

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Join eMarketer Principal Analyst Jeffrey Grau as he highlights eMarketer’s new US retail ecommerce forecast, predicting how this channel will develop over the next five years and discussing the implications for retailers.

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Page 1: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2011 eMarketer Inc.

J U N E 2 1, 2 0 1 2

Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

Jeffrey GrauPrincipal Analyst

Sponsored by:

Page 2: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Questions we will answer today

What is the outlook for online retail sales?Which product categories have the most

growth potential?What mega-trends will drive ecommerce

growth?Who shops online?Q & A

Twitter – #eMwebinar

Page 3: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

eMarketer forecasts double-digit growth rates for ecommerce sales through 2016

Page 4: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Ecommerce has steadily outperformed overall retail sales growth

Page 5: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Ecommerce’s share of total retail sales has grown—and will continue to do so

Page 6: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Consumers are shifting purchases from stores to the web

Break Out by Income (2012)

Annual Income Purchase more$100,000> 63%<$100,000 44%

Source: Deloitte, as cited in Internet Retailer, April 6, 2012

Twitter – #eMwebinar

Page 7: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Let’s compare analysts’ forecasts

BenchmarksUS DoC

comScore

Page 8: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Is eMarketer bullish or are other analysts being too conservative?

Page 9: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

“Chronically over the course of the 15 year history of ecommerce, the growth of the ecommerce market has been underestimated.” —Eric Best, CEO of Mercent, in an interview with eMarketer, February 14, 2012

Analysts tend to underestimate ecommerce growth rates

Page 10: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

How are online sales doing thus far in 2012?

Online sales were strong in Q1 2012

Page 11: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Keep in mind that the internet is much more than a sales channelIt strongly influences store sales

Share by Segment, 2012

Category ShareOnline sale 7.2%Web-influenced offline sales 38.2%Web-influenced sales 45.4%

Non web-influenced offline sales 54.6%

Source: Forrester Research, as cited by Business Insider, June 12, 2012

Page 12: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Questions we will answer today

What is the outlook for online retail sales?Which product categories have the most

growth potential?What mega-trends will drive ecommerce

growth?Who shops online?Q & A

Twitter – #eMwebinar

Page 13: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Ecommerce’s share of total retail sales is growingIn 2011, the internet accounted for 6.6% of total retail sales

Page 14: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

Ecommerce’s share of total retail sales varies greatly by category

Page 15: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Consumer packaged goods (CPG) is an online sales category with high potential

Page 16: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Electronics and apparel dominate ecommerce—and will continue to do so

Page 17: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Together they will account for 40% of retail ecommerce sales in 2012

Page 18: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

What are the fastest growing categories?

13.3%

Twitter – #eMwebinar

Page 19: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Questions we will answer today

What is the outlook for online retail sales?Which product categories have the most

growth potential?What mega-trends will drive ecommerce

growth?Who shops online?Q & A

Page 20: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

1. Portable devices power anytime, anywhere commerce

Smartphones satisfy immediate product

needs

Tablets spur product discovery and

impulse buying

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©2012 eMarketer Inc.

Smartphones promote showrooming by bringing the internet to the store

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©2012 eMarketer Inc.

Showrooming diverts sales from stores to the web

6 in 10 ‘showroomers’ said they originally planned to purchase at the store but changed their mind while there and instead bought online

Source: comScore, “State of the US Online Retail Economy in Q1 2012,” May 2012

Page 23: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Tablets help people discover products they did not know they wanted

“Our general belief is that

tablet sales are significantly additive.”

Source: eMarketer interview, April 2012Paul Cousineau

VP, Mobile ProductsWal-Mart Global Ecommerce

Matt JonesGeneral Manager of Mobile Home Depot

“With the iPad app, we focus on how we

provide this discovery experience.”

Source: eMarketer interview, May 2012

Yonatan FeldmanVP, Mobile & Global EngineeringGilt Groupe

“I would say that the tablet is creating more incremental traffic

than it is taking it away or shifting.”

Source: eMarketer interview, April 2012

Page 24: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Tablet commerce is having a noticeable impact on web sales

“We are definitely seeing continual growth of people using tablets—mobile

is our fastest growing channel. We expect traffic on tablets to continue to

increase.”Source: eMarketer interview, May 2012

“We do more than 20% of our revenue on mobile, and tablets make up about 10%

of our revenue.”

Source: eMarketer interview, May 2012 “Tablet commerce

is certainly growing, but it’s still

small—in the low double-digits.”

Source: eMarketer interview, May 2012

Yonatan FeldmanVP, Mobile & Global EngineeringGilt Groupe

Julie BornsteinSVPSephora Direct

Ed DeutscherOperating VP, Digital Commerce and Emerging PlatformsHSN

Page 25: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

2. Ecommerce is helping consumers make strong connections with products

Personalized recommendations

Curated selection

Twitter – #eMwebinar

Page 26: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Personalization brings products of interest to the consumer’s attention

75% of the videos people watch on Netflix are the result of seeing one of its recommendations

Shopycat, a social gift-finding Facebook app that came out of Walmart Labs, aims to convert consumer insights captured via social media into practical shopping tips

eBay acquired recommendation engine Hunch’s prediction technology to surface more quality recommendations from eBay’s “long tail” of product listings.

The Container Store’s conversion rates are about three times higher for customers who interact with recommendations than for a regular visit to the same page

Present

Future

Page 27: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Curated sites harness the power of social recommendations

32% of online buyers have made a purchase as a result of seeing an image on a social image-sharing site like Pinterest or Polyvore

Page 28: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Pinterest has become a powerful source of traffic during its short life

Martine ReardonChief Marketing OfficerMacy’s Inc.

“We just launched on Pinterest probably two

months ago, and we are seeing a huge response.”

Source: eMarketer interview, May 2012

Brian KalmaChief Experience OfficerGemvara

In the past month, 3.36% of Gemvara’s traffic came directly from Pinterest, outpacing Twitter, Google+ and every other social network save

Facebook, which accounted for 7.38%.”

Source: Internet Retailer, February 2012

“Pinterest is a growing source of traffic for

Etsy.”

Source: AdAgeDigital, December 2011

Adam BrownPress ManagerEtsy

Page 29: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Questions we will answer today

What is the outlook for online retail sales?Which product categories have the most

growth potential?What mega-trends will drive ecommerce

growth?Who shops online?Q & A

Page 30: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Online shoppers and buyers defined

Twitter – #eMwebinar

Page 31: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Most people who want to buy online are already doing so

Page 32: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Internet users across all age groups are buying online

Page 33: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Older consumers will account for a greater share of online buyers

Page 34: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Online buying has become a mainstream activity, where age, race and income matter less

Page 35: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Lower-income shoppers now account for a quarter of online sales

Page 36: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Millennials use new shopping channels

Page 37: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Takeaways

Ecommerce’s share of total retail sales could easily approach 15% by 2020.

Key growth engines: o Low prices, convenience and broad selection

onlineo Mobile and tablet commerceo Personalization and curated websiteso CPGo Mainstreaming of online buying

Twitter – #eMwebinar

Page 38: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

Drive Conversions and Revenue

Built for commerce: Conversions, transactions and revenue Highly personal, relevant email and cross-channel marketing Sophisticated made simple

Susan Wall | VP, Marketing

Page 39: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

Abandoned Carts

From Abandon to Conversion: Why Shoppers Abandon Carts and What Merchants Can Do About It

• Top reasons shoppers abandon online purchases

• Analysis of post-abandonment email strategies

• Recommendations for maximizing conversions

bronto.com/resources

Page 40: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

Triggered Messages

Automate, Increase Engagement & Drive Revenue with Triggered Messages

• Content and creative best practices

• 7 Triggered message program examples

• A guide to defining business rules

bronto.com/resources

Page 41: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

Cross-Channel Marketing

Taking A ‘Crawl, Walk, Run’ Approach to Cross-Channel Marketing

• How retailers build long-lasting relationships with shoppers.

• How SMS can get shoppers to complete purchases.

bronto.com/resources

Page 42: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

Tips & Tricks

• Expertise from the field

• White papers

• Customer success stories

• Blog posts

bronto.com/resources

Page 43: eMarketer Webinar: Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

©2012 eMarketer Inc.

Q&A SessionRetail Ecommerce

Forecast—Challenging Economy Drives Online

Shopping

Sponsored by:

Brontobronto.com/resources

You will receive an email tomorrow with a link to

view the deck and webinar recording.

Jeffrey Grau

How Retailers Are Leveraging 'Big Data' to Personalize Ecommerce

US Retail Ecommerce Forecast: Entering the Age of Omnichannel Retailing

Curated Ecommerce: How Less Can Be More for Shoppers

Globalizing Ecommerce: What Retailers Need to Know About Entering Foreign Markets

Learn more about digital advertising with an eMarketer corporate subscription

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