emarketer webinar: key trends in ecommerce

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Key Trends in Ecommerce

Yory Wurmser

Retail Analyst

January 22, 2015


Agenda

Ecommerce forecast overview

Mobile’s impact on the path to purchase

How is ecommerce integrating with the physical world?

Why is flexibility important for etailers?

How can you personalize ecommerce without seeming

creepy?

Twitter – #eMwebinar


Ecommerce Overview


2015 will be a strong year for US total retail and

ecommerce sales

14.2%

4.3%

Total Retail Ecommerce


Despite a thriving ecommerce market, the US

lags other countries in some key metrics

US

2015 ecommerce sales: $349.1b

2015 sales growth: 14.2%

% of total retail: 7.1%

Digital buyer penetration*: 64.9%

*of population

UK

$93.9b

14.5%

14.4%

74.3%

China

$562.7b

32.0%

12.0%

31.8%



China is the global leader in ecommerce sales;

it will account for

35.4%

of worldwide ecommerce sales in 2015



Mobile:

The New Shopping Hub


Purchases made directly from mobile devices

will remain small: 1.6% of total US retail in 2015

Mcommerce will

grow 32.2% year

over year in 2015

Mcommerce will

account for 22%

of ecommerce

sales in 2015

$4.560 trillion

in offline retail sales

$76.79 billion

in mcommerce sales

$272.77 billion in

other ecommerce sales



The indirect effect of digital is huge; the majority

of ALL US retail sales are digitally influenced

Ecommerce will

influence 55.6%

of total retail

sales in 2015



A quarter of all US retail sales are influenced by

mobile*

$1 trillion +

of retail sales are influenced by mobile

*Deloitte, New Digital Divide 2014

**Deloitte figures projected onto eMarketer retail estimates

**



Majority of US consumers will shop with their

mobile devices in 2015

166.3 million

mobile shoppers

81.2% of digital

shoppers

65.4% of US

population ages

18 and older

Increase

in mobile

shoppers:

+20.4M

in 12 mo.



Smartphone shoppers continue to outnumber

tablet shoppers in the US

121.0 million145.3 million


But US tablet owners are far more likely than US

smartphone owners to buy via their device

Average revenue

per smartphone

visit is roughly

one-third that

of a tablet visit*

*Bloomreach, June 2014



Tablet and smartphone shopping differ

Tablets

At home

Extended research

General buying

Smartphones

Everywhere

Quick research

Last-minute buying


The result: far more tablet sales

68%

of revenue from US mobile sales in 2015 will be on tablets


Mobile devices have pulled even with PCs as

search tools for shoppers

42% of US

mobile users

cite mobile

devices as their

most important

media for finding

information

while shopping



Smartphones have tools for all types of shopping

During holiday 2014 alone:

39% of US smartphone

owners planned to look up

items on search engines

38% expected to take a

picture of a gift to text to a

friend

Only 14% thought they would

use the phone to make a

purchase

Data from Placecast, Nov. 2014

Source: Victorinox via Royaldesign.com


A smartphone can’t open a bottle of wine, but it

can tell you all about it

Images from Google Play


Mobile Is Changing the

Path to Purchase


Ecommerce and physical shopping are less

distinct than they once were

Then Now


Consumers don’t distinguish ecommerce from

brick and mortar; it’s all just shopping


Transformed path to purchase has 3 major

attributes:

Omnichannel

Consumer-defined

Individual



… And each attribute has an implication for

ecommerce

Path to Purchase

Omnichannel

Consumer-defined

individual

Implications for Ecommerce

Integration with physical world

Channel flexibility

Personalization



1. Integration with the

Physical World


More than 80% of US shoppers want the ability

to check for nearby product availability


Google is trying to serve location searches with

Local Inventory Ads (LIAs)

Real-time

synchronization

of inventory still

elusive

Advanced

retailers update

inventory feed

several times

a day

Image source: Google


LIAs still account for a small minority of product

listing ads, but some big brands are using them



Etailers also working to create tools to directly

link physical objects with mcommerce sites

Beacons Visual Search

Image source: Amazon


Beacons: Deployments are growing larger, but

some obstacles remain

Image source: Estimote


A majority of US smartphone owners are aware

of in-store beacons


Visual search: Still early days but starting to

power retailer apps, including Neiman Marcus’

“ From the moment of your inspiration

of seeing something that you like on

someone walking down the street

with a great bag, or in a magazine, or

wherever, you can take a

picture of it on our app, and

[get] immediate gratification.”

—Wanda Gierhart, CMO at Neiman Marcus

Image source: Estimote

Image source: iTunes


Current applications of visual search:

Niche retail sectors: Identifying wine labels or spare

parts limits the library of images that a search tool

needs to identify

Discovery engine: For products based on styles or

designs, a product similar to what a consumer seeks

may suffice

General search: There are no consistently reliable

general visual search tools today, although several

aspire to become one



Channel Flexibility


Consumers want flexibility

“ One of the things we’re always trying to do at Barnes &

Noble is serve our customers in ways in which they want

to be served, in ways in which they’d like to consume

content. In the book world we’re used to dealing with not

just channels but formats, so the point is: We want to

mix and match those channels and formats so

that we can find the right customer experience

where someone’s going to go, ‘Oh, that’s

perfect.’

—Jaime Carey, chief merchandising officer at Barnes & Noble


In-store pickup: Customers can fulfill online

orders themselves

40% of in-store

pickups lead to

additional in-store

purchases (Source: Shopatron)

10% of Target’s

online orders are for

in-store pickup Image source: Target.com



Size of click and collect in the UK points to

possibilities for in-store pickup in the US


Amazon experimenting with new channels to

approximate real-world shopping

Amazon locker

Pop-up store in San

Francisco

Refitted food truck selling

Kindles

Same-day delivery

Source: @emilysteel, twitter via HuffingtonPost


Flexibility extends to fulfillment: More delivery

options

Value of

same-day delivery

shipments in the US

will increase sixfold

in 2015 to more

than $620 million



Online pure plays open physical stores

“[Shoppers] buy almost 75% more if they

come in through the guide shop. The

reason is they’re getting a human

experience. The world has become

lonelier through technology and through

urbanization. Having a great

human one-to-one experience is

unique these days. And for me, it

builds enormous loyalty if I like the

people that I’ve transacted with.”

—Andy Dunn, CEO and founder of Bonobos


3. Personalization


Personalization is both more important and more

attainable

“ The smartphone is just not

going to work the same way

as your stores. You can

show me thousands of

products in your store.

You can only show me

five on the phone.

—Nicolas Franchet, head of retail

and ecommerce global vertical

strategy at Facebook

“ We have more data to

work with and more tools

that know how to take

advantage of that data.

We can do more, so

there’s really no

excuse to just use a

generic approach.”

—Kevin Lindsay, director of

product marketing at Adobe


Consumers rely on site recommendations

50% of US smartphone

users listen to

personalized website

recommendations



A majority of

US consumers

value privacy

over relevance


How can you balance relevance with privacy?

Add a human touch

Focus on loyal customers

Use relevant data



Human touch puts personalization in the context

of a conversation

“ You’re going to see a lot more brands bring more of their

brand into the online experience in very visceral ways.

We’re going to see more chat … and assisted

purchasing with a real human who can help

you figure out what’s best for you through the

computer interface.”

—David Edelman, partner and global co-leader of the digital

marketing and sales practice at McKinsey & Company


Sears offers personalized advice from online

associates

Open to all

members of the

Shop Your Way

loyalty program

Members can earn

commissions from

sales by becoming

a personal

shopper for

friends

Source: www.sears.com


User-generated content also humanizes

ecommerce

Source: www.urbanoutfitters.com


Loyal customers generally trust the retailer

already

“ If someone is already part of your loyalty

program, I think that person is going to be

much more open and receptive to much more

personalized information than someone who’s more of an

anonymous guest.”

—Mike McMurray, VP of business operations at Point Inside


Receiving

personalized

product and

service

experiences is

the top benefit

of joining a

loyalty program


Use data discreetly to minimize privacy

intrusions

“ People don’t need to know we’re sending them a

message because of where they actually are.

We just need to get them the right messages

at the right time in the right place, so it feels

magical.”

—Jennifer Kasper, group vice president for digital/new media and

multicultural marketing at Macy’s


Takeaways

Ecommerce continues to grow rapidly in the US but innovations in

other countries point to areas of future growth

Although mobile commerce directly generates only 1.6% of total US

retail sales, it influences up to a quarter of all sales

The path to purchase is no longer linear

Ecommerce is becoming more connected to the physical world through

local inventory information, beacons and visual search

Consumers expect flexibility in all types of channels: sales, fulfillment

and consumption

Personalization is important but needs to be weighed against privacy

concerns. Retailers can find the balance by adding a human touch,

focusing on loyal customers and by being discreet


Data-Driven Marketing and the Digital Enterprise

Marc Schroeder

INTEGRATED MARKETING CLOUD

Digital Marketing

Campaign Management

Marketing Operations

Marketing Analytics

Customer Data Management

33% OF THE FORTUNE 500

WORK WITH THE TERADATA

MARKETING CLOUD

Looking ahead to 2017

Digital represents a third

of total marketing spend

4 billion smartphones

are internet enabled

worldwide

Mobile commerce

reaches $1 trillion

Today’s major social

networks have all

monetized their user

bases

Several social networks

that haven’t been

created yet have 100+

million users

Big data is a $50B

market in the U.S. alone

Connect with customers

Anticipate Needs

Consistently deliver on

quality

Relationship-based

channels

Predictive analytics

Multichannel metrics

Da

ta-D

rive

n M

ark

etin

g

Data-Driven Marketing Drives Better Experiences

Bra

nd

Lo

ya

lty

A Data-Driven Marketing Approach

conversion path

customer

behavior

affinity

purchase

response

mobile/websocial

customer

attribution

spend

process

segmentatio

ndecision offer

governance

preference

compliance

delivery

demand responsive

THOSE WHO RIDE THE WAVE AND

INNOVATE ALONG THE WAY

WHO WILL DOMINATE THE DIGITAL AGE?


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Yory Wurmser

Key Trends in Ecommerce

Omnichannel Trends 2015: Mobile is the New Retail Hub

Worldwide Retail Ecommerce Sales: eMarketer’s Estimates

and Forecast, 2013-2018

Visual Search & Recognition: On the Cusp of a New Era in

Retail

Product Listing Ads Google Dives into Comparison Shopping

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