market live performance index v9 110409

9VOLUME

The MarketLive Performance Index - Volume 9>> www.marketlive.com

The MarketLive Performance IndexTM

Key Holiday Success Factors

The MarketLive Performance Index - Vol. 9Key Holiday Success Factors

The MarketLive Performance Index represents the pulse of e-retailing. In it, aggregate data from a robust range of merchants is tied to actionable tactics to drive eCommerce success. Using previously undervalued performance metrics, the MarketLive Performance Index provides a holistic view of consumer behavior.

Ken BurkeChairman, Founder, & Chief Evangelist, MarketLive, Inc.

Jaye SullivanSenior eCommerce Strategist, MarketLive, Inc.

Catherine ThorpeResearch Specialist, MarketLive, Inc.

For more information about this report, contact MarketLive, Inc.

www.marketlive.com877.341.5729

2The MarketLive Performance Index Vol. 9: Key Holiday Success Factors © MarketLive, Inc. 2009

The MarketLive Performance Index Vol. 9 Key Holiday Success Factors

As November arrives, many merchants are poised to launch marketing and merchandising strategies for stoking sales during the holiday gifting season – the crucial period that often makes or breaks overall performance for the year.

In 2009, the stakes are even higher than usual. With the eCommerce industry reporting mixed results for the year to date, merchants are keeping their fingers crossed that the pivotal fourth quarter will tip the scales in favor of sales growth. But the outlook is uncertain: According to a recent consumer survey from MarketLive and the eTailing group, 46% of shoppers plan to keep spending flat for the coming season while Forrester Research forecasts fourth quarter holiday sales will be up 8% over 2008.

Data from the MarketLive Performance Index indicates that eCommerce conversion rates dropped by 6.59% from Q2 of this year to Q3, while cart abandonment rose 3.45%. Year over year, conversion slid even further, dropping by 8.6%, while abandonment jumped 4.36%.

But there are glimmers of hope. Visits edged upward year over year – and overall sales increased at a higher rate, by 1.95%. Both quarter over quarter and year over year, the “1-and-out” rate dropped while the engagement rate (or add-to-cart rate) increased – with improvements on both counts of almost 20% year over year. The numbers signal that shoppers haven’t abandoned the online channel. If anything, they’re more attentive than ever; they’re digging deep into sites, studiously using the shopping cart for research – and rewarding sites that deliver relevant products, compelling incentives and strong customer service. .

And looking ahead to the holidays, shoppers are even more bullish about the Web, with 55% of consumers saying they plan to shop online during the season – a 12% increase from 2008, according to

the MarketLive/eTailing group survey. Even better, they’re not solely looking for bargains; fully 88% of survey participants reported they’re willing to pay full price for unique products, excellent service and convenience.

What will it take for you to pay full price for gigfts this holiday season? Check all that apply.

In short, the 2009 holiday season has the potential to reap significant rewards for merchants, despite the challenging economic environment. But the key is converting attention into action. Shoppers may not be looking for rock-bottom prices, but it’s still essential to deliver value – in the form of judicious promotions and stepped-up service. With the holidays fast approaching, fine-tuning sites with the following strategies in mind will be crucial to maximize holiday sales and improve the bottom line.

Strategy #1:Targeted free shipping that won’t break the bank

Without a doubt, free shipping offers are crucial to holiday success. Shipping charges remain the number one barrier to buying online for the holidays, with 62% of consumers saying costs are too high, according to the Marketlive/eTailing Group survey. Similarly, 91% of consumers say free shipping tops the list of promotions that influence them to make purchases online.

But offering free shipping too liberally can destroy margins and set false expectations with consumers that it will always be available, whatever the circumstance. Instead, merchants should tailor free shipping offers to the purchase period and target them further by customer type – thereby delivering relevant offers and customer value.

Quarter Over Quarter

Metric Q2

2009Q3

2009%

DifferenceOverall Conversion Rate 3.64% 3.40% -6.59% Overall Cart Abandonment Rate 60.91% 63.01% 3.45% "1-and-out" - % of all visits 32.24% 30.88% -4.22% Engagement Rate (Visits to Carts) 9.51% 9.66% 1.58%

Year Over Year

Metric Q3

2008Q3

2009%

DifferenceVisits 1.16% Revenue 1.95% Overall Conversion Rate 3.72% 3.40% -8.60% Overall Cart Abandonment Rate 60.38% 63.01% 4.36% "1-and-out" - % of all visits 38.31% 30.88% -19.39% Engagement Rate (Visits to Carts) 8.12% 9.66% 18.97%

88%



aTargeting by purchase period. Research from the MarketLive Performance Index shows that consumers shop their way through the holidays in distinct buying patterns. Tailoring free shipping accordingly makes the offers more relevant and timely, making it easy for shoppers to complete sales in synch with their holiday purchasing schedules.

o In the peak order period, shoppers aren’t looking for deep discounts; they’re buying full price for unique finds or exclusive items as well as hard to find products on their gift list that might be out of stock later. Limit free shipping offers to new and exclusive products at full price, gift sets and other featured products.

o After Thanksgiving and in early December, by contrast, consumer expectations are high for free shipping offers; they know there’s still time for gifts to be delivered and expect to be rewarded for shopping early. Now is the time to offer site-wide free shipping tied to a dollar threshold; lower or eliminate the threshold on key shopping dates, such as Black Friday or Cyber Monday.

o During the “last minute frenzy,” shoppers are rushing to find items for the last names on their gift lists. Consider shipping promotions tied to items that are in-stock with guaranteed delivery by Dec. 25, and offer free upgraded shipping with a higher threshold.

aTargeting by customer segment. In addition to using the calendar to determine what type of free shipping offer to deliver, study customers’ past purchases to deliver even more targeted shipping offers.

o For buyers who frequently purchase full-price products, keep free shipping thresholds high, or offer it tied only to exclusive or new items or gift packs.

o To reward loyal customers with high lifetime value, offer free shipping without restrictions – but limit the offer to those who’ve bought repeatedly within a reasonable timeframe.

o Fulfill the expectations of bargain-hunters with shipping discounts above a moderate threshold. Consider offering free shipping without restrictions – but restrict the promotion to specific dates, such as a peak buying day like Black Friday (the Friday after Thanksgiving). Alternatively, try offering unrestricted free shipping on a specific day or time of day that has traditionally been a low performer, in an effort to encourage purchasing off-peak.

Strategy #2Using customer service to drive sales

Consumers attach real value to customer service. More than one in four shoppers – 28% – are willing to pay full price for the right products coupled with excellent customer service. And responsive merchants whose sites smooth the purchase process are more likely to win powerful word-of-mouth recommendations.

But what aspects of customer service are most important? The MarketLive/eTailing Group survey found that three elements are crucial for converting holiday browsers into buyers.

aFree returns. After free shipping, free returns are the most potent offer a site can make for holiday shoppers, with fully 81% of the MarketLive/eTailing Group survey participants saying it strongly influenced their purchase decisions. In addition to offering returns at no cost:

o Clearly state any deadlines or timeframes for returning goods.

o Specify whether items purchased on-line can be returned in-store.

o For online returns, outline the procedure for shipping returns back for exchange or refund.

aUbiquitous information. Consumers rate the ease of finding contact information on eCommerce sites a top concern, with 70% saying its prominence is the top customer service feature they expect. Another 65% of consumers give importance to the availability of a toll-free number; it should reside in the global header of your site’s navigation.

In general, don’t force shoppers to dig deep into the site to find key information. For the holidays, make sure the following information is never more than a click away throughout the path to purchase:

o Contact informationo Delivery deadlines for each shipping method on offero Shipping costs, including current free shipping promotionso In-store pickup options – a service 60% of shoppers will use

or are considering, according to the MarketLive/eTailing Group survey.

o Product guarantees o Return policieso In-stock status

Nov 1 - 22 Nov. 22 – Dec. 12 Dec. 12-24

Dec. 25 Dec. 25th



In particular, don’t overlook the product page for conveying this crucial information. Shoppers viewing a single item are on the verge of deciding whether to commit to a potential purchase; give them all the information they need right on that page to convince them to proceed to checkout.

This MarketLive Index merchant uses tabs to link to extensive product details, including a size, fit and care guide, above the fold on the product page. The “Ask an Expert” tab lists customer service contact information, including online chat – an options shoppers increasingly use. According to the MarketLive/eTailing Group study, 45% of shoppers rate click-to-chat an important customer service feature, while 41% deem click-to-call technology important.

Finally, when it comes to ubiquitous customer service information, think beyond the site to mobile devices, which one in three shoppers say they’ll use as a holiday shopping resource. Provide a store locator for mobile users that includes links to in-store and online promotions and ship-to-store options.

aPerpetual shopping cart. The ability to view and add to the cart without leaving the current page is key to a smooth browsing and buying experience, with 66% of shoppers saying it’s a top customer service feature.

While it’s probably too late to re-engineer your shopping cart process for the holidays, you can still tweak your site design to give more prominence to the cart link. If a link to the shopping cart isn’t already in your global header, add one there, and consider jazzing up your cart icon with a holiday graphic to catch shoppers’ attention

Sites with a perpetual cart already in place can go one step further, using drop-down displays of cart contents to showcase promotions and alert shoppers who are approaching the free shipping threshold.

ConclusionDelivering value, winning sales

The 2009 holiday season presents both an opportunity and a challenge. With relevant promotions and stellar service, eCommerce merchants can deliver meaningful value to customers – and end the year with strong sales.



a. Comparison DataQuarter Over Quarter

Metric Q2 2009 Q3 2009 % Difference%04.3%46.3etaR noisrevnoC llarevO -6.59%

Overall Cart Abandonment Rate 60.91% 63.01% 3.45%"1-and-out" - % of all visits 32.24% 30.88% -4.22%Engagement Rate (Visits to Carts) 9.51% 9.66% 1.58%

Year Over Year



b. Detailed Data

Conversion Average%04.3etaR noisrevnoC llarevO

Abandonment AverageOverall Cart Abandonment Rate 63.01%Checkout Abandonment Rate 50.46%

Revenue Average37.041$eziS redrO egarevA55.4$tisiV reP euneveR

Engagement AverageEngagement Rate (Visits to Carts) 9.66%"1-and-out" - % of all visits * 30.88%Home page "1-and-out" -

%62.7stisiv lla fo %77.11tisiV reP segaP6.7)setuniM( tisiV reP emiT

%85sweiveR htiw setiS fo %

AverageTraffic

%38.04senignE hcraeS llA%05.92depyT/dekramkooB%76.92rehtO

Availability Average%19.99emitpU egarevA

Average Response Time (Sec.) 2.53

MarketLive Performance Index

Customer Acquisition

Overall (Average All Sites) - Q3 2009



Catalogers - Q3 2009



Overall Cart Abandonment Rate 55.18% 56.62% 2.61%"1-and-out" - % of all visits 30.47% 31.00% 1.74%Engagement Rate (Visits to Carts) 12.89% 11.97% -7.14%

Year Over Year



b. Detailed Data







AverageTraffic








a. Comparison Data




Year Over Year

Metric Q3 2008 Q3 2009 % Difference%34.4%91.4etaR noisrevnoC llarevO 5.73%


b. Detailed Data







AverageTraffic




* “1-and-out” measures the number of single-page visits to the site



Apparel, Footwear, Accesssories - Q3 2009






Year Over Year



b. Detailed Data







AverageTraffic







Brand Manufacturers - Q3 2009



a. Comparison Data




Year Over Year


Overall Cart Abandonment Rate 72.90% 73.75% 1.17%"1-and-out" - % of all visits 35.48% 29.74% -16.18%Engagement Rate (Visits to Carts) 5.47% 5.34% -2.38%

b. Detailed Data







AverageTraffic







Brick-and-Mortar Retailers - Q3 2009



a. Comparison Data




Year Over Year


Overall Cart Abandonment Rate 62.24% 58.98% -5.24%"1-and-out" - % of all visits 38.61% 32.88% -14.84%Engagement Rate (Visits to Carts) 6.37% 10.85% 70.33%

b. Detailed Data







AverageTraffic







Housewares & Furniture - Q3 2009



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