SURVIVING MARKETING MANIA WITH

A SOLID 2012 PLAN

Today‟s Agenda

Engaged Marketing Research

3 Key Topics

o Overall digital spend

o Mobile and social

o Data

Bronto Presentation

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Food for Thought Questions:

25 merchant interviews Where are merchants placing their 2012 marketing bets?

What tactics are ripe for testing and delivering strong results?

Are mobile investments forthcoming and can you compete effectively in

this growing channel?

Will social‟s greatest role center only on branding and engagement?

Are retailers ready for SMS and have they been capturing phone numbers

for future marketing endeavors?

Are retailers more concerned with data overload or the inability to

effectively manipulate?

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We surveyed 110

merchants in 3Q11

Balanced mix of company

annual sales

24%

11%

9%

11%

13%

11%

21%

$1 - 5 million

$6 - 20 million

$21 - 50 million

$51 - 100 million

$101 - 200 million

$201 - 500 million

$501 million or greater

In which of the following ranges do your company’s annual sales fall?

For 46% of those surveyed, online

sales account for more than ½ their

overall business

25%

11%

12%

6%

10%

36%

3-10%

11-20%

21-40%

41 - 50%

51 - 70%

More than 70%

What percent of your overall business do online sales represent?

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Q11-Q12

Merchants are moderately prepared to deploy engaging

messages in a timely fashion

2%

6%

19%

15%

25%

17%

6%

4%

4%

2%

10 - fully prepared

9

8

7

6

5

4

3

2

1 - not at all prepared

Thinking about your company's ability to deploy engaging messages in a timely fashion, on a scale of 1-10 how prepared are you to meet the evolving challenges where 10 is fully

prepared and 1 is not at all prepared?

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Q6

Most rolled a

score of 6

Merchants believe they need to be everywhere given

“pace of change” but this requires resources and

suggests evolving organizational structures

“Before we spend marketing money, we

need someone to „own‟ it; we‟ll then test

small amounts of money in varying places”

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Overall Digital Spend Increases

With Most Individual Marketing

Elements Commensurate

#1

Merchants plan to invest 1/3rd of their holiday/2012

online/cross-channel marketing budgets in paid search

30%

18%

11%

9%

8%

8%

7%

4%

5%

Paid search

Email (house/ prospecting)

SEO/ Natural search

Affiliate marketing

Retargeting/Behavioral targeting

Social strategies (blogs, social networks)

Comparison-shopping engines and marketplaces

SMS/Mobile

Other (catalog, PR, loyalty program, production)

Percentage-wise, how will you likely allocate your holiday and 2012 online/cross-channel marketing budget?

(Total should equal 100% and each box must contain a number even if it is 0%)

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Q2

Retargeting and social strategies make inroads

As a % of marketing budget, merchants plan to tweak

SEO, social, email, & behavioral marketing the most

42%

32%

20%

25%

22%

23%

16%

11%

41%

47%

51%

44%

35%

34%

27%

29%

SEO/Natural Search

Social strategies (blogs, social networks)

Email

Retargeting/Behavioral marketing

Paid search

SMS/Mobile

Affiliate marketing

Comparison-shopping engines and marketplaces

Given the changing dynamics of today’s marketing programs, please assess how you plan to tweak each of these available tactics

as a percent of your overall marketing budget in the coming year. (Top-2 Significant/Slight Increase)

Significant increase

Slight increase

9

Q1

79%

83%

43%

57%

69%

57%

71%

40%

Strong interest in retargeting as it‟s attributable

10

“We are seeing a 5%

clickthrough on retargeting

and remarketing versus

straight advertising at 2%”

Cross-channel efforts change dynamics

“Have had MS barcode tags in catalog

for 2 years; Educating customers

about these tools where they can scan

reviews and access videos and seeing

lots of usage”

11

Local assumes a greater role

“Finesse what we're doing regarding

local search; Google allows us to get

close to retailers and stores where

we are constantly changing

algorithms with feeds of daily

inventory”

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1 in 3 merchants foresee that search engine optimization

and mobile initiatives will generate significant revenue

increases

31%

30%

22%

22%

14%

13%

8%

Search engine optimization

Mobile (mcommerce, iPads, mobile applications)

Email

Paid search

Social media

Affiliate programs

Catalog/Direct mail

In the coming year what changes do you foresee for the revenue that each of these tactics will generate via your ecommerce/cross-channel initiatives?

(Top-1 Significant Increase)

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Q3

Mobile And Social

Dominate Merchant

Thinking While SMS

Sees Limited

Traction

#2

While Facebook and Twitter are in place, merchants are

looking to expand their mobile and social capabilities

over the next 12 months

87%

82%

29%

38%

19%

14%

7%

6%

8%

8%

42%

31%

27%

29%

29%

26%

Facebook fan page and/or shopping

Twitter publishing (monitor, respond to and post tweets)

Mcommerce site

Bar codes or QR codes at retail, via catalog or in traditional advertising

Mobile application

Collecting SMS opt-in from customers in all channels

Texting to send out marketing messages

Texting to send out transactional support messages (confirmations, order status, etc.)

Which mobile and/or social capabilities does your company employ or plan to employ?

Employ Today

Plan to employ in the next 12 months

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Q7

95%

46%

71%

69%

43%

46%

32%

90%

Mobile dominates discussion but currently a work in progress

EVALUATION MODE

“Come up with mobile plan that makes sense as more traffic

is coming from mobile devices; last year (app)s were trendy

now mcommerce; wait until technology is consolidated

more and invest smartly”

INVESTING/ENHANCING

“Our customers are taking advantage of mobile doing

research similar to how they use the site (QR codes, price

checking, reviews, checking on inventory in the stores)”

16

Traffic growth and conversion among customers

“Addressing the design of our emails

to ensure that they work well on a

mobile device with many customers

viewing email on smartphones”

17

Apps take center stage

“Moving into new channels;

mobile/mcommerce; apps will

be beneficial for brand; also

exploring how to leverage

mobile to connect customers to

our stores”

18

Social is at a crossroads for many retailers

EARLY DAYS OF SOCIAL

“Customers don't have a game plan; we don't

know what they expect or will reach to do. If they

like you, will fan you; customers accept new

communication and it‟s part of their diligence

(social, ratings, talk to friends)”

BRANDING

“Participating every way possible to be relevant

to what customers are doing”

19

Facebook is a 24x7 brand play

20

“Facebook is our biggest

face to the brand;

opportunity to engage with

people & inexpensive to post

a message”

Everyone has a megaphone so listening and

learning is important

“Allocating $ into brand advertising that

includes social media; customer can and

will figure out a way to talk about you;

exploring where and why they talk about

us and participate in conversations; worth

it to engage but hard to measure.”

21

Embrace active customers

“Customers are completely engaged; not

shopping but good place for conversations; it's

like a focus group everyday; very successful;

spend 1 hour on FB and 1 hour on Twitter at

virtually no cost”

22

Testing to gauge consumer interest

important in early stages

“Don't have a goal I'm meeting; way to be

seen as an experiment where sales will

come; want to build relationships; targeting

influencers not just 1-time shopper”

23

To date just 21% of merchants are collecting phone

numbers for future marketing text alerts

79%

15%

3% 3%

None 1-10% 11-20% >20%

What percent of your house list has opted in to receive SMS/text alerts for marketing purposes today?

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Q8

For those collecting mobile numbers, the list size is typically less than 10% of house file

Merchants are beginning to capture phone numbers to

grow their files – primarily during call center and online

transactions despite limited SMS usage

13%

10%

3%

5%

1%

15%

16%

12%

9%

9%

Capturing phone numbers during call center transaction

Capturing phone numbers during online transaction

Capturing phone numbers during retail transaction

Executing email marketing campaigns with SMS opt-in objectives

Executing traditional marketing or advertising with SMS opt-in objectives

Regarding the tactics you are employing to grow your SMS file, please share how important each of these phone number capturing

tactics have been in building your house file. (Top-2 Critical/Very Important)

Critical

Very important

25

Q10

28%

26%

15%

14%

10%

SMS capture starts online

26

“Asking for softly in email

preference center (i.e. “If we do

this in future would you be

interested is our approach

today?”

Connecting channels via SMS sparks interest

27

“Testing SMS this year tying

into store traffic; incentivizing

those in store; opt into email or

sign up from SMS; coupons via

SMS & check in at 4square”

Data Will Determine Success

#3

There is room for improvement when it comes to

accessing the right data to successfully market to

customers and prospects

10%

6%

9%

4%

39%

37%

30%

24%

Existing data allows us to effectively segment our customers

Current data is delivered in a digestible format

Our data is very accessible for both associates and senior management

We currently receive a 360-degree view of our customer’s engagement with us

When thinking about your ability to access the right data to successfully market to customers and prospects, please indicate your level of agreement on the following aspects.

Strongly Agree

Somewhat Agree

29

Q4

49%

43%

39%

28%

Preparedness begins with data, analytics and people

30

Q5

13%

13%

11%

10%

8%

8%

6%

6%

6%

5%

4%

4%

3%

2%

1%

consumer behavior insights/CRM/data

reporting, analytics

SEO, search - paid, local

resources: staffing

resources: funding

segmentation, targeting

cross-channel integration, strategy

social

other, unknown

mobile

platform optimization

email

catalogs, print

pr, branding

promotional - free shipping

If you could do one thing to elevate your current marketing strategy what would it be and why? (open ended question)

The availability and immediacy of data drives

need for real-time decision-making

31

“Working on attribution and beefing up

analytics; what works/what doesn't”

“Trying to build perfect machine that

can crunch large amounts of data”

Merchants aspire to a 360-degree view of

their customers but have work to get there

32

“Need to see all engagements

(social + web browsing,

ratings/reviews; in-store seminars) in

order to make the right marketing

decision as this is a leading indicator

of purchase intent”

Merchants rethink customer influence

33

“Understanding customers as 99/100

brands measure value of customer

circle around ltv of customer while we

are now layering on social influence

on top of purchase”

Better attribution is essential to drive market

strategy

34

“Need to move beyond

assumptions to determine how

we allocate $ to channels where

sales activity is taking place as not

always directly attributable”

Loyalty programs have more meaning than

ever before

35

“Investing in loyalty

program; tested end of

month in select markets-

our customers deserve it”

“Loyalty program (1.5 million

people) allows us to close

the loop; the level of

information is very powerful

from most people”

Q/A

Lauren Freedman

LF@e-tailing.com

773-975-7280

www.e-tailing.com

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