the roi of christmas present capturing your fair share of consumer holiday spending during these...

1

The ROI of Christmas PresentCapturing your fair share of consumer holiday spending

during these challenging times

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METHODOLOGY & DEMOGRAPHICS

2

Online questionnaire completed September-October 2009by 1,020 adults (49% male / 51% female) who have shopped

online four times or more in the last year, spending $500+


Demographics

3

Under $25,000

$25,000-$35,000

$35,001-$50,000

$50,001-$75,000

$75,001-$100,000

More than $100,000

Prefer not to respond

4%

6%

12%

23%

21%

30%

4%

Which of the following best represents your combined annual household income before

taxes?

High school graduate

Some college, but no degree

College graduate

Some graduate school

Post-graduate degree

8%

21%

37%

8%

26%

What is the highest level of education thatyou have completed to date?

None

1

2

3

4 or more

66%

13%

14%

4%

3%

How many children 18 years of age or younger do you have living at home with you?

25-34

35-44

45-54

55-64

65+

16%

24%

24%

20%

16%

What is your age?


SHOPPING ONLINE

4


Topline Findings

5

• Cautious shoppers project behavior consistent with last year; spending is flat

• Purchasing gifts online is part of the customer consciousness where the web will garner more holiday buying than other channels as well as increased share-of- wallet

• Securing hard to find product, convenience, and customer service can trigger full price purchasing

• Free shipping and free returns are top influencers in terms of merchant selection

• Profitably maintaining in-stock status will be integral to success and averting abandonment to competitors

• One stop gift centers and wishlists support consumers’ desire for convenience

• Email is desired on a weekly basis with favored offers including free shipping, sales, and coupons

• Mobile and social usage show promising signs of influencing shoppers this holiday season


Despite economic uncertainty the good news is that overall holiday spending should equal last year

6

Q6

Spending significantly more Spending somewhat more Spending about the same Spending somewhat less Spending significantly less

2%4%

46%

33%

15%

1%3%

44%

36%

16%

How do you see the current economic climate impacting your overall holiday spending; will you be spending more, less or about the same amount than last year on holiday gifts?

2009 2008


48% intend to purchase between 6-15 gifts,on par with last year (47%)

7

1-5 6-10 11-15 16-20 More than 21

18%

27%

21%

16%18%18%

26%

21%

17%18%

14%16%

17%

13%

40%

How many gifts do you intend to purchaseover the holiday season? (Select one)

2009 2008 2007Q4


Holiday budgets see little change with 43%planning to spend $301-$800 on

family and friends, as they did last year

8

Q5

Under $100 $100-$300 $301-$500 $501-$800 $801-$1,000 $1,001-$2,500 $2,501 or more

5%

13%

23%

20%

16% 17%

6%5%

11%

22% 21%

18% 18%

5%

12%

21%23%

18%

12% 11%

3%

In which range does your total holiday budget for friends and family fall?

2009 2008 2007


88% of shoppers are willing to pay full pricefor the right products and good service

9

Q7

Hard to find product that a friend or family member has requested

Run out of time and just have to get people taken care of on my shopping list

Excellent customer experience coupled with the right products

Hot product that is likely in limited supply

Will not pay full price

57%

28%

28%

26%

12%

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

Insert MarketLive Logo10

Position “Value-oriented” Product


Visual Inspiration Goes a Long Way


Tout the Favorites

12th Annual EG Mystery Shopping, 2008


Take Advantage of Endorsements

12th Annual EG Mystery Shopping, 2008


71% expect to complete most of their holiday shopping in November through early December

14

Q8

October or earlier

November before Thanksgiving (11/26)

The week after Thanksgiving

Early December (12/1-12/15)

Mid December

Weekend before Christmas

A few days before Christmas

Christmas Eve (12/24)

7%

23%

14%

34%

15%

3%

3%

1%

When do you expect to completemost of your holiday purchases?


It’s Never Too Early to Get Started


Play Up Key Holidays


55% of surveyed shoppers plan to do theirholiday shopping online this year, up from 49% LY

17

Q12

On the Internet In stores Via catalogs Via TV or Other

55%

37%

7%

1%

49%

44%

6%

1%

22%

70%

5%3%

What percent of your overall holiday gift buying will you do in each of the following ways? If you will not be shopping in any one of these channels, please enter 0. (Must total 100%)

2009 2008 2007


The online channel also continues to gainshare-of-wallet as 26% vs. 21% last year

plan to purchase more gifts via the Internet

18

Q11

Significantly more Somewhat more About the same Somewhat less Significantly less

8%

18%

66%

5% 3%4%

17%

70%

5% 4%3%

14%

74%

4% 5%

Do you plan to purchase more gifts online this yearthan you purchased online last year?

2009 2008 2007


Books, clothing, music, gift certificates, toys, andconsumer electronics are the top product categories

shoppers are likely to purchase online

19

Q15

Books/Magazines

Clothing and accessories (men’s, women’s, kid’s)

Music/DVD/Videos

Gift Card/Certificates

Toys, Video games

Consumer electronics

Food

Computer hardware and software

Crafts/Hobbies

Gifts and collectable/Flowers

Jewelry/watches

Health and beauty items

Tickets (movies, concerts, theatre)

Sporting goods

Pet supplies

Furniture, home and garden

Don't know/unsure

Luxury Items

55%

52%

46%

41%

37%

37%

27%

23%

21%

18%

18%

17%

17%

15%

12%

10%

10%

6%

58%

53%

49%

46%

44%

36%

29%

26%

23%

21%

18%

18%

18%

14%

13%

10%

10%

0%

In which categories will you likely purchase gifts online?Select all that apply.

20082009


Gift cards/certificates continue to be a good solution for 78%of shoppers vs. 76% LY; accounting for a varied percent

of online holiday purchases

20

Q16

None 1%-10% 11%-25% 26%-50% 51%-75% 76%-99% All

22%

30%

26%

14%

5%

2%1%

24%

29%

26%

16%

4%

1%0%

What percent of your online holiday purchases will be spent on gift cards/certificates? (select one)

2009 2008


2121

Gift Cards Play Well for Last Minute

Insert MarketLive Logo 22

INFLUENCERS


The primary reasons for shopping online are stillconvenience and savings, but shoppers are also ratingtools like wish lists and reviews increasingly important

23

Q17

Saving time

Locating hard to find products

Avoid the crowds at the mall

Saving money

Greater selection

Shipping ease

Save on gas by not driving to the store

Finding more personalized gifts

Ability to purchase from recipients pre-established wish list

Online peer recommendations or reviews

85%

82%

82%

78%

77%

76%

60%

50%

40%

38%

88%

84%

83%

80%

83%

81%

74%

50%

37%

32%

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)

20082009


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Creatively Message to EngageCustomers Around Convenience

Think Holistically with Promotional OffersOptimize tactics from outlets to GWPS and contests

and integrate into the overall experience


25


Time Savings Should be Top-of-mind

26


27

Embrace B2B and B2C Customers


While high shipping charges remain the #1 reasonshoppers will not buy more online,

the store experience and in-stock status gain ground

28

Q13

Shipping charges are too high

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

I am not sure what I want to buy and browsing online is too difficult

I buy last minute so the web is not ideal for my shopping behavior

The products I want are typically not in-stock online

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.)

I prefer to pay cash

I don’t like giving my credit card information to retailers/brands online

I find it easier and more convenient to shop in a store during the holidays

62%

20%

16%

14%

13%

13%

10%

10%

8%

7%

7%

78%

16%

10%

12%

14%

7%

12%

6%

10%

10%

5%

Why don't you to plan to buy more online this holiday season?Check all that apply.

2008

2009


Some shoppers remain loyal but most will be lost tocompetitors’ websites or retail stores when they encounter

out of stock products this holiday season

29

Q22

Go to a competitor's website for the same/similar product

Check back later to see if it's in stock

Sign up for an alert to be notified when the product is back in stock

Buy an alternative/substitute product on that site

Go to the merchant's retail location to see if they have it there

Go to a competitor's retail location to find the product

70%

49%

41%

37%

37%

30%

When you do encounter products out of stock this holiday season, what will typically be your course of action? Check all that apply.


merchandising > inventory/backorders Feature: sign up for back-in stock e-mails


Researching gifts online continues to be animportant activity for 3 out of 4 shoppers

31

Q9

Yes No Don't know/Unsure

73%

7%

20%

72%

6%

22%

Do you plan to research any products online prior to purchasing them as gifts?

2009 2008


60% of shoppers are either undecided or plan topick up holiday gifts purchased online in-store,

as this is often a last minute convenience

32

Q14

Yes No Don't know/Unsure

18%

40%42%

16%

38%

46%

9%

44%47%

Do you intend to make any purchases onlinefor pickup in-store?

2009 2008 2007


Flexibility Extends Customer AppealVisual prompting and usability impact performance

Multiple ship to Shop and hold


Influencers center on promotions per this summary of “top 2” feature ratings for importance when

buying gifts online

34

Q19-21

TOP 2 - VERY TO SOMEWHAT IMPORTANT 2009 2008 2007 TOOL SET

Free Shipping w ith Purchase 91% 95% 87% Promotional

Free Returns 81% 82% NA Promotional

Sales and Specials 79% 83% 76% Promotional

Coupons and/or Rebates available for $ or % off 72% 74% 76% Promotional

Accessible contact information (phone, email) 70% 81% 76% Customer Service

% off Products or Categories 70% 72% NA Promotional

Perpetual Shopping Cart 66% 72% 69% Customer Service

800 or toll-free telephone # 65% 75% 77% Customer Service

Deals that are available for a limited time only 63% 62% 57% Promotional

Free Gift w ith Purchase offer 57% 58% 62% Promotional

Buy More, Save More 52% 48% na Promotional

Gift Center 49% 30% 31% Gifting

Wish List 48% 35% 31% Gifting

Gift Certificate/Gift Card availability 46% 55% 47% Gifting

Click to Chat (live text chat help available) 45% 48% NA Customer Service

Click to Call (live phone help available) 41% 44% NA Customer Service

Gift Suggestions for when I don’t know what to buy 37% 35% 30% Gifting

Gift Wrap/Box services 36% 29% 20% Gifting

Ability to Store Addresses of friends and family to access when sending gifts

34% 34% 27% Gifting

Multiple Ship-to Addresses can be sent in a single checkout 31% 53% 41% Gifting

Ability to Hold Gifts to ship later 27% 37% 30% Gifting

Option to include a Gift Message in the shopping cart 26% 55% 39% Gifting

Features rated 1-5 as the most important or influential when buying gifts online. (1 = most and 5 = least)


Free shipping (91%) and free returns (81%) are thepromotional features with the highest “top 2” ratings

for their influence in making a purchase

35

Q21

Free Shipping with Purchase

Free Returns

Sales and Specials

Coupons and/or Rebates available for $ or % off

% off Products or Categories

Deals that are available for a limited time only

Free Gift with Purchase offer

Buy More, Save More

91%

81%

79%

72%

70%

63%

57%

52%

95%

82%

83%

74%

72%

62%

58%

48%

Now, thinking about a website's promotional features, rate each feature from 1-5 with "5" being the most influential in making a purchase and "1" the least influential when buying gifts online.

TOP 2 - VERY TO SOMEWHAT IMPORTANT

2008 2009


Monitor Free Shipping Categorically and Industry-wide


Create Impulse Buys ThroughLimited Time Only Execution


Among gifting tools, gift centers (49% vs. 30%) andwish lists (48% vs. 35%) see the greatest “top 2” rating increase

for their importance when buying gifts online

38

Q19

Gift Center that aggregates all of a site’s gift offering and service

Wish List to find out what others say they want

Gift Certificate/Gift Card availability

Gift Suggestions for when I don’t know what to buy

Gift Wrap/Box services

Ability to Store Addresses of friends and family to access when sending gifts

Multiple Ship-to Addresses can be sent in a single checkout

Ability to Hold Gifts to ship later

Option to include a Gift Message in the shopping cart

49%

48%

46%

37%

36%

34%

31%

27%

26%

30%

35%

55%

35%

29%

34%

53%

37%

55%

Thinking about a website's gifting tools, rate each feature from 1-5 with "5" being the most im-portant and "1" the least important when buying gifts online (TOP 2 – VERY TO SOMEWHAT IM-

PORTANT).

2008 2009


Deploy a Best-in-Class Destination


30% have shopped online using someone’swish list 4 or more times vs. 24% LY

40

Q18

Never Once Twice Three times Four or more times

34%

10%

17%

9%

30%

39%

9%

18%

10%

24%

44%

13%

18%

9%

16%

How many times have you shopped online from someone else's wish list? (select one)

2009 2008 2007


Facilitate Consumer Participationmore consumers conveniently shop online

from someone else’s wish list 3 or more times: 34% ty vs. 25% ly

Source: EG Mindset of a Multi-channel Customer Survey, 2008


Customer assistance “top 2 ratings” for importance whenbuying gifts online find that accessible contact information

(ideally toll free) and access to one’s cart at all timessmooth shopping experiences

42

Q20

Accessible contact information (phone, email)

Perpetual Shopping Cart (ability to add an item to your cart or view cart contents without leaving the page that you are on)

800 or toll-free telephone #

Click to Chat (live text chat help available)

Click to Call (live phone help available)

70%

66%

65%

45%

41%

81%

72%

75%

48%

44%

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)

2008 2009


Guarantees Combat Consumer Fear


Keep Customers Informed Along the Way 89% of EG100 merchants include holiday shipping deadlines onsite

Source: the e-tailing group 12th Annual Mystery Shopping Study, 4Q 2008

44


EMAIL, MOBILE AND SOCIAL SITE SHOPPING

45


43% of shoppers who have opted in prefer toreceive emails on a weekly basis

46

Q23 Daily 2-6 times per week Weekly Twice a month Monthly Quarterly Seasonally

9%11%

43%

19%

11%

2%

5%

What is the ideal frequency you would like to receive email from retailers with whom you have opted in?


Free shipping (91%) and sales/markdowns (89%) are thetypes of email content that shoppers will be most likely

to respond to from their favorite retailers

47

Q24

Free shipping offers

Sales and markdowns

Coupons

Members-only or loyalty/rewards program offers

Gift-with-purchase

In-store promotions

New or hot products

Friends and family promotions

91%

89%

69%

53%

52%

44%

39%

34%

Please rank the types of email content that you would be most likely to respond to from your favorite retailers this holiday season where "8" is most desirable and "1" is least desirable. Check

all that apply. (TOP 3 RANKING)


Creative Execution Counts


1 in 3 shoppers plans to use a mobile phone for shoppingrelated purposes this holiday season, primarily to look up

merchant (18%) or competitive (18%) pricing

49

Q25

I don't look at mobile messaging

Look up competitive prices

Look up online price

Evaluate shipping costs

Access retailer information (locations, hours, etc.)

Get a merchant’s current coupons

Look up peer recommendations/reviews

67%

18%

18%

12%

11%

9%

7%

While shopping in stores, how likely would you be to use yourmobile phone this holiday season to do any of the following?

Check all that apply.


Extend AccessibilityTest tools to better meet the needs of today’s mobile consumer

50


This holiday season social networking sites willinfluence shopping behavior for 37% of online shoppers vs.

24% LY, but less than 1 in 5 will make a purchase as a result

51

Q26

I never consider these sites when it comes to shopping

I will spend significant time on these sites but rarely or never make a purchase as a result

I will spend limited time on these sites and sometimes make a purchase as a result

I will spend limited time on these sites but rarely or never make a purchase as a result

I will spend significant time on these sites and sometimes make a purchase as a result

63%

11%

9%

9%

8%

76%

5%

6%

9%

4%

From a purchasing perspective this holiday season, which of the following best describes the likeli -hood of social networking sites (i.e. Facebook, Twitter, You Tube) to influence your shopping behav -

ior?

2008 2009


PERSONAL POST-HOLIDAY SPENDING

52


More of the same is foreseen post-holiday too with 50%likely to spend the same as last year; although 20% vs. 15% LY

do plan to spend more, taking advantage of the sales

53

Q27

I expect to spend significantly more taking advantage of all of the sales

I expect to spend somewhat more taking advantage of some of the sales

I will likely spend the same as last year

I will be spending somewhat less as my overall spending for the year will be cutback

I will be spending significantly less as my overall spending for the year will be down

7%

13%

50%

14%

16%

4%

11%

49%

21%

15%

Which of one the following best describes your likely post-holiday and New Year’s shopping behavior?

2008 2009


5454

Be Ready for Post-Christmas Opportunities


39% plan to redeem holiday gift cards throughout the year vs. 55% LY; due to economic uncertainties many more are unsureor do not expect to receive gift cards this year (23% vs. 4% LY)

55

Q28

Immediately

December during the holiday season or between Christmas and New Year’s Eve

Early January

Throughout the year

Unsure or do not expect to receive any gift cards over the holidays

10%

10%

18%

39%

23%

10%

10%

21%

55%

4%

When do you intend to spend the gift cardsyou receive over the holidays?

2008 2009


Ensure Visibility Onsite and Utilize Emailto Drive Store Visits


EG Checklist for Pre/Post Holiday Shopping1. Review your current 4Q plan in light of early season indicators and revisit

to ensure performance remains on track to achieve plan

2. Reinforce time and money-savings as part of all holiday messaging

3. Ensure that you tout hard to find products, broad selections and unique gift ideas that are sure to inspire shoppers

4. Modify strategies ensuring that gifting receives extensive visibility in onsite locations as well as post-order communication

5. Monitor email performance and have handy a series of backup promotions that can be utilized should results not be forthcoming

6. Set your free or conditional shipping strategy but follow competitive landscape and industry and adjust to achieve desired results

7. Ensure that exemplary customer service is in place to best support your brand value proposition

8. Be ready to deploy post Christmas promotions to take advantage of gift cards received and sale shopper desires


Questions?

Lauren Freedman

the e-tailing group

773-975-7280

[email protected]

www.e-tailing.com

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the roi of christmas present capturing your fair share of consumer holiday spending during these...

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