unwrapping holiday 2015: e-commerce trends and...
TRANSCRIPT
Today’s Speakers
Scot WingoExecutive Chairman
ChannelAdvisor
Sarah O’DeaSr. Manager, Corporate Communications
ChannelAdvisor
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– #ECOMholiday
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Stay Informed With E-Commerce News
www.channeladvisor.com/blog
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Trusted By Top Sellers Globally
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ChannelAdvisor Same Store Sales
• Measures, through a monthly report, the relative performance of various online channels such as Amazon, eBay, search, CSEs and more
• Uses real transactional data captured by ChannelAdvisor’s software; measures ChannelAdvisor customers’ GMV by channel
• Defines “store” as one customer that is selling through a particular channel
– “Store” is not active until that customer has been with ChannelAdvisor for a year
• Glossary of terms:
– Other 3PM: Third-party marketplaces excluding Amazon and eBay, such as Best Buy, Newegg, Sears
– GS: Google Shopping/Product Listing Ads (PLAs).
• We lump Google Shopping in with CSEs in monthly reports, but break out Google Shopping during the holidays
– Search: This refers to AdWords
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Agenda
• Trends:
– Looking back at 2014
– Changes in consumer behavior
• Priorities and Strategies for Holiday 2015
– Marketplaces
– Digital Marketing
– Checklists
• Q&A
Copyright ChannelAdvisor 2015 #ECOMholiday | 10
Looking Back: 2014 Trends
• Earlier shopping than in previous years
Source: ChannelAdvisor SSS
E-Commercegrowth rate
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Looking Back: 2014 Trends
• Amazon and other third-party marketplaces were dominant
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Source: ChannelAdvisor SSS
Looking Back: 2014 Trends
• Consumers were much more mobile during Cyber Five Weekend
Mobile traffic accounted for 52.1% of online traffic on Thanksgiving Day, 49.6% on Black Friday, 41.2% on Cyber Monday.
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Source: IBM
Looking Back: 2014 Trends
iOS vs. Android
• Average Order Value– iOS: $121.86 per order
– Android: $98.07 per order
• Online traffic– iOS: 32.4% of total online traffic
– Android: 15% of all online traffic
• Online sales– iOS: 21.9% of total online sales
– Android: 5.8% of all online sales
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Source: IBM
Looking Back: 2014 Month of Black Friday
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2014 Black Friday Deals Start Early
Looking Back: 2014—Industry
• Online holiday growth Y/Y:
• Online holiday spend:
• Black Friday growth:
• Cyber Monday spend:
• Cyber Monday growth:
15%
$53b
26%
$2b
17%
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Source: comScore and IBM
Looking Back: 2014—ChannelAdvisor
Total growth rate during Cyber Five: 20.6%
Thanksgiving SSS:
Black Friday SSS:
Cyber Saturday SSS:
Cyber Sunday SSS:
Cyber Monday SSS:
22%
20%
27%
18%
17%
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Source: ChannelAdvisor SSS
Looking Back: 2014 Cyber Five SSS (Total)
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Source: ChannelAdvisor SSS
What We Learned In 2014
• Earlier shopping than previous years
• Month of Black Friday/ “Christmas Creep”
• Amazon and other third-party marketplaces (3PM) dominant
• Consumers much more mobile during Cyber Five weekend
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2015 Online Retail Survey: Holiday Results
Retailers’ insight: Holiday 2014 performance, expectations for Holiday 2015 and strategies to increase sales
8%5%
20%15%
2%
15%
35%
What are your average online sales per year? US
8% 10%17% 17%
11%
38%
What are your average online sales per year?
UK
17%
48%
32%
3%
36%41%
23%
Under 100 staff 100 to 999 staff 1000+ staff Unknown
Company Size
US
UK
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Source: ChannelAdvisor 2015 Online Retail Survey
Importance Of Holiday
7%
19%
43%
23%
7%
1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1-10% 11-19% 20-29% 30-39% 40-49% 50% or more
What percentage of your annual sales come during the holiday/Christmas season?
70% said Cyber
Monday and Black Friday are the two most profitable days
throughout the calendar year
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Source: ChannelAdvisor 2015 Online Retail Survey
2015 Holiday Expectations
0%
5%
12%
19%
42%
21%
I expect my online sales to decrease
The holiday season does not influence my online sales
I expect my online sales to remain flat
Increase 1-10%
Increase 10-15%
Increase over 15%
How do you expect your 2015 holiday/Christmas season to compare to your 2014 holiday/Christmas season?
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Source: ChannelAdvisor 2015 Online Retail Survey
Timing For Holiday Promotions
6%4%
11%
33%31%
10%
5%8%
3%
12%
36%
27%
9%
5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
June or earlier July August September October November December
When did you start/will you begin your holiday/Christmas season promotions in 2014/ in 2015?
2014 2015
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Source: ChannelAdvisor 2015 Online Retail Survey
Top Strategy For Increasing Holiday Sales
1%
6%
14%
15%
17%
22%
24%
Other
Stock more product quantities
Start holiday promotions earlier than last year
Offer free shipping/returns
Add products to your catalog
Increase digital marketing/advertising budget
Offer more holiday promotions than last year
What is your top strategy for increasing holiday/Christmas season this year?
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Source: ChannelAdvisor 2015 Online Retail Survey
Holiday Challenges
1%
18%
19%
27%
34%
Other
Inventory management/overselling
Converting mobile traffic
Adjusting to competitor activity (such as promotions)
Fulfilling orders on time
What is your biggest e-commerce challenge during the holiday/Christmas season?
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Source: ChannelAdvisor 2015 Online Retail Survey
Cut-Off Date For Christmas Deliveries
11% 11%
15%
31%
13%
7%9%
3%
7%
11%9%
34%
13%
10%11%
5%
16%
11%
21%
28%
13%
4%
7%
1%
December 17 orearlier
Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24
What date will be your cut-off day for guaranteed on-time Christmas deliveries?
Total USA UK
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Source: ChannelAdvisor 2015 Online Retail Survey
Changing Consumer Behavior
• Mobile
• Social
• Zero Friction
• Value Consumer
• Cross-Border Trade (CBT)
We see five changing consumer behaviors driving enormous change in the e-commerce landscape.
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Consumer Behavior: Mobile
M - C O M M E R C E
1 %
D E S K T O P
8 %
T R A D I T I O N A L R E T A I L
9 1 %
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Source: http://www.slideshare.net/FlurryMobile/source14-the-age-of
Consumer Behavior: Mobile
85%
5%9%
79%
7%
14%
Last 12 Months: Next 12 Months:
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Source: http://www.paymentscardsandmobile.com/mobile-commerce-growing-three-times-faster-than-e-commerce/
Engaged Minutes Spent Per Device
0K5K
10K15K20K25K30K35K40K45K50K55K60K65K
DESKTOP SMARTPHONE TABLET
Tota
l Min
ute
s (M
M)
Consumer online shopping activity
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Source: comScore Media Metrix and Mobile Metrix, US, March 2013-Sept. 2014
Consumer Behavior: Mobile
2 0 1 3
A L L T R A N S A C T I O N S
100%
2 0 1 4 ( X 2 )
42%
M O B I L E T R A N S A C T I O N S
51%20%
Q 1 2 0 1 5
Sources: http://www.wsj.com/articles/alibabas-revenue-rises-on-mobile-growth-1422533361?mod=djemalertTECH http://www.onlinemarketing-trends.com/2014/09/mobile-shopping-at-alibaba-contibutes.html
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Marketplaces: Mobile
• Action: Add Amazon and eBay to your mobile strategy– Amazon
• Include product identifiers (UPC, EAN, etc.) so you match with the correct listing
• Use Amazon Sponsored Products to highlight products and get visibility on mobile devices (and desktop)
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– eBay
• Use Item Specifics (both those recommended by eBay and Custom Item Specifics, which you define)
• Use responsive design templates
Marketplaces: Mobile
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• Action: Optimize your Product Listing Ads (PLAs)—this should be a priority
• Adjust your mobile bid modifier
• Diversify beyond Google with PLAs on Yahoo and Bing
Digital Marketing: Mobile
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• Action: Take advantage of Yahoo Gemini
• Clone your current campaigns and ad groups from Google AdWords into Yahoo Gemini
• Adjust your bids and daily budgets where needed
Digital Marketing: Mobile
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Digital Marketing: Mobile
• Action: Create an optimal user experience to help increase conversion rates• Optimize your product landing
pages and create an easy and trustworthy checkout experience
• Consider mobile-friendly payment options—Apple Pay, PayPal, etc.
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Mobile And Social In A Virtuous Cycle
$4.0B
$3.5B
$3.0B
$2.5B
$2.0B
$1.5B
$1.0B
$0.5B
$0.0B
PAYMENTS AND FEES
MOBILE ADVERTISING
ADVERTISING (NON-MOBILE)
REVENUE
Source: http://www.businessinsider.com/facebooks-mobile-ad-business-is-three-quarters-of-total-revenue-2015-4
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Marketplaces: Social—Buy Buttons
• Action: Keep your eye on new opportunities with social buy buttons; social platforms potentially become marketplaces
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Digital Marketing: Social
• Action: Take advantage of Facebook Dynamic Product Ads
• Create a Business Manager account
• Optimize product feed and set up pixels
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Digital Marketing: Social
• Action: Enlist Rich Pins to make sure people are sharing your products
• Set up Pinterest Business Account
• Get pixels installed; optimize product feed and monitor analytics
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• Time is money
• Brand conscious and loyal
Convenience vs Value-Oriented Consumers
• Bargain Shoppers – not brand loyal
• eBay shoppers –more time than money
CONVENIENCE VALUE
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Marketplaces: Zero Friction
• Action: Establish quick and easy shipping
• Utilize FBA for those hot items to ensure they are Prime eligible (now not the case 100% of time)
• Hire additional employees to process items more quickly
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Marketplaces: Zero Friction
• Action: Beef up your return policies • Have your return policy extend until the new year
to give customers time to make a return
• Consider offering free return shipping
• Action: Make sure orders are convenient for customers • eBay: Use Click & Collect programmes in the UK
(Argos) and AU (Woolworths)• Expect all marketplaces to request more
accommodating returns policies to get visibility and badging (i.e., Top Rated Sellers)
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Digital Marketing: Zero Friction
• Action: Be sure you are advertising with PLAs
• Optimize your PLAs for broad exposure and more…
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Jet’s Dynamic Pricing Engine
• Boosts basket size and profitability by finding efficiencies, based on retailers’ preset rules.
Efficiencies come when Jet shoppers:
Purchase multiple items
Approve a slower delivery method
Live close to a distribution center
Turn off the option of returning items
Reach an order threshold
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Marketplaces: Value
• Action: Expand your reach on emerging marketplaces such as Jet
• Apply for a Jet Partner account to get started
• Explore additional opportunities on other 3MPs
• Action: Run promotions
• Check out offers and pursue ones that are most meaningful
• Emerging marketplaces are often open to including your products in their deals programs
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Digital Marketing: Value
• Action: Use Google Merchant Promotions to advertise the best value to consumers
• Create a Promotions feed in Google Merchant Center (you must fill out interest form first)
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Digital Marketing: Value
• Action: Send a feed to all comparison shopping engines (CSEs)
• Optimize your feed; fill in any missing attributes; make sure your titles are complete; send your feed to each CSE at least once a day
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CBT: Massive Growth Expected
Source: Extrapolated from http://blog.ebay.com/paypal-unveils-the-new-modern-spice-routes/
29%
2014 2018
C R O S S - B O R D E R O N L I N E S H O P P I N G P O P U L A T I O N
101M
52M
130M
72.6M
111%
2014 2018
C R O S S - B O R D E R O N L I N E S H O P P I N G S P E N D
US $145.4B
US $50.32B
US $307B
US $106B
TOTAL
VIA MOBILE DEVICES
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eBay
53% 57% 125%
SELLERS LISTINGS ORDERS
M A R K E T P L A C E
S H I P P I N G
Source: http://www.ebayinc.com/in_the_news/story/ebays-global-shipping-program-numbers
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Amazon
M A R K E T P L A C E
2 BI T E M S
Source: http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=2002794
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AliExpress
#131 %
2 0 0 8 2 0 1 5
3 9 %
S A L E S
$ 1 T
Source: http://www.channeladvisor.com/blog/?pn=scot/ebay-q4-2014-results-from-a-sellers-perspective
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Marketplaces: CBT
• Action: Sell your hot items on international marketplaces
• Research international markets and test items that are relevant
• eBay - Global Shipping Program
• Amazon - FBA
• Amazon - Utilize Unified Accounts to make sharing inventory across Europe or North America easier
Other CBT Marketplaces: MELI CBT, AliExpress, TMall Global, Cdiscount
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• Access customers in more than 60 countries
• Sell more and diversify your revenues
• Lower your overall fulfillment costs
Fulfillment by Amazon (FBA) Global Export
Source: http://www.amazon.com/gp/help/customer/display.html/?nodeId=200240370
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AliExpress
AliExpress is a cross-border e-commerce solution enabling Chinese merchants to sell overseas.
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Tmall Global is
developing into
the largest
importing
goods
shopping
destination for
Chinese
consumers.
TMall Global
Tmall Global is a cross-border e-commerce solution enabling overseas merchants to enter and participate in China’s online retail market throughTmall.com.
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Singles Day
• $9.3B sales through Alibaba
• Alibaba sales surpassed $2B in first hour
• Alibaba processed 278M orders within 24 hours
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Digital Marketing: CBT
• Action: Utilize PLAs and text ads to reach global consumers
• Action: Take advantage of global CSEs
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We believe these five consumer trends have broad
implications for brands, manufacturers and retailers.
Those who understand and take action will seize the
advantage while others will be left behind.
Take Action
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Holiday 2015 Checklist—Trends
Add Amazon and eBay to your mobile strategy
Optimize your Product Listing Ads (PLAs); take advantage of Yahoo Gemini
Keep your eye on buy buttons
Take advantage of Facebook Dynamic Product Ads and Rich Pins
Establish quick and easy shipping; beef up your return policy
Create an optimal user experience, mobile-friendly payments
Expand your reach on emerging marketplaces
Send a feed to all CSEs
Sell your hot items on international marketplaces
Utilize PLAs and text ads to reach global consumers
#ECOMholiday | 83Copyright ChannelAdvisor 2015
Holiday 2015 Checklist—Misc.
Check that your shipping and handling policies are in line with the requirements for being a Top Rated Seller
Address customer issues head on; keep open lines of communication
Keep an eye on buyer feedback
Improve quantity management
Advertise on Amazon
Make sure your keywords are up to date
#ECOMholiday | 84Copyright ChannelAdvisor 2015
Questions?
Contact us:
Phone: 866-264-8594
Email: [email protected]
Newsletter: www.channeladvisor.com/newsletter
Blog: www.channeladvisor.com/blog
Web: www.channeladvisor.com
Twitter: @ChannelAdvisor
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ChannelAdvisor SSS Methodology
• The way SSS is compiled is as follows:– Each ChannelAdvisor customer's GMV is recorded on a monthly basis
by channel.– We think of a “store” metaphorically as one customer selling through a
particular channel – in other words, one of our online retailer customers can have multiple “stores” if they use more than one channel to sell their merchandise.
– Once a “store” has been active with ChannelAdvisor for a year (that is, the customer has been with us for at least a year and has been utilizing the particular channel for at least a year), then we begin to include it in the SSS data.
– If a customer stops working with ChannelAdvisor or stops selling on a particular channel, then that combination of customer and channel —that “store” — is no longer included (assuming it made it past the year mark in the first place). When an online retailer stops selling on a channel or stops utilizing ChannelAdvisor, they are immediately taken out of the SSS data.
– GMV is measured in native currency and compared in native currency.
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ChannelAdvisor SSS Disclaimers
There are many reasons this data is not a proxy for overall e-commerce activity as well as individual channel total performance including, but not limited to:• Customer variance - ChannelAdvisor's customers may not be representative of the overall
customer mix of any individual channel. For example, on eBay, our customers are skewed toward a larger eBay customer set, not the average.
• Category variance – ChannelAdvisor’s customers are over-represented in some categories (electronics, sporting goods and auto parts) and under-represented in others (collectibles, BMV/media, etc.). For example, on Amazon, ChannelAdvisor has very few media customers so we have no visibility into that large chunk of Amazon's business.
• Cross Border Trade variance - While ChannelAdvisor does have a fair amount of non-domestic GMV, our mix of domestic and international customers is not necessarily equivalent to that of other e-commerce players.
• Software Impact - At the end of the day, we are a software company. Some of our features cause a short-term bump in sales that may skew results high at the beginning and then lower at the end of a one-year SSS cycle.
• Channel impact - Certain changes at e-commerce channels may cause disproportionate good or harm to our customer base, category mix, international mix and software. While the data shows these changes, because we are not a material part of every channel, over 90% of that channel's business may not have the same impact (positive or negative).
• SSS is a metric unique to ChannelAdvisor- eBay, Amazon, Google and other e-commerce businesses do not measure SSS. They look at overall growth when they report their financial metrics. We believe SSS is important to our customers from a benchmarking standpoint, which is why we do it this way — it is not intended to be a proxy for the overall performance of any of these e-commerce channels.
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SURVEY METHODOLOGY
• The survey was conducted among 100 US and 102 UK decision makers in e-commerce.
• The interviews were conducted online by Redshift Research in May and June 2015 using an email invitation and an online survey.
• Sample was selected from the Crowdology & Crowdology partner panels. Crowdology™ is an online panel owned and operated by Redshift Research. The Crowdology™ panel is balanced across regional, age and gender demographic factors, and is nationally representative of the UK population. Each respondent completes 120 profiling questions before being accepted to join our panel. Panel Quality Management is carried out frequently to ensure reliable surveys.
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