com score q4 2009 sor webinar
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February 11, 2010
State of the U.S. Online Retail Economy in Q4 2009
Gian Fulgoni, Chairman, comScore, Inc.
Note: A copy of this presentation will be sent to all attendees within 24 hours of today’s webinar
Data sourced from comScore’s global panel of 2 mill ion Internet users
� E-commerce data includes all worldwide buying on U.S. sites
� Unless explicitly stated otherwise, the term comScore e-commerce refers to online retail spending, which excludes travel, autos and auctions
� Behavioral activity through December 2009
Online / Offline Transactions
DemographicsLife Stages
Web Visiting and Viewing
360°View of Consumer Behavior Analysis Parameters
2© comScore, Inc. Proprietary and Confidential.
� Survey issued in January 2010, n=1010
� Consumer Measurements:
– Site Visitation
– Buying
– Attitudes and Intentions
– Demographics
– Mobile
– Video
– Advertising & AdEffx Measurement
� Retailer Views
– Large vs. Small RetailersMedia
Exposure
Search BehaviorVideo
DEMOGRAPHICS• Self-reported and validated
• Appended Segments (e.g. Claritas, Acxiom)
• Individual & Household Level
WEB VISITING & VIEWING• All Website/Page Click Stream• Content Viewed• Search Engine Queries• Keyword Used
SURVEYS• Email or Contextual “Pops”
• Behavior-activated Surveys
• Observation of All Surveys Taken Across All Suppliers
ONLINE TRANSACTIONS• All Secure Session Activity• Purchases and Subscriptions• Price Paid, Shipping & Handling,
Promotions
comScore Customer Knowledge Platform: A 360°View of 2 Million Global Internet Users
3© comScore, Inc. Proprietary and Confidential.
Across All SuppliersPromotions • Applications/Configurations
MARKETING STIMULI• Online Ads
• Referral LinksTV VIEWING• Link to Digital Set Top TV Data
Using Name & Address
Designed to be representative of the online populat ionProjectable to the total U.S. population
TRUSTe certified for information privacy & security
OFFLINE PURCHASING• Linked using Name and Address
• Client CRM Databases
• Retailer Loyalty Card Data
Validation of comScore Sales Data:Comparison of comScore data to U.S. Department of C ommerce
4© comScore, Inc. Proprietary and Confidential.
*Note: To be consistent with DOC, comScore estimate excludes travel and events tickets but includes auction fees and autos.
e-Commerce continues to gain share of retail spendi ng
E-commerce Share of Corresponding Retail Spending*Source: comScore for e-Commerce & U.S. Department o f Commerce (DOC) for Retail
Com
mer
ceS
hare
4.6%5.1%
4.3%4.5%
5.3%5.9%
5.0%5.3%
6.4%6.7%
5.9%6.3%
7.4% 7.3%
6.5% 6.6%
7.6% 7.7%
6.8% 6.9%
7.7%
5.0%
6.0%
7.0%
8.0%
9.0%
5© comScore, Inc. Proprietary and Confidential.
*Note: e-Commerce share is shown as a percent of DOC’s Total Retail Sales excluding Food Service & Drinking, Food & Bev. Stores, Motor Vehicles & Parts, Gasoline Stations and Health & Personal Care Stores.
E-C
omm
erce
e-Commerce share peaks in colder seasons (Q4 & Q1)
4.3%
3.7%
4.0%
4.6% 4.3%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
$77 $84 $80
$143+29%
+26%
+22%
+19%
$171$200
+17%
+12%+9%
+7%
2009 total retail e-commerce sales were down 2% ver sus year ago, with travel sales down 5% and non-travel flat
$214
-5%
$210
-2%e-Commerce Dollar Sales Growth ($ Billions)Source: comScore e-Commerce Measurement
6© comScore, Inc. Proprietary and Confidential.
$42 $53 $67 $82$102
$123 $130 $130$30
$40
$51
$61
$69
2002 2003 2004 2005 2006 2007 2008 2009
$72$93
$117
Non-Travel
Travel
+29%
+26%
+33%
+26%
+28%
+20%
+24%+24%
+13%
+20% +6% 0%
Q4 09 marked the first sign of positive growth in t he year, with both retail and e-commerce showing gains vs. YA
Quarterly e-Commerce Sales Growth vs. YASource: comScore e-Commerce Measurement
17%
23%
19%
11%13%
6%
-3% 0% -1%-2%
-5%
0%
5%
10%
15%
20%
25%
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
23%
3%
7© comScore, Inc. Proprietary and Confidential.
Note: The U.S. Department of Commerce calculation includes total retail and food service sales, which also includes motor vehicles and parts dealers.
Quarterly Retail & Food Services Sales Growth vs. Y ASource: U.S. Department of Commerce (DOC)
4%4% 5%4% 3%
-8%
-15%
-10%
-5%
0%
5%
10%
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
1%2%
-9%-10%
-7%
2%
Looking at quarterly sales and sequential changes, we see that e-commerce sales growth has been stagnant for past tw o years
$39.1 $38.1
e-Commerce Dollar Sales ($ Billions)Source: comScore e-Commerce Measurement
-9% -7% +4% +43% -15% -3% +5% +38% -20% -2% -1% +26% -18% -3% -2% +32%% Chg
vs. Prior Quarter
$39.0$45.0
8© comScore, Inc. Proprietary and Confidential.
Bill
ions
($)
$33.0 $27.2
$28.4
$39.1
$31.2
$30.6
$30.3
$38.1
$30.2
$29.6$31.0
$39.0
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09
$22.2
$23.1$23.9$28.0
We’re seeing significant variance in sales performa nce across retail categories
Q4 2009 e-Commerce Sales Growth vs. YA by Retail Ca tegorySource: comScore e-Commerce Measurement
Category Growth vs. YA
JEWELRY & WATCHESUp
CONSUMER ELECTRONICS (x PC PERIPHERALS)Up
COMPUTER SOFTWARE (X PC GAMES)Up
EVENT TICKETSUp
BOOKS & MAGAZINESUp
COMPUTERS / PERIPHERALS / PDAsMarginally Up
9© comScore, Inc. Proprietary and Confidential.
COMPUTERS / PERIPHERALS / PDAsMarginally Up
MUSIC, MOVIES & VIDEOSMarginally Up
SPORT & FITNESSMarginally Up
HOME & GARDENMarginally Down
FURNITURE, APPLIANCES & EQUIPMENTMarginally Down
VIDEO GAMES, CONSOLES & ACCESSORIESMarginally Down
APPAREL & ACCESSORIESMarginally Down
FLOWERS, GREETINGS & MISC GIFTSMarginally Down
TOYS & HOBBIESDown
2009 Holiday E-Commerce Wrap-Up
10© comScore, Inc. Proprietary and Confidential.
This year’s season started earlier and lasted longe r than any prior year
Millions ($)
2008 2009 % Change
November 1 – December 31 $27,982 $29,084 +4%
Thanksgiving Day (Nov. 26) $288 $318 +10%
Black Friday (Nov. 27) $534 $595 +11%
2009 Holiday Season E-Commerce Spending vs. Corresp onding Days in 2008*Source: comScore e-Commerce Measurement
11© comScore, Inc. Proprietary and Confidential.
$534 $595 +11%
Cyber Monday (Nov. 30) $846 $887 +5%
Green Monday (Dec. 14) $859 $854 -1%
Green Tuesday (Dec. 15) $754 $913 21%
Final Weekend Before Christmas (Dec. 19-20) $677 $767 13%
*Corresponding days based on corresponding shopping days Heaviest online shopping day on record
“One year after the worst holiday shopping season on record, retailers are no doubt breathing a sigh of relief as consumers loosened their purse strings somewhat thi s year.” – Motley Fool, January 8, 2010
4% growth in spending was driven by a 10% increase in the number of buyers, but they spent 5% less per buyer
Metric 2008 2009 % changeDollar Sales ($ Billions) $28 $29 +4%
Dollars per buyer $263 $250 -5%
Buyers (Millions) 81.6 91.8 +10%
Average Order Value $80.93 $75.59 -7%
Key e-Commerce Buyer and Transaction MeasuresNov. 1 – Dec. 31 vs. YA
Source: comScore e-Commerce Measurement
12© comScore, Inc. Proprietary and Confidential.
Average Order Value $80.93 $75.59 -7%
Transactions (Millions) 175 183 +11%
Transactions per Buyer 3.26 3.31 1%Buyer Penetration (Total Internet)
49% 51% +4%
e-Commerce gained share of consumers’ wallets in mo st product categories during the holiday shopping season, but Apparel/Clothing fared better offline
e-Commerce and Retail Sales Growth in Nov. & Dec. 2 009 vs. YASource: comScore for e-Commerce & U.S. Department o f Commerce (DOC) for Retail
e-Commerce (source: comScore) % change vs. YA
e-Commerce (non-travel) +4%
Retail (source: DOC) % change vs. YA
Retail (exc. Food Service & Drinking, Food & Bev. Stores, Motor Vehicles & Parts, Gasoline Stations and Health & Personal Care Stores)
+2%
13© comScore, Inc. Proprietary and Confidential.
Consumer Electronics (excl. peripherals)
+15%
Sport & Fitness, Books & Magazines and Music, Movies & Video
+5%
Furniture, Appliances & Equipment
+5%
Apparel & Accessories -4%
Electronics Stores -2%
Sporting Goods, Hobby, Book & Music Stores
+2%
Furniture & Home Furniture Stores
-5%
Clothing & Clothing Accessories
+4%
Note: Comparisons should not be considered exact as comScore and U.S. Department of Commerce category definitions are not identical.
Note: Growth rates are not adjusted for the holiday season, meaning the calculation does not compare corresponding shopping days from 2008 to 2009.
The number of retail promotions in December 2009 was significa ntly higher than past years but discount levels were mod est relative to YA
150
200
250
300
350
400
450
500
Daily Offers Per Store
2006
2007
2008
14© comScore, Inc. Proprietary and Confidential.
“The retailers risk cannibalizing their 2010 sales by offering such juicy deals at Christmastime. "The question is, ‘Are we sucking the demand out of the first part of next year?’" asks Hargreaves, the Pacific Crest Securities analyst.”
– Time Magazine, Dec 15, 2009
0
50
100
150
Month and Day
2008
2009
Larger retailers gained online dollar share from sm aller retailers
Sales ($ Millions) 2008 2009 % Change
Total $27,928 $29,034 4%
Top 25 Retailers $16,634 $18,538 +11%
<25 Retailers $11,294 $10,496 -7%
15© comScore, Inc. Proprietary and Confidential.
Sales Share 2008 2009 Pt Change
Total 100.0% 100.0% N/A
Top 25 Retailers 59.6% 63.8% 4.2 pts
<25 Retailers 40.4% 36.2% -4.2 ptsSource: comScore, Inc. Time Period: Nov. 1 – Dec. 31 vs. year ago
The difference in performance between large and sma ll retailers indicates a need for caution when reviewing third party claim s of industry e-commerce
sales trends that are based on a sample of larger r etailers only
Approximately 40% of largest 25 retailers showed gr owth rates above 10%
Fastest Growing of the Top 25 Retailers Ranked by Dollar Sales Growth
Source: comScore e-Commerce Measurement
Amazon.com Very Strong
HSN.com Very Strong
Sears.com Very Strong
16© comScore, Inc. Proprietary and Confidential.
HP.com Very Strong
Costco.com Very Strong
BestBuy.com Strong
Apple.com Strong
QVC.com Strong
Walmart.com Strong
Note: Growth rates based on total dollar sales from Nov. 1 – Dec. 31, 2009 vs. year ago
Combined share for Amazon and Walmart grew signific antly; Amazon’s share is still substantially higher than t hat of Walmart’s
e-Commerce Dollar Share for Walmart and AmazonSource: comScore e-Commerce Measurement
7.5% 2.7%9.5%
3.2%10%
Nov 1 - Dec 31, 2008Amazon & Walmart All Others
13%
Nov 1 - Dec 31, 2009Amazon & Walmart All Others
17© comScore, Inc. Proprietary and Confidential.
89.8%87.3%
“In late 2009, as consumers showed their sensitivity to low prices, price wars returned to the retail l andscape with Walmart and Amazon engaging in book and DVD pri ce wars which eventually turned into an all out war to
have the cheapest consumer electronics.” – WalletPop. com
90% 87%
National Federation of Independent Businesses:December 2009 Survey of Members
� When asked if sales increased/decreased during Oct – Dec ‘09 vs. prior three months:
– A net 25% said sales had declined
– Lack of sales was the single most important problem faced by small businesses, being cited by 35% of respondents
– Widespread price cutting contributed to the reports of lower nominal sales
� When asked if profits increased/decreased during Oct – Dec ‘09 vs. prior three months:
– A net 43% said profits had declined.
– Only 12% of owners reported higher earnings in most recent three months
18© comScore, Inc. Proprietary and Confidential.
– Only 12% of owners reported higher earnings in most recent three months
– 54% reported lower earnings with 65% citing weaker sales as the cause
– Low sales volume was the number one reason cited for lack of earnings by 35% of respondents
� Today, the small business “job generating machine” remains in reverse. Jobs are being lost and new hiring is very weak. When asked if they were pl anning to create new jobs:
– A seasonally-adjusted net 2% of owners reported they didn’t plan to create new jobs over the next three months. (Note: this is an improvement of one percentage point over the November survey.)
– While the trend for increased employment is going in the right direction, there is no indication that job growth from small businesses will be strong enough to dramatically reduce the country’s unemployment rate
In-store pick up increases in importance in the fin al few hectic days before Christmas
Share of Transactions for In-Store Pick Up Purchase s vs. All Other PurchasesShare Based on Total e-Commerce Spending at Four Large Retailers that Offered In-Store Pick Up
Source: comScore e-Commerce Measurement
64% 60%52%
In-Store Pick Up Other
19© comScore, Inc. Proprietary and Confidential.
36% 40%33%
27% 28% 30% 25%
48%
64% 60%67%
73% 72% 70% 75%
Week Ending Nov 8, 2009
Week Ending Nov 15, 2009
Week Ending Nov 22, 2009
Week Ending Nov 29, 2009
Week Ending Dec 6, 2009
Week Ending Dec 13, 2009
Week Ending Dec 20, 2009
Week Ending Dec 27, 2009
Free shipping growing in importance, accounting for an incremental 6 points of all transactions in 2009. 75% of consumers would shift to another retailer at checkout if shipping not free
Share of E-Commerce Transactions that Include Free ShippingSource: comScore e-Commerce Measurement
43%46%
50%
45% 44% 45%50%
60%
20© comScore, Inc. Proprietary and Confidential.
31%
36% 37% 36% 35% 36%39%
42% 41%39%
42%39%
43%41% 41%
45% 44% 45%41%
20%
30%
40%
Series1
Series2
2008
2009
Big brands topped the list of heaviest retail adver tisers this holiday season, with a few smaller brands like Snor gTees and Lexar Crucial making the top five
Top Retail Advertisers by Sub-Category from Nov 1 – Dec 31 2009Source: comScore Ad Metrix
Apparel Total Display Ad Impressions (000)
1. Levi Strauss & Co. 1,238,873
2. Nordstrom, Inc. 1,182,057
3. L.L. Bean, Inc. 409,877
4. Nike 369,659
5. SnorgTees.com 347,829
Consumer Electronics Total Display Ad Impressions (000)
1. RadioShack Corporation 1,761,644
2. Best Buy 889,128
3. Samsung Group 618,914
4. Sony Electronics 515,528
5. Buy.com 314,381
21© comScore, Inc. Proprietary and Confidential.
5. SnorgTees.com 347,829
Computer Hardware Total Display Ad Impressions (000)
1. Dell 2,540,019
2. Hewlett Packard 1,849,652
3. Apple 726,613
4. Systemax Inc. 242,130
5. Lexar Crucial 121,951
Department Stores Total Display Ad Impressions (000)
1. Wal-Mart 3,401,226
2. Target Corporation 2,236,785
3. Nordstrom, Inc. 1,182,057
4. Macy’s Inc. 1,163,822
5. Sears 1,134,016
5. Buy.com 314,381
Social media is an increasingly important driver of commerce
How Social Media Influenced Purchase % of HolidayShoppers
Social media has influenced my holiday purchases 28%Reading a consumer-generated review about a product online (including personal blogs) influenced me to purchase it
13%
Reading an expert review about a product online influenced me to purchase it 11%
I have followed a company Fan Page on Facebook to take advantage of special offers/deals
7%
22© comScore, Inc. Proprietary and Confidential.
offers/dealsA friend’s status update about a product on Facebook influenced me to purchase it 6%
Watching a related video online influenced me to purchase a product 5%
I have followed a company on Twitter to take advantage of special offers/deals 5%
A tweet about a product on Twitter influenced me to purchase it 3%
Other 2%
Source: comScore Survey Time Period: Dec. 4-7, 2009, n=425
“Review sites like Retrevo are incorporating Twitter into their platform and retailers like BestBuy, Dell and others are taking advantage of social media to promote their deals and products. Dell reported that it rung up $6.5 million in sales thanks to
Twitter promotions. Obviously, social networks can be a boon to retailers.” - TechCrunch, Dec. 8, 2009
Key Trends That Will Help to Shape 2010
23© comScore, Inc. Proprietary and Confidential.
61% of consumers rate economic conditions as poor, which although far from ideal is an improvement from a year ago
Perception of Economic Conditions
Q. How would you rate economic conditions today?Source: comScore Surveys
24© comScore, Inc. Proprietary and Confidential.
77%68% 66% 61% 61%
Jan-09 Apr-09 Jul-09 Oct-09 Jan-10
Poor
Consumer Agreement with Economic Statements
48% of consumers are pessimistic about future econo mic conditions; Only 9% believe we’ve turned corner without further problems
25%
23%
“We haven’t hit bottom yet; the worst is still to come.”
“We’ve turned the corner, but I would not be surprised if the economy dropped again before it
fully recovers.”
Q. Which statement best describes how you feel about the current economic conditions?Source: comScore Survey January 2010
Pessimistic 48%
25© comScore, Inc. Proprietary and Confidential.
23%
30%
13%
9%
fully recovers.”
“We might be headed in the right direction but the signs of improvement are hard to see.”
“The economy is stagnant, not going up or down.”
“We’ve turned the corner and are beginning to see signs of improvement.”
% of All Respondents
Neutral 43%
Positive 9%
In these challenging economic times, consumers have turned to coupon sites; the category has seen significant gro wth in both UVs and Total Visits
Growth in Unique Visitors & Total Visits to Coupon Sites vs. YA
Source: comScore Media Metrix
% Composition of Coupon Users on Selected Retail Sites in December 2009
Source: comScore Segment Metrix
47%
38% 37%39%
35%35%
40%
45%
50%
11%
12%
12%
28%
24%
29%
61%
64%
59%
Overstock.com
The Home Depot, Inc.
JCPenney Sites
36 Million People Visited a Coupon Site in December 2009
26© comScore, Inc. Proprietary and Confidential.
12%
20%
27%
9% 8%
0%
5%
10%
15%
20%
25%
30%
35%
Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009
Total Visits Unique Visitors
5%
6%
7%
8%
8%
8%
8%
18%
20%
22%
21%
23%
25%
24%
77%
74%
71%
71%
69%
67%
68%
Apple.com Worldwide Sites
Amazon Sites
Best Buy Sites
Netflix.com
Wal-Mart
Target Corporation
Hewlett Packard
% Heavy Coupon Site Visitors
% Moderate + Light Coupon Site Visitors
Non-Coupon Site Visitors
Very high traffic levels for many retailer sites bu t supermarket retailers attract few visitors. Suggests supermarkets need to “fish wh ere the fish are” with their online marketing efforts
85.7
54.247.3
41.8
29.7 28.4 23.2 21.4 20.5 19.5 17.5 17.0 17.0 16.2 15.9 15.1 14.7 14.3 14.2 14.1
Total Unique Visitors (Millions) for Top 20 Retaile rs in December 2009Source: comScore Media Metrix
27© comScore, Inc. Proprietary and Confidential.
Walgreens (8.1 Million UVs), Safeway (1.7) and Krog er (1.3) have lower UV levels.
Twitter experienced explosive growth in early 2009, which has since leveled off at about 20 million monthly unique visitors. AP I usage likely means that actual monthly users are even higher
Total Unique Visitors (000) to Twitter.comSource: comScore Media Metrix Media
10,000
15,000
20,000
25,000
Uni
que
Vis
itors
(00
0)
28© comScore, Inc. Proprietary and Confidential.
0
5,000
10,000
Uni
que
Vis
itors
(00
0)
“Companies are using Twitter as a marketing or publi c relations channel, much like an extension to thei r corporate blogs. They will post about corporate acc omplishments and distribute links that take people back to
corporate web pages, press releases, and other prom otional sites.” – ReadWriteWeb.com
500
600
700
800
900
Several luxury invite -only and deal -of -the-day sites hit the scene and flourished in 2009 attracting a cross section of in come groups. But are they buying?
Uni
que
Vis
itors
(000
) +331%
+894%
+185%
+72%
Unique Visitors and Growth vs. YA for December 2009
Source: comScore Media Metrix
Total Internet
HauteLookGilt
GroupeIdeeli RueLaLa
Less than$40K
28% 27% 20% 29% 12%
$40K-$74.9K 35% 31% 30% 32% 23%
% Composition by HH Income for December 2009
Source: comScore Media Metrix
29© comScore, Inc. Proprietary and Confidential.
0
100
200
300
400
Uni
que
Vis
itors
(000
)
+72%$75K-$99.9K 17% 20% 25% 19% 22%
$100K or more
21% 22% 25% 20% 43%
Groupon.com – a relatively new “deal-of-the-day” sit e with a slightly different model and broader appeal – has grown 56% from October 2009 to December 2009.
U.S. Video Viewing and Engagement Metrics for Dec. ’09 Source: comScore Video Metrix
U.S. Online Video: People consuming more video cont ent than year ago and time spent per video is up due to more long -form content
130,000
140,000
150,000
160,000
170,000
180,000
Unique Viewers (000)
+19%
05,000,000
10,000,00015,000,00020,000,00025,000,00030,000,00035,000,000
No. of Videos (000)
+132%
30© comScore, Inc. Proprietary and Confidential.
130,000Dec-2008 Dec-2009
0Dec-2008 Dec-2009
0.0
50.0
100.0
150.0
200.0
Dec-2008 Dec-2009
Videos per Viewer
+95%
0.0
1.0
2.0
3.0
4.0
5.0
Dec-2008 Dec-2009
Minutes per Video
+26%
Online video viewers spend 13% more on e-commerce t han the average Internet user
15%
20%
25%
Total Internet
Video Viewers
113
E-Commerce Buying IndexVideo Viewers vs. Total Internet Population
Source: comScore Video Metrix (Dec 2009) Custom Research
31© comScore, Inc. Proprietary and Confidential.
0%
5%
10%
ALL PRODUCTS APPAREL, ACCESSORIES &
JEWELRY
BOOKS, MUSIC & VIDEO
ELECTRONICS & COMPUTING
HOME & LIVING
113 116 114113
Mobile usage to access retail-specific information has increased vs. YA in both total users and frequency of use but mobile bu ying still limited
# of Subscribers (Millions) and % Growth vs. YA
Accessed Online Retail
Accessed Auction Sites
Accessed ShoppingGuides
Access to Retail-related Sites via Mobile Phones in December 2009% Growth vs. YA
Source: comScore MobiLens
32© comScore, Inc. Proprietary and Confidential.
Almost every day 1.7 +54% 2.1 +55% 1.6 +23%
Ever in month 9.9 +56% 9.6 +33% 8.7 +48%
Growth in these categories exceeds both overall gro wth in the market and top-level News and Info category.
comScore Announces Acquisition of ARSgroup
33© comScore, Inc. Proprietary and Confidential.
� ARSgroup is a leading communications research agenc y specializing in the measurement of advertising persuasion for TV and multi-media ca mpaigns and helping many of the world’s largest brands in the consumer goods, pharm aceuticals, retail and entertainment industries optimize their advertising messages.
� ARSgroup’s ARS Persuasion methodology is one of the world’s most widely documented and independently validated predictive measures of the persuasive effectiveness of advertising creative.
ARS Findings for Retailers: Strength of advertising creative is four times as important in determining sales outcomes as the amou nt of media spent
� Quantify benefits. When making shopping and product decisions, people can have a hard time valuing the benefits presented.
– Say “20% lower prices” instead of “lower prices.”
� Take advantage of multiple executions. When communicating complex or higher order messaging, multiple executions are often needed to ensure understanding and impact consumer behavior.
– Use lower CPM advertising like banner ads. Take advantage of the frequency in a media plan by using multiple executions which together communicate the point.
Frank Findley, VP Research, comScore ARS
34© comScore, Inc. Proprietary and Confidential.
using multiple executions which together communicate the point.
� Don’t forget the emotional content. Ad campaigns that work best create both emotional and rational connections with the consumer.
– When using rich media and video, use compelling emotional and rational content together, in the same execution.
– If this isn’t an option for you, a combination of the two works as well…rely on rich media with sound and motion to connect emotionally and leverage lower CPM channels to reinforce rational messages.
� Make the brand prominent. If the creative doesn’t link back to the brand, then the impact on sales will be missed.
– Be sure to prominently mention the brand verbally and visually. The best outcome is to make the brand the hero of the action.
Key Takeaways
35© comScore, Inc. Proprietary and Confidential.
Key Takeaways
� 2009 total retail e-commerce sales were down 2% ver sus year ago, with travel sales down 5% and non-travel flat
– Q4 09 marked the first sign of positive growth in the year, with both retail and e-commerce showing marginal gains vs. YA
– comScore expects to see growth in e-commerce in 2010 but absolute growth will be crimped by continued high unemployment, consumer deleveraging and their desire to save
� Holiday season saw 4% growth, slightly surpassing c omScore’s forecast of 3%. This is a marked improvement over last year when sales dropped by 3%
– Sales grew because of an increase in the number of online buyers, but they spent slightly less per buyer than in 2008
36© comScore, Inc. Proprietary and Confidential.
in 2008
– The season started earlier than in previous years because of aggressive and early retailer promotions and lasted longer because of consumer confidence in the reliability of shipping
– Free shipping continued to increase in importance, and social media (especially product reviews) emerged as an influence on consumer buying
� When it comes to the state of the economy, 61% of c onsumers rate economic conditions as poor, which although far from ideal is an improvement fro m a year ago
– 48% are pessimistic about the economy’s future and only 1 in 10 think the economy will improve without further problems
� Couponing, social media, video and mobile are trend s that flourished in 2009 and will persist as we move through 2010
QUESTIONS?
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