emarketer webinar: lessons from holiday shopping 2014—what you need to know for 2015

© 2015 eMarketer Inc.

Lessons from Holiday Shopping

2014 — What You Need to Know

for 2015

Yory Wurmser

Retail Analyst

March 26, 2015

Made possible by


Agenda

What happened in the 2014 holiday season?

What should you expect in the 2015 holiday season?

Which four trends from the 2014 holiday season will

drive ecommerce growth in 2015?

What was the best way to reach mobile consumers

during the holidays?

How is the online shopping calendar changing?


What happened in 2014?


The 2014 holiday season was moderately good

overall in the US, but was very strong online

16.0%

3.5%

Total Retail Ecommerce


18.1% of 2014’s total retail sales occurred

during November and December

$850.58 billion in total retail sales

$72.03 billion in ecommerce sales


Why wasn’t 2014 stronger overall?

Downward pressure

Low labor market

participation

Weak median

income growth

Rising healthcare

costs

Gas stations

Upward pressure

Strong job

growth

High consumer

confidence

Rising stock

market

Cheap gas

Source: rgbstock.com


Core retail grew more strongly than total retail,

which was dragged down by gas stations

NRF data shows

4.0% growth for

2014, up from

3.1% in 2013


Foot traffic was down 7.1% between

Thanksgiving 2014 and January 3, 2015

“ There is this shopper that has greater

intent to purchase than we’ve seen

before. They come to the stores more

researched than they have before.”

—Chitra Balasubramanian, head of business

analytics at RetailNext


Overall retail

performance

was

consistent

with previous

years, but

ecommerce

growth was

the strongest

since 2011


What to expect in 2015


Holiday 2015 overall will broadly follow 2014

patterns

14.4%

3.2%

Total Retail Ecommerce


Ecommerce will make a big jump in percentage

of Q4 2015 total retail sales

Ecommerce’s

share of retail

sales always rises

in Q4, but 2015’s

spike will be

larger than usual


Ecommerce will approach 10% of total holiday

retail sales in 2015

Growth of

holiday season

ecommerce is

not slowing

6.80%7.60%

8.50%

9.40%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

2012 2013 2014 2015

Retail Ecommerce Holiday Sales as % of Total Holiday Retail Sales


Trends that emerged in 2014 will drive

ecommerce in 2015

1. Mobile traffic and sales growth

2. Better online and offline integration

3. Improvements in fulfillment

4. A wider online shopping calendar


Trend #1:

Mobile sales and influence

grew


Traffic from mobile devices increased more than

expected

“ Mobile traffic in general jumped a lot

faster, a lot higher, than anybody

really expected. Our mobile traffic

increased by 78% vs. the previous

year.”

—Emily Pfeiffer, VP of brand development at

Berkshire Blanket


Smartphones had strong growth in orders

generated, traffic and revenue

Smartphone

orders grew at

twice the pace

of tablet orders

MarketLive saw

mobile revenues

increase 111%


Mobile traffic was nearly half of online shopping

traffic

44.6%

of online traffic during holiday 2014 came from mobile devices

Source: IBM, “Online Retail Holiday Shopping Recap Report 2014”


Smartphone conversion rates still lagged far

behind desktop and tablet conversion rates

Only 9.1% of

digital sales

came on

smartphones


Mobile sales increased but still accounted for

roughly 1 in 5 digital holiday sales

For 2014 as a

whole,

eMarketer

estimates that

19.0% of retail

ecommerce

sales occurred

on mobile

devices


Why the big jump in mobile

commerce this year?


Reason No. 1: More mobile shoppers and buyers


Number of US mobile shoppers grew by

25 million in 2014

150.4 million

mobile shoppers

by end of 2014

171.0 million

mobile shoppers

by end of 2015

Increase

in mobile

shoppers:

+25.4M

in 1 year


Number of US mobile buyers growing almost as

quickly as number of mobile shoppers

104.8 million

mobile buyers

by end of 2014

121.8 million

mobile buyers

by end of 2015

Increase

in mobile

buyers:

+22.1M

in 1 year


Reason No. 2: Better user interfaces led to more

conversions

Larger screen sizes

More responsive design

Easier payments


Larger screen size correlates with lower cart

abandonment and higher conversion rates


Traffic share in North America from large phones

more than doubled in 2014

Website traffic

from large

smartphones

rose from 6.9%

to 17.9% in

12 months


2014 holiday sales saw big growth in phablets


Responsive design is spreading rapidly …

“ The biggest trend happening in our

industry right now is responsive

design. It’s taking off, and it’s taking

off very quickly. … So what’s driving

the mobile trend, really, is better

mobile design.”

—Ken Burke, CEO of MarketLive


Responsive

design

performs

better


… But responsive design is only part of the

solution

“ Understanding the customer

journey across device type and

adapting to it from a customer

experience perspective, and even

from a marketing perspective, is

absolutely critical. … Responsive

design is great … but that’s only the

tip of the iceberg.”

—Don Delzell, director of online at Sports

Chalet


Easier

checkout

is the leading

factor that

would make

people spend

more on their

phones


New payment options have potential to simplify

mcommerce, but are still lightly used

Google Wallet led with an

18% adoption rate in

December 2014

Apple Pay was used by

4% of US internet users


Recap: Mobile conversions increased this

holiday season because …

More mobile shoppers and buyers

Better interfaces

– Bigger screens

– More responsive design

– Easier payment options


Trend #2:

Better integration between

digital and offline shopping


Consumers

have

integrated

their online

and offline

shopping


Consumers expect seamless integration

between online and offline shopping

“ Mobile has evolved to become the remote

control for … the in-store experience of a

brand. Consumers expect that the mobile

[app] that a retailer or brand is offering

them can help them navigate the store

experience, and can help them do so in a

personalized way.”

—Maya Mikhailov, co-founder and EVP of client

strategy at GPShopper


Consumers turned to mobile on Black Friday


Most successful retailer apps anticipated

customer journey in the store


Mobile

generated more

than 50% of

website traffic

for some big US

retailers in

December 2014


Email was one of the best ways to reach

consumers on the go in holiday 2014

“ The key to winning this holiday

season, at least as far as online

shopping goes, was using email

marketing effectively.”

—Netta Kivilis, head of marketing at Custora


Email generated a larger percentage of holiday

season digital sales in 2014

Up 1.7 percentage points

for the season overall

compared to 2013

During the Thanksgiving

to Cyber Monday period,

email drove 23.1% of

sales—top among

marketing channels


Trend #3:

Improved fulfillment

boosted ecommerce


Holiday 2013: Missed deliveries made headlines

Midwest snowstorms hit

FedEx and UPS hubs

Roughly 33% of major

etailers tracked by Stella

Service missed deliveries

UPS delivered only 83% of

holiday express packages on

time, according to Shipmatrix

Image source: Shutterstock


Fulfillment problems were largely eliminated

during the 2014 holiday season

98%

of holiday express packages arrived on time

Source: Shipmatrix


In-store pick-up increased in 2014, but retailers

still lag behind consumer interest

“ Buy online and pick-up

in-store is growing, which is

good, although it’s not

growing as fast as it should.

… Consumers are demanding

it more than retailers are

providing it.”

—Ken Burke, CEO of MarketLive


Trend #4:

Online shopping calendar

spreading out


During the

2014 holiday

season, free

shipping

offers peaked

in early

November


Holiday 2014’s online shopping surge was

earlier, spurred by big discounts

Steepest

discounts on

Thanksgiving

(Nov. 27)

Discounts on

Monday and

Tuesday before

Thanksgiving

exceeded Cyber

Monday


Biggest online

shopping day

was still

Cyber Monday,

but gap

between it

and Black

Friday shrank


Biggest sales increase of 2014 holiday season

was during weekend of December 20–21: 36%

Increased in-store pick-up

Later shipping cutoffs: Zappos, Apple and Nordstrom all

had December 23 shipping cut-off dates

Extended free shipping: Amazon and Barnes & Noble

offered free shipping into Christmas week


Takeaways

In 2014:

US retail ecommerce sales grew 16.0% year over year

More mobile shoppers, bigger screens and better interfaces

combined to increase the impact of mcommerce

Email played an increasingly important role in holiday

marketing

Fulfillment improved

The digital holiday season spread out

In 2015, US ecommerce sales are expected to rise 14.4%

Email Marketing.

Evolved.Simple and fast, powerful and sophisticated. The email marketing automation platform that transforms your vision into reality

dotmailer.com/optimize

The Optimization Dilemma:

Testing at the Heart of your

Organization

dotmailer.com/RetailAutomation

Marketing Automation for

Online Retailers: 10 Email

Programs Proven to Increase

Revenue

dotmailer.com/demo


Learn more about digital marketing with an

eMarketer corporate subscription

Around 200 eMarketer reports are published

each year. Here are some recent reports you

may be interested in:

Q&A Session

Made possible by

You will receive an email tomorrow with a link to view the

deck and webinar recording.

To learn more: www.emarketer.com/products

800-405-0844 or [email protected]

Yory Wurmser

Lessons Learned from Holiday

Shopping 2014 — What You Need

to Know for 2015

Holiday Shopping Preview

Omnichannel Trends 2015: Mobile Is the New Retail Hub

Mobile Apps vs Mobile Browsers: How Usage, Ad Spending

and Mobile Commerce Sales Differ by Channel

Mobile Commerce Deep Dive: The Products, Channels and

Tactics Fueling Growth

emarketer webinar: lessons from holiday shopping 2014—what you need to know for 2015

Marketing

retail ecommerce holiday

total holiday retail

total retail ecommerce

ecommerce sales

mobile sales

ecommerce growth

mobile traffic

s total retail sales