Outlook 2012 ecommerce-2
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Holiday ecommerce sales in 2011 saw a 15% increase over 2010, showing strong consumer spending online. Merchants have adapted by embracing mobile commerce, with more having mobile-optimized sites and apps. Social media usage is also growing, with Pinterest seeing a rise in merchant activity. Merchants are also leveraging marketplaces more for prospecting and promotions, though some worry about losing control of customers. Overall, merchants are adapting well to changing consumer behaviors across channels.
Outlook 2012 ecommerce-2
- 1. Outlook 2012-13: Ecommerce TEXT BY: TIM PARRY CHARTS BY: KATE DIMARCO H oliday 2011 went down in the books as the busiest one ever for ecommerce. ComScore reported that con- sumers spent $35.3 billion at consumer ecommerce sites be- tween Nov. 1 and Dec. 26, a 15% increase over the corresponding days in 2010. Retailers saw tremendous lifts in online sales—from online accessories seller eBags (up 32% overall) to old-school depart- ment store Macy’s (which saw its ecommerce sales rise 40.3%). But were these kinds of numbers only a sign that the U.S. econo- my has rebounded? Or was something else at work? Based on MCM Outlook 2012-13 results—coupled with Merchants embracing 2012-13 respondents said they are mobile commerce not using m-commerce, that’s down an overall 2011 holiday sales 56.7% from last year. And 29.5% of growth of 4.1% as reported by It’s taken a while for merchants to em- respondents said they have a dedicat- the National Retail Federation— brace m-commerce. But after surpris- ed m-commerce site—a 211% gain it’s evident that merchants have ingly low mobile adoption numbers compared to the 2011 results. An- responded to consumer shop- in 2011, it’s evident that merchants other 13.4% said their sites are opti- ping behaviors and adapted to are ready for the small screen. mized for mobile. That question was maximize their online sales. Although 47.3% of MCM Outlook not asked in 2011. Sponsored by: 1
- 2. Eco mmerce Merchants are also starting to look at pay-per-click opportunities in the mobile space. Though just 15.2% of respondents said they are using mo- bile search ads, that number is up 120% from last year. Why the sudden jump into mo- bile? The influence of the late Steve Jobs may have something to do with it. Nearly a quarter of the respon- dents (24.8%) said they have an iPhone app, up 66.4% from last year, and 18.3% said they have an iPad app, a 161% increase. But 70.6% of respondents said they do not have a mobile app. That’s still 16.9% less than those who didn’t have mobile apps last year. To market, to market During holiday 2011, vendors that specialize in getting merchants set up in marketplaces such as Amazon and eBay boasted about their clients’ dou- ble-digit percentage growth in weekly emails to the press. But that hype has not convinced merchants to hop on board: 45.9% of MCM Outlook 2012-13 respondents said they are not selling in market- places (the question was not asked in 2011). That includes 44.3% of mer- chants who identified themselves as primarily b-to-c sellers. According to the survey results, 36.7% of merchants are using market- places as a way to prospect, and 29.1% are using them as a marketing tool to promote their businesses. No doubt selling in marketplaces can help build brand exposure (bit.ly/ Sponsored by: 2
- 3. Eco mmerce mcm-gaelsong), but now merchants may be worried about losing future sales to Amazon.com, eBay and oth- ers. But the marketplaces are seen as places to sell overstocks and overruns (bit.ly/mcm-liquidate). Half the merchants who identi- fied themselves as primarily b-to-b merchants said they are not selling in marketplaces, but that number is ex- pected to drop. On the same day we deployed MCM Outlook 2012-13, Amazon launched its b-to-b marketplace, AmazonSup- ply. While some industry experts see the launch of AmazonSupply.com as an all-out game-changer for b-to-b merchants, others see Amazon’s entry as an added plus for b-to-b sellers (bit. ly/b2b-amazon). Social media is growing up Last year, thanks to the antics of Char- lie Sheen, “Winning” became a big so- cial media catchphrase. The word was one of the most popular hashtags on Twitter, and images of Sheen with the meme flooded Facebook news-feeds. But as 2011 came to a close, the social media landscape had begun to grow. Instead of winning, social media users were suddenly “pinning.” Pinterest, a virtual bulletin board Sponsored by: 3
- 4. Eco mmerce that allows users to share images and links that can be pinned by other us- ers, grew by leaps and bounds dur- ing the second half of 2011 (bit.ly/ mcm-pinterest), and multichannel merchants took an interest, according to MCM Outlook 2012-13 results. Al- though no respondents said they were using the social media, 34.2% of mer- chants who took the 2012-13 survey said they maintain an active presence in Pinterest. Which is not to say that Pinter- est has overtaken the two social me- dia juggernauts: 87.4% of merchants maintain an active presence in Face- book, up from 77.4% last year; and 74.8% said they are actively tweeting, up from 57.5% from 2011. But merchants are clearly getting their feet wet with Pinterest (bit.ly/ mcm-pinterest-tips). In February 2012, custom T-shirt seller Threadless ran a Valentine’s Day contest to encourage community en- gagement and received a “whopping” 366 entries, according to its blog (bit. ly/mcm-threadless). As a result, it added a Pinterest button on submis- sion pages so its users could post right from Threadless to their pin boards. Pinterest wasn’t just for the pure plays—multichannel merchants like Lands End Canvas added “Pin It” buttons to their product pages so that users could seamlessly pin items they like or want to their boards (bit. ly/mcm-landsend). Merchants also created their own boards as another way pinners could spread product info virally. Pinterest wasn’t the only new- comer to the social media landscape. Sponsored by: 4
- 5. Eco mmerce MCM Outlook 2012-13 also revealed dia to listen to consumers—76.9% on its b-to-c buyers. big steps for Google Plus (Google+): said they use it to monitor what con- However, MCM Outlook 2012-13 29.7% of respondents said they main- sumers are saying about their brands, respondents who identified them- tain an active presence there. a 33.7% increase over 2011. And 74% selves as doing 60% or more busi- But is it an “active presence,” or said they use social media to engage in ness in the b-to-b space didn’t place just a presence? Because Google in- conversations with their customers— as much value on social media as Dell cludes a Google+ presence as a part of that’s up 7.4% from last year. does. Two-thirds said they are using its algorithm, merchants are taking a Computer seller Dell said last year social media to monitor what con- minimal approach to Google+ to keep that it uses social media to drive re- sumers are saying about their brands from getting penalized in the search lationships and engagement, and that (which is up significantly from 38.1% rankings (bit.ly/mcm-google-plus). it needs to drive a value-add for the in 2011), and 54.2% said they use so- Take L.L. Bean, for example. The customer (bit.ly/KHEru8). It also said cial media to engage in conversations outdoors apparel merchant used social media has seven-times more with their customers—down from Facebook to tell its brand story and impact on its b-to-b customers than two-thirds last year. engage with followers on a daily basis (on.fb.me/mcm-llbean). But it engag- es its followers on Google+ with offers and incentives on a less frequent ba- sis (bit.ly/mcm-llbean-plus). A little more than 500 Google+ users have L.L. Bean in their circles, while more than 100,000 people on Facebook “like” L.L. Bean. While merchants see social media as a place to listen to and engage with customers and prospects, they don’t see it as a place to sell. Just 6.7% of re- spondents said they have a Facebook commerce store, and only 8.4% said they use Facebook commerce sales to measure success in social media. Last year, merchants told Multi- channel Merchant that they were testing the waters to see how Facebook commerce could work for them (bit. ly/Kjae75). While smaller niche sellers such as Beaded Impressions saw some sales and exposure with outsourced Facebook commerce apps, larger mer- chants like Roaman’s and Express cre- ated inhouse solutions, just in case Facebook commerce took off. But merchants did use social me- Sponsored by: 5
- 6. Eco mmerce Seizing the search engines There was a time when search engine marketing, search engine optimization and pay-per-click advertising were over- looked by online merchants (bit.ly/seo- sem-ppc). Now, however, merchants have not only discovered the value of those three search engine tactics, they are finding better ways to measure re- sults and improve on their efforts. In last year’s MCM Outlook sur- vey, 80.2% of merchants cited sales as the number-one way they measured their SEO and SEM efforts. That number dipped to 77.4% (a decline of 3.6%), according to MCM Out- Sponsored by: 6
- 7. Eco mmerce look 2012-13. And sales was replaced survey. Total conversions as a measure- (60%) said they are reaching deeper at the top by traffic. ment tool grew by 19.3%, clickthroughs into their analytics, a 21% increase A distant second last year at 70.2%, by 15.7% and rankings by 11%. from 49.6% from last year; and 42.6% traffic was cited by 86.1% of respon- Merchants still felt that optimiz- said they are increasing PPC terms dents in this year’s poll as the top way ing landing pages was the best way (up 58.4% from 2011). merchants measure SEO and SEM ef- to improve their search engine rank- Merchants also upped their SEM forts (an increase of 22.7%). ing, but that also had the largest drop budgets to an average of 23.54% of their Three other answers to that mea- of all the answers (down 12.8%, to overall marketing budgets (a 5.59% surement question grew by double- 62.6%, in 2012). increase). An average of 43.39% of the digits in the MCM Outlook 2012-13 Three-fifths of the respondents search marketing budget is going toward PPC (up 8.82 percentage points from last year), while 25.77% is earmarked for SEO (down 1 percentage point). QR code adoption rises It’s hip to be square. QR code usage soared after last year’s MCM Outlook survey was completed. At that time, the United States Postal Service had an- nounced a “summer sale.” Mailers that used a QR code on or in a direct market- ing piece in July and August 2011 were offered a 3% discount. The USPS said nearly one-third of all standard mail during that timeframe contained a QR code (bit.ly/qr-code-2011). And with the USPS recently an- nouncing a similar sale for 2012 (bit. ly/qr-code-2012), the number of merchants using QR codes has grown to 42.7%. Last year, just 8.6% were using them. The number of merchants who said they are not using QR codes as a part of their marketing strategy is still pretty high, at 38%. But last year, that was 71.6%. Last year, 19.8% said they weren’t Sponsored by: 7
- 8. Eco mmerce using QR codes but were considering revenue opportunity. ple who had abandoned carts. That it. That number has dropped to 14.8% Last year’s results showed that, number dropped to 38.3% in MCM this year. aside from email reminders, 60.9% Outlook 2012-13. The USPS seems to have changed of merchants did not market to peo- The ways merchants have marketed the way merchants look at QR codes as a part of their marketing cam- paigns. MCM Outlook 2012-13 shows that 63.2% of respondents are us- ing them in print catalogs (up 28.2% from last year), and 47.4% have them on postcards and other non-catalog mail pieces (up 12.4%). Capturing cart abandoners As ecommerce grows in volume, so does the number of abandoned shop- ping carts. And it seems that merchants have begun paying attention to this lost Sponsored by: 8
- 9. Eco mmerce to shopping cart abandoners has also l 35.5% do not offer alternative pay- l 41.3% of merchants are selling in the grown. For example, 37.4% have offered ment methods on their sites, down Amazon Marketplace; 45.9% are not cart abandoners a special offer via email, from 56.2%. selling in marketplaces at all. up 13.9% from last year. And 29.9% are remarketing to abandoners via remar- l 65.1% of ecommerce sites include l 74.8% of merchants measure success keting ads. That’s up 18.6% from 2011. a trustmark of approval from a third- in social media by the number of fol- party company, up from 59.1%. lowers or fans, up from 64.2%. Quick hits: l Video is starting to catch on. Almost 64.3% of respondents said they are using it on their ecommerce sites, up 29.6% compared to last year. But fewer merchants are allowing users to upload videos to their sites (15.2% this year, 20.8% in 2011). l 37.8% of respondents offer Live Chat, up from 20.3% last year. l 70.5% offer their customers the abili- ty to refine search results, up from 52%. Sponsored by: 9
- 10. Eco mmerce METHODOLOGY An online survey was fielded by Multichannel Merchant be- ginning on April 19. Subsequent mailings were sent to Multichan- nel Merchant’s subscriber list, as well as to those of sister publica- tions Chief Marketer and DIRECT. Emails were also sent to members of Multichannel Merchant’s two LinkedIn groups (Multi- channel Merchant and O+F Operations & Fulfillment). A link to the survey was also tweeted via Multichannel Merchant group and individual accounts. As an incentive to participate, survey respondents were offered the chance to win a $200 American Express gift card. When the survey closed on May 21, there were 952 respondents. Of those, 654 (69%) indicated that their company was an online merchant, retailer, manufacturer, publisher/media or a wholesale dis- tributor. Those active respondents form the basis of the survey results. Sponsored by: 10