Download pdf - Holiday Predictions 2013

Holiday Predictions Survey Results, July 2013

WHY WE CONDUCTED THE RESEARCH

• Check in on trends from previous research

• Understand what is most important to retailers today

• Hear from retailers on what they are doing that is new

• Learn from their feedback

• Provide consultative advice to our clients

Baynote, Inc. © 2013 2

HOLIDAY PREDICTIONS 2013


THE DEMOGRAPHICS: 77 RETAILERS

33%

13%

6%

10%

13%

9%

9%

7%

Less than $20 million

$21 to $50 million

$51 to $100 million

$101 to $200 million

$201 to $500 million

$501 million to $1 billion

$1 to $5 billion

More than $5 billion

Company's Annual Revenue

16%

17%

17%

4%

11%

35%

Less than 5%

6% to 10%

11% to 25%

26% to 50%

51% to 75%

More than 75%

eCommerce as a % of Business


TOPLINE THOUGHTS

HOLIDAY SPENDING

• Strong growth projected for 2013 holidays projected increases in the 11-15% range (Note: in line with industry projections)

• Mobile is making significant inroads while retailers are challenged to see social’s revenue contribution

• Retailers are cautiously optimistic given customer confidence levels; promotions are likely to be in play


TOPLINE THOUGHTS

READINESS

• Retailer investment has been significant from marketing (SEO/SEM) and platform upgrades with mobile and retargeting also top-of-mind

• Customer experience investment tends to be “tactical” starting with improving key pages, onsite search and enhancing content


TOPLINE THOUGHTS

PROMOTIONS

• Retailers are split regarding deploying promotions likely based on category buying patterns with only 1/3 early birds (October or before)

• Selectivity is key: protect profitability rather than a blanket selling strategy

• Free shipping will also be deployed selectively most often associated with a minimum purchase


HOLIDAY SPENDING


60% of retailers forecast growth >10%

Almost 1-in-4 expect 21%+ increases

5%

9%

12%

14%

23%

15%

12%

10%

Down

Flat

+1% to +5%

+6% to +10%

+11% to +15%

+16% to +20%

+21% to +30%

More than 31%

Q. How do you expect your overall online sales to change during the 2013 holiday?


60% of retailers allocate more than 1/5th of their marketing budget to holiday

12%

13%

15%

21%

22%

17%

0% to 10%

11% to 15%

16% to 20%

21% to 30%

31% to 40%

More than 41%

Q. What percentage of your annual online marketing budget is allocated to the holiday season?


The Forecast: Retailers are cautiously optimistic, promotion-

minded and believe they will make their numbers

Top-2:

Strongly to

Somewhat Agree

Neither agree

nor disagree

Top-2:

Strongly to

Somewhat Disagree

We’re cautiously optimistic that it will be a strong online holiday season 80% 12% 8%

The holidays will be promotion-centric so we are planning accordingly to ensure we deliver

from a bottom-line perspective 73% 18% 9%

The holidays will start out slowly but eventually gather momentum, and we’ll make plan 53% 30% 17%

It’s going to be a strong online holiday season 52% 30% 18%

We’re a bit nervous that we won’t make our aggressive plan 47% 19% 34%

Consumers still lack “complete” confidence in the economy so it’s going to be a flat online

holiday season at best 35% 26% 39%

We are pessimistic and have adjusted our forecast accordingly 14% 17% 69%

Baynote, Inc. © 2013

Q. Please note your level of agreement with the following statements.

Lack of customer confidence plays into caution & fear that aggressive plans

won’t be met

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MOBILE MATTERS


Top-2 Strongly to Somewhat

Agree 53%

Neither agree nor disagree

9%

Top-2: Strongly to Somewhat Disagree

38%

Mobile will be a significant part of our revenue this holiday season

Mobile revenue expectations are high for the holidays


1 in 3 retailers project mobile will be more than 10% of their holiday revenues


8%

29%

29%

22%

7%

5%

0%

1-5%

6-10%

11-15%

16-20%

21%+

What percentage of your 2013 holiday revenue do you anticipate will come from the mobile channel?

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SYSTEMS READINESS


Answer Options Significant Limited No

Investment N/A

SEO/SEM 46% 46% 6% 2%

ECommerce platform upgrades 43% 38% 15% 4%

Mobile enhancement (e.g. apps, mcommerce, in-store, SMS, QR codes, payment methods) 32% 50% 14% 4%

Retargeting/advertising 31% 59% 10% 0%

Logistical improvements (faster fulfillment, more delivery choices) 26% 53% 18% 3%

Testing 23% 64% 12% 1%

Cart abandonment strategies 19% 64% 14% 3%

Big data capture, retrieval and analytics capabilities 18% 50% 27% 5%

Social (e.g. Facebook, Twitter, Pinterest, social listening tools, blogs) 17% 62% 20% 1%

Paper catalog 16% 25% 35% 24%

Alternative payment methods (e.g. digital wallets, bit coin, touchless mobile-to-mobile

transactions, etc.) 10% 24% 57% 9%

Cross-channel logistics (e.g. in-store pickup, check in-store product availability, e-receipts) 7% 34% 29% 30%

SEO/ SEM and platform upgrades see

significant investment ahead of holiday

Mobile, retargeting and testing are also top-of-mind for retailers

Q. Please note your level of TECHNOLOGY investment in 2013 from no investment to

significant investment. If a particular feature or upgrade does not apply to your business,

please select N/A.


Dedicated efforts to improve key pages,

enhanced site search and augmenting content

lead customer experience investments

Answer Options

Significant Limited No Investment N/A

Improved key pages (e.g. home page, category page, product page) 48% 46% 6% 0%

Enhanced site search 37% 40% 22% 1%

Streamlined shopping cart 30% 49% 18% 3%

Increased content (e.g. documents, videos, tips) 30% 57% 10% 3%

Overall site redesign 29% 53% 17% 1%

Initiated or evolved loyalty program 18% 29% 40% 13%

Personalized zones site-wide from home page to follow up emails 17% 36% 44% 3%

User-generated content and tools (e.g. reviews, Q&A) 14% 55% 28% 3%

Rich media or related tools (e.g. zoom, alternative views) 13% 39% 39% 9%

Expanded customer service (e.g. 24x7 access) 4% 38% 51% 7%

Q. Please note your level of CONSUMER EXPERIENCE investment in 2013 from no

investment to significant investment. If a particular feature or upgrade does not apply to

your business, please select N/A.


GIFTING


Retailers are making limited or no

investment in gifting: most already have

requisite feature set

Answer Options Significant Limited No Investment N/A

Ship to multiple addresses within a single checkout 4% 21% 58% 17%

Ability to hold gifts to ship later 5% 16% 57% 22%

Ability to store addresses of friends and family to access when sending gifts 2% 29% 52% 17%

Promotion of gift cards in personalization zones 4% 25% 52% 19%

Wish lists 6% 34% 45% 14%

Traditional gift certificates 1% 39% 42% 18%

egift or digital gift cards 9% 39% 38% 14%

Enhanced gift center/gift suggestions 7% 42% 34% 17%

Q. Please note your level of GIFTING investment in 2013 from no investment to

significant investment. If a particular feature or upgrade does not apply to your

business, please select N/A.


TESTING


Testing continues for 3 of 4 retailers yet only

a handful of retailers will increase frequency

Testing 71%

No Testing 17%

Test More Frequently

12%

Q. Which of the following best describes your approach to testing during the holiday season?

12%


PROMOTIONAL STRATEGIES


Retailers get a jump on the season: 1 in 3

deploy holiday campaigns in early October

……yet 40% will wait until November to initiate holiday marketing

30%

4%

7%

4%

16%

21%

5%

14%

Week of 10/1 or earlier

Week of 10/7

Week of 10/14

Week of 10/21

Week of 10/28

Week of 11/4

Week of 11/11

Week of 11/18 or later

Q. When do you plan to start your ONLINE holiday marketing and promotion campaigns (choose 1)?


Retailer promotion budgets vary

substantially: driven by product category and

brand orientation

13%

25%

22%

18%

22%

0%-10%

11% to 20%

21% to 30%

31% to 40%

More than 40%

Q. What percentage of your total 2013 promotion budget is allocated to holiday?


Marketing and promotion budgets are

aligned for the holiday season

12%

13%

15%

21%

22%

17%

13%

12%

13%

22%

18%

22%

0% to 10%

11% to 15%

16% to 20%

21% to 30%

31% to 40%

More than 41%

Budgets as a % of Revenue

Marketing

Promotion


CORE STRATEGIES: MOBILE


Mobile significantly impacts revenue:

social impact seen as marginal

0% 1%-5% 6%-10% 11%-15% 16%-20% 21%-30% 31%-40% 41%-50% 50%+

Mobile

8% 29% 29% 22% 7% 4% 1% 0 0

Social

33% 51% 7% 3% 3% 3% 0 0 0

In-Store

41% 6% 5% 3% 3% 1% 4% 3% 34%

Online

0% 7% 14% 2% 4% 9% 4% 7% 53%

Q. What percentage of your 2013 holiday revenue do you anticipate will come from each of the following channels?


8%

29%

29%

22%

7%

5%

33%

51%

7%

3%

3%

3%

0%

1-5%

6-10%

11-15%

16-20%

21%+

What percentage of your holiday revenue do you anticipate will come from mobile and social channels?

Mobile

Social

Social revenue trends <5% while the

majority project mobile >5%


CORE STRATEGIES:

CUSTOMER EXPERIENCE


Answer Options Significant Limited No

Investment N/A

SEO/SEM 46% 46% 6% 2%

ECommerce platform upgrades 43% 38% 15% 4%

Mobile enhancement (e.g. apps, mcommerce, in-store, SMS, QR codes, payment methods) 32% 50% 14% 4%

Retargeting/advertising 31% 59% 10% 0%

Logistical improvements (faster fulfillment, more delivery choices) 26% 53% 18% 3%

Testing 23% 64% 12% 1%

Cart abandonment strategies 19% 64% 14% 3%

Big data capture, retrieval and analytics capabilities 18% 50% 27% 5%

Social (e.g. Facebook, Twitter, Pinterest, social listening tools, blogs) 17% 62% 20% 1%

Paper catalog 16% 25% 35% 24%

Alternative payment methods (e.g. digital wallets, bit coin, touchless mobile-to-mobile

transactions, etc.) 10% 24% 57% 9%

Cross-channel logistics (e.g. in-store pickup, check in-store product availability, e-receipts) 7% 34% 29% 30%

SEO/ SEM and platform upgrades see

significant investment ahead of holiday

Mobile, retargeting and testing are also top-of-mind for retailers

Q. Please note your level of TECHNOLOGY investment in 2013 from no investment to

significant investment. If a particular feature or upgrade does not apply to your business,

please select N/A.


Dedicated efforts to improve key pages,

enhanced site search and augmenting content

lead customer experience investments

Answer Options Significant Limited No Investment N/A

Improved key pages (e.g. home page, category page, product page) 48% 46% 6% 0%

Enhanced site search 37% 40% 22% 1%

Streamlined shopping cart 30% 49% 18% 3%

Increased content (e.g. documents, videos, tips) 30% 57% 10% 3%

Overall site redesign 29% 53% 17% 1%

Initiated or evolved loyalty program 18% 29% 40% 13%

Personalized zones site-wide from home page to follow up emails 17% 36% 44% 3%

User-generated content and tools (e.g. reviews, Q&A) 14% 55% 28% 3%

Rich media or related tools (e.g. zoom, alternative views) 13% 39% 39% 9%

Expanded customer service (e.g. 24x7 access) 4% 38% 51% 7%

Q. Please note your level of CONSUMER EXPERIENCE investment in 2013 from no

investment to significant investment. If a particular feature or upgrade does not apply to

your business, please select N/A.


CORE STRATEGIES:

PROMOTIONS &

PROFITABILITY Baynote, Inc. © 2013 32

Promotion budgets vary substantially driven by product category and brand orientation

13%

25%

22%

18%

22%

0%-10%

11% to 20%

21% to 30%

31% to 40%

More than 40%

Q. What percentage of your total 2013 promotion budget is allocated to holiday?


Retailers to be selective in timing promotions offered to shoppers: flash sales & social lead

Answer Options Select Times All the Time Will Not Use

Flash sales or limited time promotions 66% 16% 18%

Social promotions 64% 17% 19%

Other incentives (e.g. buy 1 get 1 free, buy more save more, save X if spend X,

post-sale rebate) 60% 21% 19%

Online-only sale 52% 30% 18%

Coupons ($ or % off) 52% 36% 12%

Mobile promotions 49% 10% 40%

Gift with purchase 45% 9% 45%

Store-only sale 38% 4% 58%

Outlet/clearance page 25% 43% 32%

Rewards points 19% 8% 73% Q11

Outlets and coupons are the standard bears that are omnipresent for 1-in-3 retailers

Q. Which of the following promotions will be part of your holiday plan?


Retailers must decide on free shipping and divided on use with minimum purchase: most will use at “select”

times

Answer Options Select Times All Season Will Not Use

Free shipping – minimum purchase 45% 30% 25%

Free shipping – no minimum 44% 9% 47%

Free priority / 2-day shipping 40% 5% 55%

Free shipping – select products 38% 9% 53%

Free express / overnight shipping 23% 1% 76%

Free same-day delivery 8% 1% 91%

No free shipping offers 8% 8% 84%

Q. Which tactics and via what means will you employ shipping-related promotions

during the holidays?


3 of 4 retailers will offer free shipping with a minimum purchase sometime during the holiday

season


Free shipping – minimum purchase 45% 30% 25%

Free shipping – no minimum 44% 9% 47%

Free shipping – select products 38% 9% 53%

No free shipping offers 8% 8% 84%

44% will not require a minimum threshold but only at select times of the year

Q. Which tactics and via what means will you employ

shipping-related promotions during the holidays?


<50% will selectively use free priority or 2-day shipping; only 1 in 5 will extend free

express/overnight shipping


Free priority / 2-day shipping

40% 5% 55%

Free express / overnight shipping

23% 1% 76%

Free same-day delivery

8% 1% 91%

Q. Which tactics and via what means will you employ

shipping-related promotions during the holidays?


• What % of your business is done during the holiday season?

• Which tactics are core to your gifting strategy?

• How will you leverage email over the holidays?

• When is the right time to begin your first holiday campaign?

• Have you developed a robust gift center that supports all of your gifting needs?

• Are gift cards both traditional and email integrated throughout the shopping experience?

• What plans do you have in place to ensure that gifting is visible throughout your site?

• Are there any last-minute changes you could make to your gifting strategy in anticipation of the season?

• Have you embraced newer technologies including mobile and social?

Retailer Holiday Readiness Checklist



For More Information


Lauren Freedman, President

773-975-7280

[email protected]

Marti Tedesco, Sr. Director of Marketing

650-255-4219

[email protected]

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mailto:[email protected]

