Outlook 2012-13: Ecommerce TEXT BY: TIM PARRY CHARTS BY: KATE DIMARCO
oliday 2011 went down in the books as the busiest one ever for ecommerce. ComScore reported that consumers spent $35.3 billion at consumer ecommerce sites between 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 department store Macy’s (which saw its ecommerce sales rise 40.3%). But were these kinds of numbers only a sign that the U.S. economy has rebounded? Or was something else at work? Based on MCM Outlook 2012-13 results—coupled with an overall 2011 holiday sales growth of 4.1% as reported by the National Retail Federation— it’s evident that merchants have responded to consumer shopping behaviors and adapted to maximize their online sales.
Merchants embracing mobile commerce It’s taken a while for merchants to embrace m-commerce. But after surprisingly low mobile adoption numbers in 2011, it’s evident that merchants are ready for the small screen. Although 47.3% of MCM Outlook
2012-13 respondents said they are not using m-commerce, that’s down 56.7% from last year. And 29.5% of respondents said they have a dedicated m-commerce site—a 211% gain compared to the 2011 results. Another 13.4% said their sites are optimized for mobile. That question was not asked in 2011.
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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 mobile search ads, that number is up 120% from last year. Why the sudden jump into mobile? The influence of the late Steve Jobs may have something to do with it. Nearly a quarter of the respondents (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. Thatâ€™s still 16.9% less than those who didnâ€™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 clientsâ€™ double-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 marketplaces (the question was not asked in 2011). That includes 44.3% of merchants who identified themselves as primarily b-to-c sellers. According to the survey results, 36.7% of merchants are using marketplaces 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/
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mcm-gaelsong), but now merchants may be worried about losing future sales to Amazon.com, eBay and others. But the marketplaces are seen as places to sell overstocks and overruns (bit.ly/mcm-liquidate). Half the merchants who identified themselves as primarily b-to-b merchants said they are not selling in marketplaces, but that number is expected to drop. On the same day we deployed MCM Outlook 2012-13, Amazon launched its b-to-b marketplace, AmazonSupply. 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 Charlie Sheen, “Winning” became a big social 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
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that allows users to share images and links that can be pinned by other users, grew by leaps and bounds during the second half of 2011 (bit.ly/ mcm-pinterest), and multichannel merchants took an interest, according to MCM Outlook 2012-13 results. Although no respondents said they were using the social media, 34.2% of merchants who took the 2012-13 survey said they maintain an active presence in Pinterest. Which is not to say that Pinterest has overtaken the two social media juggernauts: 87.4% of merchants maintain an active presence in Facebook, 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 engagement and received a “whopping” 366 entries, according to its blog (bit. ly/mcm-threadless). As a result, it added a Pinterest button on submission 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 newcomer to the social media landscape.
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MCM Outlook 2012-13 also revealed big steps for Google Plus (Google+): 29.7% of respondents said they maintain an active presence there. But is it an “active presence,” or just a presence? Because Google includes a Google+ presence as a part of its algorithm, merchants are taking a minimal approach to Google+ to keep from getting penalized in the search rankings (bit.ly/mcm-google-plus). Take L.L. Bean, for example. The outdoors apparel merchant used Facebook to tell its brand story and engage with followers on a daily basis (on.fb.me/mcm-llbean). But it engages its followers on Google+ with offers and incentives on a less frequent basis (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 respondents 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 Multichannel 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 merchants like Roaman’s and Express created inhouse solutions, just in case Facebook commerce took off. But merchants did use social me-
dia to listen to consumers—76.9% said they use it to monitor what consumers are saying about their brands, a 33.7% increase over 2011. And 74% said they use social media to engage in conversations with their customers— that’s up 7.4% from last year. Computer seller Dell said last year that it uses social media to drive relationships and engagement, and that it needs to drive a value-add for the customer (bit.ly/KHEru8). It also said social media has seven-times more impact on its b-to-b customers than
on its b-to-c buyers. However, MCM Outlook 2012-13 respondents who identified themselves as doing 60% or more business in the b-to-b space didn’t place as much value on social media as Dell does. Two-thirds said they are using social media to monitor what consumers are saying about their brands (which is up significantly from 38.1% in 2011), and 54.2% said they use social media to engage in conversations with their customers—down from two-thirds last year.
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Seizing the search engines There was a time when search engine marketing, search engine optimization and pay-per-click advertising were overlooked by online merchants (bit.ly/seosem-ppc). Now, however, merchants have not only discovered the value of those three search engine tactics, they are finding better ways to measure results and improve on their efforts. In last yearâ€™s MCM Outlook survey, 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-
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look 2012-13. And sales was replaced at the top by traffic. A distant second last year at 70.2%, traffic was cited by 86.1% of respondents in this year’s poll as the top way merchants measure SEO and SEM efforts (an increase of 22.7%). Three other answers to that measurement question grew by doubledigits in the MCM Outlook 2012-13
survey. Total conversions as a measurement tool grew by 19.3%, clickthroughs by 15.7% and rankings by 11%. Merchants still felt that optimizing landing pages was the best way to improve their search engine ranking, but that also had the largest drop of all the answers (down 12.8%, to 62.6%, in 2012). Three-fifths of the respondents
(60%) said they are reaching deeper into their analytics, a 21% increase from 49.6% from last year; and 42.6% said they are increasing PPC terms (up 58.4% from 2011). Merchants also upped their SEM budgets to an average of 23.54% of their overall marketing budgets (a 5.59% increase). An average of 43.39% of the 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 announced a “summer sale.” Mailers that used a QR code on or in a direct marketing 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 announcing 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
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using QR codes but were considering revenue opportunity. Last yearâ€™s results showed that, it. That number has dropped to 14.8% aside from email reminders, 60.9% this year. The USPS seems to have changed of merchants did not market to peothe way merchants look at QR codes as a part of their marketing campaigns. MCM Outlook 2012-13 shows that 63.2% of respondents are using 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%).
ple who had abandoned carts. That number dropped to 38.3% in MCM Outlook 2012-13. The ways merchants have marketed
Capturing cart abandoners As ecommerce grows in volume, so does the number of abandoned shopping carts. And it seems that merchants have begun paying attention to this lost
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to shopping cart abandoners has also grown. For example, 37.4% have offered cart abandoners a special offer via email, up 13.9% from last year. And 29.9% are remarketing to abandoners via remarketing ads. Thatâ€™s up 18.6% from 2011.
l 35.5% do not offer alternative pay-
l 41.3% of merchants are selling in the
ment methods on their sites, down from 56.2%.
Amazon Marketplace; 45.9% are not selling in marketplaces at all.
l 65.1% of ecommerce sites include
l 74.8% of merchants measure success
a trustmark of approval from a thirdparty company, up from 59.1%.
in social media by the number of followers 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%.
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METHODOLOGY An online survey was fielded by Multichannel Merchant beginning on April 19. Subsequent mailings were sent to Multichannel Merchantâ€™s subscriber list, as well as to those of sister publications Chief Marketer and DIRECT. Emails were also sent to members of Multichannel Merchantâ€™s two LinkedIn groups (Multichannel 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 distributor. Those active respondents form the basis of the survey results.