Teleconference The Outlook For US eCommerce In 2008 And Beyond Sucharita Mulpuru Principal Analyst Forrester Research February 20, 2008. Call in at 12:55 p.m. Eastern time
B2C US eCommerce will continue to grow at a double-digit clip
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January 2008 “US eCommerce Forecast: 2008 To 2012”
Forecast: US eCommerce, 2007 To 2012
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January 2008 “US eCommerce Forecast: 2008 To 2012”
Forecast: US eCommerce, 2007 To 2012 (Cont.)
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January 2008 “US eCommerce Forecast: 2008 To 2012”
Forecast: US eCommerce, 2007 To 2012 (Cont.)
© 2007, Forrester Research, Inc. Reproduction Prohibited
Online holiday sales were strong “Given the total amount you spent during the holiday season, what percent was spent in each channel?” 100% 90% 23% 34% 80% 70% 60% Online Stores 50% 71% Other 40% 61% 30% 20% 10% 6% 5% 0% 2006 2007 Base: US online consumers
Source: Consumer Technographics ® Post-Holiday Retail Online Survey, Q1 2008
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This growth has happened in spite of economic conditions . . .
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. . . including a declining dollar US$ to Euro Interbank rate 0.9
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1/1/2008
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December 2007 “US Online Travelers’ Outlook On The Economy And Spending”
Consumers’ Views Of Their Financial Situations And The US Economy
December 2007 “US Online Travelers’ Outlook On The Economy And Spending”
Consumers’ Views Of Their Financial Situations And The US Economy (Cont.)
eCommerce may be insulated because: • Online consumers tend to be more affluent in general. • Online consumers use the channel because it is just more convenient. • Only 15% of US online consumers agreed with the statement “I bought less online this holiday season due to uncertainty about the US economy.” • While overall retail sales may be flat or declining in most stores, online retailers still experience upward trajectories from a channel shift.
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The Web is growing faster than stores US$B $3,000
Online sales
Non-online sales
$2,000 $2,605
$2,646
$2,689
$2,734
$2,783
CAGR 2008-12: 2%
$1,000 CAGR 2008-12: 13%
$0
$204
$235
$268
$301
$335
2008
2009
2010
2011
2012
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The reasons consumers shop online remain the same
I prefer to shop online to avoid crowds/lines
I found products online that I couldn’t find anywhere else
I found the best values/deals online
CONVENIENCE
SELECTION
VALUE
40%
42%
49%
46%
43%
44%
46%
48%
Base: US online consumers
Source: Consumer Technographics ® Post-Holiday Retail Online Survey, Q1 2008
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50%
Core shoppers drive most of eCommerce
Half of online shoppers drive two-thirds of online shopping spend.
Source: Consumer Technographics ÂŽ Post-Holiday Retail Online Survey, Q1 2008
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Consumer problems haven’t improved with time “Did you experience any complications while shopping online during holiday 2007?”
Shipping prices were higher than expected
21%
The item I purchased was backordered or not in stock
58% No
42% Yes Base: US online Web buyers
17%
Shipping ended up taking longer than I had expected
13%
Poor Web site performance (e.g., sluggishness)
8% 0%
5% 10% 15% 20% 25%
Source: Consumer Technographics ® Post-Holiday Retail Online Survey, Q1 2008
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January 2008 “US eCommerce Forecast: 2008 To 2012”
This makes Web shopping very utilitarian
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December 2007 “Which Personalization Tools Work For eCommerce — And Why”
We believe some trends will shape the coming years
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This should mean more experiences like this:
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Consumers still prefer to shop in stores “Please rank the following channels in order of your purchasing preference.” Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Traditional offline stores
74%
19%
4%
2%
2%
Online
22%
52%
11%
7%
8%
Print catalog
1%
18%
50%
24%
7%
By telephone (e.g., flowers)
2%
9%
26%
45%
19%
Television (e.g., shopping channel, infomercial)
1%
2%
9%
22%
64%
Base: US online consumers
Source: Consumer Technographics ® Retail Online Survey, Q3 2007
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This should mean stronger multichannel integration
US leaders
International leaders
Circuit City
FNAC
Best Buy
Tesco
Wal-Mart
ASDA
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On-demand production driven by the long tail
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Better, richer user experiences
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Prognosis
Despite economic conditions, eCommerce should continue on a strong, upward trajectory.
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One last plug • For those of you interested in more online retail metrics who also have an eCommerce business, participate in our annual “The State of Retailing Online” survey! • Rich report with the following data points: » Marketing spend » Merchandising priorities » Percent of business through the Web channel » Multichannel priorities
• Email me (smulpuru@forrester.com) or retailresearch@forrester.com for a link to the survey. • Must be completed very, very soon.
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Thank you Sucharita Mulpuru smulpuru@forrester.com www.forrester.com
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