1 Proprietary and Confidential. MARS Advertising, Inc. All Rights Reserved. ÂŠ 2008
E-Commerce sales are booming…
• On average, online retail sales are expected to grow at an annual rate of 14% from 2007 to 2012, compared to only 2.6% for brick & mortar stores. • E-commerce is expected to account for nearly 13% of total U.S. retail sales by 2012. • In the OTC Medications & Personal Care category specifically, total ecommerce sales are expected to grow 133%, from $1.8 BB to $4.2 BB, between 2007 and 20012.
Source: U.S. E-Commerce Forecast: 2008 to 2012, Forrester Research, February 2008
… despite the slumping economy “E-commerce continues its double-digit year-over-year growth rate, in part because sales are shifting away from stores and in part because online shoppers are less sensitive to adverse economic conditions than the average U.S. consumer.”
E-commerce appears to be insulated from the current economic downturn because… • • •
Online consumers tend to be more affluent in general. Online consumers use the channel because it is more convenient. While overall retail sales may be flat or declining, online retailers still experience upward trajectories from a channel shift.
Source: U.S. E-Commerce Forecast: 2008 to 2012," Forrester Research, February 2008
Website Unique Visitors (September 2008) Rank Pure e-Retailers amazon.com 55,762,079 10 drugstore.com 2,151,968 645 Brick & Mortar.coms target.com 25,372,322 28 walmart.com 25,042,978 29 walgreens.com 5,998,178 174 costco.com 5,901,946 180 kmart.com 4,502,466 264 samsclub.com 4,338,725 273 cvs.com 2,880,771 458 riteaid.com 1,419,490 1,073 meijer.com 1,180,910 1,307 safeway.com 1,089,707 1,432 bjs.com 1,083,016 1,445 publix.com 776,173 2,116 albertsons.com 548,460 3,089 dollargeneral.com 476,766 3,574 heb.com 205,742 8,781
Website myalli.com nicorette.com aquafresh.com tums.com breatheright.com abreva.com citrucel.com
Unique Visitors (September 2008) 226,546 147,935 139,553 13,465 7,795 7,709 3,998
Rank 7,975 12,351 13,175 113,543 179,176 180,904 312,242
Retailer websites are benefitting from the increased activity •
The sites for many of GSK’s key retail partners attract significantly more traffic than GSK’s own brand pages. –
Even if we assume that only 1% of walmart.com’s monthly audience clicks through to an Aquafresh product page, that would still represent nearly 250,000 unique visits – almost 80% more than aquafresh.com currently receives.
Amazon.com, walmart.com and target.com are among the most trafficked sites on the entire Web. –
They receive more monthly unique visitors than sites like nytimes.com, mlb.com, weather.com and ask.com.
Source: www.compete.com, May 2008
And so are their brick & mortar outlets Beyond promoting a rapid increase in ecommerce transactions, the Web also plays a prominent role in influencing brick & mortar retail sales. •
In 2007, retailers reported that 27% of store sales were either directly or indirectly influenced by the web.
In December 2007, 91.6% of consumers reported researching products online “regularly or occasionally” prior to making a purchase decision.
eMarketer forecasts that in 2008, Web-influenced store sales will reach $625.2 BB, compared with $158.3 BB in retail e-commerce sales.
From 2007 to 2012, Web-influenced store sales are expected to grow at a 19% average annual rate, compared with a 14% rate for e-commerce sales.
In 2008, online product research generated $3.95 in offline sales for every $1 in e-commerce sales; that number is expected to increase to $4.68 by 2012.
Sources: *U.S. E-Commerce Forecast: 2008 to 2012," Forrester Research, February 2008; **Multi-Channel Shopping Changing E-Retail, eMarketer, June 2008
And thus, the case for a thoughtful online content strategy…
“As online retailing and marketing have matured, many retailers and marketers have learned that consumers have an insatiable thirst for information about the products they research and buy online. A variety of these retailers have attempted to gauge the right amount of product content for their Web sites, ultimately discovering that more product content is always better at driving conversions and desired customer outcomes. As a result, a majority of retailers rank improved product content — which ranges from sizing charts to images and video — as their top priority in the coming year.” Specifically, a well-executed online content strategy can: – Help online retailers boost customer buying confidence – Support critical cross-channel shopping scenarios – Enhance manufacturers’ brand, sales, and retailer support efforts
Source: Maximizing E-Commerce Content to Drive Sale, Forrester Research, May 2008
And just for good measure… • Targeted Measurable Reach (TMR) – Affords us the opportunity to deliver targeted, shopper-specific communication to a highly-engaged online audience – More likely to lead to a deeper brand education, an immediate sale and a re-contact opportunity – Easier to measure and analyze program performance due to wider availability of data
• Low-Hanging Fruit – "Consumers do exhibit loyal behavior to the channel, provided that retailers are able to meet and exceed customer expectations. By focusing more energy on accurate product information, improved imagery/photography, and flexibility in payments and returns, and by reducing the hurdles of shipping costs, online retailers can go a long way in currying favor with shoppers.” -U.S. E-Commerce Forecast: 2008 to 2012," Forrester Research, February 2008