Press Releases

the e-tailing group 10th Annual Merchant Survey

Diligent Investing plus Solid Execution is the Formula for Evolved Selling

In anticipation of revenue growth merchants will be investing significantly more in ecommerce in 2011 compared to 2010

FOR IMMEDIATE RELEASE
April 12, 2011

“To succeed in today’s commerce anywhere marketplace merchants must not only deploy an ever-expanding depth and breadth of features and functionality, they must ensure that execution is solid to deliver seamless shopping across all channels of distribution,” advises Lauren Freedman, President of the e-tailing group. “From strategic planning to merchandising to marketing they are diligently investing to meet the demands of sophisticated, technology-savvy consumers based on the findings of the e-tailing group’s 10th Annual Merchant Survey completed by a cross-section of 200 retailers.”

  • 90% of merchants anticipate Internet revenues will increase over last year; 46% vs. 36% are projecting those revenues to climb 16% or more as the channel continues to evolve
  • eCommerce investments “somewhat to significantly more” are up slightly over last year (69% vs. 66%) but those planning to invest “significantly more” jumps to 27% vs. just 7% in 2010

A. Strategic initiatives are expanding beyond the basics
Initiatives in the forefront focus on the customer experience, service, retention, and profitability. With merchants rallying to get on the Mobile and Social bandwagon, these areas see the most significant year-over-year acceleration (+26 and +20 percentage points respectively). Branding and global initiatives also grow in importance (each +13 percentage points) as does process improvement (+12 percentage points).

Three new metrics (highlighted in green) have been added this year based on evolving goals: data/content improvement (83%), testing (64%), and replatforming (33%).

B.   Initiatives to improve website performance remain important
The list of initiatives to specifically improve website performance are consistent year-over-year with targeted email (78%), improved onsite search (68%), and enhanced onsite merchandising features (66%) topping the list.

Here too we see the impact of mobile commerce as newly tracked metrics indicate that merchants plan to improve website performance via investments in mCommerce sites (44%) and mobile applications (24%).

C.   Personalization in support of better targeting is more prevalent
Personalization is finally becoming a viable tool as 25% report that their emails are very personalized, 36% intend to add it this year, and 14% are using pre-defined algorithms.

D.   Cross-channel experiences show room for improvement to deliver truly seamless shopping
Just 10% of merchants report already having a seamless shopping experience in place and 46% plan to deliver one by next year. Respondents strongly/somewhat agree that consistent branding (74%), shared and similar inventory (60%), and consistent promotions (60%) are germane to their cross-channel initiatives.

With both feature sets and execution needing attention, it makes sense that on average merchants rank their current cross-channel experiences at 5.4 (out of a possible 10) for delivery of a seamless shopping experience.

Improved customer experiences yield slightly higher conversion rates
As merchants get more tactical, conversion rates continue to inch up with 45% now reporting rates at 3% or greater vs. 41% last year.

Merchandising and navigational tactics for customer retention leverage analytics and site design
As charted, analytics (88%) and site redesign (85%) along with other enhancements are rated “most important to somewhat important” for optimizing the shopping experience and retaining customers.

A more sophisticated merchandising feature set is a requirement
To gain an understanding of the value of specific merchandising tactics, 50 features were ranked on a 5-point scale: 5 being very valuable and 1 indicating not at all valuable in driving revenue and results. From search to streamlined checkout, ease of use is imperative while standard functionality is combined with category-centric tools to achieve differentiation.

Charted below are the ten most highly valued features ranking very valuable/somewhat valuable/neutral (Top-3) which include a cross-section of established merchandising tactics as well as “must-haves” from email to sales/specials and search/navigational aids.

The value of promotional tactics increases to meet consumer expectations

 

 

 

 

 

 

Shoppers continue to be price-conscious, making tactics like free shipping more valued with both conditional and unconditional showing dramatic increases (respectively +32 and +14 percentage points). Promotional incentives to buy are also more valued by merchants (up +18 percentage points) for their deal closing power.

Content is valued for adding to the quality of the shopping experience

By educating and/or entertaining shoppers about products and services, content can be a dealmaker or breaker. It appears merchants are betting on the former with double-digit value rankings of these features.

Order payment and processing choices provide value by connecting with demanding shoppers

Mobile strategies are valued as they strive to capitalize on consumer adoption

Both social and mobile tactics continue to rapidly accelerate in value as merchants rally to reap branding and, to a lesser extent, incremental commerce rewards from these new browsing and buying options.

Mobile investments and initiatives are poised for channel growth
One-half of those making investments in mobile will be spending under $26,000 this year; 16% plan to spend more than $100,000 as this channel continues to grow.

Commensurate with market share and shopper-friendly functionality, mobile initiatives are currently focused on mCommerce sites and iPhone applications

Beyond reviews the social media tools that most merchants employ/plan to employ are Facebook-related.

In these early stages merchants are looking for engagement and relationship building rather than revenue from social media initiatives. When asked to rate their level of agreement relative to ROI from social media 80% strongly/somewhat agree that social media is all about engagement and building stronger relationships with their customers; 72% strongly/somewhat agree that they are testing social media and see efforts to date as mostly R&D.

Social media success is primarily being measured by the number of Facebook fans (78%) or Twitter followers (61%). Indicative of emergent channel integration, click-throughs from social media to retail sites (53%) and sales from social networks (47%) are also strong.

Preparing for future success
In conclusion Freedman counsels merchants to, “Know your existing channel structure, assess your ecommerce requirements and corresponding investment demands with ROI top-of-mind. Ensure that basic functionality is optimized, category-centric tools are in place or planned with feature enhancements designed to serve forward thinking merchants in maximizing performance. By keeping your customer in mind you will always be on target, ensuring delivery of the best possible customer experience. Ultimately, maintain a robust roadmap, continually assessing and aligning priorities to meet internal goals and exceed customer expectations.”

Complete report available to purchase
A comprehensive report that summarizes aggregated findings from this survey is available to purchase for $595. It can be downloaded using PayPal from the e-tailing group website www.e-tailing.com. Those interested in paying via credit card may contact Lauren Freedman by emailing LF@e-tailing.com or calling 773-975-7280.

About the e-tailing group
the e-tailing group is a niche e-commerce consultancy that helps merchants deliver the right customer experience on their websites and across all of their channels while adeptly assisting technology companies to create and execute go-to-market strategies that simultaneously educate the retail community and deliver cost-effective thought leadership and lead generation.

Survey Methodology
In the first quarter of 2011, 200 merchants responded to 57 questions related to trends in strategy, merchandising, and marketing online. For more background about this research study or for additional information on the e-tailing group, inc. please contact Lauren Freedman at LF@e-tailing.com or visit the e-tailing group website www.e-tailing.com.

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