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Our intention is to help keep you up-to-date with the trends in the online world in order to give merchants a competitive edge in this growing channel.
Please email km@e-tailing.com with any ideas or facts you would be interested in learning more about in future newsletters. Each month we will post the best ideas from your emails.
In an attempt to help merchants sort through all the Internet clutter, we have gathered some interesting stats about e-commerce, the online shopper, the online merchant and other marketing trends. We hope that you will find this information useful in making your online store the best it can be.
2007
Archived e-facts
2Q'07
2Q'06
4Q'05
4Q'04
3Q'04
1Q'04
4Q'03
3Q'03
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US online retail sales will plateau at 10-15% of total US retail sales, barring any dramatic change in the online shopping experience with 2007 sales projected at a 16% growth; 2010 (9%); 2011 (8%); CAGR for US online will be at a growth rate of 11%, reaching $171B in 2011 and accounting for 6.6% of total retail 1
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Americans spend half of their spare time online (48%) where broadband users spend an hour and 40 minutes online in a typical weekday with 12% of time spent shopping 2
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Smaller niche retailers growing faster than their competitors where total sales for all start up retailers in Internet Retailer 500 in business since 2004 grew by 55% to $494 million last year from $319 million in 2005 3
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Web continues to garner a greater penetration of direct business for many merchants (Tiffany's web business represents 60% of direct sales)5
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Forrester Research's U.S. eCommerce Report shows online retail sales will reach $243.1 Billion in 2007. broken out Travel ($86B; 35.4%), computers, hardware & software ($19B; 7.8%), automotive & auto parts ($19B; 7.8%), apparel, accessories & footwear ($16.4; 6.7%), home furnishings ($12.5B; 5.1%) and other ($90.2B; 37.1%)2
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Sources: 1) Jupiter 2) Media-Screen 3) Internet Retailer; all 2007
Sources: Ipsos Insight; 2007
 | | While nearly three-quarters of the top 100 retailers in the U.S. operate in multiple channels, only 22% consider seamless multi-channel integration as a top priority 1
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| | Nearly three-quarters offer integrated pricing/promotions, two-thirds allow the use of stored value/gift cards across channels, and more than half allow returns to cross channels
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| | Online research influences more than $400 billion in in-store sales 3
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| | 51% of online shoppers say they research products on the web and then buy them in stores- 45% say they buy additional items once in the store, spending and average $154 on those items 2
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| | Cross channel shoppers are more likely to have high-speed Internet access at home than the general population (60% vs. 40%), a college degree (44% vs. 38%) and higher household income ($71,204 vs. $56,383) 3
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| | 43% say they purchased the item at a different retailer than the one whose web site they used to research2
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| | 6% of online shoppers expect an item to be ready for pick up with a half hour of ordering and 13% within an hour 3
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Source; 1) LakeWest Group's 8th Annual POS Benchmarking Survey: 2007 2) JupiterResearch & Ipsos Insights; 2007 3) Forrester Research; 2Q06 4) JupiterResearch & Ipsos Insights; 2007
The M-C Demographic Slant |
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The multi-channel customer skews slightly younger and more upscale with a longer online tenure and greater frequency of purchase and is one who embraces technology
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Single Channel |
Multi-Channel |
| Average Age |
48 |
43 |
| Average Household Income |
$58,672 |
$74,302 |
| Average Household Size |
2.6 |
2.7 |
| Married or Partnered |
65% |
73% |
| Female |
55% |
51% |
| Have a college degree |
31% |
49% |
| Broadband at home |
35% |
49% |
| Made purchase online in past 3 months |
39% |
65% |
| Average online spending in past 3 months |
$304 |
$398 |
| Average online tenure (in years) |
5.3 |
6.4 |
| Technology optimist |
50% |
67% |
Source: Forrester Research Inc. US Only
Fast store pick up of online orders is only a nice-to-have
Source;1) JupiterResearch & Ipsos Insights; 2007
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Consumers are most motivated to begin an online search after viewing magazine ads (47.2%); newspapers (42.3%), TV (42.8%), and reading articles (43.7%). Women were more likely than men to be motivated by coupons (41.8% vs. 29%) and in-store promotions (29% vs. 24.5%) while men were more driven to start an online search based on a face-to-face conversation (36.1% vs. 29.5%)1
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68% of consumers surveyed said they were prompted to browse a site after receiving an email from a retailer; 73% said they would appreciate any post-purchase follow-up 2
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Online/mobile marketing tactics used by US marketing starts with email marketing at 72.6% and newsletters (60.8%), banner ads (44.5%), online promos (36.9%) and blogs (22.8%) 3
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Almost two-thirds of all retailers (65.2%) will increase the size of their opt-in email lists between 10.1% and 40% this year; email marketing consultants consider a delivery rate of about 80-85%, and an open rate of 35% to be an effective campaign. Only 4.5% of retailers have a conversion rate from emails of more than a 10% while 27.9% have conversion rates under 1% and another 25.4% have conversion rates of 1.1% to 4% 4
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Source: 1) Bioresearch's Simultaneous Media Survey by RAMA) 2) RightNow and Harris Interactive;
3) Penton Media Customer Research 4) Internet Retailer; all '07
Changing Tactics
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1 in 4 adult Internet users visits social networking sites regularly (i.e. kaboodle, shopWiki, StyleFeeder, ThisNext, StyleHive and Crowdstorm) and 1 in 3 says their purchase decisions are influenced by sites that contain social content 1
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Word of mouth (w-o-m) marketing now a factor for all demographic segments as 84% of consumers earning more than $150,000 annually visit sites where customers review and rate products 3
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More retailers offer alternative payments including 24% of the e-tailing 100; 62 million online shoppers between the ages of 18 and 34 will account for $34 billion /$116 billion showing strong interest in such payment 2
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Source: iProspect/Jupiter Research 2) Jupiter Research/Bill Me Later 3) Luxury Institute; all '07
| What day is good for you? |
| Top 20 retail e-mail days |
| % of retailers sending email, day, proximity to holidays |
| % |
Date |
Day of
the Week |
# Days before a
major holiday |
| 53.1% |
Dec. 26, 2006 |
Tuesday |
Day after Christmas |
| 49.0% |
Dec. 11, 2006 |
Monday |
14 Days before Christmas |
| 45.9% |
Dec. 15, 2006 |
Friday |
10 Days before Christmas |
| 44.9% |
Dec. 18, 2006 |
Monday |
7 Days before Christmas |
| 43.7% |
April 17, 2007 |
Monday |
Tax Day |
| 43.7% |
Nov. 27, 2006 |
Monday |
Cyber Monday, and 28 days before Christmas |
| 42.1% |
Dec. 4, 2006 |
Monday |
21 Days before Christmas |
| 42.1% |
Dec. 8, 2006 |
Friday |
17 Days before Christmas |
| 40.2% |
April 24, 2007 |
Tuesday |
19 Days before Mother's Day |
| 40.0% |
June 5, 2007 |
Tuesday |
12 Days before Father's Day |
| 39.6% |
Dec. 1, 2006 |
Friday |
24 Days before Christmas |
| 39.4% |
Feb. 20, 2007 |
Tuesday |
Day after President's Day |
| 39.2% |
Nov. 14, 2006 |
Tuesday |
9 Days before Thanksgiving Day |
| 38.8% |
Jan. 29, 2007 |
Monday |
16 days before Valentine's Day and 6 days before the Super Bowl |
| 38.4% |
June 11, 2007 |
Monday |
6 days before Father's Day |
| 37.9% |
Dec. 7, 2006 |
Thursday |
18 Days before Christmas |
| 37.8% |
Dec. 14, 2006 |
Thursday |
11 Days before Christmas |
| 37.8% |
Dec. 12, 2006 |
Tuesday |
13 Days before Christmas |
| 36.7% |
March 29, 2007 |
Thursday |
10 Days before Easter |
| 36.7% |
Dec. 20, 2006 |
Wednesday |
5 Days before Christmas |
Source: Retail Insight; 2007
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Social sites only drive about 12% of online shoppers to buy more than planned
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Some 53% of people making online purchases go directly to the retailer's site versus 3% using blogs
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Social and community sites help reaffirm purchase decisions as 29% of online shoppers say they make better decisions after using these sites
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Source: JupiterResearch; 2007
Do you searchandise?
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| | 70% of leading online retailer reports that visitors who use web site search tools were more likely to convert from browsers to buyers |
| | Among best-in-class retailers, 62% continually fine tune search for desired results based on user actions, current promotions and collective behavior |
| | 76% of all online merchants surveyed report that producing search results that meet customer needs is a significant challenge |
| | 38% derive customer analytics data from site search activity; 31% personalize site search based on the purchase histories of unique customer or segments of customers |
| | 41% say they spend very little time managing research |
| | Among best in class 17% have staff dedicated to managing search results, and 33% spend more than 5 hours per week fine tuning search |
| | 55% of best-in-class retailers actively monitor conversion rates achieved from search organization tactics and continually fine tune results as a corrective measure |
| | 82% align their site search and Internet search strategies |
| | 22% of retailers reported conversion rates 26% to 50% better than those whose did not use search; 11% of best-in-class retailers reported improvements in conversion rates that were 51% to 75% better than non-search users |
Source: Aberdeen Group; 2007 |
Is direct marketing working?
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| | 53% of women surveyed ages 25-44 who have access to e-mail, read e-mail advertisements, consistent with the 54% that did so in 2005 |
| | 72% of adults surveyed said they have replied to direct mail containing a "buy one, get one free" offer |
| | 63% indicated they have responded to direct mail collateral offering a percentage discount on merchandising, up from 54% in 2005 |
| | 57% of women ages 35-64 prefer that companies they express interest in, send follow up communication through direct mail pieces personalized to their needs, though 38% of men 35-49 prefer generic direct mail when being contacted |
| | 52% of men ages 25-34, and 56% of women the same age, say that e-mail is an acceptable form to follow-up communication, though 45% of all adults are open to receiving personalized follow up e-mails |
Source: Vertis Communications; 2007 |
Blogging in the U.S
Users
| Activity |
Millions of Users |
| Internet Users |
147 |
| Read blogs |
57 |
| Keep a blog |
12 |
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Source: Pew Internet & American Life Project, July 2006 |
Readers
| Frequency |
% of respondents |
| Every day |
3.1 |
| Several times a week |
4.0 |
| About once a week |
4.5 |
| Seldom |
20.1 |
| Never |
52.3 |
| Don't know what blogs are |
16.0 |
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Source: Radio Television News Directors Foundation, October 2006 |
Young shoppers love gift cards
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According to a recent report from The NPD Group of Port Washington, NY, 60% of all children (ages 2 to 14) received a gift card within the past few months and close to 58% use the gift card for impulse purchases
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Boys received more gift cards for entertainment or electronics stores and girls received more cards for department stores, clothing stores and bookstores
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The average value was $44 and 39% of the recipients spent more than the face value of their card when it was redeemed
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Apparel |
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Online apparel sales ($18B) surpassed computers for the first time in 2006 with a 61% year over year increase and should reach 10% penetration of total retail sales1
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Source:1) Shop.org and Forrester research: 2007
Food Gifting
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Food gifting in the US reveals that the total market for consumer gifts decreased 8% to $92B in 2006 from 2004. In contrast, the food gifting market grew 47% in the period, nearly reaching $16B
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25% of people surveyed said they purchased boxed chocolates and other gift-packaged candy for themselves
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50% of candy givers reported buying 3 or more boxed chocolate or candy gifts in the previous 12 months
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Most respondents spend less than $20 on a single box of chocolates or other gift-packaged candy, and the majority spend under $100 per year
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People are willing to spend more on "specialty food gifts", such as assortments, nuts and salty snacks, with two-thirds of people who purchase these willing to spend $20 on a single gift and 14% spending $50 or more
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Overall 40% of consumers say they purchase specialty food gifts, with the most popular occasion being the winter holidays
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Corporate gifts are also a promising avenue for food gifts, which currently make up about 33% or $2.5B of the total corporate gift market
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Brands do not hold much weight for consumers when selecting food gifts. Only 11% indicated the importance of brands, while 25% said they want food gifts from "a trusted source or store"
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Source: NPD Group
Source:1) Travel Industry Association of America; 2006 2) Conference Board & TNS "Consumer Internet Barometer" study; 2007 3) Hitwise; 2007
Look who's visiting online...
What do you research when traveling?
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More women than men, 21% vs. nearly 19%, used travel Web sites solely to research their travel arrangements.
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More men than women, 34% vs. 33%, researched and also booked their travel arrangements via a travel Web site
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How do you plan a vacation?
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More than half of US households now regularly shop online where top three drivers of transactions in the ecommerce channel were 24/7 convenience, broad assortment available online and competitive pricing 1
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55% of U.S. online consumers have shopped across channels, an 8% increase from 2004 1
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96% of women who are online say they have made at least one purchase online in the past year spending an average of 1.2 hours per week shopping online 2
|  | | 57% said they both research and buy online while 31% said they browse online but purchase in store2 |
| | | 32% reported negative experiences; of those, 20% said they did not receive the item they ordered and 13% said the merchandise was different from description2 |
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Multi-channel shoppers are more price sensitive because they use the online channel to price compare where they have also been found to have higher expectations for customer service 3
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139 million individuals, or 78.5% of Internet users ages 14+ will shop online in the US by 2011 4
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Women account for 51.7% of total online population 4
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Source: 1) Forrester/Shop.org, 2007 2) Stores-Consumer Reports National Research Center for Shop Smart; 2007 3) Gartner Group; 2006 4) emarketer; 2007
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Where are all the Online Shoppers going?
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This year 139 million individuals, or 78.5% of Internet users ages 14 and older, will shop online in the US, while by 2011, 80% of those users will be online shoppers
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What are people doing online
Source: U.S. Consensus Bureau; 2007
Who's visiting more often?
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Adult female Internet users typically visited four or more Web sites in the course of doing product research, while men used an average of nearly five
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A March 2007 study by the Business Software Alliance and Harris Interactive found that 41% of teens considered the home computer the most important consumer electronic device used on a regular basis
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TV was a distant also-ran by comparison, with only 8% of teens naming it as the most important, consumer electronic device
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Source: ThirdAge Inc. and JWT Boom: 2007
Users Fear Onine Threats
| 80% | Are concerned someone could steal their identity from personal information on the Internet |
| 86% | Have made at least one change in their online behavior |
| 30% | Reduced their overall use of the Internet |
| 53% | Stopped giving out personal information on the Internet |
| 25% | Stopped buying things online |
| 29% | Cut back on how often they buy on the Internet |
| 54% | Of those who shop online are more likely to read a siteıs privacy policy or user agreement before buying |
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41% of shoppers less likely to shop stores after bad online experience; 59% vs. 55% LY said a frustrating online shopping experience negatively impacts their overall opinion of the retailer or brand while 82% (same as LY) also making it less likely theyıll return to the same web site 1
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Wide gap between the best and worst performing sites where the two lowest scorers trail the two highest scorers by more than 20% (top 5= Netflix, QVC, amazon, B&N, Drs Foster Smith); price was the least important factor on customer satisfaction where improvements to brand and site experience would be far more influential on increasing satisfaction and likelihood to purchase2
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Almost 40% of Internet shoppers are not satisfied with the process for returning items they purchased online where biggest areas of dissatisfaction are paying shipping costs and standing in line at a post office; 51% indicated they never returned an item purchased online where online shopping tenure has the most influence on likelihood to return an order3
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45% of ecommerce sites don't present shipping policies in their shopping carts and only 58% list their return policy there 4
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Consumers two biggest complaints about customer service call centers are not getting their problem solved on the first call and communication problems with offshore call centers 5
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42% of shoppers suggested that they would prefer to be able to find the answers they need online by themselves if they had a question or needed help during an online shopping experience 6
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Source: 1) Zoomerang; 2) Foresee Results 3) Pricerunner 4) Jupiter Research 5) CFI Group using ACSI index; 6) RightNow Technologies/Harris Interactive Poll ; all '07
Source: Jupiter Research: 2007
Web shoppers dissatisfied with returns processes
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Almost 40% of Internet shoppers are not satisfied with the process for returning items they purchased online with the largest areas of dissatisfaction being paying shipping costs for returns and standing in line at the post office
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Source: PriceRunner.com: January 2007
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