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.

1Q04
State Of The Industry
Marketing
Category
Customer Service
The Shopper

Archived e-facts
1Q03
4Q03

State of the Industry

The Numbers
2003 e-commerce holiday sales reached $11.72B where consumers spent an average of $200M day from Nov1-Dec 26, a 29% jump with weather playing to the Internet's favor1
Total consumer retail spending grew 6.5%2 with Gift Cards a $20B category killer3
51% of consumers regularly buy online purchasing a much wider range of goods where the number of different product categories a consumer buys has grown from an average of 2 in 1998 to 8 in 20034
Apparel sales rose 40% ($3.1B), Videos/DVDÍs up 58% ($1.4B). Music up 20% ($790M), Books up 39% ($1.4B) and Toys/ Video games rose 21% ($1.9B)5
Amazon shipped 1 million packages on its busiest day seeing 630,000 visitors to its US site in a single hour with more than 70,000 gift certificates ordered on December 24th
Broadband access in more that 30% of homes has a significant impact on shoppers online usage6
Key promotions included email marketing, conditional free shipping and research online, buy offline
The eSpending consumer survey reports that 51% of respondents started their Holiday shopping in November, up from 43% in 2002. The survey also reports that consumers spent $8.5B online in November, 55% ahead of November last year
According to DoubleClick consumers accessed fewer pages during each visit, but spent more time evaluating the content on each page they visited, with average time per page increasing 34% over Q2 (32.47 seconds in Q2 Vs 43.48 in Q3)

Source: 1)comScore; 2003 2 )MasterCard; 2003 3)BusinessWeek Online; 2003 4) Forrester; 2003 5) according to spending report, Goldman Sachs, Harris Interactive and Nielsen//NetRatings;2003 6) BizRate; 2003


Free Shipping Seals the Deal?
According to Bizrate the promotion that carried the most weight when deciding to make a purchase is conditional free shipping


BizRate; 2003



Are You Satisfied?
Online shoppers were 4% more satisfied Ty Vs Ly over the holiday shopping season

Where We're Headed
E-commerce represents 3% of total retail sales. By 2008 itÍs projected to be 8%1
2004 Online sales are expected to grow to $122.6B with $149.2B, $176.8B and $204.3B forecasted for 2005, 2006 and 2007, respectively1

Source: 1)Forrester Research; 2003 2 )MasterCard; 2003 3)BusinessWeek Online; 2003 4) Forrester; 2003 5) according to spending report, Goldman Sachs, Harris Interactive and Nielsen//NetRatings;2003




Marketing
10 steps to a better e-mail marketing relationship
1. Build files responsibly
2. Affirmative consent
3. Confirm e-mail registrations
4. Consumer privacy is the No. 1 priority
5. Information must be relevant
6. Don't over communicate
7. Opt-out must be immediate
8. Consumer assistance
9. Maintains fresh, responsive database
10. Privacy policy must be clear and visible


According to a 2003 Opt-in News study, business-to-business e-mail newsletters fare better than business-to-consumer e-mail newsletters, in terms of open rates, with rates of 71% compared to 41%, respectively
59% of merchants surveyed considered free shipping provisions their most effective marketing promotion. Sales were a distant second, at 27%1
86% of marketers said e-mail promotions drove the most business as far as promotional vehicles. 38% of the marketers said their e-mail open rates had increased from the previous holiday season, while 14% said they had decreased1
Other effective promotional vehicles were search engine marketing (cited by 58% of marketers), affiliate marketing (50%), and print catalogs (37%)1

Source: 1) Shop.or/BizRate; 2003





Marketing Matters

How Do You Like Your Information?


Do You Personailze?
In 2002, the DMA found that over 50% of direct marketers were using personalization tactics in their e-mail marketing campaigns

Source: PlanetFeedback.com; 2003


Do You Like Spam?
Harris Poll indicates that even though 61% of online adults in the US say the are getting more spam than they were 6 months ago, a smaller amount of people are finding it annoying.

According to computer-security firm MessageLabs, about 56% of all e-mail in December, was spam or unsolicited e-mail, up 34% in the same month 2002

Source: WebTrends/Net IQ Corp.; 2003


Search
The overall click-through rate for sponsored search in general is 18.3%, more than 4 times that for free search listings1
US Bancorp projects the global market for search advertising will double to $2B in 2003 and soar to $6B in 2006
Source: 1) comScore; 2003

Source: U.S. Bancorp Piper Jaffray, Nielsen//NetRatings; 2003


Why use a Search Engine?



How Far Will You Go?
48% of users will go no further than the first page of search results before clicking on a listing


Category
Who's the Tops?


Do You Like Spam?
The TIA reports that 42.2 million adults in the US book travel online as of 2003. 29% make all their travel bookings online

Travel Tapers Off


Gifting
The growth rate for reloading gift cards has more than doubled, 20% growth to 42%, between 2001 & 2003 1
59% of gift shoppers say they will use the Internet to research specific gifts or prices, 22% will use it before every purchase and 19% will not turn to the Internet at all1
Source: 1) ValueLink; 2003 2) CoolSavings.com


Gift Card Industry Grows!



Customer Service
The average call to a customer service center costs $20 to $32, including hiring, training, turnover, management and the expense of the facility itself1
62% of online shoppers found it necessary to contact customer service only 1 or 2 times, with 90% of those contacts either being routine requests for more information on a product or to check on shipping/delivery status2
54% of online shoppers said their customer service experience was as good as or slightly better than their experiences the previous year2
33% of merchants believe themselves to be effective at measuring customer satisfaction3
43% are either ineffective at or havenÍt tried linking customer information from different channels3
Source: 1) WebSideStory; 2003 2) Aspect Communications/ Greenfield Online; 2003 3) Forrester Research, Inc.; 2003


Will I Return?
90% of survey respondents state that a convenient return policy and process is important to purchase decisions
95% are very likely or somewhat likely to shop with an online or catalog retailer again if the process is convenient
85% of consumers are not likely to shop online or through catalogs with a retailer that has an inconvenient return process
76% say pre-paid, pre-addresses label on an invoice that they can leave in any U.S. Postal Service location is most convenient when shopping direct.
17% of online shoppers had purchased an item in a store versus on the web because they expected the returns process online to be problematic2
Source: 1) Harris Interactive, commissioned by Newgistics, Inc.; 2003 2) Jupiter Research; 2003




Source: Jupiter Research; 2003


Online Shoppers Make Choice Key





The Shopper
What is the General population Doing Online
The percentage of adult Americans online has leveled off at 63%1
73% of U.S online shoppers are ages 14 years or older, while only 58.3% are actual buyers. The numbers are projected to grow to 78% and 61.8% respectively in 20052
31% of Americans are "highly tech-savvy" people for whom the Internet, cell phones and handheld organizers are more indispensable than TVs and old-fashioned wired phones1
Kids between the ages of 2 and 17 represented 21% of active at-home internet users3
While women 18-34 years old are 15.7% of all Internet users, they are 24% of the shoppers at fragrance/cosmetic sites, 22.3% of shoppers at jewelry/accessory/luxury good sites and 20.8% of shoppers at apparel sites4
According to data, 43% of consumers aged 50+ say they use the Internet between 11-30 hours per week. 90% access the Internet at home and 83% say they forward information they found on the Internet to family & friends5
Source: 1) Pew Internet & American Life Project 2) eMarketer; 2003 3) Nielsen//NetRatings 4) comScore Media Metrix; 2003 5)Thirdage; 2003


Are All Users Created Equal?

What Motivates me?

What Annoys me?

What are They Doing Online?
General population...
Source: Harris Poll; 2003


Teens

Source: TRU; 2003


© 2003. the e-tailing group, inc.