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.

2Q06
State Of The Industry
Multi-Channel
Marketing
Category
Shopper

Archived e-facts
4Q05
4Q04
3Q04
1Q04
4Q03
3Q03

State of the Industry

U.S. retail sales over the Internet and other electronic networks rose a seasonally adjusted 7% in 1Q06, the biggest quarterly jump in 2 1/2 years1
Purchases over the Internet, by e-mail or through other electronic networks rose to a seasonally adjusted $25.218 B in 1Q06, and an increase of 25.4% from a year earlier1
E-commerce sales accounted for a record 2.6% of the total retail sales, a new record for the 6th quarter in a row and up from 2.5% in the 4th quarter of 20051
Online sales will pass $200 billion. Total sales, including travel, are seen as reaching $211.4 billion according to a study from shop.org and Forrester Research
Total online spending without travel is predicted to reach $138 Billion (Vs. $113.6 billion in 2005) 2
Approximately 77% of Americans are now online, up from 74% in 2005 4
70% of US adults are now online at home, up from 66% in 2005 4
Source: 1) The U.S. Commerce Department; 2006 2) Forrester Research; 2006 3) Harris Interactive; 2006


Women Out Number Men Online
51.4% of U.S. Internet users are woman (Vs. 48.6% men)

gender pie


Retail Hoilday Shopping Forcast 2006
51% of retailers surveyed projected solid comparable-store sales growth (between 5% and 9%) for the 2006 holiday season compared to 2005 and 5% anticipated an exceptional year (more than 10% growth) citing "continued strength of the economy" and "the introduction of new merchandising strategies" as key factors

39% of retailers are predicting flat sales, and 5% projecting declining sales citing "rising fuel prices" as a consumer spending inhibitor
61% of respondents predicted flat margins, and 27% projected lower margins for the 2006 holiday season with executive management and IT managers being more pessimistic about margins than senior management (merchandising, planning, and marketing managers) and store operations respondents
45% of retailers said that the ability to project demand would be among their greatest challenges for the 2006 holiday season
Over half (52%) of respondents have already implemented some type of inventory management system to help ensure a successful holiday season




Source: Oracle Corporation; 2006




Source: PQ Media, LLC, April 2006




Source: Burst Media; April 2006






Multi-Channel

63% of searchers completed a purchase in offline retail stores following their search activity1.

More than 80% of buyer conversions occurred offline in categories such as consumer Electronics Toys & Hobbies, Video Games and Consoles and Music/Movies/Videos1.

74% of U.S. adults said they use trusted, familiar web sites when purchasing online, and 55% opt-in for e-mail marketing messages from companies they trust2.

Consumers on average consider three brands before making a purchase. 38% of consumers still want to see and touch products before they buy. 6.1% said the Internet search engines are one of their favorite tools for finding product information2.

comScore Networks found that 25% of people who researched products online went on to buy the items, but 63% of those purchases were completed at a physical store, not over the web3.
Source: 1) comScore; 2006 2) Yahoo! And OMD; 2006


Who do you trust?




Source: Yahoo! And OMD; 2006


The rise of e-mail contact



Source: Internet Retailer; 2006


Bad Online Experience Threatens Brick and Mortar Store
According to a study conducted by Allurent, 82% of respondents would be less likely to return to a site where they had a frustrating shopping experience. Nearly a third said a frustrating experience when shopping online would make them less likely to buy at the retailer's physical store.
55% said a frustrating shopping experience online negatively impacts their overall opinion of the retailer
51% abandoned their shopping cart even though they intended to buy products on the site. Significant reasons include; having to click through too many pages to checkout & checkout process being too long
76% said they are more likely to buy products on a site that offers rich features, such as product zoom, 360 degree product views and online videos of the product
81% said shopping online during the Holiday 2005 season was convenient, but only 57% said it was trouble free and 29% described shopping online as fun
Source: Allurent; 2006




Catalogs shift online
According to the 2006 edition of "The National Directory of Catalogs," from Oxbridge Communications, the number of product catalogs in North America that were available only in an online format nearly doubled in 2005.
Online catalogs made up 78% of 11,438 catalog listings in 2005, compared to only 60% in 2004 and 1,320 of them were available online only
Printed catalogs accounted for 65% of multi-channel retail sales in 2002, but only 40% in 20051. On the other hand, website and e-catalog sales rose from 14% to 30% of the total in the same period 2.


Source: 1) Direct Marketing Association; 2005 2) Oxbridge Communications; 2006




Marketing


According to PQ Media, spending on advertising in blogs, podcasts and RSS grew 198.4% to $20.4 Million in 2005
Blog, podcast and RSS advertising have demonstrated an ability to reach younger demographics as well as influentials, and the media tend to be highly engaging
Total spending on user-generated online media is forecasted to grow at a compound annual rate of 106.1% form 2005 to 2010, reaching $757 million in 2010 according to Blog, Podcast and RSS Advertising Outlook.
By comparison, the overall alternative media industry including, among others, markets such as branded entertainment, digital out-of-home advertising, mobile marketing and video-on-demand marketing is projected to grow at a compound annual rate of 14.8% in the five-year period to $253.7 Billion in 2010
As online alternative media grow, a new study projects that podcast advertising will surpass blog advertising by 20102

Source: PQ Media


*Note: RSS non-existent until mid 2005

Source: PQ Media; 2006

Do you share?

 89% of adult Internet users in America share content with others via email
75% of respondents forward this content to up to 6 other recipients
64% of female respondents share content at least once a week vs. 58% of males
56% of respondents are less or slightly likely to forward content with an overt brand message; 43% are more or slightly more likely to send marketing-related messages and 5% refuse to share content that contains a clear brand message






Source: Sharpe Partners, Inc.; 2006


How far will you go?

According to iProspect, in order to attract visitors search marketers must get on the first page, or at least the first 3 pages of search results
36% of search engine users believe that the companies whose websites are returned at the top of the search results are the top brands in their field
41% of search engine users who continue their search when not finding what they seek, will change engines or their search term if they don't find what they seek on the first page of search results
88% will change engines or their search term if they don't find what they seek on the first 3 pages of search results


Source: iProspect; April 2006


Sponsored clicks
The total number of searches conducted on Google rose 36% to 2.7 Billion in March 2006, versus a year ago
Searches on Yahoo! Search totaled 1.6 Billion, an increase of 8% over the prior year
In March 2006, 1.4 Billion searches conducted on Google included a sponsored ad, up 50% versus a year ago
942 Million searches conducted on Yahoo! Search included a paid ad, up 30% versus the prior year

Source: comScore; 2006



What do you "opt" for?

 51% of Internet users in the US make purchases from opt-in e-mails and 44% make regular purchases from online ads

Source: Lyris Technologies; 2006





Category



Online Music

 Online sales of digital music represented almost 6% of the total worldwide music market in 2005
Online music sales will grow 7-fold worldwide by 2010, rising to $10.7 billion from $1.5 billion in 2005
According to the International Federation of the Phonographic Industry (IFPI), paid-for digital single downloads reached 420 million in 2005, which is more than double the number in 2004
Subscription-based services reached an overall subscriber base of 2.8 million, up from 1.5 million in 2004
Mobile phones have evolved form basic voice-based handsets to multimedia handsets used for different functions such as voice, data, music, music distribution and video
The largest percentage of respondents who have purchased music online spent between $10 and $20 in the last 12 months
The most popular site used was iTunes, with 53% of music purchasers having used the site

Source: InStat; 2006


Online bill payers
69% of U.S. online households say they are paying at least 1 bill online
Paper checks are used for 37.5% of all bill payments and online payments used for 35%

Source: CheckFree Corporation; 2006


Textbooks
According to the National Association of College Stores, 23% of textbooks are being purchased over the Internet, compared to 16% in 2004
61% of online buyers said price was the determining factor
21% said they shopped online because of friends' recommendations and 18% due to professors' recommendations





Shopper

The less affluent, technology-shy mainstream consumer now accounts for about 40% of online shoppers, changing the dynamics of a customer base once dominated by wealthy, more experienced consumers1
The percentage of Americans with broadband connections at home has increased to 42%, from 29% in January 20052
50% of Americans said they enjoy a higher standard of living because of smarter shopping habits3

73.1% of Americans identify themselves as "savvy shoppers"3
73.3% of Americans said they had purchased an item that they didn't need at the time, simply because it was a good value for the money3
The number of Hispanic Internet users is expected to hit 20.9 million by 2010; a 33% increase from 15.7 million users at year-end 20054

Source: 1) Forrester research; 2006 2) Pew Internet & American Life Project; 2006 3) Boston Consulting Group; Harris Interactive Inc.; 2006 4) eMarketer; 2006





Gift giving is in the cards
8 out of 10 consumers say they would rather receive a gift card redeemable at their favorite retailer than any other kind of gift
76% of adults purchased gift cards in the 2005 holiday season

91% of adults who had received holiday gift cards had redeemed them before the end of February 2006
More than half said that they "always" or "often" add their own money when making a purchase using a gift card
Those who received gift cards during the 2005 holiday season were given an average of 2.6 cards, with an average value of US $42.32
Source: Stored Value Systems; 2006



Young Affluent Adults Online
88% of young online adults will make online purchases by 2010

About 27 million young adults (ages 25-34) made online purchases in 2005

Young affluent adults have high online tenure-78% have five or more years of online experience, compared with 64% of the overall online population
They are more likely to have broadband access at home, with 64% using high-speed connections versus 56% of average users
Source: Jupiter Research; 2006





Teens Online
A third of all US teenagers spend at least three hours a day on the Internet



Do you know where your Mom is?



Source: Lucid Marketing; January 2006



College Grads
71% of college grads are active online banking users, while nearly half regularly download music form the Internet
69% have posted a resume online
73% would prefer to receive their college newspaper via e-mail
A big shift away form alumni networks, supplanted by social networking sites and the use of instant messaging. Only 32% indicated they would seek out alumni for social purposes
74% of adults are now online, up from 73% last summer, 64% in 2001 and 57% in 2000.
Source: Y2M; 2006



Women are from Venus, Men are from Mars
Men value the Internet for the breadth of experiences it offers, and women value it for the human connections
The percentage of women using the Internet (66%) lags slightly behind men (68%). Women under 30 (86%) and black women, however, outpace their male peers (80%)
Men are slightly more intense Internet users than women. Men log on more often, spend more time online, and are more likely to be broadband users
Men and women are equally likely to use the Internet to buy products and take part in online banking, but men are more likely to use the Internet to pay bills, participate in auctions, trade stocks and bonds, and pay for digital content
Source: PEWInternet; 2006



© 2003. the e-tailing group, inc.