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.

4Q04
State Of The Industry
Multi-Channel
Marketing
Category
Customer Service
Shopper

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

State of the Industry

2004 ecommerce reached $117B up 26% from $93.2B in 2004 1
US holiday shoppers spent $23.2 billion online, not including travel up _ from the $18.5 billion spent last year2
90 million people a week visited at least one retail web site in the lead up to Xmas 1
25 multi-channel retailers posted an aggregate year over year growth about twice that of online retailing 1
Shoppers spent $1.4B more on clothes this year than on consumer electronics5
Amazon sold 2.8 million items in a single day or 32 per second worldwide shipping merchandise to 217 countries and more than 100,000 parcels to military personnel; 500,000 email gift cards sold between 11/25 and 12/24 3
Thanksgiving Day was most intensive shopping day and even Xmas day saw a spike in visits seeking out post-holiday sales 4 with overall traffic peaking December 17th 5
Online purchases by women, already the majority of web surfers are exploding

1.67 million consumers conducted online searches for the word ipod1
37% of shoppers were very satisfied, 24% were somewhat satisfied and 30% felt this years online shopping was better than last 2
36% cited a preference to avoid crowds as the #1 reason to shop online, 36% finding a lower price, 33% wide product selection2
According to Hitwise, shopping and classified web sites received 11.39% of all web traffic on Thanksgiving day, breaking the 2003 high of 8.96% 5
ComScore Networks reports that shoppers spent $133 million online Thanksgiving day, a 100% increase from $67 million spent online Thanksgiving day 2003 5
Source: 1) comScore; 2005 2) Goldman Sachs, Harris Interactive and Nielsen/Net Ratings


Fun facts ...
  • Percentage of holiday shopping that takes place the week after Christmas: 10
  • Percentage of gifts that are returned: 4 to 6
  • Number of Christmas cards designed by Hallmark every year: 2,800
  • Increase in Americans' revolving debt from January 1994 to January 2004: $440 Billion


Source: Chicago Tribune; 2004.


Deciding factors in choosing a website to shop from during the Holidays


Source: Goldman Sachs & co., Harris Interactive, Nielsen//NetRatings; December 2004



Multi-Channel

  • According to Channel Intelligence, 93% of shoppers often do online research before buying a product over the web or at a retail location1.
  • Among the shoppers who intended to buy within the first week of initial interest, 56% plan to make that purchase online1.
  • Of the shoppers who actually purchased merchandise, 24% bought from an online retailer: only 8% bought from a brick-and-mortar store1.
  • 88% of respondents said they were "very likely" or "fairly likely" to visit the website after receiving a catalog2.
  • 83% of respondents said they were "very likely" or "fairly likely" to visit the Website after receiving an e-mail message2.
  • 43% more shoppers used retailers' websites to look at items to buy in store during the 2004 holiday season compared to last year3.
  • Every $1 spent online, consumers are influenced to spend another $6 offline3.
Source: 1)Abacus Annual Catalog Industry Trend Report; 2004 2)Millard Group; 2004 3)CrossMedia Services, Inc.


What channel do you prefer?
  • The Internet is moving up as the preferred channel for sales spurred by catalog recipients.
  • The Tools category saw the greatest growth in purchases, rising 16%, followed by men's and senior products, both of which generated 9% increases in sales, while the gift sector recorded a 7% growth in sales



From online - to offline to?
People still prefer buying products offline rather than online, even when they conduct product research online
Spending on offline purchases influenced by Internet research is growing faster than online purchases

Multi-Channel retailing a must!

In a new 2004 research report by the Aberdeen Group, "The Integrated Multichannel Benchmark Study," indicates that in today's Internet age, a mere 6% of store retailers currently operate in only one channel.

The survey also found:
44.7% of retailers have 3 channels of store, catalog and Internet, with 1/4th having integrated systems across all channels
20% sell through catalog and Internet
19.5% sell through stores and Internet
1% sell through stores and catalog
7% are only online
2% are only catalog or other direct, non-Internet channel
4.1% sell only through a store
Among the retailers that do track the relative profitability of their multi-channel customers, the findings are as follows:



Multi-Channel retailing a must!
57% of multi-channel shoppers browse in one channel and buy in another




Kiosk madness!
How much retailers pay for a kiosk


Source Summit Research Associates; 2004

*Includes e-commerce, gift registry, music downloads, ticketing
Source Summit Research Associates; 2004





Marketing


WebTrends and eMarketer surveyed attendees at the Ad:Tech San Francisco conference, finding that 25.8% said they allot only between 0% and 5% of their marketing budget to online advertising
33.5% of respondents said that over 41% of their marketing budget is spent online

Source: WebTrends and eMarketer; 2004

Incentivize me!
It matters what kind of incentive marketers offer, but frequency doesnıt help much.
A biweekly newsletter with no incentive achieved the lowest open rate and click through rates, while campaigns with incentives achieved incremental increases in performance

Source: Advertising.com; 2004


How do you rate?
26% of adult Internet users in the U.S. have rated a product, service or person using an online rating system.
29% of male Internet users and 22% of female Internet users have rated something online
30% of Generation Y Internet users (ages 18-27) have posted a rating, compared to 23% of baby Boomers
33% of users live in a household with an income of more than $75,000 have added a rating compared to only 22% of those who live in a household with an income of less than $30,000
Source: Pew Internet & American Project; 2004




Category

Who's the tops?

Home Furnishings
Home furnishings is the fastest growing category online, according to NOP World's Roper Reports. Their survey of online adults shows that 25% have purchased a home furnishing item online in the past year, up from 17% a year before
Consumers are more likely to buy what Roper defines as household good, such as linens and home furnishings, such as lamps. 14% of consumers bought household goods online in the past year; up from 6% a year earlier and 10% bought home furnishings vs. 3% a year ago.
Household good buyers are more likely than the average online shopper to have purchased travel services in the past year (47% vs. 32%).

Toys
According to Harris Nesbitt, an investment bank, Wal-Mart controlled 22% of the retail toy Market in 2004, Toys "R" Us 16% and 10% for Target

Digital Music
Digital sales are expected to be more than $270M in 2004, then grow another sixfold by 2009 to $1.7B, surpassing online sales of music, CD's.1
By contrast, online sales of CD's will grow to $817M in 2004; up 15% from 2003 then hit $1.3B in 20041
Music fans in the U.S. and Europe legally downloaded more than 200M tracks in 2004, up from about 20M in 20032
Estimated digital music revenues of around $330M in 2004, up sixfold from the previous year. 2
Source: 1) Jupiter Research, 2004, 2) IFPI, 2004


Spending for songs


Consumers going digital


Consumer Electronics
25% of people searching for consumer electronics ultimately purchased a product, an estimated 92% of these purchases occurred offline.
Generic search terms (such as "plasma TV") accounted for 70% of consumer electronics and computer search volume and 60% of search-to-purchase conversion.
Branded terms (either retailer trademarks or product-specific terms) accounted for 30% of search volume, but 40% of purchase conversion.
Searches for Consumer Electronics, such as DVD players, TVıs and cameras were more likely to result in an offline purchase than were searches for desktop and laptop computers.
Nearly 40% of all purchases occurred 5 to 12 weeks after the initial Consumer electronics/computer search was conducted
Source: comScore; 2004


Travel


Who's booking online?
Today's online bookers are more affluent and spend more on travel


Where are they booking?


Source: Forrester Research, Inc.; 2004


Gifting
64% of the domestic population purchased or received a gift card within the past 12 months, on increase from 36% in 2001
Shoppers bought an average of almost 7 cards in the past 12 months
27% of the shoppers who received a gift card in the past 12 months spent the cardıs value within one week of receiving the gift
Another 31% of shoppers say they spent their card's value within a month
Source: 1) ValueLink Consumer Insights Survey; 2004


Gift Card Industry Grows!

Source: 1) ValueLink Consumer Insights Survey; 2004


Benefits of gift cards ...

Source ValueLink Consumer Insights Survey; 2004





Customer Service
99% of shoppers said customer service was at least somewhat important when deciding to make a purchase1
Just 16% of traditional shoppers were extremely satisfied with their most recent customer service. In contrast, online shoppers were almost three times as likely to be extremely satisfied (44%) and an additional 45% were satisfied1
Customer service expectations of online shoppers vary greatly from those who shop in stores. Online shoppers want merchandise to be delivered on time (73%) and want the retailer to quicklyhandle questions and requests (74%)1
Not only do most customers want returns to be accepted without problems (70%), 70% of customers want return policies to be clear and fair (69%)1
Source: 1) NRF Foundation; 2004


Shopper
Who's Online?
73% of adults are now online, up from 69% in 2003, 67% in 2002, 64% in 2001 and 63% in 20001
7% of those online are over age 65, compared to 15% of all adults who are over age1
39% of those online did not go to college, compared to 47% of all adults1
16% have incomes under $25,000, compared to 22% of all adults1
The percentage of adults who are online at work has risen from 31% in 2003, to 34% in 2004, while at-home Net penetration has risen from 61% in 2003 to 65% in 20041
Source: 1) Harris Interactive; 2004


Cross-Channel Shopper
Cross-channel shoppers actually comprise the majority of all online consumers, 65% in 20041
They spend an average $458 on products they research online and buy offline1

Source: Forrester Research; 2004


Men vs. Woman ...

Source: America Online; 2004


Young Affluents Online

Note: Young Adults are ages 25 to 34
Source: Jupiter Research; 2004

İ 2003. the e-tailing group, inc.