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State of the US Online Retail Economy Q2 2012

State of the US Online Retail Economy Q2 2012

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State of the U.S.

Online Retail Economy in Q2 2012
August 2012

Gian Fulgoni, Chairman, comScore, Inc. Andrew Lipsman, VP Industry Analysis, comScore, Inc.
Note: A copy of this presentation will be sent to all attendees within two business days of today’s webinar

Data sourced from comScore’s global panel of 2 million Internet users via behavioral tracking and custom surveys

2 million person panel 360°View of Consumer Behavior
 

Analysis Parameters
E-Commerce data includes all worldwide buying on U.S. sites Unless explicitly stated otherwise, the term e-Commerce refers to online retail spending, as measured by comScore, which excludes travel, autos and auctions Behavioral activity through June 2012 Survey conducted week of July 30, 2012 (n=2000) Consumer Measurements:
– – – – –

  

Online Buying Attitudes and Sentiment Site Visitation Demographic Segments Mobile and Portable e-Commerce

© comScore, Inc. Proprietary.

2

Topics for Today

 Review of Key Macroeconomic Trends

 Consumer Perceptions of the Economy
 Retailer and Product Category Overview  The Digital Endcap: Retailers as Publishers

 The Impact of Mobile and Tablets on Shopping and Buying
 Social Commerce Trends  Key Takeaways

 Q&A

© comScore, Inc. Proprietary.

3

Validation of comScore Sales Data: Comparison of comScore data to U.S. Department of Commerce

Quarterly U.S. e-Commerce Sales* ($ Billions)
Source: comScore & U.S. Department of Commerce (DOC)
Dept. of Commerce (DOC) comScore Estimate of DOC comScore Estimate of Mobile e-Commerce

Quarterly U.S. e-Commerce Growth* vs. YA
Source: comScore & U.S. Department of Commerce (DOC)
Dept. of Commerce (DOC) comScore Estimate of DOC

50%

Correlation: 0.93 Billions ($)
40%

% Growth vs. YA

30%

20%

10%

0% 2005 - Q1 2005 - Q2 2005 - Q3 2005 - Q4 2006 - Q1 2006 - Q2 2006 - Q3 2006 - Q4 2007 - Q1 2007 - Q2 2007 - Q3 2007 - Q4 2008 - Q1 2008 - Q2 2008 - Q3 2008 - Q4 2009 - Q1 2009 - Q2 2009 - Q3 2009 - Q4 2010 - Q1 2010 - Q2 2010 - Q3 2010 - Q4 2011 - Q1 2011 - Q2 2011 - Q3 2011 - Q4 2012 - Q1

-10%

*Note: To be consistent with DOC, comScore estimate excludes travel and event tickets but includes auction fees and autos.
© comScore, Inc. Proprietary. 4

State of the Economy

A Review of Key Macroeconomic Trends

© comScore, Inc. Proprietary.

5

Retail e-Commerce spending is up +16% Y/Y, posting $87 billion in sales through June 2012

U.S. e-Commerce Dollar Sales Growth ($ Billions)
Source: comScore e-Commerce Measurement
+12% +7% +17% -2% +19% +22% +26% +29% +9% +13%

$256
$94 +11%

$214 $209 $228 $200
$77
+12%

$171
$69
+13% +20%

$143
$61
+28%

$84

+9%

$80

-5%

$85

+6%

$141
$54
+9%

$72
Travel Retail

$93
$40 $53

$117
$51
+33% +26%

$30
$42

$67

+26%

$82

$102 +24% +24%

$123 +20% $130 +6% $130 0%

$162 +14% $142 +10%
$87 +16%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011 Q1-Q2 2012

© comScore, Inc. Proprietary.

6

The channel shift to online was particularly evident in Q2 2012, with online retail growing nearly 4x the rate of total consumer spending or 7x on an apples-to-apples basis
Quarterly e-Commerce Sales Growth vs. YA Source: comScore e-Commerce Measurement
19% 13% 11% -3% 0% -1% -2% 3% 10% 9% 9% 11%

23% 17%

23%

12% 14%
13%

14%

17% 15%

6% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012

Quarterly Retail & Food Services Sales Growth* vs. YA Source: U.S. Department of Commerce (DOC)

*Note: The U.S. Department of Commerce calculation includes total retail and food service sales, which also includes motor vehicles and parts dealers.

4%

4%

3%

5%

4%

2%

6% 1% 2%

7%

8%
7% 7% 7%

8% 4%

5% 5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 -8% -7% -10% -9%
Quarterly Retail & Food Services Sales Growth vs. YA (excluding autos, gas and food/beverage)

3%

3%

3%

3%

2%

2%

1%

4% 0%

5%

6%

7%

6%

4%

4%

3%

6% 2%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 -5% -5% -6% -6%
7

© comScore, Inc. Proprietary.

The shift of consumer spending to the Internet continues to accelerate, with the e-Commerce share of spending hitting 8.7% in Q2, up 1.6 points in only two years

e-Commerce Share of Corresponding Consumer Spending*
Source: comScore for e-Commerce & U.S. Department of Commerce (DOC) for Retail
10.0% 9.0%

9.4% 8.6% 7.4% 7.3% 6.4% 6.7% 5.9% 5.1% 6.3% 5.9% 6.5% 6.6% 6.8% 6.9% 7.6% 7.7% 8.9% 8.7%

e-Commerce Share

8.0% 7.0% 6.0% 5.0% 4.0%

7.7%

8.1%

8.0% 7.7% 7.6%

7.1% 7.1%

4.3% 4.6% 4.0% 3.7% 4.3%

5.3% 4.5%

5.3% 5.0%

Q2 2012 share: +1.6 points vs. Q2 2010

3.0%
2.0% 1.0% 0.0%

e-Commerce share peaks in colder seasons (Q4 & Q1)

© comScore, Inc. Proprietary.

8

*Note: e-Commerce share is shown as a percent of DOC’s Total Retail Sales excluding Food Service & Drinking, Food & Bev. Stores, Motor Vehicles & Parts, Gasoline Stations and Health & Personal Care Stores.

All income segments showed double-digit growth versus 2011, with mid and lower income consumers leading the way
e-Commerce Sales by Income Segment ($ Billions) Growth vs. YA
Source: comScore e-Commerce Measurement

Under $50K (23% of Total)
+6% +2%

$50K - $99K (43% of Total)
+8% +3% +9% +12% +19%
$20.0 $18.3

$100K or more (34% of Total)
+9% +7% +12% +15% +16% +21% +10%

$17.5 $17.2 $17.3 $15.3 $14.6 $15.4 $15.1 $13.5 $12.4 $12.1 $15.0 $14.8

+26% +39% +28% +31% +22% +18% +17%
$12.2 $10.0 $12.1 $11.0 $9.4 $8.9

$10.3

Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12

Q4 '10Q1 '11Q2 '11Q3 '11Q4 '11Q1 '12Q2 '12

Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12

© comScore, Inc. Proprietary.

9

Consumer Perceptions of the Economy

© comScore, Inc. Proprietary.

10

Overall consumer sentiment slid in July, with 56% of consumers rating the economy as poor, up from 49% in April
Q. How would you rate economic conditions today?
Source: comScore Surveys

Percent of Consumers Who View The Economy as Poor
Increase in negative sentiment driven by Under $50k (61%) and Baby Boomers (60%)

77%
68% 66% 61% 61% 59% 62% 61%

52%

59%

60%

62%

60%

54%

49%

56%

Jan-09 Apr-09

Jul-09

Oct-09

Jan-10 Apr-10

Jul-10

Oct-10

Jan-11 Apr-11

Jul-11

Aug-11 Oct-11

Jan-12 Apr-12

Jul-12

© comScore, Inc. Proprietary.

11

Concern over unemployment saw a +7 point swing from April, but continued to lag behind prices, the main economic concern

Percent of Respondents Citing Their One Most Important Issue
Q. Based on your current situation, which one of the following economic conditions most concerns you?
Source: comScore Surveys
54%
50% 46% 48% 40% 42% 42% 44% 45% 42% 32% 28% 29% 29% 32% 33% 30% 36% 37% 38% 37% 37% 31% 33% 43% 44%

Unemployment / Job Security Rising Prices

Financial Markets
Real Estate / Home Values
15% 13% 13%

27%

26%

13% 7% 9% 10% 8% 10% 9%

11% 7% 7%

12%

12% 9%

10% 10%

11% 11% 10% 8%

8%

8%

8%

9%

7%

8%

Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12

© comScore, Inc. Proprietary.

12

Retailer and Product Category Overview

© comScore, Inc. Proprietary.

13

Compared to 2011, retail e-Commerce saw an increase in every key metric, including dollars per buyer, total buyers & transactions per buyer
Key e-Commerce Buyer and Transaction Measures Q2 2012 vs. YA
Source: comScore e-Commerce Measurement

Metric
Dollar Sales ($ Billions) Dollars per buyer Buyers (Millions) Average Order Value Transactions (Millions) Transactions per Buyer Buyer Penetration (Total Internet)

Q2 2011
$38 $221 170 $70 539 3.2 70%

Q2 2012
$43 $242 178 $74 584 3.3 72%

% change
+15% +10% +5% +6% +8% +3% +3%

© comScore, Inc. Proprietary.

14

All product categories showed at least +10% growth, with digital content and consumer electronics showing the highest growth

Q2 2012 e-Commerce Sales Growth vs. YA by Retail Category
Source: comScore e-Commerce Measurement

Product Category
Digital Content and Subscriptions

Q2 2012 Growth vs. YA
Very Strong

Consumer Electronics (x PC Peripherals)
Flowers, Greetings & Misc. Gifts Computers/Peripherals/PDAs Apparel & Accessories Event Tickets Consumer Packaged Goods Jewelry & Watches

Very Strong
Very Strong Very Strong Very Strong Very Strong Strong Strong Q2 growth rates of 15% or higher

Home & Garden
Books & Magazines Sport & Fitness Office Supplies Video Games, Consoles & Accessories Furniture, Appliances & Equipment
© comScore, Inc. Proprietary.

Strong
Strong Strong Strong Strong Strong
15

Q2 growth rates of 10-14%

While Amazon remains the leader in unique visitors to retail sites, Apple and Wal-Mart each showed strong gains versus year ago

Avg. Monthly UVs (MM) on Select Retail Sites in Q2 2012
Source: comScore Media Metrix, U.S.

Y/Y Change
+7% +24% +23% -5% +5% +7% +52% +51% +17%

Amazon Sites Apple.com Sites 47.5 41.4 27.3 23.2 18.3 14.9 14.7 12.4

100.4

Wal-Mart
Netflix.com Target Corporation Best Buy Sites Ticketmaster The Home Depot, Inc. Sears.com

© comScore, Inc. Proprietary.

16

Compared to the overall retail e-Commerce market, Amazon.com heavily over-indexes for consumer electronics, toys and books
Product Category Share at Amazon Indexed to Retail e-Commerce (Q2 2012)
Index: 0-40
Computers/Peripherals/PDAs Apparel & Accessories Consumer Electronics (x PC Peripherals) Office Supplies Books & Magazines Home & Garden

40-80

80-120

120-160

160+

Toys & Hobbies

Index: 0-40

40-80

80-120

120-160

160+

Nodes indicate range of Amazon’s index to Total Internet share composition

© comScore, Inc. Proprietary.

17

Groupon is still the leader in monthly unique visitors among coupon sites. In June, visits to Groupon via mobile eclipsed PC visitors

Avg. Monthly UVs (MM) on Select Coupon Sites in Q2 2012
Source: comScore Media Metrix, U.S.

Unique Visitors to Groupon in June 2012
Source: comScore Media Metrix & Mobile Metrix, U.S., 18+

Y/Y Change 11.8
-5%

Groupon WhaleShark Media LivingSocial Coupons, Inc. DeedOrGreed.com DealsPL.US CouponAlert.com MyPoints Sites BradsDeals.com FatWallet.com 2.1 2.0 1.8 1.6 1.5 7.5 6.7 6.3

Groupon
N/A -35% -10% N/A +30% +89% +29% +116% +53%

(via PC)

11.9 million

Groupon
(via mobile*)

17.7 million

1.3

* - WhaleShark Media includes RetailMeNot.com, Deals2Buy.com, CouponShare.com and CouponsEven.com
© comScore, Inc. Proprietary. 18

* includes mobile web and mobile app

When looking at the types of daily deals consumers are purchasing, Food/Drink and Beauty, Spa & Massage accounted for largest share Offers Published by Category
Source: Local Offer Network / Dealradar.com

20101Q
1 2 3 4 5 6 7 Food & Drink Beauty, Spa & Massage Clothing & Accessories Health, Medical & Dental Travel & Hospitality Photography & Photo Services Kids 31% 20% 2% 3% 2% 2% 1%

20104Q
26% 20% 4% 5% 2% 4% 2%

20114Q (e)
14% 13% 10% 9% 9% 7% 5%

4Q Share of $ Sold
16% 16% 2% 14% 13% 5% 1%

8
9 10

Home Products & Services
Fitness & Nutrition Sports & Recreation All Other

2%
6% 11% 16%

6%
7% 5% 17%

5%
4% 3% 20%

4%
3% 4% 20%

© comScore, Inc. Proprietary.

19

The average price per deal has been increasing as deal of the day sites offer higher-value offers to consumers

Excluding Travel & Medical

© comScore, Inc. Proprietary.

20

Most flash sale sites continue to see growth in unique visitors, with Totsy.com the fastest growing property
Avg. Monthly UVs (000) on Select Flash Sale Sites in Q2 2012
Source: comScore Media Metrix, U.S.

Y/Y Change 2,237 2,185
+9% +74% +36% +40% +60% +82% +881% -20% +46% +22%

Zulily.com Woot.com Gilt Groupe HauteLook.com OneKingsLane.com MyHabit.com Totsy.com Ideeli.com 638 590 545 785 903 1,137 1,118 1,098

EBay Fashion Vault BeyondtheRack.com

© comScore, Inc. Proprietary.

21

The percent of e-Commerce transactions with free shipping saw a seasonal pullback to 42%, down from all-time high of 52% in Q4 2011

Percentage of e-Commerce Transactions with Free Shipping
Source: comScore e-Commerce Measurement

61%

60%

59%

51%

53%

57%

60%

48%

51%

58%

39%

40%

41%

49%

47%

43%

40%

52%

49%

42%

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

% Transactions with Paid Shipping % Transactions with Free Shipping

55% of consumers stated in a recent survey* that if they reached the end of an e-Commerce transaction and free shipping was not offered, they would cancel their purchase at that retailer
*comScore survey – July 2012
© comScore, Inc. Proprietary. 22

Among online shoppers,* 61% would prefer to use in-store pickup than pay for shipping to their home

Q. When shopping online, are you more likely to utilize free shipping to your home or free in store pickup?
Source: comScore Survey July 2012

Q. Similar to the previous question, would you be more likely to pay for shipping to your home, or utilize free in store pickup?
Source: comScore Survey July 2012

95%

61% 39%

5%
% of respondents More likely to use free shipping More likely to use free in store pickup % of respondents More likely to pay for shipping

More likely to use free in store pickup
* - those who shop online at least once a month

© comScore, Inc. Proprietary.

23

A lenient and clear returns policy is likely to lead to recommendations and repeat business from online shoppers
If an online retailer offers a lenient, easy-to-understand returns policy, I will …
Source: comScore Custom Survey

“Return policy has to be clear, easy and up front.”

Shop more often with that retailer

48%

Recommend the retailer to a friend

48%

Drop another retailer with a less easy returns process

35%
“[If] I cannot find the return policy or it is unclear I will never purchase or return to that site again”

Focus less on prices and more on their quality of service

32%

Agreement (Top 2 Box)
© comScore, Inc. Proprietary. 24

Q60. How much do you agree with the following statements? If an online retailer offers a lenient, easy-to-understand returns policy, I will …

Free shipping was, by far, the factor considered most influential on the online shopping experience

Factors Influencing Total Purchasing Experience
Source: comScore Custom Survey

Average # of Chips Allocated out of 100
Free shipping on most items Knowing what day my purchase will be delivered Easy to understand returns process Availability of express shipping choices Offers environmentally-responsible products Ability to select a 2-hour delivery window Ability to re-route packages to an alternate location while in transit
Q29. Thinking of factors that would influence your total purchasing experience with a retailer, how influential is each of the following factors? Please distribute 100 points across these factors, allocating more points to factors that are more influential and fewer points to factors that are less influential.

7 8

6

37

10
14 18

© comScore, Inc. Proprietary.

25

Join us and UPS for a deeper dive into the online shopping experience – August 22 at 2 PM ET

The Online Shopping Customer Experience Study
provides insights into consumers’ online shopping behaviors and preferences. Other online shopping surveys have focused on purchase or web usability, but this particular survey bridges that gap with a view of perceptions on customer experience from pre-purchase through post-delivery. This study also provides a clear picture of which shipping and postpurchase services enhance customer experience.

www.comscore.com/OnlineShoppingWebinar
© comScore, Inc. Proprietary. 26

The Digital Endcap: Retailers as Publishers

© comScore, Inc. Proprietary.

27

The Digital Endcap: Manufacturer ad impressions delivered on Amazon.com tripled versus a year ago and remain far ahead of Walmart
Impressions Delivered (in Millions) & Selected Leading Creatives on Amazon & Walmart
Source: comScore Ad Metrix, U.S., Jan-2011 to June-2012 3,000

Amazon.com

2,500

Amazon.com
Walmart.com

+341% vs. Jun ’11

2,000

1,500 +103% vs. Jun ’11

Walmart.com

1,000

500

0

© comScore, Inc. Proprietary.

28

The Digital Endcap: Reaching consumers at the bottom of the funnel

Ads on retailer websites reach consumers down-funnel, but sold at below average CPMs.

Shouldn’t they be going for more?
Standard Display Ads
Average CPM

$2.91

Digital Endcaps

Average CPM

$2.74
Source: comScore Ad Metrix, U.S., Apr-2012 to June-2012

© comScore, Inc. Proprietary.

29

The Digital Endcap: Friend or Foe?

Friend
 Ability to leverage available site
inventory

Foe
 Shoppers might click away from the
retailer website BUT, we know that display ad CTRs are low and the branding effect is strong

 Delivers competitive advantage due
to synergies created for retailer and manufacturer (vertical integration)

 Inherently high margin offering, with
minimal costs

 Retailers may not have an ad sales
force to leverage

 CPM upside

Why aren’t more retailers leveraging the Digital Endcap?

© comScore, Inc. Proprietary.

30

The Impact of Mobile and Tablets

on Shopping and Buying

© comScore, Inc. Proprietary.

31

More than 4 million new smartphone subscribers activated in Q2, taking the audience over the 110 million mark

Acquisition Trend for Smartphone Subscriber Base and Total Smartphone Subscriber Base
Source: comScore MobiLens, U.S., 3 Mo. Avg. Sep-2009 to Jun-2012 +7.0 120,000 100,000 80,000 +4.0
+3.3 +3.6 +2.9 +2.3+2.3 +2.1 +1.3 +1.3 +1.0 +2.0 +1.8 +0.7 +2.7 +2.9 +2.1+2.2 +1.6 +3.8 +3.1 +2.5 +2.2 +1.4 +0.7 +0.9 20,000 +2.1 +3.5 +3.3 +2.6

New Smartphone Acquisitions (In Millions)
+6.0 +5.0

+6.5

Total Smartphone Subscriber Base (In Thousands)

60,000 40,000

+3.0

+2.7 +1.9 +1.3 +1.3 +1.1

+2.0
+1.0 +0.0

0

© comScore, Inc. Proprietary.

32

Nearly 1 in 10 e-Commerce dollars are spent via mobile device

Percentage of Total e-Commerce Dollars Spent via Mobile or Tablet Device
Source: comScore Mobile Measurements

Spike in percentage of e-commerce sales via mobile coincides with surge in tablet ownership

9% 8% 6% 6%

9%

8%

3% 3% 2%

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2010 2010 2010 2011 2011 2011 2011 2012 2012

© comScore, Inc. Proprietary.

33

Nearly 2 in 5 tablet owners have purchased something online via their device in the past month, more than double smartphone owners

Smartphone Owners Who Purchased Item/services via Mobile (past month)
Source: comScore MobiLens

Tablet Owners Who Purchased Item/services via Tablet (past month)
Source: comScore TabLens

Smartphone owners

18%

Tablet owners

39%

Tablet owners are generally more engaged overall – in addition to the above ‘purchased’ metric, 43% have researched items and 42% have compared product prices in the past month (compared to 21% and 22% for smartphones, respectively)
© comScore, Inc. Proprietary. 34

When compared to overall tablet owners, iPad owners significantly over index on every e-Commerce metric, including purchasing items
Retail/e-Commerce Actions Taken by iPad and Kindle Fire Owners (Indexed Against All Tablet Owners)
Source: comScore TabLens

Metric (took action in past month)
Found store location Purchased goods or services online Made shopping lists Found coupons or deals Checked product availability Compared product prices Researched product features

All tablet owners
42% 39% 23% 35% 32% 42% 42%

iPad Index
122 117 115 115 113 113 113

Kindle Fire Index
85 99 106 96 93 92 92

© comScore, Inc. Proprietary.

35

Social Commerce Trends

© comScore, Inc. Proprietary.

36

Pinterest & Instagram among the two hottest growth sites over past year

Pinterest & Instagr.am: U.S. Unique Visitor (000) Trend
Source: comScore Media Metrix, May 2011 – July 2012

25,000

20,000

Pinterest.com

+22x Y/Y

15,000

Instagram.com

10,000

+5x Y/Y
5,000

0

© comScore, Inc. Proprietary.

38

Social networkers tend to be heavier online buyers, but Pinterest has significantly higher propensity than average

Buying Power Index (BPI)* for Selected Leading Social Networking Sites
Source: comScore Media Metrix, U.S., June 2012

250 200

226

163 150 111 100 50 130 106 109

Facebook

Twitter

Linkedin

Myspace

Tumblr

Pinterest

*Buying Power Index = Average Spending per Buyer for Site / Average Spending per Buyer for Total Internet x 100; Index of 100 represents average spending behavior
© comScore, Inc. Proprietary. 39

Pinterest users love, love, love shopping, making it a gold mine for marketers wanting to reach buyers
Top 20 Site Categories with Highest Concentration (%) of Pinterest Visitors
Source: comScore Media Metrix, U.S., June 2012
Retail - Jewelry/Luxury Goods/Accessories Retail - Flowers/Gifts/Greetings Retail - Fragrances/Cosmetics Retail - Food e-cards Gay/Lesbian Retail - Books Travel - Transactions Lifestyles - Green Overall Pinterest Retail - Coupons Internet Retail - Apparel Retail - Consumer Goods penetration: Retail - Health Care Retail - Home Furnishings Retail - Toys Incentives Retail - Mall Religion/Spirituality Travel - Hotels/Resorts Shipping
22.8% 21.2% 20.1% 19.7% 19.0% 18.8% 18.7% 18.6% 18.3% 18.0% 17.8% 17.8% 17.7% 17.4% 17.2% 17.2% 16.8% 16.7% 16.6% 16.6%

10%

16 of top 20 Pinterest

users’ highest affinity categories are Retail-related
© comScore, Inc. Proprietary. 40

Pinterest is carving out a big share of social media referral traffic to retail apparel category

% of Social Networking Referral Visits to Retail Apparel Category
Source: comScore Custom Metrix, U.S., May 2012

4%

4%
Facebook Pinterest

8%
30%

Tumblr

54%

Twitter Other

© comScore, Inc. Proprietary.

41

Quantifying the Effect of the Social Web

© comScore, Inc. Proprietary.

42

Power of Like 2: Key Findings
Amplification: Brands can meaningfully
extend Facebook reach through amplification
to Friends of Fans and help drive sales

Earned Media Lift: The causal effects of
Facebook earned media (non-paid) exposure can be isolated, and show lifts in purchase behavior

Paid Media Lift: Facebook paid
advertising also shows evidence of driving

lifts in purchase behavior
© comScore, Inc. Proprietary. 43

Download full white paper at: www.comscore.com/like2

comScore Social Essentials™ complements and extends Facebook Insights’ functionality

PAGE INSIGHTS

SOCIAL ESSENTIALS™

Reach & Frequency for Your Own Brand
© comScore, Inc. Proprietary. 44

Competitive Audience Insights & Social Lift for All Brands

How Social Marketing Works: Brands control the three basic levers that will determine social media marketing success

Many brands don’t consider these intermediary steps

Get Fans

Brand Messages Reach Fans in News Feed

Fans “Talk About” News Feed Content

News Feed Content Spreads to Friends

Goal: Max Reach, ROI

1. Fan Reach

2. Engagement 3. Amplification
© comScore, Inc. Proprietary. 45

Quantifying Amplification: Top Facebook Brands tend to reach 0.5-2.0 Friends for every Fan reached w/ earned media

Fans & Friends of Fans' Earned Impressions and Amplification Ratios for Selected Leading Facebook Brands
Source: comScore Social Essentials, U.S., March 2012 Exposed Social Impressions (MM) 70 60 50 40 30 20 0.5 10 1.5 1.0 Amplification Ratio 2.0 2.5

0

-

Exposed Fan Impressions

Exposed Friend of Fan Impressions

Amplification Ratio

© comScore, Inc. Proprietary.

46

Earned Media Lift: Starbucks earned media impressions drove significant lifts in in-store purchase in 4 weeks following exposure

Starbucks Fans & Friends of Fans In-Store Purchase Behavior: % of Exposed Group vs. Control Group Purchasing Starbucks Weeks 1-4 Following Earned Media Exposure
% Reach of Exposed and Control Groups
Source: comScore Social Lift, U.S., February-March 2012

2.00% 1.60% 1.20% 0.83% 1.00% 0.36

2.12% 1.80%
+38%

1.40
1.20 1.00 0.80

1.36%
1.30% 0.50

1.54%

0.58

0.80%
0.40% 0.00%

0.60 0.40 0.20 0.00

0.66%

0.17

Week 1

Weeks 1-2

Weeks 1-3

Weeks 1-4

© comScore, Inc. Proprietary.

47

Nominal Lift in Purchase Incidence

2.40%

Nominal Lift

Test Group

Control Group

1.60

Paid Media Lift: Also evidence that Facebook paid ad campaigns can drive positive lifts in purchase behavior

Retailer Premium Facebook Ad Lift: % of Exposed Group Purchasing Online and In-Store Weeks 1 - 4 Following Paid Media Exposure
Source: comScore AdEffx Action Lift, U.S., September-December 2011

1.60% 1.40% 1.47%
+16%

1.20%
1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 0.19% 0.11% Week 1 Online - Test 0.46% 0.37% 0.69% 0.38% 0.84%

1.18%

1.27%

1.00% 0.49% 0.32% 0.61%
+56%

0.39%

0.20%
Weeks 1-2 Online - Control Weeks 1-3 In-Store - Test Weeks 1-4 In-Store - Control

© comScore, Inc. Proprietary.

48

Five Ways to Achieve Social Marketing Success

Move beyond just collecting Fans
Use them as a leverage point to achieve marketing objectives

Reach Fans effectively
Use newsfeed to get them to engage and amplify your messages

Know who you’re reaching & how often
Tie these metrics back to your broader marketing strategies

Quantify value of earned media
Compare earned to paid ads & put a $ value on exposures; measure ‘social lift’

Cultivate the ‘virtuous cycle’ of
Paid, Earned & Owned Media are intertwined and combine to help brands maximize impact

© comScore, Inc. Proprietary.

49

Key Takeaways

© comScore, Inc. Proprietary.

50

Key Takeaways
 The channel shift to online appears to be accelerating: online sales
increased by +15% this quarter, while on a comparable category basis, offline sales increased only 2%

 Mobile and tablets accounted for 9% of all retail e-Commerce sales in Q2  All product categories showed strong (10% or higher) growth in Q2  Overall consumer sentiment weakened this quarter, with 56% of respondents
viewing the economy as poor (versus 49% in Q1 2012). Unemployment increased in importance as a concern

 Leading deal-of-the-day sites are now seeing more visitors from mobile devices
than from the fixed Internet and the value of offers has increased dramatically

 The rise of the visual web is the key social media trend this year and promises
to be important for marketers and retailers

 Facebook and Pinterest are both important social media channels for
influencing commerce but Linkedin attracts the heaviest online buyers
© comScore, Inc. Proprietary. 51

QUESTIONS? Please contact us at learnmore@comscore.com if you have any additional questions or comments.

© comScore, Inc. Proprietary.

52

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