SPECIAL REPORT

IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report
Industry Benchmark Analysis and Best Practice Guide to Maximize Holiday Returns
J U N E 2 011

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IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report

Table of Contents
Introduction Trends in Online Shopping Consumers Are Spending More on More Items Mobile Device Usage and Social Media Are Growing Consumer Attention Continues to Decline Carting and Ordering Hit Record Highs Single-Page ‘Bounce’ Visitors Remain High Best Practices Focus on the Customer Life Cycle Capitalize on the Mobile Channel Retarget Your Browsers and Abandoners Use Personalized Product Recommendations Cultivate the Social Media Channel Make the Holiday Season Profitable 1 2 3 5 7 8 10 11 11 15 17 20 21 22

Copyright ©2011 Coremetrics, an IBM Company. All Rights Reserved.

formulate powerful programs and tactics to take this holiday season head-on. They’re shopping surgically—zeroing in quickly on the items they want—and are more likely than ever to “bounce” after a glance at a single page. including a look at: • Trends in key performance metrics over time • Emerging opportunities and challenges in online retail • Proven strategies to maximize success and deepen customer engagement • Key technological capabilities for web analytics and online marketing In preparing this guide. according to Coremetrics Benchmark data. an IBM Company. Happy selling! Copyright ©2011 Coremetrics. the online retailer. retailers participating in the Coremetrics Benchmark program. IBM® Coremetrics® Benchmark data shows. Meanwhile. SPECIAL REPORT 1 .S. Discriminating visitors are spending a lot less time browsing retail sites than they did several years ago. In this fourth annual holiday guide from Coremetrics. you’ll find in-depth analyses of key trends in online shopping and usage based on anonymous data aggregated from more than 500 U. Yet pitfalls loom. This report also offers best-practice guidance on how you can adapt to fast-moving trends and make the most of your opportunities during the critical holiday season. suggesting that the upcoming holidays could well be another record-setting season for online retail. Those increases have continued into 2011.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Introduction The 2010 holiday season was huge for online retailers. our goal is to help you. Mobile sales as a percentage of overall site business nearly doubled in our reporting period. sinking to new lows in such metrics as average time on site and page views per session. mobile browsing and shopping has surged impressively as consumers indulge in the convenience and rich functionality of feature-laden tablets and smartphones. an IBM Company. with mobile shopping poised to break into double digits by the holidays. All Rights Reserved. Web merchants racked up double-digit increases in total site sales and average order value as consumers shook off the effects of the recession. Consumer attention has flatlined at its weakest levels ever. Social media visitors and sales have lifted modestly—yet these shoppers are more than twice as likely to convert compared to overall site visitors.

September 2010. “Online Retail Holiday Study. Coremetrics Benchmark comes standard with IBM® Coremetrics® Web Analytics at no additional cost. North American Technographics® Retail Online Survey. SPECIAL REPORT 2 . which captures online marketing results and commerce data from more than 500 contributing U. an IBM Company.S. Q3 2010 (US). Forrester Research.” December 2010. the independent research firm Forrester has found: • 83 percent of consumers prefer to shop online than in crowded stores during Thanksgiving weekend1 • 21 percent of online shoppers expect to spend more over the web in 20112 Such trends are reflected in our analysis of Coremetrics Benchmark data. In support of this. The industry’s only peer-level benchmarking solution enables Coremetrics customers to measure performance against the competition (in anonymized. 1 2 Bizrate Insights and Forrester Research.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Trends in Online Shopping The holiday season is the proving ground for the strategies. All Rights Reserved. tactics. retailers. and technologies that your company has in place to boost sales by attracting and retaining customers. The following section of this report examines trends in five key areas: • Consumers are spending more on more items • Mobile device usage and social media are growing • Consumer attention continues to decline • Carting and ordering hit record highs • Single-page “bounce” visitors remain high About Coremetrics Benchmark. The opportunity is huge with online retail sales predicted to increase significantly over the next several years. Copyright ©2011 Coremetrics. aggregated form). Data in this report is based on Coremetrics Benchmark.

SPECIAL REPORT 3 . Between the 2009 and 2010 holiday seasons. Retargeting browsers and abandoners with personalized emails and targeted display ads is a proven way to prompt return visits and conversions among would-be buyers. Order values were also up substantially on Black Friday and Cyber Monday 2010 compared to 2009. web analytics. Product recommendations technology can contribute 10 percent and more of total sales. and social efforts to maximize returns while strengthening long-term customer loyalty. retailers saw a double-digit gain in AOV. hitting a record $204. As the economic rebound continues. And consumers are buying more items online. reaching a new high of 8. Smart retailers will not rest on their successes and blindly assume that spending will remain strong past the 2011 holidays. Holiday Season Average Order Value 2009 November December Black Friday Cyber Monday 2010 $ 195 $ 190 $ 191 $ 195 % Gain 11. but will aggressively expand their emarketing. as shown in Figure 1.3% 10.26 items per order in March 2011—nearly double the 4.7% 12. Coremetrics Benchmark data has shown. Copyright ©2011 Coremetrics. All Rights Reserved. boosting both AOV and items per order.8 items per order in December 2008.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Consumers Are Spending More on More Items Average order value (AOV) surged to a new high in our reporting period. retailers have the opportunity to capitalize on consumers’ newfound willingness to spend.58 in April 2011—up a massive 70 percent from a low of $120 in June 2008. while social media offers an emerging channel to deepen consumer engagement and trigger site visits. Online retailers posted double-digit AOV gains during the 2010 holiday season. Strong mobile device support is essential to satisfying the fast-growing population of mobile browsers and shoppers. an IBM Company.1% 8. mobile.3% $ 175 $ 172 $ 170 $ 180 Figure 1.

00 $100.00 $140. Retail: Average Number of Items Per Order 8.S. Both average order value and average number of items per order hit record highs in early 2011.00 5. an IBM Company.00 $180.00 $200.00 2009 Apr April 2008 .April 2011 Nov Dec Sep Jan Feb Jun Oct Feb Feb Mar Mar U.S.50 6.00 7.00 April 2008 . 2011 Apr May Jul Oct Dec Jan Jul Sep 2010 Apr Aug 2008 Apr May May Nov Mar Feb Nov Sep Dec Aug Aug Jun Mar Jan Jun Oct Jul 2011 Apr Mar Jul Dec Jan Jul Nov Sep May 2008 Apr 2010 Apr Aug May May Dec Mar Nov Sep Feb Aug Aug Jan Jun Oct Jun Oct Jul Copyright ©2011 Coremetrics.50 4.50 5.50 7. All Rights Reserved. SPECIAL REPORT 4 .00 $120. signaling opportunities for a banner holiday 2011.00 4.April 2011 Nov Sep Dec Jan Feb Jun Oct 2009 Apr Figure 2.50 8.00 6.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report U.00 $160. Conclusion: Increases in average order value and average number of items per order should prompt savvy retailers to look for ways to smartly engage online shoppers and capitalize on consumer use of social media and mobile devices. Retail: Average Order Value $220.

The mobile channel shows strong growth in percent of both site visits and sales. Retail: Mobile Site Traffic 8. We expect that mobile site traffic will grow well beyond the 7. mobile usage is clearly rising and is a critical channel that no online retailer can afford to shortchange or ignore.April 2011 Mar Apr U. the mobile channel as a percent of total site sales nearly doubled.00% Nov Dec Jan Feb November 2010 . For instance.00% 7. All Rights Reserved. iPads. Though the population is relatively small.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Mobile Device Usage and Social Media Are Growing Coremetrics Benchmark data reveals strong and steady increases in mobile device usage in both site visits and sales. SPECIAL REPORT 5 . Site visits and sales by social media visitors were less than 2 percent in our limited reporting window of October 2010 to April 2011.00% 3.00% 5. from October 2010 to April 2011 as mobile data was first launched in Coremetrics Benchmark at the end of 2010.00% 4.S.00% 6. This indicates that social visitors (often Facebook fans or Twitter followers) are uniquely predisposed to purchasing and are responding to offers exclusively on social media.5 percent of all site sales as of April 2011—is impressively high and illustrates that consumers are using iPhones. Interestingly.00% 4. Sales via mobile devices—at 6.00% 5.6 percent versus 1. the percentage of social-driven site sales is higher than social-driven site visits (1. Retail: Mobile Sales Percent 7.April 2011 6. in our six-month reporting period. Copyright ©2011 Coremetrics.2 percent respectively in April 2011). as seen in Figure 4. rising incrementally over those six months. an IBM Company.4 percent to 6. it’s a promising segment that retailers are smart to cultivate.6 percent recorded in April 2011 and be in the double digits by holiday 2011. and Android devices for more than just finding directions to a store. Though our snapshot is somewhat limited.S.00% Nov Dec Jan Feb Mar Apr Figure 3.00% November 2010 .00% 3. U. BlackBerries.5 percent. from 3.

25% 0 Nov Dec Jan Feb November 2010 .8 percent) is high and their time on site (3:26 minutes) is low.75% 1. and social visitor populations reveals some interesting insights: • Social visitors. A comparison of key metrics across the overall.2% 35. They’re less engaged than the overall population. at a rate of 10.2 3:26 10. Though this is not unsurprising. and should continue cultivating the important segment of social media users. mobile.25% 0 Nov Dec Jan Feb November 2010 .S. Many of these social visitors are likely responding to offers.50% 1.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report U. less time on site. Retail: Social Sales Percent 1.1% Figure 5.7% 62.7 percent versus 5. & social segments of retail site visitors. All Means Page views per session Average time on site Conversion rate Bounce rate Mobile 4.S. All Rights Reserved. Retail: Social Site Traffic 1.8% Social 5. as their bounce rate (62. Conclusion: Mobile and social visitors are rapidly becoming a force to be reckoned with. Social-driven sales exceed social-driven site traffic. They’re more than twice as likely as the overall population to convert.5 7:20 5.April 2011 Mar Apr Figure 4. mobile. SPECIAL REPORT 6 . lower conversion. it does underscore the need for retailers to monitor and optimize the mobile user experience. Copyright ©2011 Coremetrics.8 3:42 3. • Mobile visitors. indicating social visitors are highly inclined to convert.9% 44.8% 7. A comparison of key metrics across overall.25% 1.April 2011 Mar Apr U.75% 0.2 percent. with fewer page views.75% 0.00% 0.50% 0. and higher bounce rates.00% 0.50% 0. an IBM Company.25% 1. Retailers need to move fast to ensure they meet the expectations of fickle mobile visitors.

Retail: Time on Site 10:33 10:04 9:36 9:07 8:38 8:09 7:40 7:12 6:43 April 2008 . down to 7:04 minutes from 10:04 in April 2008—a 30 percent decline.00 13. product review sections. while the growth of social media and mobile usage and general information overload has cut into the time that they used to spend on retail sites. Retailers should also revisit fundamental web analytics and A/B testing to optimize site navigation and the overall experience.S.00 7.S.5 in April 2008. Average page views per session also found a new bottom in December 2010—7. Use of relevant product recommendations.00 10. SPECIAL REPORT 7 .April 2011 Nov Sep Dec Jan Feb Jun Oct 2009 Apr Figure 6.00 11.00 9. the new lows are small dips in lines that are relatively flat over the past 1½ years after dropping precipitously from levels of 2008. Average time on site and page views per session hit new lows in late 2010. retailers should redouble efforts to make sites personalized and compelling. Discriminating consumers are clearly engaging in surgical shopping. Conclusion: A leveling off of consumer attention spans illustrates a new reality of discriminating customers and surgical shopping. All Rights Reserved. and social media are proven techniques to lengthen site visits. an IBM Company.44. The average time spent on site fell to its lowest point of the past three years in October 2010.April 2011 Nov Sep Dec Jan Feb Jun Oct Feb Feb May Dec 2010 Apr May Mar Mar Nov Jan Jul Oct Jan Jul Sep Aug Mar 2009 Apr U. consumer attention hit record lows in the past year. to improve these important metrics.00 12. To counter these trends and shrunken windows of engagement. down 45 percent from a high of 13.00 April 2008 . such as relevant product recommendations and site optimization.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Consumer Attention Continues to Decline Despite encouraging gains in AOV. As shown in Figure 6. U. Retailers need to diligently test and implement techniques.00 8. Retail: Page Views Per Session 14. 2011 Apr Sep Mar 2010 Apr May May Jul Oct Dec Jan Jul Nov Feb Aug 2008 Apr May Mar Nov Sep Dec Aug Aug Jan Jun Jun Oct Jul 2011 Apr Jun Sep Oct Dec Mar Feb Jun Aug 2008 Apr May Nov Aug Jul Copyright ©2011 Coremetrics.

Shopping cart sessions (when a shopper has carted an item) reached 10.7 product page views per session of April 2008.00% 10.3 percent in September 2008.00% 8. trending steadily downwards in the 12 months preceding.00% 1.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Carting and Ordering Hit Record Highs In another positive development.April 2011 U.S. up from a low of 8.S.00 3.00% 7.50 1.9 percent in February 2011. Ordering sessions peaked at 5.50 2. more than double the 2. but they’re viewing fewer product pages. Retail: Shopping Cart Session Percent 12.00% 11. But product page views per session fell to a new low of 1. Mar Nov Sep Dec Aug Aug Jan Jun Jan Feb Jun Oct Jun Oct Oct Jul Jan Jul Jul Jan Feb Oct Jun Jun Oct Oct Jul Jan Jul Jul Copyright ©2011 Coremetrics.00% 4.April 2011 Nov Nov Sep May Dec Sep 2010 Apr 2009 Apr Aug 2008 Apr U. an IBM Company.00% 0 April 2008 .7 in November 2010. and less than half the 3. Retail: Order Session Percent 6.S.3 percent in February 2011 as well. SPECIAL REPORT 8 . Combined. U.00 2. All Rights Reserved. Retail: Product Page Views Per Session 4. both shopping cart and ordering sessions reached new highs during our reporting period.00 1.00% 2.00% 3.00% Nov Jan Feb Feb Feb Mar Mar Mar Feb Jun Sep Oct Dec 2009 Apr 2011 Apr 2011 Apr 2011 Apr May Jul Oct Dec Jan Jul Sep 2010 Apr Aug 2008 Apr May May Nov Mar Feb Nov Sep Dec Aug Aug Jun Mar Jan Jun Oct Jul April 2008 .00% 5.6 percent of September 2008.00% 9.50 3.00 May May Mar Nov Dec April 2008 .April 2011 Dec Dec Nov Feb Sep Aug Aug Jun Mar Jan Sep Sep Mar 2010 Apr May May Dec Nov Feb 2009 Apr Aug 2008 Apr May Figure 7. but they’re carting and purchasing more items. Consumers are carting and ordering more items. these three data points corroborate observations on the surgical shopping phenomenon—shoppers are visiting fewer product pages.

S.00% 30. SPECIAL REPORT 9 . but retailers haven’t been able to make sustained improvement in shopping cart conversions.00% 36. Retailers are increasingly successful at converting new visitors. has been erratic over the past two years. Testing and optimization towards improving this key metric can pay off with sizable increases in top-line revenue.00% 1.00% April 2008 . U. Mar Nov Dec Dec Mar Nov Feb Sep Aug Aug Jan Jun Jan Feb Jun Oct Jun Oct Oct Jul Jan Jul Jul Copyright ©2011 Coremetrics. with less than one-third of carting sessions ending in conversion. Retail: New Visitor Conversion Percent 6.00% 38. Shopping cart conversion. an IBM Company.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Conclusion: Savvy retailers will strive to improve product page views per session. and spend. however. With no sustained gains in this critical metric. more than double the roughly 2 percent typical during 2008. New visitor conversions are rising gradually. with new visitor conversions hitting a high of 4.00% 5. retailers can benefit by applying web analytics for a fresh re-examination of their ordering funnel. All Rights Reserved. New visitor and shopping cart conversion.April 2011 Nov Sep Sep 2010 Apr May May Dec 2009 Apr Aug 2008 Apr May Figure 8.00% 3.00% 2. Conclusion: Erratic and unsustained movement in shopping cart conversion trends suggest the need for retailers to re-examine their carting and ordering processes.9 percent in December 2010. and in online retail in general. using web analytics to identify key drop-off points.00% 34.00% 32. and retargeting abandoners with personalized emails and display ads. using relevant product recommendations and social media techniques.00% 4. This metric has trended gradually upwards for more than a year and reflects growing consumer trust of web sites they haven’t dealt with before.April 2011 U.S.00% 0 Nov Jan Feb Feb Mar Mar Feb Jun Sep Oct Dec 2009 Apr 2011 Apr 2011 Apr May Jul Oct Dec Jan Jul Sep 2010 Apr Aug 2008 Apr May May Nov Mar Feb Nov Sep Dec Aug Aug Jun Mar Jan Jun Oct Jul April 2008 . to capitalize on consumer inclinations to cart. order. Retail: Shopping Cart Conversion Percent 40.

00% 20.00% Nov Nov Jan Sep Dec Jan Feb Jun Oct Feb Feb May Mar Dec May Mar Mar Jun Sep Oct Jul Oct Jan Jul Dec Feb Sep Aug Mar ’09 Apr ’11 Apr ’11 Apr ’08 Apr May Aug Jul Jun Aug Nov ’10 Apr April 2008 . They should also test and optimize page content to entice visitors into clicking through to multiple pages. U. Corresponding with the surgical shopping trend.00% 62.April 2011 77. It underscores the need for online retailers to ensure that landing pages reached from a display ad. an IBM Company. retailers need to ensure that landing page content corresponds with what was highlighted in an email promotion and display or paid search ads.00% 25. In addition. videos. Retailers can also combat high bounce rates with personalized recommendations. email promotion.S. the elevated bounce rate makes clear that discriminating visitors are likely to click away if they don’t find content that’s personalized and relevant. Retail: Bounce Rate (Single Page Sessions) 40. 2010—conversely. encouraging visitors to click on. or paid search listing are spot-on with what was advertised.00% 67.April 2011 U.00% 15. Retail: Multi-page Session Percent 82.00% 35. rising slightly over that period and hitting a record high of more than 35 percent in December 2010. The bounce rate hit a record high in Dec.S. Conclusion: To improve bounce rate performance. hitting a record low of 65. complementing on-site search results with product recommendations helps ensure relevant search page content and can trigger additional conversions.00% Nov May Mar May Sep Dec Dec ’09 Apr ’08 Apr ’10 Apr Aug May Nov Dec Sep Sep Nov Jan Feb Mar Aug Aug Jun Jan Feb Jun Oct Jun Oct Oct Jul Jan Jul Jul Figure 9.5 percent in March 2011.00% 72. Multi-page sessions are down in concert. product review sections. the bounce rate is up sizably from 22 percent in April 2008. Copyright ©2011 Coremetrics. All Rights Reserved.00% April 2008 . Despite remaining flat. and social media. SPECIAL REPORT 10 . multi-page sessions fell to an all-time low.00% 30.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Single-Page ‘Bounce’ Visitors Remain High The bounce rate (the percentage of single-page sessions) has remained fairly steady over the past 1½ year.

email. Whether it’s through display advertising. etc. As a marketer. He or she may have clicked through from natural search to gather information. In the digital landscape. According to data gathered in IBM® Coremetrics® Lifecycle. Copyright ©2011 Coremetrics. media. then saw customer reviews. then read about a sales promotion on Facebook—all before clicking on that one paid search campaign. an IBM Company. customer reviews. While a consumer may have clicked through on a paid search campaign and made a purchase. how can you take advantage of increases in online sales and AOV. content.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Best Practices Going into the holiday season. then been exposed to a display ad. and products influence customer life cycle progression and adjust marketing spend appropriately. All Rights Reserved. while combating the decline in consumer attention? Online retailers that excel will relentlessly pursue these objectives: • Learn from a customer’s browsing path over an extended period of repeat visits • Use historical behavior data to optimize all online marketing efforts • Deliver highly personalized and relevant customer experiences across all channels • Invest in processes of continuous improvement to create and execute marketing programs that get better and better Those best practice principles apply to five areas of strategic focus for the holidays and beyond. which we examine in the next section of this report: • Focus on the customer life cycle • Capitalize on the mobile channel • Retarget your browsers and abandoners • Use personalized product recommendations • Cultivate the social media channel Focus on the Customer Life Cycle Customer-centric marketing has been a theme that has resonated for years in traditional channels: print. By understanding this full customer life cycle. on average it takes a consumer 6. search. advertising. there were likely a number of other activities that ultimately led to the conversion. consumers are exposed to numerous digital channels influencing their online purchases and decision making. but also capturing these individual consumer behaviors over time. marketers can more clearly define what campaigns. it’s important not only to be measuring each of these digital channels. SPECIAL REPORT 11 . mobile or social campaigns.8 digital interactions before converting. it has more recently come into the spotlight as customers are becoming more discriminating in their online behaviors and are being exposed to more information.

Furthermore. marketers must be aware of where customers are in their customer journey outside of understanding all of those points of influence. Furthermore. First time visitors to a web site may be responding to different campaigns through different channels. 9. SPECIAL REPORT 12 .311 visitors over the last 400 days. an IBM Company. Figure 10. milestones are mapped based on shopper frequency. Of the 399. All Rights Reserved. Each of these ‘milestones’ are an important point to help map the customer journey for your web site. Came directly to the site. Returned via a Display Ad click. Each retailer may have different characteristics as to what should define a milestone: visits.132 were unique visitors while 8. Figure 11. 239. Copyright ©2011 Coremetrics.995 visitors migrated from 1x buyers to 2x buyers.855 were 3x buyers. In this Coremetrics Lifecycle report example. Came to the site via Natural Search. product reviews. A first time buyer may respond differently and perhaps have an affinity for certain products or content on the site compared to a repeat buyer. bought a Blu-Ray player. or perhaps social media. Marketers must understand the journey—the complete conversion cycle and all of the key points of influence—in order to appropriately allocate marketing spend. Responded to Newsletter TV Clearance link. Picked a Product Recommendation on site.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Paid Search Direct Load Display Ad Email Natural Search Searched for HDTV on Google. entered discount code and purchased. purchases.

Figure 12. affiliate sites. these life cycle analytics provide new opportunities for marketers to retarget customers and build loyalty. Versus a campaign-centric or page-view centric analysis. across multiple ad networks or via email. look at what segments or milestones define your customer journey or what your goal is for how you want customers to interact and engage with your brand. an IBM Company. beginning to understand individual customer behavior over time will help to develop the broader context and story for how customers engage with your brand. With the customer behavior information in hand. Some techniques include: • Track customer behavior over time. video. The IBM® Coremetrics® Explore and new Coremetrics Lifecycle solutions offer the tools marketers need to prepare for the holiday 2011 season and beyond. you may even be able to look at segments from last year’s online holiday shopping season to see if certain behaviors. social media and more. Within Coremetrics Lifecycle. With the right solution. All Rights Reserved. standard out-of-the box reports provide pre-made milestones or you can create your own customized milestones. milestones have been mapped based on a more high-level customer journey starting from customer awareness evolving to customer advocacy. SPECIAL REPORT 13 . • Define your customer journey.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Even though online shopping may differ over the holiday season as gift shopping is more common than personal shopping. providing a single comprehensive view of each visitor’s behavior over time and across channels. Copyright ©2011 Coremetrics. IBM® Coremetrics® LIVE (Lifetime Individual Visitor Experience) Profile™ tracks customers and prospects as they interact with your business online. In this figure. patterns or segments stand out that should be tracked this year.

Copyright ©2011 Coremetrics. All Rights Reserved. start looking more closely at the content. In this example. Figure 13. Begin to nurture your customers based on where they are in the customer life cycle. Coremetrics Lifecycle shows that the marketing channel that most heavily influenced the 2x buyer segment was an email campaign. but for web site content and product recommendations as well. Marketers should pay attention to these analyses to adjust investment appropriately—not only for marketing campaigns. an IBM Company. campaigns and products that are most heavily influencing their behaviors. As the holiday season approaches. SPECIAL REPORT 14 .IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report • Adjust your marketing efforts based on your customer life cycle. As the holiday season approaches. begin tracking these types of reports more closely to make real-time decisions and execute campaigns in response to how customers are progressing through the milestones.

“The short-term growth of mobile online shopping has been nothing short of phenomenal. Social.5 percent of site traffic. For example. and hunt for deals. mobile commerce (excluding travel) more than doubled in 2010—to $3. High usage during the holidays can be expected as harried consumers utilize their devices as shopping tools—and then share their experiences on social media while sipping a coffee at a shopping mall.00% 14.” ABI Research said. anytime. in April 2011.S.00% 20. and Mobile. Forrester Research and Shop. “The State Of Retailing Online 2011: Marketing. ABI Research estimates that U. U.4 billion. 3 4 5 ABI Research.3 Yet retailers have been relatively slow to embrace the mobile channel.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Capitalize on the Mobile Channel The sizable and ever-rising increases in mobile devices as a percentage of site traffic and sales are a clarion call to online retailers. If you’re not building and executing a mobile gameplan.00% Nov Dec Jan Apple iPhone Apple iPad LG Android Blackberry Feb Mar Apr Figure 14. December 17.Org. “2011 US Mobile Marketing Predictions. to browse products.org. As in other areas of online marketing.” Forrester Research observed. The increases revealed by Coremetrics Benchmark correspond with other industry research. They are followed by iPad. and only 35 percent offered an iPhone app.9 percent and 2.5 A key baseline is which devices and operating platforms are driving the most traffic and sales for your site.S. iPhone remains the leader for mobile site traffic. All Rights Reserved. Coremetrics Benchmark data from October 2010 through April 2011 shows Apple iPhone in the lead with Android closing fast. but Android is narrowing the gap.00% 16.” news release.00% 12. Retail: Mobile Traffic by Device 22. an IBM Company. the firms’ survey found. some clever and enterprising competitor is going to leave you in the dust during the 2011 holidays. Smart retailers aren’t just throwing mobile applications and functionality at the wall and hoping that something sticks.” May 2011. as shown in Figure 14. check availability and store locations.4 With the emergence of tablets and smartphones. mobile devices have become an almost physical extension of the consumer.4 Billion in 2010. inconsistent data and analytics will plague mobile marketers hoping to make a business case for testing emerging opportunities.” January 4.4 billion in 2009. they accounted for 2. Shoppers use devices virtually anywhere.00% 18. BlackBerry. “Mobile Commerce Sales Explode in United States: Will Top $3. Forrester Research. 2011. and LG. compare prices. respectively. success in the mobile realm depends on continuous optimization and measurement. up from $1. Only 48 percent of retailers reported having a mobile-optimized web site. SPECIAL REPORT 15 . “Despite increasing activity and more strategic spending. Copyright ©2011 Coremetrics. according to a May 2011 report by Forrester Research and Shop. 2010. enabling you to prioritize your efforts.

or in a number of subverticals such as department stores. you can track your key metrics versus your peers in retail as a whole. mobile marketing can be a competitive differentiator. using location data for geo-specific promotions. Studies have found that mobile users are generally more affluent and savvy. products they browse and buy. Some techniques include: • Optimize the site for mobile usage. Measuring the mobile channel is essential to success. In the fast-moving mobile race. Mobile marketing is still young—just 34 percent of interactive marketers were planning mobile campaigns. • Test and measure mobile marketing tactics. 2011. how well you’re performing compared to your competitors is critical in informing your strategies. as such. Coremetrics technology enables you to pinpoint device drop off points in navigation and conversion. SPECIAL REPORT 16 .6 If closely measured and adjusted. retailers need to aggressively hunt down and correct weaknesses in usability and functionality for mobile devices. particularly during the promotion-happy holiday season. With Coremetrics Benchmark. priorities. broad context. and more.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report The Coremetrics Explore ad hoc reporting solution and other elements of the Coremetrics platform give you the tools you need to capitalize on the mobile opportunity during holiday 2011 and beyond. a Forrester study found. electronics. health and beauty. Given the high bounce rate and brief time on site of mobile users. It’s critical to understand the extent to which mobile is cannibalizing sales from the conventional online channel. and their social media interactions. • Segment and cultivate your mobile audience. It’s not enough to simply track mobile application downloads—their usage must be measured. Delivering marketing messages via text or mobile-optimized display ads. • Understand mobile in a deep. which pays off in both the short term and over time by delivering a satisfying user experience that prompts return visits. offering mobile coupons and bar coding. All Rights Reserved. content they view. and mobile-optimized paid search and email are gaining traction. 6 Forrester Research.” January 4. “2011 US Mobile Marketing Predictions. they represent a particularly valuable customer slice. Coremetrics’ comprehensive platform enables you to measure mobile not as a silo. and resource allocations. but as a component in an overall digital marketing ecosystem to support informed channel and spend decisions. Building this intelligence gives you a foundation to engage these visitors with personalized emails and mobile-specific promotions. • Benchmark your industry performance. an IBM Company. Segment them as mobile users and then by types of device. Copyright ©2011 Coremetrics.

If a shopper leaves your site without a purchase. and click-through rates for targeted ads that are five times greater than generics. chances are good it’s to do further research through a search engine or to visit a competitor’s site.84 per email. Nor are they relying strictly on costly paid search campaigns to interact with prospects. Coremetrics Benchmark enables comparison of your site traffic and conversion rates against industry peers.11 cents for a control group—a 26-fold increase. the Netherlands’ largest online retailer. All Rights Reserved.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Figure 15. Coremetrics customers are realizing impressive results by retargeting visitors with IBM® Coremetrics® LIVEmail™ and IBM® Coremetrics® AdTarget: • Targeted display ads: wehkamp.43 percent compared to . Your window to re-engage a customer and drive conversion during the holiday season is shorter than ever. Smart marketers aren’t sitting back and hoping that would-be buyers return. an IBM Company. versus . • Personalized email: L’OCCITAnE En PROVEnCE has calculated its revenue from email retargeting at $2. is seeing return on investment (ROI) from targeted display ads that is 15 times greater than ROI from generic banners. Copyright ©2011 Coremetrics.14 percent for personalized retargeting compared to generic emails. They’re retargeting browsers and abandoners with cost-effective personalized email and targeted display ads to prompt a return site visit and conversion.nl. Retarget Your Browsers and Abandoners Speed is at a premium during the holiday season. Its retargeting conversion rate is 2. SPECIAL REPORT 17 .

effectiveness by audience segment.” March 2010. segmenting those who visited high-level category pages. a targeted display ad can and should illustrate the products browsed. Coremetrics allows you to correlate offsite impressions against web site visits. All Rights Reserved. it’s beneficial to monitor the effectiveness of targeted display ads by frequency. creative and message. particularly among people who have shown interest in your products or services. a study by the Network Advertising Initiative (NAI) of 12 online advertising networks found that behaviorally targeted ads are considerably more effective than non-targeted run-of-network ads. it also serves to enhance brand presence. such as videos or blog posts). with browsing and buying patterns that fluctuate as the weeks go by. an email to a shopping cart abandoner is likely to be most effective if it highlights the product left in a cart and invites one-click access to conclude the transaction. Take advantage of the real-time capabilities of the Coremetrics platform to monitor and optimize on the fly.68 times more revenue than non-targeted ads • Resulted in a 6. Done right. rather than a brand-level message. high-value customers. time of day. • Measure unclicked ad impressions. as once a day may be too little and every 15 minutes. and campaign data to maximize precision and relevance. Some strategies to keep in mind: • Strive for personalization and clarity. For product browsers. For instance.7 According to NAI. it cuts through the informational clutter that confronts shoppers to present a personalized offer and clear call to action. along with subsequent sales. product detail pages. Mobile users.8 percent for non-targeted ads While retargeting’s primary goal is to reacquire departing browsers and abandoners. customer. given their higher rates of conversion and the word-of-mouth value they offer in sharing their experiences with your brand. or shopping cart pages. Retargeting dovetails with consumer propensity for surgical shopping. conversions. and other activities. A particularly effective segment can be social media users. SPECIAL REPORT 18 . versus 2. and dormant registrants are also good candidates for segmentation and retargeting. too much. The best emarketers finely slice their clickstream. and other attributes. “The Value of Behavioral Targeting. For instance. • Use advanced segmentation. Look beyond click-through and conversion as the only metrics to monitor targeted display ad performance. By embedding an impression tag in display ads (or other impression-based assets. • Continuously monitor and optimize. behaviorally targeted ads: • Generated 2. an IBM Company. The holidays are a dynamic period. IBM® Coremetrics® Impression Attribution enables you to measure the “view-through” impact that unclicked display ads have on conversion.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Such evidence of the payback from retargeting comports with broader industry research. Consider using a funnel approach to determine retargeting type and message. 7 Network Advertising Initiative. Copyright ©2011 Coremetrics. It also pays to measure retargeting email by lag time after cart abandonment. For instance.8 percent conversion rate for ad clickers.

IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Figure 16. All Rights Reserved. an IBM Company.nl Copyright ©2011 Coremetrics.” Ewald Hoppen. The ability to speak with our customers on a 1-to-1 basis drives immense value back to our business. Coremetrics LIVEmail allows for the simple automation of email marketing to retarget shopping cart abandoners and other high-value segments. “We firmly believe that retargeting is a valuable way for improving your marketing communications. wehkamp. SPECIAL REPORT 19 . Senior Web Analyst.

SPECIAL REPORT 20 . even if an internal search engine delivered so-so results. generating between 7 percent to 9 percent of site sales. Figure 17. This technology enables you to meet the personalization and relevance demands of time-pressed shoppers while capitalizing on impulse purchasing and the higher AOV revealed by Coremetrics Benchmark. Coremetrics Intelligent Offer’s prebuilt integration with leading email service providers lets you seamlessly incorporate recommendations into your communications. Copyright ©2011 Coremetrics.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Use Personalized Product Recommendations The holiday season is prime time for personalized product recommendations. Key elements for testing include products. and more. All Rights Reserved. Coremetrics Benchmark data has found that recommendations on product list and product pages often deliver the greatest returns. • Aggressively test and tune recommendations. Real-time reporting gives you instant insight into performance and allows you to adjust on the fly as the holiday season unfolds. Coremetrics Intelligent Offer enables users to create business rules to govern product recommendations in the holiday season. wisdom of the crowds. Use recommendations technology in the personalized email you deliver to customers. Automation spares the costly resources that would be required to operate a manual recommendations solution. Recommendations on search results pages both prompt sales and ensure that results relevant to a search term are displayed. text. search behavior. from the home page to order confirmation pages. Recommendations are effective across virtually every shopping-related page on a web site. and more. Typically. Some best practices used by leading marketers include: • Use recommendations across the site. whether the email is an order confirmation or spotlights new products or discounts of interest to the shopper. colors. audience segmentation. an IBM Company. IBM® Coremetrics® Intelligent Offer lets you recommend the best products for segments of visitors based on historical and in-session data. Powered by self-learning algorithms. • Integrate product recommendations with email. creative. product recommendations can contribute 10 percent or more of total site sales. while analytics and reporting lets you monitor and optimize product performance. and customizable rules. Recommendations need not be limited to just the web site. A/B or multivariate testing helps ensure that you get the most out of your product recommendations solution. cross-session conversion. page placement. It’s a proven way to put in front of shoppers products they might not otherwise have known were available while promoting the 1-to-1 experience that discriminating consumers appreciate.

the majority have difficulties calculating the ROI from their investments. In addition to pure ROI numbers. marketers need to take into account the indirect effect of social media exposure and unclicked media impressions. providing a clearer picture of how effective your social media efforts are. it’s important to know what people are saying about your brand online.” Will Bender. Segments of social media users who browsed your site or carted but abandoned an item are ideal for retargeting via personalized email or display ads. it’s important to analyze click-through. • Aggressively retarget social users. page views. IBM® Coremetrics® Social Analytics enables you to quickly and simply plug into the social conversation. Best practices to make the most of social media marketing include: • Focus on ROI. A continued focus on building fans and followers will pay off with incremental revenue in the short term. Web analytics enables you to track direct click-through and conversion. and over a longer span improve customer loyalty and word-of-mouth evangelism among friends and friends of friends. conversion. the substantially higher conversion rate of social users testifies to the effectiveness of cultivating social fans and followers. SPECIAL REPORT 21 . or microsites. such as Facebook coupons or free shipping advertised only via a Twitter tweet. based on both click-through and view-through. as shown in Figure 18. But to fully understand social media ROI. across various social media. All Rights Reserved. Coremetrics Social Analytics enables you to compare selected business-impacting metrics. • Determine your best social media bet. Using feeds from Facebook and Twitter. Copyright ©2011 Coremetrics. YouTube. Though social is relatively small as a percentage of site traffic and sales. Not all social media marketing is created equal. Intelligent Offer has created an interesting mix of products that people really seem to like. Coremetrics Impression Attribution lets you incorporate this view-through traffic into marketing attribution models. While retailers are investing in social media. and other metrics by social media channel. be it Facebook. This introduces uncertainty into which techniques are most effective for which social media and can lead to misinformed decisions on marketing mix and budget allocation. Finding and engaging with brand champions on Facebook and Twitter is a great way to boost engagement and loyalty among your most vocal customers. To optimize performance. and the use of social-exclusive promotions. an IBM Company. Web Merchandising Manager. S&S Worldwide Cultivate the Social Media Channel The social channel is among the most promising for retailers heading into the holiday season.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report “The results we’ve seen with Intelligent Offer have been really quite impressive—we’re very happy with our return on investment. Their higher conversion rates and expressed interest in your brand suggests a likelihood of positive response to post-visit marketing. • Monitor brand and social conversations. Twitter. Enterprising retailers are looking to capitalize on the trend through the holidays. with more offers aimed at social users.

and recognizing that clever competitors are right now brainstorming over how they can capture a chunk of your holiday business. SPECIAL REPORT 22 . we would have seen Facebook as only obliquely connected with top-line enrollment and bottom-line revenue goals. we can see that Facebook is a significant and subtly sophisticated new front in the development of markets for the university. “Without the Coremetrics data. look critically for weaknesses. Coremetrics Social Analytics enables analysis of business-impacting metrics across various social media. along with big challenges. online retailers will also benefit by redoubling efforts to engage important and growing segments of mobile device and social media users. All Rights Reserved. an IBM Company.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Figure 18. Seton Hall University Make the Holiday Season Profitable Big opportunities await this holiday season. Now is the time for retailers to rethink their web analytics and online marketing strategies. As this report makes clear. Because of the data.” Senior Director of Strategic Marketing. We hope this guide has provided actionable insights that can help you maximize your holiday returns and lay the foundation for a profitable and prosperous 2012! Copyright ©2011 Coremetrics. and strive to meet consumers’ increasing demand for personalization and relevance by leveraging rich stores of historical and in-session customer behavior data.

and search engine bid management— delivered to customers through any digital vehicle including social. an IBM Company. retailers. abandoners. Coremetrics Benchmark comes standard with Coremetrics Web Analytics at no additional cost. mobile. offers a set of solutions suited specifically for the online retail industry. Customized for online retailers. and create precise and actionable customer segments. email targeting. To achieve this. All Rights Reserved. The Coremetrics Digital Marketing Optimization Platform includes the following solutions: Coremetrics Reporting and Analysis Coremetrics Web Analytics is our base analytics solution. Coremetrics enables marketers to further enhance not only their online marketing channels. Marketers can track and understand how customers progress through long-term conversion life cycles. Copyright ©2011 Coremetrics. but offline channels as well. event-driven customer segments that equip marketers with the most effective tools to cultivate high-value customers. social media presences. Coremetrics Explore is an ad hoc reporting solution that provides a complete picture of visitor and customer behavior. an IBM Company. Coremetrics Intelligent Offer The industry’s most sophisticated recommendation engine automatically generates personalized product recommendations by leveraging the rich. Coremetrics Benchmark Coremetrics Benchmark captures online marketing results and commerce data from more than 500 contributing U. web analytics and digital marketing automation. aggregated form). it leverages granular visitor activity captured by Coremetrics to deliver highly relevant display ads that increase visitor reacquisition. drill down into granular detail. and buyers with recommendations in emails. The industry’s only peer-level benchmarking solution enables Coremetrics customers to measure performance against the competition (in anonymized. and promote customer engagement. A life cycle is characterized by milestones ranging for example from first-time visitors to repeat buyers or social advocates. etc.S. enabling marketers to automatically execute campaigns. SPECIAL REPORT 23 . Through the fusion of customer profiles. Coremetrics Impression Attribution allows marketers to understand how unclicked impressions (display ads. videos. advertising.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Coremetrics for eCommerce Coremetrics. Coremetrics tracks customers and prospects as they interact with a business’ online presence providing marketers with a comprehensive view into how consumers are interacting with their brands online over time and across channels. Coremetrics empowers marketers to turn site visitors into repeat customers and loyal advocates by orchestrating a compelling experience throughout each customer’s digital life cycle. This unique insight is used to automate real-time personalized recommendations.) affect behaviors and conversions. Coremetrics Lifecycle Coremetrics Lifecycle provides visibility into unique. detailed customer information in LIVE Profiles. Seamless integration with Coremetrics LIVEmail lets you easily target browsers. enabling marketers to track website activity and cross-channel campaign performance. power cross-sell and up-sell. as well as in-session and “wisdom of the crowds” data. and demographics. and web. Through a simple integration with other systems of record such as CRM. Coremetrics AdTarget Coremetrics AdTarget is a data syndication platform and online marketing application that enables targeting and personalization of display advertising. display ad targeting across leading ad networks.

Coremetrics Social Analytics provides online marketers with a centralized console for analyzing social media channels and campaigns. As part of the Coremetrics platform. an IBM Company. Coremetrics LIVEmail may be configured to generate personalized emails to individuals who abandoned a shopping cart. or to send offers to select customer segments. SPECIAL REPORT 24 .IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Coremetrics LIVEmail Coremetrics LIVEmail solution gives marketers the flexibility to automatically deliver emails to customers based on specified scenarios. it allows users to track social channels alongside other online marketing channels to help understand the performance (ROI) of campaigns. Coremetrics Social Analytics Coremetrics Social Analytics enables marketers to treat social media as another marketing channel and measure ROI and engagement accordingly. For instance. Copyright ©2011 Coremetrics. and integrate with leading search providers. It features prebuilt best practice metrics for online retailers and integrates with email service providers. All Rights Reserved. Coremetrics Search IBM® Coremetrics® Search is a pay per-click (PPC) management application that improves top-line business performance. reduces operational costs. automate and fine-tune keyword bidding. It makes it easy for online retail marketers to identify top-performing keywords. and enables data-driven optimization of search advertising initiatives.

SPECIAL REPORT 25 . All Rights Reserved.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report Copyright ©2011 Coremetrics. an IBM Company.

and syndicate information across all customer channels. automate marketing decisions in real time.coremetrics. an IBM Company Coremetrics. an IBM Company. anywhere. and search engine bid management. automatically. email targeting.IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report About Coremetrics.com Copyright ©2011 Coremetrics. All Rights Reserved. Lotus Park The Causeway Staines Middlesex TW18 3AG U. visit http://www. display ad targeting across leading ad networks.2673 Coremetrics Europe Ltd. For Additional Information To learn more about Coremetrics.100 online brands globally use Coremetrics Software as a Service (SaaS) to optimize their online marketing.com/company/privacy. Coremetrics integrated marketing optimization solutions include real-time personalized recommendations. Tel: + 44 (0)8706 006123 www. 5307 .Coremetrics. To learn more.K.com or call 866-493-2673.coremetrics.php Corporate Headquarters 1840 Gateway Drive San Mateo. CA 94404 Tel: 866. a leading provider of web analytics and marketing optimization solutions helps businesses relentlessly optimize their marketing programs to make the best offer. The company’s solutions are delivered on the only online analytics platform designed to anticipate the needs of every customer. More than 2. every time. an IBM Company.493. Coremetrics has strongly supported online privacy since its inception. visit www.

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