Digital Digs: Hot topics in retail

By ARTEMIS BERRY, VICE PRESIDENT, DIGITAL RETAIL, SHOP.ORG | Published: NOVEMBER 15, 2013

3 Comments | This entry was posted in Holidays, International, Marketing, Merchandising, Retail Companies

The most wonderful time of the year is here. Between holiday planning, IPOs adding to the number of billionaires in the world, game-changing announcements from Amazon, and pop-up stores giving digital retailers a physical presence, it’s been a busy month for digital retail.

To help you catch up from some of the hottest news from the last few weeks, I’ve included a few of my favorite articles in our second edition of the Shop.org Digital Digs.

Twitter: IPO success and all things TV

Differentiation in an increasingly crowded digital marketing landscape helped drive Twitter to a successful IPOthis month. As we see retailers and brands continue to utilize the platform for consumer engagement and advertising it will be interesting to see how Twitter positions and proves itself in the advertising world. Tapping into the TV ad market may be the key to their future.

For those as fascinated with the IPO world as I am, keep your eye out for a few more digitals that could be going public soon: Chegg, Zulily, Alibaba, and Square.

Amazon Shipping Domination: Thresholds and Sunday deliveries

Amazon had a couple big announcements over the last few weeks. In the free shipping world, they increased the spending threshold for their Super Saver shipping option from $25 to $35. While Amazon gave no reasonfor the first increase in more than a decade, the shift could drive Amazon Prime membership, decrease shipping costs and increase the size of their average order value.

Additionally, Amazon came out with news of a partnership with the U.S. Postal Service for Sunday product deliveries, beginning in the Los Angeles and New York metropolitan areas and expanding in 2014 to Dallas, Houston, New Orleans and Phoenix. The free service will now allow Amazon Prime customers to buy on Friday and receive orders on Sunday. The financially-stressed USPS may be thankful for the undisclosed added revenue, but this is yet another way Amazon is disrupting the supply chain and logistics world.

Marketplace or bust

Some of the most robust and distinctive marketplaces in the U.S. include Amazon, eBay, Etsy and OpenSky. But marketplaces continue to develop all over the traditional retail landscape. Since October, we’ve seen announcements from Staples, Best Buy, and Tom’s joining the realms of Barnes and Noble and other large retailers in this area. There is a lot of opportunity for both large and small retailers, but quite a few factors to consider in order to make this a win-win for retailers and consumers alike.

With my favorite sports commentator, Chris Berman’s Two Minute Drill in mind, I have a few more stories from around the world that caught my attention. Alibaba’s Singles Day sales in China, Instagram introducing ads,Cyber Monday sales predictions, and digital retailers like Indochino and Zady opening their own pop-up shopswere also on my hot list. I can’t wait to see what the rest of 2013 has in store for us.

via Shop.org Blog http://blog.shop.org/2013/11/15/digital-digs-three-hot-topics-in-retail/

The state of free shipping this holiday season

OCT25

By FIONA SWERDLOW, HEAD OF RESEARCH, SHOP.ORG | Published: OCTOBER 25, 2013

Be the first to comment | This entry was posted in Holidays, Marketing

When you think holiday, do you also think free shipping? Consumers value – often demand – free shipping this time of year, putting pressure on retailers to balance making the offer against maintaining profits. Free shipping offers are likely to ramp up quickly heading into the thick of the holiday shopping season: one-third of retailers surveyed expect to launch their first free holiday shipping offer sometime in November.

We dug into the Shop.org eHoliday 2013 Pre-Holiday Study conducted by Prosper Insights & Analytics to glean some insights into the state of free shipping for this holiday season.

Consumers value more than just free shipping.  More than four out of five (85 percent) of online consumers say free shipping is very important or important, just ahead of factors such as flexible return policies and an easy-to-use website But when asked to choose the most important factor in deciding to shop with a particular retailer, 35 percent said sales or discounts, and almost as many focused on aspects of the merchandise, including selection (18 percent) and quality (14 percent). Free shipping and shipping promotions were the most important consideration for only 5 percent.

Retailers have invested in their free shipping programs this year… Retailers should think about how free shipping augments merchandise selection and quality to tip the scales so the customer completes the purchase. We were encouraged to see that approximately one-third of retailers we surveyed this summer were investing significantly in free shipping programs for holiday, both with and without conditions.

…And are testing several free shipping approaches. Nearly half (47 percent) of retailers surveyed expect to increase free shipping offers this holiday season, compared with just one-third last year. One in 10 plan to increase use of free returns shipping, while 13 percent expect to lower the minimum required to qualify for free shipping.

Retailers know they have to offer a mix of promotions across coupons and free shipping.Ultimately, retailers understand that many consumers remain concerned about the economy and will be looking for both coupons and free shipping to stretch their holiday budgets. Among the three promotions retailers plan to most heavily emphasize this holiday season: percentage-off coupons (45 percent), dollar-off coupons (29 percent) and free standard shipping with conditions (29 percent).

Find the right free-shipping threshold. Monetate advised retailers last year to not only test the right shipping thresholds, but also test where to place the threshold message on their sites, including the checkout process. Retailers should take the same mindset as we get deeper into the holiday season.

There’s plenty more data where this came from. Shop.org members can see the full Shop.org eHoliday 2013 Pre-Holiday Study results on the Shop.org site.

via Shop.org Blog http://blog.shop.org/2013/10/25/the-state-of-free-shipping-this-holiday-season/

6 Ecommerce Predictions for the 2013 Holidays

SEPTEMBER 12, 2013 • ARMANDO ROGGIO

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U.S. online sales are expected to exceed $61 billion in November and December, making the holiday shopping season vital to small and mid-sized retailers.

Six trends — ecommerce growth, mobile sales, an increased number of free shipping offers, early sales promotions, competitive pricing, and new competitors — could have an impact on holiday revenues.

1. U.S. Retail Ecommerce Sales Will Grow More than 15 Percent

Last week, trend monitoring firm eMarketer revised its holiday sales projections upwards and reported that it now expects 2013 U.S. retail ecommerce holiday season sales to grow about 15.1 percent to $61.8 billion, up from $53.7 billion in the 2012 holiday season and $46.6 billion in the 2011 holiday shopping season.

For the entire year, eMarketer expects U.S. retail ecommerce sales — excluding travel and ticket sales — to reach $262.3 billion, up 16.4 percent from 2012. On a quarter-by-quarter basis, U.S. retail ecommerce should grow about 15.5 percent in the fourth quarter to $83.2 billion, again according to eMarketer.

Separately, ecommerce platform provider Volusion predicted that global retail ecommerce sales for small and mid-sized businesses would grow about 20 percent. Although Volusion’s forecast and the eMarketer predictions are not based on the same sample or data, both may imply that relatively smaller retailers might enjoy greater sales growth than large retailers like Amazon, Best Buy, or Walmart.

2. 16 Percent of U.S. Online Sales Will Come From Mobile Devices

U.S. retail ecommerce sales from mobile devices should reach $9.8 billion in November and December of this year, accounting for 16 percent of ecommerce market, according to eMarketer data released September 5.

“Tablets are particularly significant for m-commerce sales growth,” eMarketer reported, adding that retail ecommerce sales from tablets should total $26 billion for 2013, accounting for some 62.5 percent of all mobile-based ecommerce sales. Growth in tablet-based online sales should top 87 percent.

3. Even More Retailers Will Offer Free Shipping

Many consumers have come to expect free shipping or at least free shipping with a minimum purchase. In fact, a UPS study conducted in May 2013 found that 68 percent of shoppers have recommended a particular online store to a friend simply because it offered free shipping.

Separately, Google reported that queries for the term “free shipping” surge early in the holiday shopping season, peaking on Cyber Monday.

In response to this sort of popularity with consumers, expect even more online and multi-channel retailers to offer free shipping options.

4. Promotions Will Start Sooner

“For the big shopping seasons, people are making their wish lists — and shopping lists — earlier than ever,” wrote Google sales managers Erin Dean, Jacalyn Stolt, and Nina Thatcher in an August 2013 article. “In July, nearly half of surveyed shoppers already had made plans for when to purchase their holiday gifts. Of those actively planning, 30 percent are expecting to start before Halloween.”

With shoppers eager to buy early, retailers are responding. A survey from personalization provider Baynote and The E-tailing Group found that 30 percent of retailers plan to start holiday 2013 promotions by October 1 this year, indicating that many stores want to capture early season sales.

5. Unfortunately Price Will Matter Even More

While many of the 2013 holiday shopping season predictions have been generally positive — more ecommerce sales, more mobile sales — it may also be the case that shoppers will, perhaps increasingly, use price to make buying decisions.

A Google Consumer Survey from July 2013 found that consumers are generally not loyal to a particular brand when shopping for gifts, with 40 percent of those surveyed saying that they simply look for the best price.

What’s more, finding the best price is getting a lot easier for holiday shoppers, who can check online marketplaces like Amazon, Rakuten, and Newegg; shopping price comparison sites, including Google Shopping, NexTag, PriceGrabber, and similar; and mobile price comparison applications.

6. More Competition for Small Sellers

Many brick-and-mortar retailers, including Walmart, missed second-quarter sales estimates this year, indicating, perhaps, that while ecommerce is growing, overall retail is not nearly as hot.

Potentially sluggish brick-and-mortar retail sales has motivated some small shop owners, who had been holding out, if you will, to begin selling online.

In addition to boutique stores coming online, better and easier-to-use ecommerce solutions from companies like Bigcommerce, Volusion, Shopify, and Magento are making it even easier to start a new ecommerce business.

As ecommerce revenue grows, so will the number of retailers trying to earn a share of those sales.

via Practical Ecommerce http://www.practicalecommerce.com/articles/58511-6-Ecommerce-Predictions-for-the-2013-Holidays

The Commerce EvRolution, Part 1: Shopping Trends

AUGUST 27, 2013 • DALE TRAXLER

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Did I just make up a word, EvRolution? Why not. Technologists and marketers have been doing it for years. We’ve come up with ecommerce, m-commerce, and t-commerce to describe online commerce on, respectively, desktop computers, mobile devices, and tablets.

We have multichannel commerce, which implies marketing and selling products through many channels. Now we have omnichannel commerce, which implies delivering a seamless experience regardless of where or how consumers choose to interact with a company.

Whatever term we assign to it, commerce is evolving quickly to keep up with the revolution in mobile devices.

Whether you are a global retailer, pure-play online retailer, brand manufacturer, mom-and-pop local store, or small-to-medium-sized ecommerce merchant, you are likely impacted by rapid adoption of mobile devices.

According to Forrester Research, total U.S. online retail sales will be $252 billion in 2013, growing to $327 billion by 2016. That’s a small portion of forecasted total retail sales of $1.8 trillion in 2016. But, 44 percent of offline retail sales will be influenced by online shopping. That’s another $1.6 trillion worth of sales influenced by shoppers online, with most of them using a mobile device.

Mobile devices and technologies are revolutionizing shopping. Consumers are simply using the devices they are most comfortable with and demanding they deliver the same level of service that their desktop computer or an in-store sales person might deliver.

They are also creating new business opportunities for restaurants and other retailers. Rather than operating just online or in a physical store, retailers can open pop-up or mobile stores and leverage social media, online stores, and mobile apps for consumer ordering and payment convenience. They can go to the consumer rather than the other way around.

As consumers spend more time shopping online, there is an evolution in the way different channels are reacting to the new paradigm. This multi-part article explores key consumer shopping trends that are rapidly forcing changes in the way channels sell them products. I’ll examine the following:

• Key consumer shopping trends;
• Global multichannel retailers;
• Pure-play online retailers;
• Brand manufacturers;
• New channels;
• Small-to-medium-sized online retailers.

This article will focus on key consumer shopping trends. In the next installment, I will address how channels are responding to those trends.

Consumer Shopping Trends

Since consumers are at the heart of this EvRolution, I’ll start with consumer shopping trends.

• Desire to shop online. Most people under the age of 40 prefer to shop online. Period. Research increasingly bears this out. Some exceptions apply for things like clothes you need to try on and food. But watch for those lines to blur as well, as retailers develop new solutions.
• More pre-purchase research online. People like the ability to research, compare, and create wish lists without being pressured to buy. This trend is accelerating. Even if they buy in-store, they are likely to research online first.
• Mobile shoppers. People who shop both on mobile and in physical stores spend more. As more online stores are optimized or offer apps for online purchases, this trend will grow.
• Lowest price. Consumers are using tools to monitor prices automatically. There are apps that recommend when to make a purchase based on daily pricing trends. Consumers showroom and shop online for better prices while in physical stores.
• Shoppers want it now. They want it shipped the same day with two-day delivery, or they want to pick it up now. Amazon Prime created a monster for online retailers with its free two-day shipping. Global retailers are responding with in-store pickup. Watch for this to be next day and same day delivery expectations in the coming years.
• Free returns and return shipping. Not only do customers want you to ship them the orders free, they also want you to pay for the return shipping if they don’t like an item. This trend will increase as well.
• Payment flexibility. If you offer only credit card payments in your store, that’s not going to cut it in the future. Consumers love PayPal. New choices will be added from all sorts of places in the future. Think Square, Facebook, and Pinterest.
• Shopping with friends. Shoppers want their friends’ feedback and ideas. Facebook, Pinterest, Wanelo, Fab, Fancy and more are all tightly integrated with social shopping. Again, this trend is increasing online. It’s always existed for physical stores.
• Consistency. Consumers want the shopping experience to be the same regardless of the channel. Omnichannel commerce is simply a response to consumers who want to be able to order the same product online that they saw in the store at the same — or lower — price.
• Sourcing indifference. Consumers don’t care where it comes from. They don’t care if you have to ship it from your store in Florida to their homes across the U.S. Just get it there in two days or they will simply order from Amazon.
• Great online experience. Does your website load in, say, three seconds? That may not be fast enough for consumers today. Once they are in the store, they want good search and navigation. They want the store to be optimized for the device, but they also demand all the content — including reviews, ratings, descriptions, images and so forth.
• Seamless experience. If a consumer starts a cart on her smartphone, she wants to access that same cart on another device if she decides to buy at another time.
• Online coupons. Coupons are back. Daily deals are dead. Coupon aggregators are hot with consumers. Searching online for coupons is popular as consumers seek the lowest price.
• Showrooming. Consumers are using bar code apps to scan UPCs while in physical stores to shop for better deals, or research.
• Wish lists. Wish lists and gift lists are being used to save and share gift ideas. This extends beyond weddings to birthdays, holidays, and so forth. This allows for personal gifts that consumers want, instead of impersonal gift cards or unwanted gifts.

Consumer showrooming is a trend physical stores are dealing with. This shopper is scanning a UPC code with his smartphone.

Universal Trends

As a result of consumer actions, here are common responses by various channels and supporting systems.

• Mobile. Retail channels are quickly deploying and upgrading mobile sites and apps.
• Experimentation. There is a lot of experimentation with new channels – virtual stores, pop-up stores, in-store product customization, marketplace selling – as retailers try to find new and unique ways of reaching consumers and creating loyalty.
• Social media. Social media is being used for branding and messaging as well as promotional marketing. Smart retailers are using it for direct communications and research into buying motivations.
• Pricing automation. Retailers are using automation to monitor and manage price changes. Dynamic pricing software is used to execute price changes within multiple channels concurrently based on real time conditions. Changes occur constantly throughout the day.
• Big data. Retailers are discovering the gold mine of information they already have about consumer buying habits. As they consolidate information from online and physical stores and learn to mine it and combine it with third party information more effectively, consumers will be targeted with more appealing, highly personalized offers.
• Brands competing with channels. Major brands are getting into the retail game with both physical and online stores. Gone are the days when they worried about channel conflict. They are aggressively pursuing “lifestyle” stores rather than simply product stores to reinforce brand images. Think Apple, Nike, and many more.
• Faster delivery. All channels are moving toward faster delivery in response to consumer demand. Free delivery is also the norm rather than the exception.

In “Part 2: Channel Trends,” I’ll explore changes to each of the retail channels. In “Part 3: Smaller Merchants,”I’ll offer competitive strategies for small to mid-size retailers and manufacturers.

via Practical Ecommerce » Articles http://www.practicalecommerce.com/articles/57618-The-Commerce-EvRolution-Part-1-Shopping-Trends

Shopping Cart Usability : Why a simple, honest checkout sequence (usually) wins

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by Toby Biddle

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When it comes to e-commerce sites and shopping cart flows, usability testing is more than good practice. It’s a precious tool that helps uncover missed opportunities and dollars left on the table.

I’d like to present a handful of case studies and A/B tests that indicate a streamlined, “no BS” e-commerce flow with elegant user experience—where the site is honest and clear with visitors about how checkout works and what happens next—usually takes the cake for best conversion rate. The caveat is, keep on testing. As the last case study will suggest, there are always surprises.

Lesson 1: Do what you say you’re going to do

In business and in life, integrity is key and we often prefer people who do what they say they’re going to do. Why should buttons be any different?

Curious Country Creations, with the help of their digital agency, benefited from a nearly 88% lift in clickthroughs to the next page in the purchase process when they swapped their original button text on the page below from “Submit” to “Go to Payment Options.”

What do they sell? Dried plants and flowers for home decor.

“Submit” button

“Go to Payment Options” button

The takeaway here is, if you’re wondering what’ll convert best on that button, ask yourself: does this button do exactly what its text suggests? The visitors in this test knew exactly what they were in for when they clicked the “Go to Payment Options” button, and I’ll bet when they hit the payment options page, they were anything but surprised, which recalls another powerful checkout usability maxim: keep the surprise factor low! It’s a shopping cart, not a birthday party.

Lesson 2: Eliminate distractions, tempting as they may be

It’s a tough choice. You know it’s useful for your customer to see an order summary before checkout—perhaps it’s even the more transparent and “honest” approach to checkout UX—but it dominates a large swath of real estate.

Is it better to provide an order summary during checkout, or minimize distractions during the purchase process?

In this case study, Windstream, a provider of high-speed Internet service, saw a 5% increase in purchases when they removed an inline order summary sidebar on their final checkout page.

Inline order summary

No order summary

This single study doesn’t tell the whole story when it comes to order summaries (we all know Amazon swears by theirs) but it’s important to consider what your site visitors might consider distracting. For Windstream, it turned out the summary was just that: a distraction.

Lesson 3: Give them the whole enchilada

There are good reasons to break the order process into bite-size pieces: it’s less overwhelming, more organized, and cleaner in the design phase. But a number of studies like this one have shown that, perhaps counter-intuitively, a single-page checkout can perform better than a multi-step purchase process.

Charmandising, a French e-commerce site that sells pop music memorabilia, discovered that a single-page checkout process increased purchases by a whopping 67%.

Single-page checkout

Multi-step checkout

Lesson 4: Surprises lurk, so keep on testing

Yes, much of the common (empirical) lore suggests that your e-commerce site will convert better if you keep a streamlined, clean checkout flow with minimal distractions and no friction. But Dell ran quite an interesting test to the contrary.

The Dell team decided to test whether sales might be helped by a small lightbox creating some friction for users who decide to leave the shopping cart screen. As it turned out, the triggered overlay increased Dell’s sales by 4.4% while decreasing the number of items being removed from the cart.

Triggered “are you sure” overlay

No overlay

One nuance to consider in this test is that most of Dell’s products are “high consideration” products. People tend to research the computer they’re going to buy with some gravity and time investment as compared to, say, a t-shirt or a toaster. So the “are you sure” triggered overlay for this type of customer may help create real second-guessing and embattle the decision a bit, whereas a buyer of products of “lower consideration” may not behave the same way.

Conclusion

In these case studies, three companies won customers by: setting and fulfilling clear expectations of how their e-commerce website will behave; favoring a clean house free of distractions over increased detail about the purchase; and doing on a single web page what many shopping cart flows insist on doing over several.

It’s important to remember that, between retail category, visitor demographics and savvy, and changing trends over time, there’s a lot of idiosyncrasy to any single case study. And of course, as Dell’s bold triggered overlay test illustrates, there are exceptions and surprises, and we have to keep on testing to uncover them.

Image of shopping carts courtesy Shutterstock.

Four digital trends you need to succeed in 2013

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By TONY FONTANA, COORDINATOR, COMMUNICATIONS & PUBLIC AFFAIRS | Published: JANUARY 13, 2013

Be the first to comment | This entry was posted in Research, Retail Companies

Benchmarking and forecasting. It’s a vicious cycle, especially in retail. But past performance drives future direction, and these were two big concepts discussed by Forrester Research’sSucharita Mulpuru during her First Look presentation this morning at Retail’s BIG Show 2013. And her advice: retailers should temper their optimism for digital retail in the year ahead.

Forrester Research VP, Principal Analyst, Sucharita Mulpuru looks back at 2012 and discusses top digital initiatives for 2013.

One of the hottest topics in the industry in 2012 was same-day delivery and the impact this has had on redefining instant gratification. Mulpuru coined this phenomenon as the “last-mile obsession”, and used an analogy of a strategic chess game move for how smart retailers in the industry were responding to this shift. Just as a savvy chess player situates their castle piece closest to the most important player on the board, the king, retailers are similarly leveraging their online channel to support their brick-and-mortar presence. This idea reflects retailers’ high-prioritization of a seamless multichannel presence, an underlying precedent found in the results of Shop.org’s and Forrester’s latest edition of the State of Retailing Online (SORO) survey, released today at Retail’s BIG Show.

As Mulpuru discussed her outlook for 2013, she shared four main takeaways from the SORO research as well as larger-scale industry trends.

1. With mobile, it’s going to get a lot worse before it gets better.The constant emergence of new devices on the market is constantly reinventing how retailers design and develop. While consumer favorites like Apple’s iPad may seem like an industry standard for tablets, newer products like those ondisplay at CES have caused the design and development process to be “messier” for retailers, Mulpuru said.
2. Whatever is up Amazon’s sleeve will keep you up at night. Mulpuru cited a 40 percent year-over-year growth rate for Amazon from 2011 to 2012, and the company’s innovative Amazon Prime shipping club strategy has helped provide another leg up on the competition. Forrester’s research in tandem with Bizrate Insights shows the perk of free two-day shipping for those signed-up for Amazon Prime has enticed shoppers to spend more, putting the onus on more retailers to invest in this sought-after benefit.
3. Relentless innovation will continue. The fast-track evolution of flash sale sites like Gilt and Rue La La, to daily deal sites such as Groupon, and now subscription sale websites can mean only one thing: what’s the next big thing around the corner? Mulpuru targeted three types of commerce to look out for: curated, distributed and crowd-sourced.
4. Be prepared for the party to end. While the jury is still out on the results of 2012 holiday sales, Mulpuru predicted that retailers would be more strategic in their holiday promotions for 2013. Pointing to Chase Paymentech Solutions figures, which found November online transaction rates were much higher in November than December, the data revealed that more customers were taking advantage of earlier holiday deals. As a result, Mulpuru believes December sales and Q4 sales will be softer overall.

In Mulpuru’s wrap-up, she warned that e-commerce may see tougher times in 2013 – positive news for those that also have physical stores with a welcoming in-store experience. And while responsive web design is king for now, the next chapter in digital retail has yet to be written. But the book is open to those who learn from the innovators to re-implement in their own unique way.