Post on 21-Oct-2014
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©2014 eMarketer Inc.
May 1, 2014
Retail Ecommerce
Outlook—Tallying The
True Impact of Digital
Sponsored by
Presented by:
Yory Wurmser
eMarketer, Inc.
©2014 eMarketer Inc.
Agenda
eMarketer’s 2014 ecommerce forecast
– Overall pace of growth
– Sector-by-sector details
Convergence of online and offline shopping
– How digital influences brick-and-mortar
– Lessons from offline for digital retail
Role of mobile devices in ecommerce
– Smartphones
– Tablets
Twitter Hashtag – #eMwebinar
©2014 eMarketer Inc.
eMarketer’s Ecommerce
Forecast for 2014
©2014 eMarketer Inc.
Ecommerce: Rapid growth in sales and in
share of total retail revenue in 2014
©2014 eMarketer Inc.
Ecommerce sales growth will more than
triple growth in retail overall …
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15.5%
4.4%
Ecommerce Retail Overall
©2014 eMarketer Inc.
… but sales in traditional retail still will
dwarf ecommerce sales in 2014
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Sales
Traditional Retail Ecommerce
$4.43 Trillion
$0.30 Trillion
©2014 eMarketer Inc.
Recap: Ecommerce will grow quickly in
2014
• Sales reach $304 billion• 15.5% increase from 2013 • 6.4% of overall retail sales
©2014 eMarketer Inc.
Retail sales are still trying to pick up speed
following great recession
©2014 eMarketer Inc.
Retail still hasn’t recovered to
prerecession levels as a percent of GDP
• Reached 27.6%
in 2007
• Fell to 25.2% in
2009 at trough
• Back to 27.0% in
2013
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©2014 eMarketer Inc.
Consumer spending is influenced by
conflicting forces
Upward
• Improving
consumer
confidence
• Lower debt
• Low interest
rates
• Pent-up
demand
Downward
• Flat real
income
• High
unemployment
• Harsh winter
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©2014 eMarketer Inc.
One other ‘upward’ pressure: ecommerce
itself
©2014 eMarketer Inc.
One other ‘upward’ pressure: ecommerce
itself
1. The growth of ‘long-tail’ sales
2. The impact of international
sales from US ecommerce sites
3. The power of information to
overcome consumer reluctance
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©2014 eMarketer Inc.
1. The long tail enabled by ecommerce
marketplaces
Source: Chris Anderson, www.thelongtail.com
©2014 eMarketer Inc.
2. International sales
7%OC&C Strategy Consultants
©2014 eMarketer Inc.
3. The power of information online
“[Consumers] don’t want to be
wrong. … So, a productive
thought process for the
retailer can be, ‘How can I
help them to feel more
assured in their choice?’”
— Karen Leitze, Executive Vice
President, Director of Research and
Strategy
MARC USA
©2014 eMarketer Inc.
Unpacking ecommerce: Retail sectors
deploy ecommerce differently
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Clipart from www.clipartbest.com
©2014 eMarketer Inc.
Ecommerce by sector: Size tells only part
of the story
2014 Sales Ecommerce
(eMarketer) penetration*
Consumer electronics $66.4B 28%−44%
Apparel & accessories $50.2B 11%
*comScore & NPD Group
©2014 eMarketer Inc.
Biggest impact of ecommerce in
sectors characterized by:
Commodities
Easy storage
Easy delivery
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©2014 eMarketer Inc.
Sectors with biggest ecommerce
growth in 2014
Books/Video/Music: 17.0%
Apparel & Accessories: 16.2%
Auto & Parts: 15.9%
Consumer Electronics: 15.8%
©2014 eMarketer Inc.
Focus on apparel: Why the lag and now
the growth?
• Low penetration
• Comfort in
returns
• Better online
experience
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©2014 eMarketer Inc.
Focus on groceries: Big players join fray …
©2014 eMarketer Inc.
… while consumers gain comfort with
mobile shopping in supermarkets
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Convergence of Online
and Offline Shopping
©2014 eMarketer Inc.
Impact of digital much bigger than
ecommerce sales
“The total impact of digital on
the retail enterprise today
[extends to] the majority of
retail sales.”
— Michael Burgess, President of
HBC Digital
©2014 eMarketer Inc.
Most US shoppers are digital shoppers
and buyers
• Nearly 90% of
219.4 million
internet users
shop online
• Nearly three-
quarters buy
online
©2014 eMarketer Inc.
Webrooming and showrooming: a two-way
street
©2014 eMarketer Inc.
Consumers shop on desktops, mobile and
stores as part of a single shopping
experience
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©2014 eMarketer Inc.
Shift in focus from channel-specific
sales to overall sales
“Among multichannel retailers
… their interest in digital is
increasingly focused on
driving customers and
shoppers into their store
locations.”
— Scott Falzone, Industry Director
of Retail Specialty
©2014 eMarketer Inc.
CASE:
• Map to guide in-store
shopping
• Purchase history
• Clienteling app
• Click to collect
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©2014 eMarketer Inc.
Multichannel retailers need to gauge
the total effect of ecommerce
“I truly don’t care if shoppers
end up buying online or in-
store.”
— Gihad Jawhar, Vice President, Customer
Interface
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©2014 eMarketer Inc.
Ecommerce Teaching Brick-and-Mortar
Some Lessons
©2014 eMarketer Inc.
Stores finding equivalents to web
analytics
Web
• Cookie
• Heat map
• Traffic source
• Shopping carts
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Store
• Loyalty number
• Foot traffic
• MAC address
• Location-tracking
©2014 eMarketer Inc.
In-store messaging personalized at-scale
• Apps with scanners
• Mobile CRM
• Beacons
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©2014 eMarketer Inc.
Ecommerce can also learn from brick-
and-mortar
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Clipart from 4vector.com
©2014 eMarketer Inc.
Digital is a less free-flowing shopping
experience than is in-store
“You’re trying to catch lightning
in a bottle by relying on digital to
drive your market product.”
— Marshal Cohen, Chief Industry Analyst,
NPD Group
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©2014 eMarketer Inc.
The Role of Mobile
Devices
©2014 eMarketer Inc.
US retail mcommerce in 2014
• $57.8 billion in sales
• Up 37.2% from 2013
• 19.0% of ecommerce sales
• 1.2% of total retail sales
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©2014 eMarketer Inc.
Tablets generate far higher on-device
sales
2/3of mcommerce
sales in 2014
will come
via tablets
©2014 eMarketer Inc.
Growth in tablet sales will outpace
growth in smartphone sales through 2018
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266%
134%
©2014 eMarketer Inc.
Corollary: Smartphone share of
mcommerce is decreasing
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©2014 eMarketer Inc.
Mobile Is Becoming a Ubiquitous Part of
Shopping
“Retailers increasingly see consumers as not only
being always on, but also on the go.”
Scott Falzone, Industry Director of Retail Specialty
©2014 eMarketer Inc.
Mobile shoppers in 2014 make up 73.7%
of digital shoppers
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110.9 million124.8
million• 144.8 million total
• Up 16% from 2013
©2014 eMarketer Inc.
Smartphone shoppers outnumber tablet
shoppers
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110.9 million124.8
million110.9 million
©2014 eMarketer Inc.
Knowing the Role of Devices
Tablets
• At home
• Extended
research
• General buying
Smartphones
• Everywhere
• Quick research
• Last-minute
buying
©2014 eMarketer Inc.
Mcommerce is biting into desktop’s share
of traffic and revenue
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Percent change in US apparel and accessories retail ecommerce,
Q3 2012 & Q3 2013
Traffic RevenueDesktop 19.8% 7.9%Smartphone 58.5% 66.4%Tablet 49.0% 60.8%
Source: MarketLive, “Q3 2013 Performance Index”
©2014 eMarketer Inc.
Three implications for retailers trying to
maximize impact of mobile shopping
1. Understanding use cases is
crucial for strategy
2. Small screen size demands
simplicity of design
3. Curation is vital for
merchandising
©2014 eMarketer Inc.
Implication No. 1: Understanding
Use cases is crucial for strategy
©2014 eMarketer Inc.
Implication No. 2: Small screen size
demands simplicity of design
“The smartphone is just not going to work
the same way as your stores. You can
show me thousands of products in your
store. You can only show me five on the
phone. So there is a mechanical,
mathematical kind of compression effect
between the two that is going to disrupt
the way business is done.”
--Nicolas Franchet, Head of Retail and Ecommerce,
Global Vertical Strategy
©2014 eMarketer Inc.
Implication No. 3: Simpler smartphone
interfaces raise importance of curation via…
– Algorithms
– Friends
– Shopper
recommendations
– Tastemakers
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©2014 eMarketer Inc.
Takeaways
2014 will be another year of rapid growth in
ecommerce sales
Sales are only a partial measure of
ecommerce, which may influence the majority
of sales
The brick-and-mortar and ecommerce shopping
experiences are converging, making a singular
strategy important
Mobile is taking on a bigger role, with tablets
becoming digital catalogs and phones
becoming omnipresent research tools.
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› RMN SHOWCASE:
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American Eagle’s
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©2014 eMarketer Inc.
You will receive an email tomorrow with a link to
view the deck and webinar recording.
Q&A Session
Retail Ecommerce
Outlook—Tallying the
True Impact of Digital
Around 200 eMarketer reports are published
each year. Here are some recent ones you
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Proximity Marketing in Retail: Can Ecommerce Tactics
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Shopping Cart Abandonment: How Retailers Are Using
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Supermarkets and Mobile: Satisfying Grocery
Shoppers’ Appetites
The State of Omnichannel Retail: Retailers Playing
Catch-Up with Consumers
Tablets and Apparel: Fashioning a Role in Mobile
Commerce
Key Digital Trends for 2014
Learn more about digital
marketing with an eMarketer
corporate subscription
To learn more: www.emarketer.com/corporate
800-405-0844 or webinars@emarketer.com
Sponsored by
Yory Wurmser