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The MarketLive Performance IndexTM - Volume 16>> www.marketlive.com

The MarketLive Performance IndexTM

Q3 2011 Update: Anticipating the holiday rush

2The MarketLive Performance IndexTM Vol. 16—Q3 2011 Update: Anticipating the Holiday Rush © MarketLive, Inc. 2011

The MarketLive Performance IndexTM Vol. 16 Q3 2011 Update: Anticipating the Holiday Rush

The MarketLive Performance IndexTM - Vol. 16Q3 2011 Update: Anticipating the Holiday Rush

The MarketLive Performance IndexTM represents the pulse of e-retailing. In it, aggregate data from a robust range of merchants is tied to actionable tactics to drive eCommerce success. Using previously undervalued performance metrics, the MarketLive Performance Index provides a holistic view of consumer behavior.

Ken BurkeChairman, Founder, & Chief Evangelist, MarketLive, Inc.

Jaye SullivanSenior eCommerce Strategist, MarketLive, Inc.

Catherine ThorpeResearch Specialist, MarketLive, Inc.

For more information about this report, contact MarketLive, Inc.

www.marketlive.com877-341-5729

MarketLive Performance Index: Year Over Year Comparison Metric Q3 2010 Q3 2011 % difference Visits 15.95% Revenue 18.14% Conversion rate 4.43% 4.66% 5.24% Cart abandonment rate 61.41% 61.48% 0.12% “1-and-out” rate 31.82% 36.57% 14.91% Engagement rate 9.66% 10.48% 8.47%

Source: The MarketLive Performance Index Vol. 16. YOY figure compares performance for sites included in the Index in both 2010 and 2011.



As the crucial holiday season approaches, merchants are once again poised for solid gains in online sales. Forecasters are predicting a 13.5% increase in online sales – slightly less robust than 2010, but still potentially a bright spot amidst what may be an otherwise-tepid season. i

Third-quarter data from the MarketLive Performance Index indicates merchants are in a strong position to take advantage of holiday opportunities. From July 1 to September 30, Index merchants saw solid gains in visitors and revenue, with conversion also inching upward by 5.24%, to 4.66%.

The data also highlights a potential challenge for merchants – engaging shoppers beyond the first page of the site. Like in the second quarter, the year-over-year data for the third quarter shows a marked increase in the “1-and-out” rate, which measures the percentage of visits ending after just one page. In the third quarter, the “1-and-out” rate increased by nearly 15%, suggesting that increased traffic is also bringing more visitors whose aren’t immediately connecting with products or offers that meet their needs. The incentive to engage those “1-and-out” visitors is high – merchants have the opportunity to see even larger gains in engagement, conversion and sales if they succeed.

As the peak holiday season begins, the potential rewards are great. With continuing economic uncertainty fueling a conservative outlook, shoppers nonetheless report they plan to maintain holiday spending at levels on a par with last year. According to new data from the MarketLive/e-Tailing Group Holiday Shopping Survey,ii fully 87% of consumers plan to shop online at least as much as they did last year, if not more. And a majority of shoppers – 56% – report they’ll spend the same amount as they did last year, with 7% saying they’ll spend more.

Of course, there will be plenty of bargain hunters roaming the Web for deals, with 37% of shoppers reporting they intend to spend less this year. And regardless of their budgets, consumers will use the Web to hunt for deals, with 61% of shoppers saying they intend to research products online before making offline purchases, according to the survey.

Still, these statistics are reason for merchants to take heart: there are ways to engage shoppers beyond simply instituting deep discounts. The key is to communicate the value of the brand and the products on offer, during every phase of the holiday season. Tactics to try:

Early season: encourage immediate purchases

Counteract shoppers’ instincts to hold out for better bargains with irresistible promotions early in the season. These offers needn’t slash prices, but can focus on the convenience of beating the holiday rush and the security of knowing sought-after items will be in stock.

•Promote pre-season bargains. Target’s home page promotion similarly mentions holidays explicitly with the tag line “Cyber Monday deals before November” — promising shoppers they’ll find discounts now that are as enticing as what will be offered later in the season, when much-hyped shopping days such as Black Friday (the Friday after Thanksgiving) and Cyber Monday (the Monday after Thanksgiving) drive frenzied sales spikes.

•Play up scarcity. Merchants should prominently promote new arrivals, holiday-specific products and popular gifts — and, especially in the early going, message the convenience of purchasing now rather than scrambling to find items later. For example, retailer Toys “R” Us has already published its 2011 Hot Toy List of popular gifts; product pages emphasize scarcity by limiting the number of items purchased per customer and encourage immediate purchase with a free shipping discount.



Peak buying: spotlight “white glove” customer service (think shipping)

Shoppers’ relentless focus on the bottom line can be an opportunity for merchants to emphasize the value of stellar customer service. Make customer service information especially prominent — not only on your eCommerce site, but also on social outposts and your mobile site. After all, what’s the use of scoring the lowest possible price for a product if it doesn’t end up arriving in time, or if confusion over a return or exchange policy mars the purchase experience?

First and foremost, put a special emphasis on shipping. From a marketing standpoint, shipping discounts are the top promotions online buyers seek during the holidays — so featuring them prominently is a winning strategy to boost sales. And from a service standpoint, clear communication over delivery options and timelines helps shoppers complete purchases in time and within their budgets.

•Promote the service advantage of site-to-store purchasing. To encourage shoppers to buy online rather than simply heading to the store without completing purchases first, stress the convenience of site-to-store pickup — Sears does in its “5 Minutes or $5” promotion. Customers presenting an email purchase confirmation in the store will receive their items within five minutes, or else they’ll get a $5 coupon.

•Message those timelines. Position messaging about delivery cutoff dates prominently across all your brand properties. The more detailed the information, the better — and don’t forget to pair it with instant access to customer service through all available channels — including phone, live chat, email, and Twitter. During the 2010 holiday season, home furnishings manufacturer Cuddledown featured a countdown clock on its homepage to drive home the importance of purchasing immediately, and offered a detailed map showing delivery cutoff zones across the country. Shoppers could quickly scan the map, locate their delivery zone and get a precise cutoff date for their area.



Last-minute frenzy: cater to shoppers on the go

As shipping deadlines pass, put the focus on connecting shoppers with products in bricks-and-mortar stores, as available. With mobile devices and social networks playing a central role, it’s crucial to message in-store events and specials beyond the eCommerce site. To reach shoppers on the go:

•Don’t neglect social-to-store possibilities. Use your Facebook page and Twitter feed to keep shoppers apprised of the latest in-store holiday happenings. Train social media customer service staff to localize responses and help connect shoppers with in-store as well as online options for resolving their questions. And integrate a “locations” application into your page, as Crate and Barrel has done – making it easy for social shoppers to find stores without leaving the social environment.

•Tie your mobile store locator to in-store events. Holiday shoppers on the go should be able to find not only store hours and turn-by-turn directions, but also upcoming in-store events. And store locators aren’t just for brick-and-mortar retailers. Brand manufacturers can get in on the act by pointing shoppers to partner retailers who stock the brand’s products and participate in local or regional promotions. Beauty manufacturer Clinique displays which stores are featuring a “Bonus Time” with free sample giveaways and other goodies along with promotion dates.

Conclusion: Strategies for holiday success

The 2011 holiday season promises to be strong for eCommerce merchants. Those who reap the greatest rewards will find innovative ways to communicate value – through early purchase incentives, a spotlight on service and a seamless cross-touchpoint experience to ease the last-minute holiday frenzy.

For more holiday strategies, be sure to register for MarketLive’s 2011 Consumer Shopping Survey and Holiday Strategies Webinar October 26, presented in conjunction with the e-Tailing Group. And visit our blog, marketlive-blog.com, for ongoing holiday updates throughout the season.

i Internet Retailer, “A Subdued Holiday Forecast,” Sept. 22, 2011, http://www.internetretailer.com/2011/09/22/subdued-holiday-forecast

ii MarketLive and the e-Tailing Group, “2011 Holiday Buying,” preliminary study results. For full survey data, sign up for the Oct. 26 Webinar, http://tinyurl.com/42abem8.

a. Comparison Data

Quarter Over Quarter

Metric Q2 2011 Q3 2011 % DifferenceOverall Conversion Rate 5.04% 4.55% -9.72%Overall Cart Abandonment Rate 59.54% 61.48% 3.26%"1-and-out" - % of all visits 33.81% 35.97% 6.39%Engagement Rate (Visits to Carts) 10.97% 10.42% -5.01%

Year Over Year

Metric Q3 2010 Q3 2011 % DifferenceOverall Conversion Rate 4.02% 4.55% 13.18%Overall Cart Abandonment Rate 62.25% 61.48% -1.24%"1-and-out" - % of all visits 32.86% 35.97% 9.46%Engagement Rate (Visits to Carts) 9.15% 10.42% 13.88%

b. Detailed Data

Conversion AverageOverall Conversion Rate 4.55%

Abandonment AverageOverall Cart Abandonment Rate 61.48%Checkout Abandonment Rate 18.01%

Revenue AverageAverage Order Size $147.28Revenue Per Visit $5.26

Engagement AverageEngagement Rate (Visits to Carts) 10.42%"1-and-out" - % of all visits * 35.97%Home page "1-and-out" - % of all visits 7.49%Pages Per Visit 11.43% of Sites with Reviews 62%

AverageTraffic

All Search Engines 35.69%Bookmarked/Typed 30.01%Social Networks 2.88%Other 31.42%

MarketLive Performance Index

Customer Acquisition

Overall (Average All Sites) - Q3 2011



Catalogers - Q3 2011

a. Comparison Data



Year Over Year


b. Detailed Data





AverageTraffic






a. Comparison Data



Year Over Year


b. Detailed Data





AverageTraffic


* “1-and-out” measures the number of single-page visits to the site



Brick-and-Mortar Retailers - Q3 2011



a. Comparison DataQuarter Over Quarter


Year Over Year

Metric Q3 2010 Q3 2011 % DifferenceOverall Conversion Rate 2.90% 2.58% -11.03%Overall Cart Abandonment Rate 66.36% 70.74% 6.60%"1-and-out" - % of all visits 36.86% 43.52% 18.07%Engagement Rate (Visits to Carts) 8.71% 9.12% 4.71%

b. Detailed Data





AverageTraffic





Brand Manufacturers - Q3 2011



a. Comparison Data



Year Over Year

Metric Q3 2010 Q3 2011 % DifferenceOverall Conversion Rate 4.76% 4.99% 4.83%Overall Cart Abandonment Rate 60.14% 60.61% 0.78%"1-and-out" - % of all visits 27.14% 30.59% 12.71%Engagement Rate (Visits to Carts) 11.09% 11.86% 6.94%

b. Detailed Data





AverageTraffic





Apparel, Footwear, Accesssories - Q3 2011



a. Comparison Data



Year Over Year


b. Detailed Data





AverageTraffic





Housewares & Furniture - Q3 2011



www.marketlive.comFor more information:

HEADQUARTERS:MarketLive, Inc. • 617 B 2nd Street Petaluma, California 94952

Main: 1-877-341-5729 • E-mail: [email protected]

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