Wp online-retailing-optimized-2011

IBM Coremetrics 4th Annual Online Retail Holiday Readiness ReportIndustry Benchmark Analysis and

Best Practice Guide to Maximize

Holiday Returns

JUNE 2011

S P E C I A L R E P O R T

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IBM Coremetrics 4th Annual Online Retail Holiday Readiness Report

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

Table of Contents

Introduction 1

Trends in Online Shopping 2

Consumers Are Spending More on More Items 3

Mobile Device Usage and Social Media Are Growing 5

Consumer Attention Continues to Decline 7

Carting and Ordering Hit Record Highs 8

Single-Page ‘Bounce’ Visitors Remain High 10

Best Practices 11

Focus on the Customer Life Cycle 11

Capitalize on the Mobile Channel 15

Retarget Your Browsers and Abandoners 17

Use Personalized Product Recommendations 20

Cultivate the Social Media Channel 21

Make the Holiday Season Profitable 22


SPECIAL REPORT 1Copyright ©2011 Coremetrics, an IBM Company. All Rights Reserved.

Introduction

The 2010 holiday season was huge for online retailers. Web merchants racked up double-digit increases in total site sales and average order value as consumers shook off the effects of the recession. Those increases have continued into 2011, IBM® Coremetrics® Benchmark data shows, suggesting that the upcoming holidays could well be another record-setting season for online retail.

Yet pitfalls loom. Consumer attention has flatlined at its weakest levels ever, sinking to new lows in such metrics as average time on site and page views per session, according to Coremetrics Benchmark data. Discriminating visitors are spending a lot less time browsing retail sites than they did several years ago. 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.

Meanwhile, mobile browsing and shopping has surged impressively as consumers indulge in the convenience and rich functionality of feature-laden tablets and smartphones. Mobile sales as a percentage of overall site business nearly doubled in our reporting period, with mobile shopping poised to break into double digits by the holidays. Social media visitors and sales have lifted modestly—yet these shoppers are more than twice as likely to convert compared to overall site visitors.

In this fourth annual holiday guide from Coremetrics, an IBM Company, you’ll find in-depth analyses of key trends in online shopping and usage based on anonymous data aggregated from more than 500 U.S. retailers participating in the Coremetrics Benchmark program. 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, including a look at:

• Trendsinkeyperformancemetricsovertime

• Emergingopportunitiesandchallengesinonlineretail

• Provenstrategiestomaximizesuccessanddeepencustomerengagement

• Keytechnologicalcapabilitiesforwebanalyticsandonlinemarketing

In preparing this guide, our goal is to help you, the online retailer, formulate powerful programs and tactics to take this holiday season head-on.

Happy selling!



Trends in Online Shopping

The holiday season is the proving ground for the strategies, tactics, and technologies that your company has in place to boost sales by attracting and retaining customers. The opportunity is huge with online retail sales predicted to increase significantly over the next several years. In support of this, the independent research firm Forrester has found:

• 83percentofconsumersprefertoshoponlinethanincrowdedstoresduring Thanksgiving weekend1

• 21percentofonlineshoppersexpecttospendmoreoverthewebin20112

Such trends are reflected in our analysis of Coremetrics Benchmark data. The following section of this report examines trends in five key areas:

• Consumersarespendingmoreonmoreitems

• Mobiledeviceusageandsocialmediaaregrowing

• Consumerattentioncontinuestodecline

• Cartingandorderinghitrecordhighs

• Single-page“bounce”visitorsremainhigh

About Coremetrics Benchmark. Data in this report is based on Coremetrics Benchmark, which captures online marketing results and commerce data from more than 500 contributing U.S. retailers. The industry’s only peer-level benchmarking solution enables Coremetrics customers to measure performance against the competition (in anonymized, aggregated form). Coremetrics Benchmark comes standard with IBM® Coremetrics® Web Analytics at no additional cost.

1 Bizrate Insights and Forrester Research, “Online Retail Holiday Study,” December 2010.2 Forrester Research, North American Technographics® Retail Online Survey, Q3 2010 (US), September 2010.



Consumers Are Spending More on More Items

Average order value (AOV) surged to a new high in our reporting period, hitting a record $204.58 in April 2011—up a massive 70 percent from a low of $120 in June 2008. And consumers are buying more items online, reaching a new high of 8.26 items per order in March 2011—nearly double the 4.8 items per order in December 2008.

Between the 2009 and 2010 holiday seasons, retailers saw a double-digit gain in AOV. Order values were also up substantially on Black Friday and Cyber Monday 2010 compared to 2009, as shown in Figure 1.

Holiday Season Average Order Value

2009 2010 % Gain

November $ 175 $ 195 11.3%

December $ 172 $ 190 10.7%

Black Friday $ 170 $ 191 12.1%

Cyber Monday $ 180 $ 195 8.3%

Figure 1. Online retailers posted double-digit AOV gains during the 2010 holiday season.

As the economic rebound continues, retailers have the opportunity to capitalize on consumers’ newfound willingness to spend. Smart retailers will not rest on their successes and blindly assume that spending will remain strong past the 2011 holidays, but will aggressively expand their emarketing, web analytics, mobile, and social efforts to maximize returns while strengthening long-term customer loyalty.

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. Product recommendations technology can contribute 10 percent and more of total sales, Coremetrics Benchmark data has shown, boosting both AOV and items per order. Strong mobile device support is essential to satisfying the fast-growing population of mobile browsers and shoppers, while social media offers an emerging channel to deepen consumer engagement and trigger site visits.



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April 2008 - April 2011U.S. Retail: Average Number of Items Per Order

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Figure 2. Both average order value and average number of items per order hit record highs in early 2011, signaling opportunities for a banner holiday 2011.

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.



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. Though our snapshot is somewhat limited, from October 2010 to April 2011 as mobile data was first launched in Coremetrics Benchmark at the end of 2010, mobile usage is clearly rising and is a critical channel that no online retailer can afford to shortchange or ignore. For instance, in our six-month reporting period, the mobile channel as a percent of total site sales nearly doubled, from 3.4 percent to 6.5 percent.

We expect that mobile site traffic will grow well beyond the 7.6 percent recorded in April 2011 and be in the double digits by holiday 2011. Sales via mobile devices—at 6.5 percent of all site sales as of April 2011—is impressively high and illustrates that consumers are using iPhones, iPads, BlackBerries, and Android devices for more than just finding directions to a store.

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November 2010 - April 2011U.S. Retail: Mobile Sales Percent


Figure 3. The mobile channel shows strong growth in percent of both site visits and sales.

Site visits and sales by social media visitors were less than 2 percent in our limited reporting window of October 2010 to April 2011, rising incrementally over those six months. Interestingly, as seen in Figure 4, the percentage of social-driven site sales is higher than social-driven site visits (1.6 percent versus 1.2 percent respectively in April 2011). 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. Though the population is relatively small, it’s a promising segment that retailers are smart to cultivate.



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November 2010 - April 2011U.S. Retail: Social Site Traffic


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November 2010 - April 2011U.S. Retail: Social Sales Percent


Figure 4. Social-driven sales exceed social-driven site traffic, indicating social visitors are highly inclined to convert.

A comparison of key metrics across overall, mobile, and social visitor populations reveals some interesting insights:

• Social visitors. They’re more than twice as likely as the overall population to convert, at a rate of 10.7 percent versus 5.2 percent. Many of these social visitors are likely responding to offers, as their bounce rate (62.8 percent) is high and their time on site (3:26 minutes) is low.

• Mobile visitors. They’re less engaged than the overall population, with fewer page views, less time on site, lower conversion, and higher bounce rates. Though this is not unsurprising, it does underscore the need for retailers to monitor and optimize the mobile user experience.

All Means Mobile Social

Page views per session 7.5 4.8 5.2

Average time on site 7:20 3:42 3:26

Conversion rate 5.2% 3.9% 10.7%

Bounce rate 35.1% 44.8% 62.8%

Figure 5. A comparison of key metrics across the overall, mobile, & social segments of retail site visitors.

Conclusion: Mobile and social visitors are rapidly becoming a force to be reckoned with. Retailers need to move fast to ensure they meet the expectations of fickle mobile visitors, and should continue cultivating the important segment of social media users.



Consumer Attention Continues to Decline

Despite encouraging gains in AOV, consumer attention hit record lows in the past year. The average time spent on site fell to its lowest point of the past three years in October 2010, down to 7:04 minutes from 10:04 in April 2008—a 30 percent decline. Average page views per session also found a new bottom in December 2010—7.44, down 45 percent from a high of 13.5 in April 2008.

As shown in Figure 6, the new lows are small dips in lines that are relatively flat over the past 1½ years after dropping precipitously from levels of 2008. Discriminating consumers are clearly engaging in surgical shopping, 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.

To counter these trends and shrunken windows of engagement, retailers should redouble efforts to make sites personalized and compelling. Use of relevant product recommendations, product review sections, and social media are proven techniques to lengthen site visits. Retailers should also revisit fundamental web analytics and A/B testing to optimize site navigation and the overall experience.

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April 2008 - April 2011U.S. Retail: Time on Site

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Figure 6. Average time on site and page views per session hit new lows in late 2010.

Conclusion: A leveling off of consumer attention spans illustrates a new reality of discriminating customers and surgical shopping. Retailers need to diligently test and implement techniques, such as relevant product recommendations and site optimization, to improve these important metrics.



Carting and Ordering Hit Record Highs

In another positive development, both shopping cart and ordering sessions reached new highs during our reporting period. Shopping cart sessions (when a shopper has carted an item) reached 10.9 percent in February 2011, up from a low of 8.3 percent in September 2008. Ordering sessions peaked at 5.3 percent in February 2011 as well, more than double the 2.6 percent of September 2008.

But product page views per session fell to a new low of 1.7 in November 2010, trending steadily downwards in the 12 months preceding, and less than half the 3.7 product page views per session of April 2008. Combined, these three data points corroborate observations on the surgical shopping phenomenon—shoppers are visiting fewer product pages, but they’re carting and purchasing more items.

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April 2008 - April 2011U.S. Retail: Shopping Cart Session Percent

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April 2008 - April 2011U.S. Retail: Order Session Percent

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April 2008 - April 2011U.S. Retail: Product Page Views Per Session

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Figure 7. Consumers are carting and ordering more items, but they’re viewing fewer product pages.



Conclusion: Savvy retailers will strive to improve product page views per session, using relevant product recommendations and social media techniques, to capitalize on consumer inclinations to cart, order, and spend.

New visitor and shopping cart conversion. Retailers are increasingly successful at converting new visitors, with new visitor conversions hitting a high of 4.9 percent in December 2010, more than double the roughly 2 percent typical during 2008. 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, and in online retail in general.

Shopping cart conversion, however, has been erratic over the past two years, with less than one-third of carting sessions ending in conversion. With no sustained gains in this critical metric, retailers can benefit by applying web analytics for a fresh re-examination of their ordering funnel, and retargeting abandoners with personalized emails and display ads.

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April 2008 - April 2011U.S. Retail: New Visitor Conversion Percent

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April 2008 - April 2011U.S. Retail: Shopping Cart Conversion Percent

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Figure 8. New visitor conversions are rising gradually, but retailers haven’t been able to make sustained improvement in shopping cart conversions.

Conclusion: Erraticandunsustainedmovementinshoppingcartconversiontrendssuggestthe need for retailers to re-examine their carting and ordering processes, using web analytics to identify key drop-off points. Testing and optimization towards improving this key metric can pay off with sizable increases in top-line revenue.



Single-Page ‘Bounce’ Visitors Remain High

The bounce rate (the percentage of single-page sessions) has remained fairly steady over the past 1½ year, rising slightly over that period and hitting a record high of more than 35 percent in December 2010. Despite remaining flat, the bounce rate is up sizably from 22 percent in April 2008. Multi-page sessions are down in concert, hitting a record low of 65.5 percent in March 2011.

Corresponding with the surgical shopping trend, 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. It underscores the need for online retailers to ensure that landing pages reached from a display ad, email promotion, or paid search listing are spot-on with what was advertised.

Retailers can also combat high bounce rates with personalized recommendations, product review sections, videos, and social media, encouraging visitors to click on. In addition, complementing on-site search results with product recommendations helps ensure relevant search page content and can trigger additional conversions.

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April 2008 - April 2011U.S. Retail: Bounce Rate (Single Page Sessions)

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Figure 9. The bounce rate hit a record high in Dec. 2010—conversely, multi-page sessions fell to an all-time low.

Conclusion: To improve bounce rate performance, retailers need to ensure that landing page content corresponds with what was highlighted in an email promotion and display or paid search ads. They should also test and optimize page content to entice visitors into clicking through to multiple pages.



Best Practices

Going into the holiday season, how can you take advantage of increases in online sales and AOV, while combating the decline in consumer attention? Online retailers that excel will relentlessly pursue these objectives:

• Learnfromacustomer’sbrowsingpathoveranextendedperiodofrepeatvisits

• Usehistoricalbehaviordatatooptimizeallonlinemarketingefforts

• Deliverhighlypersonalizedandrelevantcustomerexperiencesacrossallchannels

• Investinprocessesofcontinuousimprovementtocreateandexecutemarketingprograms 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:

• Focusonthecustomerlifecycle

• Capitalizeonthemobilechannel

• Retargetyourbrowsersandabandoners

• Usepersonalizedproductrecommendations

• Cultivatethesocialmediachannel

Focus on the Customer Life Cycle

Customer-centric marketing has been a theme that has resonated for years in traditional channels: print, media, advertising, etc. In the digital landscape, 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. According to data gathered in IBM® Coremetrics® Lifecycle, on average it takes a consumer 6.8 digital interactions before converting.

Whether it’s through display advertising, email, search, customer reviews, mobile or social campaigns, consumers are exposed to numerous digital channels influencing their online purchases and decision making. As a marketer, it’s important not only to be measuring each of these digital channels, but also capturing these individual consumer behaviors over time. While a consumer may have clicked through on a paid search campaign and made a purchase, there were likely a number of other activities that ultimately led to the conversion.

He or she may have clicked through from natural search to gather information, then been exposed to a display ad, then saw customer reviews, then read about a sales promotion on Facebook—all before clicking on that one paid search campaign. By understanding this full customer life cycle, marketers can more clearly define what campaigns, content, and products influence customer life cycle progression and adjust marketing spend appropriately.



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Searched for HDTV on Google.

Came directly to the site, bought a Blu-Ray player.

Responded to Newsletter TV Clearance link.

Returned via a Display Ad click. Picked a Product Recommen-dation on site.

Came to the site via Natural Search, entered discount code and purchased.

Figure 10. Marketers must understand the journey—the complete conversion cycle and all of the key points of influence—in order to appropriately allocate marketing spend.

Furthermore, marketers must be aware of where customers are in their customer journey outside of understanding all of those points of influence. First time visitors to a web site may be responding to different campaigns through different channels. A first time buyer may respond differently and perhaps haveanaffinityforcertainproductsorcontentonthesitecomparedtoarepeatbuyer.Eachofthese‘milestones’areanimportantpointtohelpmapthecustomerjourneyforyourwebsite.Eachretailermayhave different characteristics as to what should define a milestone: visits, purchases, product reviews, or perhaps social media.

Figure 11. In this Coremetrics Lifecycle report example, milestones are mapped based on shopper frequency. Of the 399,311 visitors over the last 400 days, 239,132 were unique visitors while 8,855 were 3x buyers. Furthermore, 9,995 visitors migrated from 1x buyers to 2x buyers.



Eventhoughonlineshoppingmaydifferovertheholidayseasonasgiftshoppingismorecommonthan personal shopping, these life cycle analytics provide new opportunities for marketers to retarget customers and build loyalty.

The IBM® Coremetrics®ExploreandnewCoremetricsLifecyclesolutionsofferthetoolsmarketersneedtoprepare for the holiday 2011 season and beyond. Some techniques include:

• Track customer behavior over time. Versus a campaign-centric or page-view centric analysis, beginning to understand individual customer behavior over time will help to develop the broader context and story for how customers engage with your brand. IBM® Coremetrics® LIVE(LifetimeIndividualVisitorExperience)Profile™ tracks customers and prospects as they interact with your business online, across multiple ad networks or via email, video, affiliate sites, social media and more, providing a single comprehensive view of each visitor’s behavior over time and across channels.

• Define your customer journey. With the customer behavior information in hand, 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. With the right solution, you may even be able to look at segments from last year’s online holiday shopping season to see if certain behaviors, patterns or segments stand out that should be tracked this year.

Figure 12. Within Coremetrics Lifecycle, standard out-of-the box reports provide pre-made milestones or you can create your own customized milestones. In this figure, milestones have been mapped based on a more high-level customer journey starting from customer awareness evolving to customer advocacy.



• Adjust your marketing efforts based on your customer life cycle. Begin to nurture your customers based on where they are in the customer life cycle. As the holiday season approaches, start looking more closely at the content, campaigns and products that are most heavily influencing their behaviors.

Figure 13. In this example, Coremetrics Lifecycle shows that the marketing channel that most heavily influenced the 2x buyer segment was an email campaign. Marketers should pay attention to these analyses to adjust investment appropriately—not only for marketing campaigns, but for web site content and product recommendations as well. 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.



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, some clever and enterprising competitor is going to leave you in the dust during the 2011 holidays.

The increases revealed by Coremetrics Benchmark correspond with other industry research. For example, ABI Research estimates that U.S. mobile commerce (excluding travel) more than doubled in 2010—to $3.4 billion, up from $1.4 billion in 2009. “The short-term growth of mobile online shopping has been nothing short of phenomenal,” ABI Research said.3

Yet retailers have been relatively slow to embrace the mobile channel, according to a May 2011 report by Forrester Research and Shop.org. Only 48 percent of retailers reported having a mobile-optimized web site, and only 35 percent offered an iPhone app, the firms’ survey found.4

With the emergence of tablets and smartphones, mobile devices have become an almost physical extension of the consumer. Shoppers use devices virtually anywhere, anytime, to browse products, compare prices, check availability and store locations, and hunt for deals. 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.

Smart retailers aren’t just throwing mobile applications and functionality at the wall and hoping that something sticks. As in other areas of online marketing, success in the mobile realm depends on continuous optimization and measurement, enabling you to prioritize your efforts. “Despite increasing activity and more strategic spending, inconsistent data and analytics will plague mobile marketers hoping to make a business case for testing emerging opportunities,” Forrester Research observed.5

A key baseline is which devices and operating platforms are driving the most traffic and sales for your site. Coremetrics Benchmark data from October 2010 through April 2011 shows Apple iPhone in the lead with Android closing fast; they accounted for 2.9 percent and 2.5 percent of site traffic, respectively, in April 2011. They are followed by iPad, BlackBerry, and LG, as shown in Figure 14.

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Figure 14. iPhone remains the leader for mobile site traffic, but Android is narrowing the gap.

3ABIResearch,“MobileCommerceSalesExplodeinUnitedStates:WillTop$3.4Billionin2010,”newsrelease,December17,2010.4 Forrester Research and Shop.Org, “The State Of Retailing Online 2011: Marketing, Social, and Mobile,” May 2011. 5 Forrester Research, “2011 US Mobile Marketing Predictions,” January 4, 2011.



TheCoremetricsExploreadhocreportingsolutionandotherelementsoftheCoremetricsplatformgiveyou the tools you need to capitalize on the mobile opportunity during holiday 2011 and beyond. Some techniques include:

• Optimize the site for mobile usage. Given the high bounce rate and brief time on site of mobile users, retailers need to aggressively hunt down and correct weaknesses in usability and functionality for mobile devices. Coremetrics technology enables you to pinpoint device drop off points in navigation and conversion, which pays off in both the short term and over time by delivering a satisfying user experience that prompts return visits.

• Segment and cultivate your mobile audience. Studies have found that mobile users are generally more affluent and savvy; as such, they represent a particularly valuable customer slice. Segment them as mobile users and then by types of device, products they browse and buy, content they view, and their social media interactions. Building this intelligence gives you a foundation to engage these visitors with personalized emails and mobile-specific promotions.

• Test and measure mobile marketing tactics. Delivering marketing messages via text or mobile-optimized display ads, using location data for geo-specific promotions, offering mobile coupons and bar coding, and mobile-optimized paid search and email are gaining traction. Mobile marketing is still young—just 34 percent of interactive marketers were planning mobile campaigns, a Forrester study found.6 If closely measured and adjusted, mobile marketing can be a competitive differentiator, particularly during the promotion-happy holiday season.

• Understand mobile in a deep, broad context. Measuring the mobile channel is essential to success. It’s not enough to simply track mobile application downloads—their usage must be measured. It’s critical to understand the extent to which mobile is cannibalizing sales from the conventional online channel. Coremetrics’ comprehensive platform enables you to measure mobile not as a silo, but as a component in an overall digital marketing ecosystem to support informed channel and spend decisions.

• Benchmark your industry performance. In the fast-moving mobile race, how well you’re performing compared to your competitors is critical in informing your strategies, priorities, and resource allocations. With Coremetrics Benchmark, you can track your key metrics versus your peers in retail as a whole, or in a number of subverticals such as department stores, health and beauty, electronics, and more.

6 Forrester Research, “2011 US Mobile Marketing Predictions,” January 4, 2011.



Figure 15. Coremetrics Benchmark enables comparison of your site traffic and conversion rates against industry peers.

Retarget Your Browsers and Abandoners

Speed is at a premium during the holiday season. If a shopper leaves your site without a purchase, chances are good it’s to do further research through a search engine or to visit a competitor’s site. 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. Nor are they relying strictly on costly paid search campaigns to interact with prospects. They’re retargeting browsers and abandoners with cost-effective personalized email and targeted display ads to prompt a return site visit and conversion. Coremetrics customers are realizing impressive results by retargeting visitors with IBM® Coremetrics®LIVEmail™ and IBM® Coremetrics® AdTarget:

• Targeted display ads: wehkamp.nl, the Netherlands’ largest online retailer, is seeing return on investment (ROI) from targeted display ads that is 15 times greater than ROI from generic banners, and click-through rates for targeted ads that are five times greater than generics.

• Personalized email: L’OCCITAnEEnPROVEnCE has calculated its revenue from email retargeting at $2.84 per email, versus .11 cents for a control group—a 26-fold increase. Its retargeting conversion rate is 2.43 percent compared to .14 percent for personalized retargeting compared to generic emails.



Such evidence of the payback from retargeting comports with broader industry research. For instance, 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.7 According to NAI, behaviorally targeted ads:

• Generated2.68timesmorerevenuethannon-targetedads

• Resultedina6.8percentconversionrateforadclickers,versus2.8percentfor non-targeted ads

While retargeting’s primary goal is to reacquire departing browsers and abandoners, it also serves to enhance brand presence, particularly among people who have shown interest in your products or services. Some strategies to keep in mind:

• Strive for personalization and clarity. Retargeting dovetails with consumer propensity for surgical shopping. Done right, it cuts through the informational clutter that confronts shoppers to present a personalized offer and clear call to action. For instance, 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. For product browsers, a targeted display ad can and should illustrate the products browsed, rather than a brand-level message.

• Use advanced segmentation. The best emarketers finely slice their clickstream, customer, and campaign data to maximize precision and relevance. Consider using a funnel approach to determine retargeting type and message, segmenting those who visited high-level category pages, product detail pages, or shopping cart pages. A particularly effective segment can be social media users, given their higher rates of conversion and the word-of-mouth value they offer in sharing their experiences with your brand. Mobile users, high-value customers, and dormant registrants are also good candidates for segmentation and retargeting.

• Continuously monitor and optimize. The holidays are a dynamic period, with browsing and buying patterns that fluctuate as the weeks go by. Take advantage of the real-time capabilities of the Coremetrics platform to monitor and optimize on the fly. For instance, it’s beneficial to monitor the effectiveness of targeted display ads by frequency, as once a day may be too little and every 15 minutes, too much. It also pays to measure retargeting email by lag time after cart abandonment, time of day, creative and message, effectiveness by audience segment, and other attributes.

• Measure unclicked ad impressions. Look beyond click-through and conversion as the only metrics to monitor targeted display ad performance. IBM® Coremetrics® Impression Attribution enables you to measure the “view-through” impact that unclicked display ads have on conversion. By embedding an impression tag in display ads (or other impression-based assets, such as videos or blog posts), Coremetrics allows you to correlate offsite impressions against web site visits, along with subsequent sales, conversions, and other activities.

7 Network Advertising Initiative, “The Value of Behavioral Targeting,” March 2010.



Figure 16. 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. The ability to speak with our customers on a 1-to-1 basis drives immense value back to our business.”

Ewald Hoppen, Senior Web Analyst, wehkamp.nl



Use Personalized Product Recommendations

The holiday season is prime time for personalized product recommendations. 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. Typically, product recommendations can contribute 10 percent or more of total site sales.

Powered by self-learning algorithms, IBM® Coremetrics® Intelligent Offer lets you recommend the best products for segments of visitors based on historical and in-session data, search behavior, wisdom of the crowds, and customizable rules. 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.

Automation spares the costly resources that would be required to operate a manual recommendations solution, while analytics and reporting lets you monitor and optimize product performance, audience segmentation, cross-session conversion, and more. Some best practices used by leading marketers include:

• Use recommendations across the site. Recommendations are effective across virtually every shopping-related page on a web site, from the home page to order confirmation pages. Coremetrics Benchmark data has found that recommendations on product list and product pages often deliver the greatest returns, generating between 7 percent to 9 percent of site sales. Recommendations on search results pages both prompt sales and ensure that results relevant to a search term are displayed, even if an internal search engine delivered so-so results.

• Integrate product recommendations with email. Recommendations need not be limited to just the web site. Use recommendations technology in the personalized email you deliver to customers, whether the email is an order confirmation or spotlights new products or discounts of interest to the shopper. Coremetrics Intelligent Offer’s prebuilt integration with leading email service providers lets you seamlessly incorporate recommendations into your communications.

• Aggressively test and tune recommendations. A/B or multivariate testing helps ensure thatyougetthemostoutofyourproductrecommendationssolution.Keyelementsfortestinginclude products, page placement, creative, colors, text, and more. Real-time reporting gives you instant insight into performance and allows you to adjust on the fly as the holiday season unfolds.

Figure 17. Coremetrics Intelligent Offer enables users to create business rules to govern

product recommendations in the holiday season.



“The results we’ve seen with Intelligent Offer have been really quite impressive—we’re very happy with our return on investment. Intelligent Offer has created an interesting mix of products that people really seem to like.”

Will Bender, 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. Though social is relatively small as a percentage of site traffic and sales, the substantially higher conversion rate of social users testifies to the effectiveness of cultivating social fans and followers, and the use of social-exclusive promotions.

Enterprisingretailersarelookingtocapitalizeonthetrendthroughtheholidays,withmoreoffersaimedatsocial users, such as Facebook coupons or free shipping advertised only via a Twitter tweet. A continued focus on building fans and followers will pay off with incremental revenue in the short term, and over a longer span improve customer loyalty and word-of-mouth evangelism among friends and friends of friends.

While retailers are investing in social media, the majority have difficulties calculating the ROI from their investments. 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. Best practices to make the most of social media marketing include:

• Focus on ROI. Web analytics enables you to track direct click-through and conversion. But to fully understand social media ROI, marketers need to take into account the indirect effect of social media exposure and unclicked media impressions. Coremetrics Impression Attribution lets you incorporate this view-through traffic into marketing attribution models, providing a clearer picture of how effective your social media efforts are.

• Aggressively retarget social users. 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. 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. In addition to pure ROI numbers, it’s important to know what people are saying about your brand online. Using feeds from Facebook and Twitter, IBM® Coremetrics® Social Analytics enables you to quickly and simply plug into the social conversation. Finding and engaging with brand champions on Facebook and Twitter is a great way to boost engagement and loyalty among your most vocal customers.

• Determine your best social media bet. Not all social media marketing is created equal. To optimize performance, it’s important to analyze click-through, page views, conversion, and other metrics by social media channel, be it Facebook, Twitter, YouTube, or microsites. Coremetrics Social Analytics enables you to compare selected business-impacting metrics, based on both click-through and view-through, across various social media, as shown in Figure 18.



Figure 18. Coremetrics Social Analytics enables analysis of business-impacting metrics across various social media.

“Without the Coremetrics data, we would have seen Facebook as only obliquely connected with top-line enrollment and bottom-line revenue goals. Because of the data, we can see that Facebook is a significant and subtly sophisticated new front in the development of markets for the university.”

Senior Director of Strategic Marketing, Seton Hall University

Make the Holiday Season Profitable

Big opportunities await this holiday season, along with big challenges. Now is the time for retailers to rethink their web analytics and online marketing strategies, look critically for weaknesses, and strive to meet consumers’ increasing demand for personalization and relevance by leveraging rich stores of historical and in-session customer behavior data.

As this report makes clear, online retailers will also benefit by redoubling efforts to engage important and growing segments of mobile device and social media users, and recognizing that clever competitors are right now brainstorming over how they can capture a chunk of your holiday business. 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!



Coremetrics for eCommerceCoremetrics, an IBM Company, offers a set of solutions suited specifically for the online retail industry. Through the fusion of customer profiles, web analytics and digital marketing automation, 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. To achieve this, 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. This unique insight is used to automate real-time personalized recommendations, email targeting, display ad targeting across leading ad networks, and search engine bid management—delivered to customers through any digital vehicle including social, mobile, and web.

Through a simple integration with other systems of record such as CRM, advertising, and demographics, Coremetrics enables marketers to further enhance not only their online marketing channels, but offline channels as well. The Coremetrics Digital Marketing Optimization Platform includes the following solutions:

Coremetrics Reporting and AnalysisCoremetrics Web Analytics is our base analytics solution, enabling marketers to track website activity andcross-channelcampaignperformance.CoremetricsExploreisanadhocreportingsolutionthatprovides a complete picture of visitor and customer behavior, enabling marketers to automatically execute campaigns, drill down into granular detail, and create precise and actionable customer segments. Coremetrics Impression Attribution allows marketers to understand how unclicked impressions (display ads, videos, social media presences, etc.) affect behaviors and conversions.

Coremetrics Intelligent OfferThe industry’s most sophisticated recommendation engine automatically generates personalized product recommendationsbyleveragingtherich,detailedcustomerinformationinLIVEProfiles,aswellas in-sessionand“wisdomofthecrowds”data.SeamlessintegrationwithCoremetricsLIVEmailletsyoueasily target browsers, abandoners, and buyers with recommendations in emails.

Coremetrics BenchmarkCoremetrics Benchmark captures online marketing results and commerce data from more than 500 contributing U.S. retailers. The industry’s only peer-level benchmarking solution enables Coremetrics customers to measure performance against the competition (in anonymized, aggregated form). Coremetrics Benchmark comes standard with Coremetrics Web Analytics at no additional cost.

Coremetrics LifecycleCoremetrics Lifecycle provides visibility into unique, event-driven customer segments that equip marketers with the most effective tools to cultivate high-value customers. Marketers can track and understand how customers progress through long-term conversion life cycles. A life cycle is characterized by milestones ranging for example from first-time visitors to repeat buyers or social advocates.

Coremetrics AdTargetCoremetrics AdTarget is a data syndication platform and online marketing application that enables targeting and personalization of display advertising. Customized for online retailers, it leverages granular visitor activity captured by Coremetrics to deliver highly relevant display ads that increase visitor reacquisition, power cross-sell and up-sell, and promote customer engagement.



Coremetrics LIVEmailCoremetricsLIVEmailsolutiongivesmarketerstheflexibilitytoautomaticallydeliveremailstocustomersbasedonspecifiedscenarios.Forinstance,CoremetricsLIVEmailmaybeconfiguredtogeneratepersonalized emails to individuals who abandoned a shopping cart, or to send offers to select customer segments. It features prebuilt best practice metrics for online retailers and integrates with email service providers.

Coremetrics SearchIBM® Coremetrics® Search is a pay per-click (PPC) management application that improves top-line business performance, reduces operational costs, and enables data-driven optimization of search advertising initiatives. It makes it easy for online retail marketers to identify top-performing keywords, automate and fine-tune keyword bidding, and integrate with leading search providers.

Coremetrics Social AnalyticsCoremetrics Social Analytics enables marketers to treat social media as another marketing channel and measure ROI and engagement accordingly. Coremetrics Social Analytics provides online marketers with a centralized console for analyzing social media channels and campaigns. As part of the Coremetrics platform, it allows users to track social channels alongside other online marketing channels to help understand the performance (ROI) of campaigns.


About Coremetrics, an IBM Company

Coremetrics, an IBM Company, a leading provider of web analytics and marketing optimization solutions helps businesses relentlessly optimize their marketing programs to make the best offer, every time, anywhere, automatically. More than 2,100 online brands globally use Coremetrics Software as a Service (SaaS) to optimize their online marketing. Coremetrics integrated marketing optimization solutions include real-time personalized recommendations, email targeting, display ad targeting across leading ad networks, and search engine bid management. The company’s solutions are delivered on the only online analytics platform designed to anticipate the needs of every customer, automate marketing decisions in real time, and syndicate information across all customer channels.

For Additional InformationTo learn more about Coremetrics, visit www.coremetrics.com or call 866-493-2673.

Coremetrics has strongly supported online privacy since its inception. To learn more, visit http://www.coremetrics.com/company/privacy.php

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

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