©2011 eMarketer Inc.

J U N E 2 1, 2 0 1 2

Retail Ecommerce Forecast—Challenging Economy Drives Online Shopping

Jeffrey GrauPrincipal Analyst

Sponsored by:

©2012 eMarketer Inc.

Questions we will answer today

What is the outlook for online retail sales?Which product categories have the most

growth potential?What mega-trends will drive ecommerce

growth?Who shops online?Q & A

Twitter – #eMwebinar

©2012 eMarketer Inc.

eMarketer forecasts double-digit growth rates for ecommerce sales through 2016

©2012 eMarketer Inc.

Ecommerce has steadily outperformed overall retail sales growth

©2012 eMarketer Inc.

Ecommerce’s share of total retail sales has grown—and will continue to do so

©2012 eMarketer Inc.

Consumers are shifting purchases from stores to the web

Break Out by Income (2012)

Annual Income Purchase more$100,000> 63%<$100,000 44%

Source: Deloitte, as cited in Internet Retailer, April 6, 2012

Twitter – #eMwebinar

©2012 eMarketer Inc.

Let’s compare analysts’ forecasts

BenchmarksUS DoC

comScore

©2012 eMarketer Inc.

Is eMarketer bullish or are other analysts being too conservative?

©2012 eMarketer Inc.

“Chronically over the course of the 15 year history of ecommerce, the growth of the ecommerce market has been underestimated.” —Eric Best, CEO of Mercent, in an interview with eMarketer, February 14, 2012

Analysts tend to underestimate ecommerce growth rates

©2012 eMarketer Inc.

How are online sales doing thus far in 2012?

Online sales were strong in Q1 2012

©2012 eMarketer Inc.

Keep in mind that the internet is much more than a sales channelIt strongly influences store sales

Share by Segment, 2012

Category ShareOnline sale 7.2%Web-influenced offline sales 38.2%Web-influenced sales 45.4%

Non web-influenced offline sales 54.6%

Source: Forrester Research, as cited by Business Insider, June 12, 2012

©2012 eMarketer Inc.

Questions we will answer today

What is the outlook for online retail sales?Which product categories have the most

growth potential?What mega-trends will drive ecommerce

growth?Who shops online?Q & A

Twitter – #eMwebinar

©2012 eMarketer Inc.

Ecommerce’s share of total retail sales is growingIn 2011, the internet accounted for 6.6% of total retail sales

Ecommerce’s share of total retail sales varies greatly by category

©2012 eMarketer Inc.

Consumer packaged goods (CPG) is an online sales category with high potential

©2012 eMarketer Inc.

Electronics and apparel dominate ecommerce—and will continue to do so

©2012 eMarketer Inc.

Together they will account for 40% of retail ecommerce sales in 2012

©2012 eMarketer Inc.

What are the fastest growing categories?

13.3%

Twitter – #eMwebinar

©2012 eMarketer Inc.

Questions we will answer today

What is the outlook for online retail sales?Which product categories have the most

growth potential?What mega-trends will drive ecommerce

growth?Who shops online?Q & A

©2012 eMarketer Inc.

1. Portable devices power anytime, anywhere commerce

Smartphones satisfy immediate product

needs

Tablets spur product discovery and

impulse buying

©2012 eMarketer Inc.

Smartphones promote showrooming by bringing the internet to the store

©2012 eMarketer Inc.

Showrooming diverts sales from stores to the web

6 in 10 ‘showroomers’ said they originally planned to purchase at the store but changed their mind while there and instead bought online

Source: comScore, “State of the US Online Retail Economy in Q1 2012,” May 2012

©2012 eMarketer Inc.

Tablets help people discover products they did not know they wanted

“Our general belief is that

tablet sales are significantly additive.”

Source: eMarketer interview, April 2012Paul Cousineau

VP, Mobile ProductsWal-Mart Global Ecommerce

Matt JonesGeneral Manager of Mobile Home Depot

“With the iPad app, we focus on how we

provide this discovery experience.”

Source: eMarketer interview, May 2012

Yonatan FeldmanVP, Mobile & Global EngineeringGilt Groupe

“I would say that the tablet is creating more incremental traffic

than it is taking it away or shifting.”

Source: eMarketer interview, April 2012

©2012 eMarketer Inc.

Tablet commerce is having a noticeable impact on web sales

“We are definitely seeing continual growth of people using tablets—mobile

is our fastest growing channel. We expect traffic on tablets to continue to

increase.”Source: eMarketer interview, May 2012

“We do more than 20% of our revenue on mobile, and tablets make up about 10%

of our revenue.”

Source: eMarketer interview, May 2012 “Tablet commerce

is certainly growing, but it’s still

small—in the low double-digits.”

Source: eMarketer interview, May 2012

Yonatan FeldmanVP, Mobile & Global EngineeringGilt Groupe

Julie BornsteinSVPSephora Direct

Ed DeutscherOperating VP, Digital Commerce and Emerging PlatformsHSN

©2012 eMarketer Inc.

2. Ecommerce is helping consumers make strong connections with products

Personalized recommendations

Curated selection

Twitter – #eMwebinar

©2012 eMarketer Inc.

Personalization brings products of interest to the consumer’s attention

75% of the videos people watch on Netflix are the result of seeing one of its recommendations

Shopycat, a social gift-finding Facebook app that came out of Walmart Labs, aims to convert consumer insights captured via social media into practical shopping tips

eBay acquired recommendation engine Hunch’s prediction technology to surface more quality recommendations from eBay’s “long tail” of product listings.

The Container Store’s conversion rates are about three times higher for customers who interact with recommendations than for a regular visit to the same page

Present

Future

©2012 eMarketer Inc.

Curated sites harness the power of social recommendations

32% of online buyers have made a purchase as a result of seeing an image on a social image-sharing site like Pinterest or Polyvore

©2012 eMarketer Inc.

Pinterest has become a powerful source of traffic during its short life

Martine ReardonChief Marketing OfficerMacy’s Inc.

“We just launched on Pinterest probably two

months ago, and we are seeing a huge response.”

Source: eMarketer interview, May 2012

Brian KalmaChief Experience OfficerGemvara

In the past month, 3.36% of Gemvara’s traffic came directly from Pinterest, outpacing Twitter, Google+ and every other social network save

Facebook, which accounted for 7.38%.”

Source: Internet Retailer, February 2012

“Pinterest is a growing source of traffic for

Etsy.”

Source: AdAgeDigital, December 2011

Adam BrownPress ManagerEtsy

©2012 eMarketer Inc.

Questions we will answer today

What is the outlook for online retail sales?Which product categories have the most

growth potential?What mega-trends will drive ecommerce

growth?Who shops online?Q & A

©2012 eMarketer Inc.

Online shoppers and buyers defined

Twitter – #eMwebinar

©2012 eMarketer Inc.

Most people who want to buy online are already doing so

©2012 eMarketer Inc.

Internet users across all age groups are buying online

©2012 eMarketer Inc.

Older consumers will account for a greater share of online buyers

©2012 eMarketer Inc.

Online buying has become a mainstream activity, where age, race and income matter less

©2012 eMarketer Inc.

Lower-income shoppers now account for a quarter of online sales

©2012 eMarketer Inc.

Millennials use new shopping channels

©2012 eMarketer Inc.

Takeaways

Ecommerce’s share of total retail sales could easily approach 15% by 2020.

Key growth engines: o Low prices, convenience and broad selection

onlineo Mobile and tablet commerceo Personalization and curated websiteso CPGo Mainstreaming of online buying

Twitter – #eMwebinar

Drive Conversions and Revenue

Built for commerce: Conversions, transactions and revenue Highly personal, relevant email and cross-channel marketing Sophisticated made simple

Susan Wall | VP, Marketing

Abandoned Carts

From Abandon to Conversion: Why Shoppers Abandon Carts and What Merchants Can Do About It

• Top reasons shoppers abandon online purchases

• Analysis of post-abandonment email strategies

• Recommendations for maximizing conversions

bronto.com/resources

Triggered Messages

Automate, Increase Engagement & Drive Revenue with Triggered Messages

• Content and creative best practices

• 7 Triggered message program examples

• A guide to defining business rules

bronto.com/resources

Cross-Channel Marketing

Taking A ‘Crawl, Walk, Run’ Approach to Cross-Channel Marketing

• How retailers build long-lasting relationships with shoppers.

• How SMS can get shoppers to complete purchases.

bronto.com/resources

Tips & Tricks

• Expertise from the field

• White papers

• Customer success stories

• Blog posts

bronto.com/resources

©2012 eMarketer Inc.

Q&A SessionRetail Ecommerce

Forecast—Challenging Economy Drives Online

Shopping

Sponsored by:

Brontobronto.com/resources

You will receive an email tomorrow with a link to

view the deck and webinar recording.

Jeffrey Grau

How Retailers Are Leveraging 'Big Data' to Personalize Ecommerce

US Retail Ecommerce Forecast: Entering the Age of Omnichannel Retailing

Curated Ecommerce: How Less Can Be More for Shoppers

Globalizing Ecommerce: What Retailers Need to Know About Entering Foreign Markets

Learn more about digital advertising with an eMarketer corporate subscription

To learn more: www.emarketer.com/products800-405-0844 or webinars@emarketer.com

Over 120 reports are published each year. Following are a few recent ones you may be interested in: