E-Retail Outlook for 2008 & Beyond
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Transcript of E-Retail Outlook for 2008 & Beyond
TeleconferenceThe Outlook For US eCommerce In 2008 And BeyondSucharita MulpuruPrincipal AnalystForrester Research
February 20, 2008. Call in at 12:55 p.m. Eastern time
2Entire contents © 2008 Forrester Research, Inc. All rights reserved.
B2C US eCommerce will continue to grow at a double-digit clip
© 2007, Forrester Research, Inc. Reproduction Prohibited
Forecast: US eCommerce, 2007 To 2012January 2008 “US eCommerce Forecast: 2008 To 2012”
© 2007, Forrester Research, Inc. Reproduction Prohibited
Forecast: US eCommerce, 2007 To 2012 (Cont.)January 2008 “US eCommerce Forecast: 2008 To 2012”
© 2007, Forrester Research, Inc. Reproduction Prohibited
Forecast: US eCommerce, 2007 To 2012 (Cont.)January 2008 “US eCommerce Forecast: 2008 To 2012”
6Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Online holiday sales were strong
Base: US online consumers
“Given the total amount you spent during the holiday season, what percent was spent in each channel?”
6% 5%
71%61%
23%34%
0%10%20%30%40%50%60%70%80%90%
100%
2006 2007
OnlineStoresOther
Source: Consumer Technographics® Post-Holiday Retail Online Survey, Q1 2008
7Entire contents © 2008 Forrester Research, Inc. All rights reserved.
This growth has happened in spite of economic conditions . . .
8Entire contents © 2008 Forrester Research, Inc. All rights reserved.
0.4
0.9
1/1/
2006
3/1/
2006
5/1/
2006
7/1/
2006
9/1/
2006
11/1
/200
6
1/1/
2007
3/1/
2007
5/1/
2007
7/1/
2007
9/1/
2007
11/1
/200
7
1/1/
2008
US$ to Euro Interbank rate
. . . including a declining dollar
December 2007 “US Online Travelers’ Outlook On The Economy And Spending”
Consumers’ Views Of Their Financial Situations And The US Economy
Consumers’ Views Of Their Financial Situations And The US Economy (Cont.)
December 2007 “US Online Travelers’ Outlook On The Economy And Spending”
11Entire contents © 2008 Forrester Research, Inc. All rights reserved.
eCommerce may be insulated because:
• Online consumers tend to be more affluent in general.
• Online consumers use the channel because it is just more convenient.
• Only 15% of US online consumers agreed with the statement “I bought less online this holiday season due to uncertainty about the US economy.”
• While overall retail sales may be flat or declining in most stores, online retailers still experience upward trajectories from a channel shift.
12Entire contents © 2008 Forrester Research, Inc. All rights reserved.
The Web is growing faster than stores
US$B
CAGR2008-12: 2%
CAGR2008-12: 13%
$204 $235 $268 $301 $335
$2,605 $2,646 $2,689 $2,734 $2,783
$0
$1,000
$2,000
$3,000
2008 2009 2010 2011 2012
Online sales Non-online sales
13Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Base: US online consumers
43%
46%
49%
40% 42% 44% 46% 48% 50%
I found the best values/deals online
I found products online that I couldn’t
find anywhere else
I prefer to shop online to avoid
crowds/linesCONVENIENCE
SELECTION
VALUE
The reasons consumers shop online remain the same
Source: Consumer Technographics® Post-Holiday Retail Online Survey, Q1 2008
14Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Core shoppers drive most of eCommerce
Half of online shoppers drive two-thirds of
online shopping spend.
Source: Consumer Technographics® Post-Holiday Retail Online Survey, Q1 2008
15Entire contents © 2008 Forrester Research, Inc. All rights reserved.
“Did you experience any complications while shopping online
during holiday 2007?”
42%Yes
58%No
Base: US online Web buyers
Consumer problems haven’t improved with time
8%
13%
17%
21%
0% 5% 10% 15% 20% 25%
Poor Web site performance (e.g., sluggishness)
Shipping ended up taking longer than I had expected
The item I purchased was backordered or not in stock
Shipping prices were higher than expected
Source: Consumer Technographics® Post-Holiday Retail Online Survey, Q1 2008
© 2007, Forrester Research, Inc. Reproduction Prohibited
This makes Web shopping very utilitarianJanuary 2008 “US eCommerce Forecast: 2008 To 2012”
© 2007, Forrester Research, Inc. Reproduction Prohibited
We believe some trends will shape the coming yearsDecember 2007 “Which Personalization Tools Work For eCommerce — And Why”
18Entire contents © 2008 Forrester Research, Inc. All rights reserved.
This should mean more experiences like this:
19Entire contents © 2008 Forrester Research, Inc. All rights reserved.
“Please rank the following channels in order of your purchasing preference.”
Base: US online consumers
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5
Traditional offline stores 74% 19% 4% 2% 2%
Online 22% 52% 11% 7% 8%
Print catalog 1% 18% 50% 24% 7%
By telephone (e.g., flowers) 2% 9% 26% 45% 19%
Television (e.g., shopping channel, infomercial)
1% 2% 9% 22% 64%
Consumers still prefer to shop in stores
Source: Consumer Technographics® Retail Online Survey, Q3 2007
20Entire contents © 2008 Forrester Research, Inc. All rights reserved.
This should mean stronger multichannel integration
US leaders
Circuit City
Best Buy
Wal-Mart
International leaders
FNAC
Tesco
ASDA
21Entire contents © 2008 Forrester Research, Inc. All rights reserved.
On-demand production driven by the long tail
22Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Better, richer user experiences
23Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Prognosis
Despite economic conditions, eCommerce
should continue on a strong, upward trajectory.
24Entire contents © 2008 Forrester Research, Inc. All rights reserved.
One last plug
• For those of you interested in more online retail metrics who also have an eCommerce business, participate in our annual “The State of Retailing Online” survey!
• Rich report with the following data points:» Marketing spend» Merchandising priorities» Percent of business through the Web channel» Multichannel priorities
• Email me ([email protected]) or [email protected] for a link to the survey.
• Must be completed very, very soon.
25Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Sucharita Mulpuru
www.forrester.com
Thank you