Ecommerce sales continue to grow as a percentage of overall retail, but the true impact of digital shopping goes far beyond the final click. Topics in this webinar include: What does double-digit growth in ecommerce sales mean for retail overall? How are innovative retailers responding to the convergence of digital and physical shopping? How do tablet and smartphone usage differ, and what does it mean for digital shopping and buying?

1. ©2014 eMarketer Inc.
May 1, 2014
Retail Ecommerce
Outlook—Tallying The
True Impact of Digital
Sponsored by
Presented by:
Yory Wurmser
eMarketer, Inc.

2. ©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
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3. ©2014 eMarketer Inc.
eMarketer’s Ecommerce
Forecast for 2014

4. ©2014 eMarketer Inc.
Ecommerce: Rapid growth in sales and in
share of total retail revenue in 2014

5. ©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

6. ©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

7. ©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

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Retail sales are still trying to pick up speed
following great recession

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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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10. ©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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11. ©2014 eMarketer Inc.
One other ‘upward’ pressure: ecommerce
itself

12. ©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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1. The long tail enabled by ecommerce
marketplaces
Source: Chris Anderson, www.thelongtail.com

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2. International sales
7%OC&C Strategy Consultants

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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

16. ©2014 eMarketer Inc.
Unpacking ecommerce: Retail sectors
deploy ecommerce differently
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Clipart from www.clipartbest.com

17. ©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

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Biggest impact of ecommerce in
sectors characterized by:
 Commodities
 Easy storage
 Easy delivery
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Sectors with biggest ecommerce
growth in 2014
 Books/Video/Music: 17.0%
 Apparel & Accessories: 16.2%
 Auto & Parts: 15.9%
 Consumer Electronics: 15.8%

20. ©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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21. ©2014 eMarketer Inc.
Focus on groceries: Big players join fray …

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… while consumers gain comfort with
mobile shopping in supermarkets

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Convergence of Online
and Offline Shopping

24. ©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

25. ©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

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Webrooming and showrooming: a two-way
street

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Consumers shop on desktops, mobile and
stores as part of a single shopping
experience
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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

29. ©2014 eMarketer Inc.
CASE:
• Map to guide in-store
shopping
• Purchase history
• Clienteling app
• Click to collect
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30. ©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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31. ©2014 eMarketer Inc.
Ecommerce Teaching Brick-and-Mortar
Some Lessons

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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

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In-store messaging personalized at-scale
• Apps with scanners
• Mobile CRM
• Beacons
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34. ©2014 eMarketer Inc.
Ecommerce can also learn from brick-
and-mortar
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Clipart from 4vector.com

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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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36. ©2014 eMarketer Inc.
The Role of Mobile
Devices

37. ©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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38. ©2014 eMarketer Inc.
Tablets generate far higher on-device
sales
2/3
of mcommerce
sales in 2014
will come
via tablets

39. ©2014 eMarketer Inc.
Growth in tablet sales will outpace
growth in smartphone sales through 2018
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266%
134%

40. ©2014 eMarketer Inc.
Corollary: Smartphone share of
mcommerce is decreasing
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41. ©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
Google

42. ©2014 eMarketer Inc.
Mobile shoppers in 2014 make up 73.7%
of digital shoppers
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110.9 million
124.8
million
• 144.8 million total
• Up 16% from 2013

43. ©2014 eMarketer Inc.
Smartphone shoppers outnumber tablet
shoppers
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110.9 million
124.8
million
110.9 million

44. ©2014 eMarketer Inc.
Knowing the Role of Devices
Tablets
• At home
• Extended
research
• General buying
Smartphones
• Everywhere
• Quick research
• Last-minute
buying

45. ©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 Revenue
Desktop 19.8% 7.9%
Smartphone 58.5% 66.4%
Tablet 49.0% 60.8%
Source: MarketLive, “Q3 2013 Performance Index”

46. ©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

47. ©2014 eMarketer Inc.
Implication No. 1: Understanding
Use cases is crucial for strategy

48. ©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

49. ©2014 eMarketer Inc.
Implication No. 3: Simpler smartphone
interfaces raise importance of curation via…
– Algorithms
– Friends
– Shopper
recommendations
– Tastemakers
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50. ©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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51. › RETAILER CHALLENGES
 Reaching the mobile consumer,
at the right time and place
 Creating a seamless experience
across channels
 Delivering results

52. › RetailMeNot MOBILE IN-STORE SOLUTION

53. › PROFITABLE MOBILE MARKETING CHANNEL
+3-5% Lift in
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54. › RMN SHOWCASE:
A RICH AND ENGAGING SHOPPING EXPERIENCE
American Eagle’s
Spring Collection
Lord & Taylor’s
Swim Collection
Home Depot’s Spring
Black Friday Deals

55. ©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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the Metric to Drive Better Results
 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
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800-405-0844 or webinars@emarketer.com
Sponsored by
Yory Wurmser