Nimble Commerce: Your Key to Maximizing Online Sales in Holiday 2015

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1 Nimble Commerce: Your Key to Maximizing Online Sales in Holiday 2015 Nimble Commerce: Your Key to Maximizing Online Sales in Holiday 2015 DON DAVIS MODERATOR Editor-in-Chief Internet Retailer LAUREN FREEDMAN President CHRIS BAUSERMAN Senior Director, Product & Demand Marketing Rackspace Sponsored by

2 When will you begin holiday marketing? 45% 40% 35% 30% 25% 20% 15% 42% 10% 5% 0% 1% 7% 12% June July August September 23% October 14% November Source: ChannelAdvisor, 2014 survey

3 Black Friday keeps getting earlier Source: Internet Retailer Wal-Mart and Amazon offer Black Friday deals a week in advance 634 of Top 1000 online retailers were offering discounts a week before Thanksgiving Most common offer: 20% off

4 Thanksgiving keeps getting bigger Do you plan to research or buy online on Thanksgiving? 31% % 2014 Thanksgiving morning online sales are coming in at even larger discounts and higher sales volume than predicted. Tamara Gaffney, principal analyst, Adobe Digital Index Source: PriceWaterhouseCoopers

5 Grey Friday? 70% of consumers consider Black Friday unimportant because of the prevalence of sales throughout the holiday season. Source: Accent Marketing Services survey, 2014

6 Big days didn t grow as expected Year-over-year growth: projected versus actual 15.6% 14.3% 13.0% 15.8% 9.5% 8.5% Thanksgiving Black Friday Cyber Monday Projected Actual Source: IBM Corp. Digital Analytics Benchmark

7 but there were a lot of them Sales in billions, 2014 $2.500 $2.000 $1.500 $2.038 $1.796 $1.615 $1.505 $1.463 $1.343 $1.192 $1.172 $1.168 $1.162 $1.000 $0.500 $0.000

8 Mobile merriment Smartphones and tablets accounted for: 45% of online traffic, a 25.5% increase over 2013 This year was a smartphone story. 22.6% of online sales, an increase of 27.2% David Katz general manager of mobile Fanatics Source: IBM Corp. Digital Analytics Benchmark

9 Nimble Commerce: Your Key to Maximizing Online Sales in Holiday 2015 Nimble Commerce: Your Key to Maximizing Online Sales in Holiday 2015 DON DAVIS MODERATOR Editor-in-Chief Internet Retailer LAUREN FREEDMAN President CHRIS BAUSERMAN Senior Director, Product & Demand Marketing Rackspace Sponsored by

10 THE E-TAILING GROUP NIMBLE COMMERCE: YOUR KEY TO MAXIMIZING ONLINE SALES IN HOLIDAY 2015 July, 2015

11 The Voice of Cross-Channel Merchandising Straight talk from in-the-trenches online merchandising experts 20 years e-commerce consulting Author, It s Just Shopping 50+ years traditional retail and catalog experience Fortune 500 client projects ranging from strategic planning, merchandising, marketing, to technology development and messaging Cross-category projects spanning specialty retail to departments Category and country-centric assignments including Bloomingdales, Barneys, Ulta, Burt s Bees, Vitamin Shoppe Proprietary research studies on mystery shopping, merchandising, mobile and consumer behavior - PAGE 11 -

12 Poll When do you lock down IT changes for your busy season? September October November Other (we lock down for a different busy season) Never - PAGE 12 -

13 12 Takes on Nimble Customers Aren t On Lockdown, So Retailers Should Follow Suit 1. Know Your Holiday Facts 2. Remember, The Customer is in Control 3. Be Aware of the Calendar 4. Timing is of the Essence 5. Promotional Creativity Plays Well with Shoppers 6. Guiding Shoppers Facilitates Gift Giving 7. is an Important Tool 8. Think Logistics and Be Nimble with Delivery 9. Appeal to Last Minute Shoppers 10. Maximize the Mobile Opportunity 11. Social s Time has Come 12. Omnichannel Choice is Desirable - PAGE 13 -

14 1. Know Your Holiday Facts US holiday retail sales rose 4.0% last year 1 Retail ecommerce holiday sales grew nearly 7% in 2014, enough to push the total to $101.9 billion 2 ecommerce spending between November 1 and December 31, 2014 came in at $53.31 billion, up 15% from prior holiday season 2 - PAGE 14-1) NRF 2)comScore

15 2. Remember, The Customer Is In Control 1 in 3 holiday shoppers believes that buying the right gift for a loved one is more important than adhering to a budget. - PAGE 15 -

16 3. Be Aware of the Calendar - PAGE 16 -

17 Start Early And Extend Promotions To Meet Plan The average consumer spent $407 on Black Friday last year (NRF) - PAGE 17 -

18 A Strong Cyber Monday Starts The Digital Season Off Right - PAGE 18 -

19 Factor In The Consumer Interest In Thanksgiving Purchasing Desktop sales increased 32% on Thanksgiving Day (comscore) - PAGE 19 -

20 5. Promotional Creativity Plays Well with Shoppers What will it take for you to pay full price for gifts this holiday season? Check all that apply. I will pay full price for something that is perfect for someone on my list I will pay full price for items that never go on sale Hard to find product that a friend or family member has requested I will pay full price when I receive free shipping on my order Hot product that is likely in limited supply I am running out of time and just need to get people taken care of on my shopping A store where I receive loyalty/rewards points for my purchase I will not pay full price for gifts this holiday season I will pay full price when I am using a gift card Excellent customer experience coupled with the right products Other, please specify 1% 43% 38% 37% 30% 27% 27% 22% 20% 19% 15% - PAGE 20 - MarketLive/e-tailing group 2014 Holiday Survey

21 Test A Range Of Promotions That Support Your Brand Promotional Strategies EG100 Penetration Limited Hour Specials (Lunch Time, 4 Hour) 63% Online Outlet/Clearance Area 84% Sweepstakes/Contests 30% Gift with Purchase 40% Purchase with Purchase 14% Buy One/Get One Free 8% Buy More/Save More; Buy More & Save 23% Other (% Off, Buy One/Get One 1/2 Off) 26% - PAGE e-tailing group Mystery Shopping

22 Free Shipping Must Be In Play (At Least Some Of The Time) 42% of holiday shoppers actively seek out free shipping deals (Statisticsbrain) 92% of shoppers have taken an action to qualify for free shipping. Eight in ten shoppers agree that a free shipping offer makes them more likely to shop with a retailer - PAGE 22 - UPS 2015 Pulse of the Online Shopper

23 Making The Choice To Pay For Shipping Is Frequently Driven By Total Value Total cost of order (TCO) plays a primary role Reasons to decide to pay for shipping Among those who pay for shipping (n=4,786) Free shipping was not offered, and I wanted the product The total cost of my order was still a good bargain, even with shipping charges included I needed it faster than the free shipping service offered I didn't have enough items in the cart to meet the threshold The product discount that I received from the retailer exceeded the cost of shipping I couldn't locate a promo code for free shipping I'm not a member and didn't want to become a member of the retailers' loyalty or free The item is oversized or requires special handling or set-up I needed to ship to multiple addresses on the same order My preferred carrier for the purchase was not included in the free shipping option Other 8% 8% 17% 16% 1% 30% 29% 29% 26% 60% 57% CHECK4aNEW: What are the reasons you may decide to pay for shipping when shopping online? Please select all that apply. - PAGE 23 - UPS Pulse of the Online Shopper 2015

24 6. Guiding Shoppers Facilitates Decision-making - PAGE 24 -

25 A Strong Gift Center Sets The Tone - PAGE 25 -

26 The Gift Card is an Essential Ingredient The average consumer planned to spend $231 on gift cards 70% shoppers buying gift cards=$30 Billion (Saved Value/NRF) - PAGE 26 -

27 Many Shoppers Will Take Advantage Of Promos For Personal Consumption Do you plan to take advantage of sales or price discounts during the holiday season to make additional, NON-GIFT purchases for yourself or your family? Yes 89% No 11% - PAGE 27 -

28 Gifting Visibility Drives Sales - PAGE 28 -

29 7. Is An Important Tool Over 25% of all s are sent during the holidays (Marketing profs) is part of almost every retail marketing program. Please share your agreement with the following statements regarding . Top-2: Strongly/Somewhat Agree Daily s are fine but when I get multiple s a day I start to ignore them 71% I m bored with most of my s and often delete as quickly as I receive them 58% I rarely receive an that sparks my attention 50% I mostly open s on my phone but don t pay as much attention as I would on my desktop 38% I don t mind being contacted multiple times a day via during the holiday season 31% - PAGE 29 - MarketLive/e-tailing group 2014 Holiday Survey

30 8. Think Logistics and Be Nimble with Delivery Average # Days to Receive Orders in 2014: PAGE 30 - e-tailing group 2014 Mystery Shopping

31 9. Appeal to Last Minute Shoppers When do you typically start and finish your holiday shopping? September or earlier October November December Start 29% 29% 35% 7% Finish 2% 4% 16% 78% - PAGE 31 -

32 Shoppers Procrastinate So Be Prepared - PAGE 32 -

33 10. Maximize the Mobile Opportunity 45% of all online traffic to retail websites and apps came from smartphones and tablets between Nov 1 and Dec 31, 2014, a year-over-year increase of 25.5% Retail sales on mobile devices jumped 27.2% year over year, with mobile sales accounting for 22.6% of online holiday shopping in 2014 IBM Digital Analytics Benchmark reports - PAGE 33 -

34 Online Shoppers Foresee Continued Migration To Online Channels Projected shopping frequency relative to the past year 5% 10% 9% 17% 30% 22% 24% 10% 73% 65% 68% 67% Less More Desktop/laptop computer (n=4,931) Smartphone (n=3,537) Tablet (n=2,761) In store (n=5,118) The same FUT7. Over the next year, do you plan to shop less, the same or more in comparison to last year using each of the following methods? - PAGE 34 - UPS Pulse of the Online Shopper; 2015

35 11. Social s Time Has Come 55% of Twitter users discuss gift on ideas on Twitter 62% of shoppers Tweet about holiday purchases they ve made 67% of consumers have purchased a gift they saw on social media Source: Media Bistro - PAGE 35 -

36 12. Omnichannel Choice is Desirable Almost half of shoppers have used ship to store, and over two in five who have done so have made additional purchases during the pickupups (UPS) On Black Friday, 55% of parents check the availability of times on their smartphones prior to going to the store (iab.net) - PAGE 36 -

37 Be Ready for Post Xmas Selling - PAGE 37 -

38 THANK YOU Lauren Freedman PAGE 38 -

39 Foundations for Nimble Commerce Chris Bauserman Senior Director, Digital Solutions Marketing

40 Rackspace is the # 1 Managed Cloud Company Global Footprint Customers in 120+ Countries 300,000+ Customers 110,000+ Servers 50,000+ VMs 70 PB Stored 9 Worldwide Data Centers Over $1.9B GARTNER 2014 MAGIC QUADRANT LEADER FOR Cloud Enabled Managed Hosting IN BOTH NORTH AMERICA AND EUROPE #1 Hosting Provider for the Internet Retailer Top 1,000 Ecommerce Websites (4th consecutive year) Annual Revenue We Serve FORTUNE 69% OF THE

41 Poll What is your biggest obstacle to nimble commerce? Risk aversion cannot chance any mistakes during holidays Technology platform and tools cannot respond quickly / safely Team lack skills or capacity to define, test, and deploy Logistics supply chain is locked in, limiting flexibility Insights need analytics and expertise for real time merchandising

42 A Nimble Ecommerce Strategy Can Payoff Huge This Year Retailers with Frequent Site Updates 20% MORE LIKELY TO MEET OR BEAT REVENUE TARGETS vs. Traditional Lock Down Approach Source: Internet Retailer 2014 Holiday Survey, April 2015

43 Are You Set Up to Be Nimble? VS. 4

44 PLAN ahead [together] 4

45 Make it easy 4 5

46 W E B G R O W T H S I T E V I S I T I N C R E A S E VISIT Q Q Q Q Q Q Q Q Q Q Q

47 C Y B E R M O N D A Y No Downtime ALL DAY! 47

48 MONITOR [and respond] 48

49 Know When Its Time for Plan B and How to Quickly Recover Monitoring, expertise, and a fallback plan to handle 700% TRAFFIC SURGE Even if all doesn t go according to plan 4 9

50 SCALE [with speed] 50

51 A Few Lessons Learned from ABC s Shark Tank Prioritize Stick to the Essentials Close the Sale Build for the Present Michael Johnstone Director of Web Technologies, Mark Cuban Companies

52 AUTOMATE [with precision] 52

53 Automated Deployments Enable Speed and Reduce Risk Configuration Errors Responsible for Over 50% of Application Downtime - Gartner Group

54 EASIER [with an experienced partner] 5

55 Rackspace Digital Empowers Your Ecommerce Team To Do More Expertise Experience Innovation 9 of 10 Top Digital Agencies Managed Cloud for Magento Gain SaaS Simplicity. Don t give up Control. Hybrid Cloud Right infrastructure. Always. Critical Application Services Fully managed. 100% uptime guarantee

56 THANK YOU Learn more about Managed Cloud for Magento: go.rackspace.com/mcm Or visit:

57 Q&A

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