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1 HOLIDAY HOT SHEET OCTOBER 23, 2014

2 2014 Holiday Hot Sheet: Weekly insights for the holiday marketer As marketers seek to connect with their customers during the largest consumer spending season of the year, Experian Marketing Services presents our Holiday Hot Sheet series to provide a weekly recap of trends for the 2014 holiday season: how consumers are shopping, what they are searching for and how marketing campaigns can be optimised to maximise rewards for both consumers and brands. What's hot this week: 37 percent of visits to the top retail sites come from smartphones or tablets. (Page 7) 83 percent of cell phone owners engage in shopping related activities from their phone immediately before, during or after visiting a store. (Page 8) 97 percent of tablet owners have made a purchase from their tablet. (Page 8) volume is up by 26 percent season-to-date among multi-channel retailers. (Page 2) Trends to note: Eighty-nine percent of campaigns in Experian Marketing Services shopping analysis contain offers with the majority of offers found within the content of the . Offers in subject lines have decreased from being in 27 percent of subject lines last season to only 24 percent so far this season. Mobile web is critical to reaching new customers. Fifty-three percent of smartphone owners access mobile shopping sites from their phone per month versus 41 percent who use shopping apps. (Page 8) Black Friday and Cyber Monday appeared in subject lines this week for the first time this season. Receive the latest Holiday Hot Sheet in your inbox each week. Register here. 1

3 by the numbers Holiday season all industry volume shows 11.3 percent year-over-year increase. The largest increases this past week were seen by multi-channel retailers, consumer products and media and entertainment. volume variance: 2014 compared to 2013 Industry YOY by week: 10/12-10/17 Season-to-date 09/28-10/17 All industry Business products Catalogers Consumer products Media and entertainment Multi-channel retailers Publishers Travel 16.0% -7.2% 6.6% 27.4% 56.1% 26.9% 18.6% -1.0% 11.3% 23.2% -3.0% 14.7% 34.2% 26.0% 5.3% 2.8% performance metrics Multi-channel retailers and publishers are showing higher click rates this season as compared to last year. Season-to-date performance variances: (09/28-10/17/2014 compared to 2013) All industry Unique open variance Unique clicks variance Transaction variance Revenue per variance Average order variance All industry 4.5% -1.4% -5.5% -10.8% 1.2% Business products 15.2% -10.5% Catalogers Consumer products -5.5% 2.4% -18.5% -19.4% -23.1% -6.2% -18.1% -1.7% 0.4% -3.2% Media & entertainment Multi-channel retailers Publishers Travel -4.5% 5.0% 8.5% 2.1% -24.6% 12.3% 7.0% -2.1% -1.9% -13.4% 6.8% 2

4 Industry All industry Business products Catalogers Consumer products Media & entertainment Multi-channel retailers Publishers Travel Season-to-date performance metrics: (09/28-10/17/2014 compared to 2013) Unique opens % 16.0% 10.4% 16.8% 16.9% 15.7% 17.1% 20.8% Unique opens % 18.4% 9.8% 17.2% 16.2% 16.4% 18.5% 21.2% Unique clicks % 2.4% 1.2% 2.1% 2.2% 2.2% 3.3% 2.3% Unique clicks % 2.1% 1.0% 1.7% 1.7% 2.4% 3.5% 2.3% Transaction rates % volume and performance metrics are based on analysis of 350 current brands that also mailed during the 2013 Holiday season. All data is viewed at three days from sent. 0.06% 0.06% 0.04% Transaction rates % 0.05% 0.06% 0.04% Revenue per $0.07 $0.06 $0.07 $0.06 Revenue per $0.06 $0.05 $0.07 $0.06 Average order 2013 $193 $152 $121 $199 Average order 2014 $195 $152 $117 $212 3

5 highlights and trends: Gift guides, countdowns and mobile Gift guides During the holiday season, gift guides become quite popular and successful for many brands, as they are an effective way to engage customers. Last holiday season, gift guides had 26 percent higher unique click rates than the overall click rate for the holiday period (2.6 percent for gift guides compared to 2.1 percent for all holiday mailings). In 2013, gift guide transaction rates peaked early in the season, but volume was greatest in mid-november and the week before Christmas Holiday season gift guide trends This year, Experian Marketing Services is seeing some early season 'lookbooks.' As the season progresses, it will be interesting to see if these do as well as gift guides. 4

6 Countdowns One technique that is particularly popular during the holiday season is the countdown to the start of a sale, the end of a sale or the holiday itself. In last year's holiday season, campaigns with countdowns enjoyed a 15 percent increase in transaction rates compared to campaigns without any countdowns. Using a dynamic countdown feature doubled the increase to a 31 percent rise in transaction rates. Transaction rates for s by inclusion of countdown (Holiday 2013) 5

7 Mobile How will mobile impact this season? Last year over 65 percent of opens for multi-channel retailers occurred on a mobile device, and over 50 percent did so across all industries. Marketers should expect similar or higher percentages for this year as well, so it is critical to have mobile-friendly design in all of your campaigns. In our shopping study this season, only 29 percent of campaigns have included links to mobile apps, and only six percent have provided a link to enroll in their mobile program. There is still time to adjust and mobile content and make sure that these channels complement each other this holiday season. shopping highlights In Experian Marketing Services shopping highlights program, 94 percent of campaigns have included links to social media. Most popular social media combinations 6

8 Consumer insights & targeting More and more consumers are turning to mobile web and mobile apps to engage in online activities and to interact with brands and marketers need to be ready. In fact, Experian Marketing Services Hitwise online intelligence tool reveals that 30 percent of all website visits today come from smartphones and digital tablets. Visits to the top online retail sites are even more likely to come from a mobile device 25 percent more likely, to be specific. During the share of website visits by device the week ending October 18, 2014, 37 percent of visits to the Hitwise Retail 500 came from smartphones or tablets. Hitwise Retail 500 = top 500 online retail websites, excluding auctions, classifieds and buying clubs 7

9 Much of the mobile activity on retail sites comes from browsing while shopping, whether it s to compare prices, get product detail, check inventory, find store hours or locations, etc. In fact, a new study from Experian Marketing Services found that 83 percent of cell phone owners engage in shopping-related activities on their phone immediately before, during or after visiting a store. In addition, 53 percent of smartphone owners visit shopping websites from their phone during a given month versus 41 percent who use shopping apps during the same time frame. While mobile apps are great ways for marketers to interact with existing customers, mobile web is critical for reaching potential new customers. Marketers who focus their mobile efforts on developing mobile apps at the expense of mobile optimised sites are likely missing the opportunity to attract new shoppers. Percent of tablet and mobile phone owners who have made any purchase on their device Consumers are not only visiting retail sites from mobile devices, they re also making purchases through them. A recent survey by Experian Marketing Services found that 97 percent of digital tablet owners and 72 percent of cell phone owners have made a purchase through that device. While downloadable electronic media purchases like books, music, apps, etc. are likely pushing those numbers up, a deeper analysis of the data found that significant shares of mobile consumers are still purchasing physical items, including those that are big movers around the holidays. Specifically, 77 percent of tablet owners and 48 percent of cell phone owners have purchased apparel, toys or electronics through their mobile device. 8

10 Percent of tablet and mobile phone owners who have purchased apparel, toys or electronics on their device Social media is an increasingly important component of the shopping experience, especially the mobile shopping one. Experian Marketing Services found that immediately before, during or after visiting a store, 32 percent of cell phone owners access social media from their phone. Those individuals are 38 percent more likely to follow their favorite brands on social media and 43 percent more likely to purchase products that they see advertised on social media. As such, retailers shouldn't miss the opportunity to promote their social pages in their physical stores and encourage shoppers to follow them, "Like" them, or "check in" to their store for special perks. They should also remind them that they always welcome them to leave comments and feedback through their social media channels. When shoppers engage in shopping activities and access social media from their phone Mobile shopping Mobile social media Before entering store 62% 12% While shopping 53% 11% At checkout 25% 7% After exiting 19% 13% Anytime 83% 32% 9

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