ONLINE INSIGHTS. Spending Season Preferences, Intentions and Devices of Holiday Shoppers. October Copyright 2013

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2 Overview Consumer marketers have reason to celebrate this season. According to NRF, holiday sales in November and December are projected to increase 3.9% to $602.1 billion a percentage increase that edges 2012 s actual 3.5% holiday season sales growth, and remains higher than the 10-year average year-overyear holiday sales growth of 3.3%. 1 In addition, Shop.org expects online holiday sales in November and December to grow between 13%-15% over last holiday season to as much as $82 billion. 2 In early October 2013, Burst Media surveyed 993 US online adults aged 18 or older about how and when they plan to shop for the holidays. In a year where Hanukkah starts before Thanksgiving and Cyber Monday falls in December for the first time since 2008, respondents to our survey are ready to hit the malls and shop online and they will use their mobile devices to shop in a variety of ways. Key Findings Time is on marketers sides. Among all respondents, a plurality (40.0%) plans to start holiday shopping after Thanksgiving only 14.3% say they have already started, and 11.8% will start after Halloween. Mobile devices are increasingly used for shopping. Overall, 45.7% of respondents use smartphones and 41.3% use tablets to go online and shop for holiday products and gifts far outpacing year-over-year usage as found in our 2012 Online Insights holiday season study. Mobile shopping apps will play a big role this season. Among respondents who use a smartphone or tablet to shop, more than one-half (54.6%) of women and 2-in-5 (41.9%) men use mobile shopping apps at least somewhat frequently. Mobile devices aid with shopping in retail locations. Overall, 2-in-5 (40.3%) of respondents use a mobile device inside physical retail locations to aid in a variety of shopping activities. Parents of minors use mobile devices at retailers to comparison shop. Nearly 2-in-3 moms (64.5%) who use mobile devices at a retail location research and compare store prices on their gadgets as do 63.2% of dads.* Shoppers go digital for relaxation and convenience. Overall, one-quarter (25.1%) of shoppers say their favorite aspect about shopping online (or with apps) is that it s a relaxed shopping experience though there are differences between men and women. 1 NRF Forecasts Marginal Sales Gains This Holiday Season, National Retail Federation. October 3, Online holiday expectations setting the bar high again in 2013, Shop.org. October 3, *For the purposes of our study, moms are US women aged 18 or older who are online and report being the parent or guardian of at least one child aged 18 or younger. 2

3 Insight #1: Most Holiday Shoppers Have Yet to Start Shopping Three-quarters (74.7%) of all respondents to our survey will shop for the 2013 winter holidays, which include Christmas, Hanukkah and Kwanzaa. Considering that Hanukkah arrives before Thanksgiving this year, 14.3% of respondents indicate they have already started their holiday shopping and another 11.8% will start after Halloween but before turkey day. A plurality (29.3%) of all respondents will start shopping after Thanksgiving, and another 11.7% overall including 17.3% of all men and 6.4% of women admit they will wait until the last minute. Holiday shoppers in 2013 are ready and willing to open up their wallets wider, too. Close to one-fifth (18.7%) of consumers say they will either spend much more or somewhat more on holiday gifts this year, vs. what they spent in Nearly one-half (46.9%) will spend about the same, and 22.6% will spend less this year vs. last. Overall, men (22.3%) are more likely than women (14.7%) to say they plan to spend more however, 25.9% of moms of minor children say they will spend either much or somewhat more in 2013 vs All of this points to a consumer market that is very much in play. In fact, of those who have already started shopping, three-fifths (59.8%) say they have only just started. Only 3.0% say they have completed their shopping for the season. 3

4 Insight #2: Mobile Plays an Increasingly Significant Role Devices Used for Online Holiday Shopping Women - Moms Women - Not Moms Men - Dads Men - Not Dads 60.2% 59.2% 53.4% 53.9% 50.2% 56.6% 54.8% 29.1% 45.1% 42.5% 44.9% 38.9% 43.8% 41.5% 35.1% 33.7% Laptop Desktop Smartphone Tablet Chart #1: Devices Used for Online Holiday Shopping (by gender and parent status) Burst Media, October 2013 n = 778 Margin of Error = +/- 3.5% NOTE: Connected TV, Gaming Platforms and Don t Shop Online as response categories all received < 10% and are omitted. The vast majority (91.7%) of holiday shoppers this year will go online in some capacity on one or more devices to research gifts and/or make purchases. This figure slightly edges the finding of our 2012 holiday season study 87.2% which at the time was up nearly 10.0% from our 2011 holiday research. Make Way for Mobile In our 2012 study, 30.3% of respondents said they used smartphones to help with holiday shopping, whether for researching and/or purchasing products and gifts. Another 14.4% in 2012 said they used tablets to help with shopping. Fast-forward to 2013, and the mobile evolution in this regard is significant and far outpaces usage from last year s holiday season. This year overall, 45.7% of respondents will use smartphones (up 51% year-over-year) and 41.3% will use tablets a whopping 190% year-over-year increase to go online and research/shop for holiday products and gifts. Laptops and desktop computers are obviously still vital for consumers to go online and shop; 51.5% of respondents overall use laptops and 47.8% use desktops for holiday shopping. However, as indicated in Chart #1, there are some significant differences between the genders and with parental status. Moms are more likely to use a desktop (45.1%) versus a laptop (29.1%); women who do not have children are far more likely (53.4%) to use a laptop than moms. Dads are heavy tech users when it comes to holiday shopping: 3-in-5 (60.2%) use laptops, 53.9% use desktops, 56.6% use smartphones and 54.8% use tablets to research/purchase products and gifts online. A Leveling Off of Online Purchasing Compared to 2012, three-fifths (60.4%) of respondents say they will either purchase more or about the same amount of products/gifts online this year. This finding is consistent with our 2012 study; 61.5% respondents last year said they would spend more or the same in 2012 vs

5 Insight #3: Holiday Shoppers Swipe and Tap Mobile Apps Frequency of Shopping App Use { { 21.4% 54.6% 41.9% 19.6% 13.6% Women 24.2% 10.5% 7.2% Men Somewhat Frequently Very Frequently All of the Time Chart #2: Frequency of Shopping App Use (by gender) Burst Media, October 2013 n = 735 Margin of Error = +/- 3.6% Among respondents who use a smartphone or tablet to shop, four-fifths (79.8%) say they use shopping apps such as Amazon, ebay, and Zappos in some capacity to browse and/or make purchases. More than 1-in-2 (54.6%) women and 2-in-5 (41.9%) men use mobile shopping apps at least somewhat frequently to browse and/or make purchases. See Chart #2. Interestingly, one-third of women (33.2%) say they use apps to shop either all the time or very frequently a figure that is significantly greater than men (17.7%) who use shopping apps at the same frequency. Of all respondents who intend to spend much more this holiday season vs. last, one-half (49.3%) say they use shopping apps either all the time or very frequently to browse and/or make purchases. Shopping Apps vs. Shopping Websites In the big picture of holiday shopping on digital platforms, the websites of retailers and ecommerce merchants far outpace shopping apps (54.8% vs. 4.8%) as the preferred method for browsing and purchasing products and gifts. Just 14.5% of all respondents prefer both equally, and 18.1% say they are not sure. Interestingly, of those who intend to spend much more this season than last, one-quarter (24.2%) say they prefer apps as the go-to place for online holiday shopping. 5

6 Insight #4: Mobile Devices Aid with Shopping in Physical Retail Locations 34.3% 34.2% Mobile Use Inside Retail Location(s) to Aid in Shopping Research/Purchase(s) 54.3% 38.8% Yes - I Use a Mobile Device 60.9% X X 51.2% 46.3% X X X X 34.7% X X X X X X X X No - I Do Not Use a Mobile Device Women - Moms Women - Not Moms Men - Dads Men - Not Dads Chart #3: Mobile Use Inside Retail Location(s) to Aid in Shopping Research/Purchase (by gender and parent status) Burst Media, October 2013 n = 752 Margin of Error = +/- 3.6% Mobile devices blur the lines between shopping through digital channels and shopping at physical locations. With a few swipes of the finger, consumers use their gadgets inside brick-and-mortar retailers to not just help them research products and services but ultimately to help them make purchasing decisions. Overall, 2-in-5 (40.3%) respondents to our survey who use either a smartphone and/or tablet to shop use their device(s) inside physical retail locations to aid in a variety shopping activities. (Note: these activities are detailed in Insight #5 of this report.) Mobile Devices for Parental Guidance Men are more likely than women (46.2% vs. 34.3%) to use mobile devices to assist with shopping inside retail locations. Notably, more than one-half (54.3%) of dads more so than men who are not dads (38.8%) use a mobile device inside retailers for shopping assistance. Use among moms and women without children is equal (34.3% vs. 34.2%). See Chart #3. 6

7 Insight #5: Shoppers Use Mobile Devices Inside Physical Locations for a Variety of Reasons Reasons Mobile Devices are Used Inside Retail Location(s) Women - Moms Women - Not Moms Men - Dads Men - Not Dads 64.5% 63.2% 43.3% 53.8% 48.8% 47.5% 39.7% 35.1% 53.6% 44.7% 38.3% 26.7% 56.4% 40.1% 33.9% 28.4% 52.1% 41.7% 32.4% 12.4% 35.3% 29.2% 18.9% 13.7% 38.0% 23.3% 15.7% 11.0% Research/Compare Store Prices Research/Compare Product Reviews Research/Compare Brand Prices Access Coupons/ Promos Research/Compare Brand Features Scan QR Codes Access Retailer Rewards Program Chart #4: Reasons Mobile Devices are Used Inside Retail Location(s) (by gender and parent status) Burst Media, October 2013 n = 332 Margin of Error = +/- 5.4% As highlighted in Insight #4, 2-in-5 (40.3%) respondents who use either a smartphone and/or tablet to shop use their device(s) inside physical retail locations. Among this retail location + mobile shoppers segment, a majority (55.9%) of respondents overall use their device(s) inside retailers to research and compare the prices of different stores. Notably, nearly 2-in- 3 moms (64.5%) and 63.2% of dads use mobile gadgets in this capacity outpacing their non-parent counterparts by 21.2% and 9.4%, respectively. See Chart #4. More than two-fifths (43.7%) of all respondents in this segment use devices inside stores to research and compare the product reviews of different brands; 42.7% research and compare the prices of different brands; and 37.5% research and compare the features of different brands. Other reasons cited by respondents include accessing coupons and/or sales promotion codes (37.5%); scanning barcodes or QR codes for information exclusively available on mobile devices (25.2%); and accessing personal account information for the retailer s rewards program (20.1%). Interesting findings of note: nearly 3-in-5 (56.4%) women who are not moms say they access coupons and promo codes on their devices inside stores vs. 40.1% of moms. However, 38.0% of moms access the retailer rewards program, vs. just 23.3% of non-moms and 13.1% of men. On the male side of the equation, dads are more likely than moms (35.3% vs. 18.9%) to scan barcodes or QR codes for exclusive information. 7

8 Insight #6: Holiday Shoppers Go Digital for Relaxation and Convenience Favorite Aspect About Online or App Holiday Shopping 25.7% 24.5% 23.1% Men 15.7% 18.3% 20.8% Women 11.9% 8.6% 6.9% 7.0% 6.1% 5.1% Relaxed Convenient Efficient Always Open Budget Friendly Other Reason Chart #5: Favorite Aspect About Online or App Holiday Shopping (by gender) Burst Media, October 2013 n = 729 Margin of Error = +/- 3.6% Overall, one-quarter (25.1%) of shoppers say their favorite aspect about shopping online (or with apps) is that it s relaxed; they avoid the stress of store crowds, finding parking and more. Trailing just behind less stress is convenience (23.1%); respondents who chose this aspect like that they don t have to go anywhere or even get dressed to shop. Interestingly, more men than women (23.1% vs. 15.7%) say this aspect is their favorite about shopping online or via apps. See Chart #5. At 18.3% vs. 11.9% respectively, men are also more likely than women to say efficiency i.e., shopping more quickly and effectively online is their favorite aspect about turning to sites and apps for holiday shopping tasks. On the other hand, 20.8% of women vs. 8.6% of men say the fact that digital channels are always open (i.e., no store hours to worry about) is their favorite aspect. Time Is Money? Interestingly, relative to the time-related aspects of convenience, efficiency and availability, a small percentage of respondents overall (7.0%) say the budget-friendly aspect is their favorite part about going digital for holiday shopping. 8

9 How You Can Use This Information Interactive rich media spanning display and the continually evolving mobile platforms give advertisers multiple touch points to holiday shoppers. As a result, marketers have an opportunity to provide product and pricing information to consumers and invite these consumers to interact and engage directly with offerings from brands and retailers. Engagement is the key; presenting captivating creative that allows shoppers to research and compare offerings, find a location where they can purchase products and grab coupons or sales promotion codes should be paramount. Location-based targeting is a great solution for retailers looking to reach consumers with laser accuracy and within very specific geographic bounds. Savvy marketers that apply latitude/longitude targeting to their mobile campaigns can reach consumers by points of interest for example, in the mall parking lot outside a physical retail location or geo-fence to a specific radius around points of interest. Equally as important is the context of where advertising and marketing messaging appears. The independent web and the mobile internet comprise a wealth of highly segmented and focused communities. Marketers must ensure their messages target audiences in content that matters, as the placement within the right contextual environment only helps to foster success. 9

10 Mobile Solutions for Brands Burst Media s comprehensive suite of mobile ad units connect you with highly targeted audiences as they access high-quality content on tablets and smartphones. Right Message + Right Medium = Results Premium mobile rich media designed and built by our in-house creative production team Massive distribution on independent websites featuring passion-point content Precision targeting, including geo-fencing Full reporting including interaction, engagement and dwell time Tablet and Smartphone Enabled Rich Media and Display Fixed Footer Expandable Fixed Footer Interstitial Sidewalk Expandable Peelback Standard MMA Ad Sizes Rich Media Components to Drive Engagement Video Social Sharing Expand on Tap Product Carousels Image Carousels Custom Headers, Fonts and Images Store Locator and Mapping Influencer Blog Posts Be Part of the Conversation Contact your Burst Media Account Executive or visit burstmedia.com to learn more about our mobile solutions that deliver high visibility, impact and consumer interaction. Copyright 2013 Burst Media Corporation. All rights reserved. The information and specifications in this document may be subject to change. Company and/or product names not held by Burst Media may be registered trademarks of their respective owners. 10

11 About Burst Media Founded in 1995, Burst Media represents thousands of independent web publishers. Through a select group of vertical channels, built around areas of specific interest, Burst connects advertisers with audiences across the web s most dynamic communities in a social, engaging way. A wholly owned subsidiary of blinkx PLC (LSE AIM: BLNX), Burst is headquartered in Burlington, Massachusetts, with sales offices throughout the United States and in the UK. Visit us at or call +1 (781) for more About Online Insights Trends in Internet use and consumers online purchasing behaviors are constantly evolving, so it can be very difficult to stay up to speed. That s why Burst Media publishes Online Insights our research series that highlights emerging trends in online media and ecommerce. Findings reported in Online Insights are based on an online survey fielded across our collection of sites. 11