ECOMMERCE STRATEGEY FOR 2015 HOLIDAY

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1 ECOMMERCE STRATEGEY FOR 2015 HOLIDAY Digital Strategy Team May 2015

2 LYONSCG White Paper: ecommerce Strategy for 2015 Holiday 1 What 2014 Holiday Trends Tell Us As you plan for the Holiday 2015 sales push, we asked the analysts and strategists in LYONSCG s Digital Marketing practice to provide their advice on where you should focus your efforts. Their suggestions are based on several key trends that drove holiday sales last year. MOBILE 1 in 4 purchases were made on a mobile device which should be a surprise given the number of people who own smartphones and tablets. For Q4 2014, comscore reports 182 million people in the U.S. owned smartphones (representing a 74.9 percent mobile market penetration) 1 ; up four percent since September. Pew Research figures indicate that as of October 2014, 42% of American adults owned a tablet. The larger screen size in phones, and a general increase in the use of tap devices help explain the shopping trend. BRANDED SHOPPING Nearly three-quarters of Cyber Monday shoppers said they visited stores less because they took care of so much shopping that day. Retailers have branded additional online shopping days as opportunities to influence shoppers with promotions (see ). Green Monday (the last Monday 10 days before Christmas) is now the third largest online sales day; and Free Shipping Day which occurs in mid-december when shoppers can get free shipping with guaranteed delivery by Christmas Eve. SEARCH During the 2014 holiday shopping season, 38.5% of online transactions originated in a search query (either free or paid). A look at search from mobile devices shows a whopping 284% jump from Google Shopping Ad sales (formerly PLAs) saw an increase of 41 2 %. Product ads have been growing over the last three years and are accounting for a larger percentage of traffic. MARKETING Online shoppers are very deal conscious and is the most cost-effective way to deliver special offers. It accounted for 18% of all holiday transactions. Over 40% of Cyber Monday buyers said s were more helpful than social or search in identifying special offers they ultimately purchased. s played an important role in reaching out to shoppers who d abandoned their carts. According to Salesforce, 15% of all retailers sent personalized s about cart abandonment. Within 24 hours, 60% of the s led to a sale, with an average spend of $36 per click. 3

3 LYONSCG White Paper: ecommerce Strategy for 2015 Holiday 2 SOCIAL MEDIA A survey last holiday season by MarketLive showed that half of all holiday shoppers were influenced by social media 4. The study also found that over the course of 2014, 30% of respondents had made a purchase as a direct result of engaging with a social media site, up from 18% the previous year. Social helped feed the top of the buying funnel; but has yet to have a strong showing as an actual sales driver. Besides getting gift ideas, the top two reasons people used social media were to: find information about discounts, coupons or sales (45% of users) read reviews, likes or recommendations (41%) 2015 Holiday Readiness Each year the holiday shopping season seems to start earlier and earlier. Some consumers may have balked at Kmart ads for layaway that ran shortly after Labor Day last year; but it only shows how strong the battle is for shopper dollars. Last season s statistics clearly indicate omni-channel shopping is just going to increase. If you aren t already providing a consistent and valuable customer experience across all devices, you don t want to leave it to the last minute. Even experienced online retailers can benefit from a review of their infrastructure, technologies and ecommerce presence to make sure they can deliver the frictionless, personalized omni-channel shopping customers want. So you can take make the most of your planning, here are our recommendations.

4 LYONSCG White Paper: ecommerce Strategy for 2015 Holiday 3 MOBILE Branding Brands monthly mobile commerce index showed that smartphone s share of total online revenue increased 56% from March 2014 to March That trend will continue as new devices with larger screens are released and mobile payments continue to grow. Be sure to use the analytics information on mobile sessions to help determine the mix of devices used to visit your site. This pays off when you also take a look at data for bounce rates and conversions. If you haven t updated your device library, you could be missing out on sales. When designing your mobile site be sure to take make use of a device s feature set. GPS allows location-based integration which can come in handy with in-store promotions as well as pick-up and returns. Another way to take advantage of geolocation is to include a check stock function. A mobile user looking for a specific item at a store near them can quickly see if it s available. As with any site design, good user experience is critical on mobile. While not holiday-specific recommendations, we suggest following these best practices to increase conversions. Site search: If a visitor is using search on your site, they re very likely looking to make a purchase. In our experience, a visitor is more than 3 5 times more likely buy if they engage in a search. So make sure internal search is optimized for misspellings, related terms, synonyms and hypernyms (a general category-like word that could include other more specific terms think pants/khakis). We had one client who realized a $1 million increase in sales over a four-month period after they optimized site search. Calls-to-action: Think tap not click. Make CTAs easy, big and obvious by using buttons that are fingerfriendly. If you re using text blocks, make the whole block tappable, not just the click here text. Check-out: Omni-channel shopping means making sure an item saved to a cart when a user visits your site on their smartphone will appear in their basket when they log-in at their home computer to complete the purchase. The same goes for payment information which should auto-populate (remember how hard filling out a form is on a mobile device). You can also reduce cart abandonment through use of a guest checkout option.

5 LYONSCG White Paper: ecommerce Strategy for 2015 Holiday 4 Branded Shopping Days Another aspect of the lengthening holiday season is a decreased emphasis on particular shopping days. This isn t to say that Cyber Monday and Black Friday aren t key revenue generators. But taken together, their combined sales in 2014 accounted for only 9.5% of ecommerce revenue 5. Illustration by Custora However, you still need to understand what drives sales for branded shopping days. Extrapolating from Forrester research on consumer sentiment and retailer promotions for Cyber Monday, ubiquitous free shipping offers, aggressive marketing, and an effective mobile presence are three keys to increased sales 6. Consumers are already conditioned to expect special sales on branded shopping days. So why not use this to your advantage? You can manipulate traffic, and increase transactions, in the early morning, through flash sales (limited availability offers). SEARCH We ve already mentioned how the holiday season starts earlier each year. When planning, you should use October 1 st as the kick-off date for the shopping season. One thing you need to address right way is Google s new mobile-focused algorithm which took effect April 21. Search ranking will now favor sites with good mobile experiences. Sites with no mobile or poor mobile sites will rank lower. This also means your investment in SEO will not be fully realized. For holiday SEO, you should start planning what keywords you want to optimize for around May or June. It will take around two months to prepare and test your pages; and about another three months for Google (and other search engines) to index your site.

6 LYONSCG White Paper: ecommerce Strategy for 2015 Holiday 5 One technical aspect of SEO not to overlook is rich snippets which provide a small sample of a site's content on SERPs. Because they make it more enticing for users to click on your listing, you need to make sure they re enabled on your pages. If you re a retailer of luxury or expensive merchandise, you ll want to take advantage of local search. Research shows that shoppers for high-end goods still want to conduct these transactions in-store. Local search, initiated last July by Google, combines standard search and map results, giving preference to nearby stores when a user conducts a geographic search such as furniture stores in You ll need to build out individual pages for each store with relevant information on store hours, phone number, location, directions and other relevant information. Don t overlook images as a form of search result. Many people prefer to see pictures of an item for inspiration, and then locate where to make a purchase. Think of it as the Google version of Instagram.

7 LYONSCG White Paper: ecommerce Strategy for 2015 Holiday 6 Product ads will continue to be important because of their placement high on the page. They re particularly helpful to shoppers since they provide price information, which is a key decision factor, along with visuals. To maximize their benefit, you need to make sure that the feed of product data and images you provide is easily readable by Google so your ads get served. We ve also seen Google expanding the range of queries that will result in a product ad being shown. MARKETING Personalization is taking a huge leap forward. With so many s being opened on mobile devices, you can never be sure when or where a shopper is opening them, nor what else they may be doing at the same time. This places even more emphasis on understanding the context in which the recipient is interacting with the . Many new service providers now offer retailers the ability to create contextual, real-time personalized s based on a customer data combined with a wide array of other sources such as each recipient's time, location, device, weather, and social context at the moment of open. The s are built with elements that change in real-time per available data. The ability to serve dynamic content in the same helps boost relevance, which will drive more click-throughs. If the concept of real-time, contextual s is a bit overwhelming, you should at the very least be working to increase traffic to your site by making sure your s are optimized for mobile. With 65% of s opened first on a mobile device 7, it s best to take a mobile first design approach. (Surprisingly last year 42% of online retailers said they rarely or never use mobile responsive design for their business s.) If your layout feature multiple columns, you ll need to arrange for content to stack vertically on mobile devices, creating a long scrolling page. You should also consider placing navigation at the bottom of the so you give more prominence to the merchandise and offer. If you extend an offer in an , increase the chances of it being redeemed by making it scanable in-store on your customer s smartphone. SOCIAL MEDIA The big news in social media is pay-to-play. Starting this past January, Facebook started pushing paid social media marketing. Organic promotional efforts will be penalized. Other social platforms such as Pinterest and Polyvore which now offer CPC models, are quickly climbing on the bandwagon in the search for new revenue streams. The trend will only continue. To have your brand stand out, you might want to look into becoming an early adopter.

8 LYONSCG White Paper: ecommerce Strategy for 2015 Holiday 7 When it comes to how much you should budget for social media, be prepared to invest almost 13% of your marketing budget. Most of your spend will be on Facebook which is still the largest direct monetary driver (as it drive top of funnel traffic). Overall, you ll still need to choose the social platform that s most appropriate to your brand (i.e. where do your customers hang out the most). If you re in Fashion, Accessories or Home Décor, then you ll also see a high return from Polyvore. For brick-and-mortar retailers, organic isn t entirely dead. As discussed under Search, Google+ is a great way to grow your presence. For local optimization, you ll need have an individual G+ page for each store. Video will be the dominant content format for social because they are so highly shareable. Make sure your content and calls to action are strong when you create a video ad. Tutorials and other informative videos are more relevant to your customers than a recycled commercial. Social networks will give extra exposure to videos uploaded to their platform because they keep users on their sites longer. Read our white paper Paid Social Media to Promote Your Brand for a more detailed discussion of where to invest you time and money; how to optimize your social engagement; and best ways to track and attribute demand. CONCLUSION Winning the ecommerce race requires continuous effort over time. That s why our recommendations aren t just for the holiday season. Smart companies should be employing these marketing strategies year-round. The steady stream of feedback and analytics you receive will help you better plan what you should do to achieve ecommerce success in Holiday 2015.

9 LYONSCG White Paper: ecommerce Strategy for 2015 Holiday 8 Footnotes 1 Subscriber-Market-Share Mondays.pdf?link=button 7

10 LYONSCG White Paper: ecommerce Strategy for 2015 Holiday 9 Thank You About LYONSCG LYONSCG is the industry s premier ecommerce digital agency, serving brand, retail, and B2B organizations with tailored ecommerce solutions that maximize online potential. Headquartered in Chicago, the firm offers a full range of services beginning with digital strategy and digital marketing and extending through experience design, platform implementation, application development, hosting and support. The approach is holistic to provide every client with a creative, robust and increasingly profitable ecommerce website. LYONSCG is ecommerce Realized! LYONSCG 20 N. Wacker Drive, Suite 1750 Chicago, IL P: F: W: