Data for Breakfast

Web 2.0 users spent about $27 billion online in the United States in the second quarter of 2007, according to comScore’s “Web 2.0 in Retail Today” report.

comScore reported that social networking site traffic rose 33% to 81 million unique visitors in August 2007 versus August 2006. Blog traffic grew 23% to 28 million unique visitors, while online video site traffic increased 20% to 93 million.

“[The company also found that] 158 million people, or 87% of the US online population, visited Web sites that used Web 2.0 technology in August 2007, spending an average of 210 minutes per person at such sites,” said comScore chairman Gian Fulgoni at the Shop.org Retail Summit, as reported by Internet Retailer.

comScore’s findings imply that Web 2.0 users spend more money online than the average Internet user.

Data from an “Mplanet” survey indicate that retailers who do not market on social networks might be missing an opportunity.

A majority of respondents who were interested in social networking said they would be receptive to finding out about upcoming sales or discounts on products (51%) and downloading coupons (51%). Nearly three out of 10 (29%) said they would buy products on social networking sites.

The study is especially relevant right now, as online retailers are gearing up for the holiday shopping season.

 http://www.emarketer.com/Article.aspx?id=1005408&src=article2_newsltr

Category : ecommerce

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comScore conducted research across dozens of retail and non-retail categories and found consistently that 65% to 90% of conversion occurs offline.

These figures alone have a profound impact on the strategy and economics of search. For example, pure-plays like eBay and Amazon rely extensively on search to drive ecommerce. How do the economics change when multi-channel nationals like Wal-Mart and Target achieve 5x or 10x the ROI as pure-plays?

http://www.comscore.com/blog/2007/06/larger_role_of_search.html

Category : search, ecommerce

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This is an article that came out today from MediaPost’s Search Insider on the effectiveness of free and reduced shipping offers.

Free shipping offers are becoming more and more commonplace, but can they really provide a lift to your campaign — or are consumers increasingly immune to the message due to the very fact that it is so omnipresent? To answer this question, we analyzed the campaign results of a major consumer product brand for the 1st quarter of this year. This advertiser had included free shipping offers in the ad copy for specified periods in January, February, and March. Each of these offer periods was preceded and followed by a period in which no offer was included in the copy.

In analyzing the data, we found the most obvious change was a decline in the average order value (AOV) during the free shipping offer period. The magnitude of the decline varied, but there was a definite decline nonetheless. In January and March, the AOV declined by 2.2% and 3.1% respectively, while the decline in February was much larger at almost 20%. These AOV declines resulted in a concurrent decline in return on advertising spend (ROAS), a key performance metric for this campaign, during each of the offer periods. The decline in ROAS ranged from 30-70% during the free shipping periods, indicating a clear loss of efficiency during the promotional cycles.

Given that other elements of the campaign remained constant during these periods, the declines in AOV and ROAS can likely be attributed to consumers’ reactions to the free shipping offer. Online consumer behavior suggests that consumers are more comfortable making small online purchases when they do not have to pay for shipping. Without the offer of free shipping, the costs of the shipping may seem high relative to the cost of the item, and consumers may well avoid purchasing it online or else add additional items to their cart to take advantage of the efficiency of shipping multiple items together. Thus, when offered the opportunity for free shipping, consumers may tend to purchase lower-cost items they would ordinarily have purchased offline or grouped together with other purchases.

With this in mind, it is crucial that the free shipping offer generates enough additional sales to compensate for revenue lost due to lower order amounts. These additional sales are especially important for those advertisers that also make a small profit from their shipping charges.

In this particular case, the free shipping offer did indeed generate additional conversions. The offer generated between 15 and 70 additional conversions, depending on the period, and the conversion rate increased by between 0.3% and 2.0%. It is also important to note that the conversion rate declined when the offer was removed in two out of the three non-offer periods tracked.

In both February and March, the conversion rate increased during the offer period; however, when the offer was removed, sales declined to a level below that of the pre-offer period.

As a way to avoid the potential pitfalls of free shipping offers, companies will have to find other avenues to differentiate their shipping services and might consider emphasizing fast shipping instead, particularly just before major holidays.

Category : ecommerce

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This is a really interesting report from WebTrends on various topics relating to e-commerce.

Here are some tasty data tib bits:

The overwhelming majority online merchants— 71 percent to be exact—attribute less than 10 percent of their retail web sales to the e-mail marketing they do.

68 percent of e-retailers are doing more e-mail marketing this year than the year before and the majority of those surveyed believe e-mail marketing is as or more effective than other forms of web site marketing.

Fully 56 percent of this group report that e-mail marketing generates between 10 percent and 25 percent of their web-based retail sales.

These are really just some random data that I pulled from the guide, I would really recommend skimming this if you’re involved in any kind of e-commerce.

wp_clicktobuyguide.pdf

Category : ecommerce

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Campaigns which use both display ads and search marketing convert more online shoppers into buyers than those which use only one of these tactics.

That is the main finding of a Yahoo!/comScore study called “From Clicks to Bricks: The Impact of Online Pre-Shopping on Consumer Shopping Behavior.”

Among consumers in the study group who had been exposed to both search and display ads, 43% made in-store purchases, compared with 26% of those who had viewed only search ads, and 6% of those who had only seen display ads.

The search/display combination also increased in-store spending. Those consumers who had seen both ad types spent an average of 83% more than those who had not seen either type of ad.

In comparison, consumers who had seen only search ads spent 26% more, on average, than those who had not seen any ads. Exposure to display ads lifted in-store sales an average of 11% over spending by buyers who had not seen any ads.

Many studies on the effectiveness of search and display compare the two, rather than looking at them in tandem. This search vs. display approach often measures click-through rates (CTRs) rather than conversions. CTR is a fundamental metric of pay-per-click (PPC) advertising.

By this measurement, the search click rate tends to surpass that for display ads. Morgan Stanley estimates a steady rise in the search marketing CTR from 10.4% in 2003 to 12.6% in 2010.

http://www.emarketer.com/Article.aspx?id=1005214&src=article2_newsltr

http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=64847

Category : search, metrics, ecommerce

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Many shop. Few buy.

Online merchants convert an average of 2%-3% of their site visitors into buyers, according to the e-tailing group’s “Sixth Annual Merchant Survey.”

That’s about the same as last year. And the year before that.

The group says that driving the right customers to sites and increasing sales and retention all require more targeted tactics every year. It points to analytics and data mining as the way to make this happen.

Shop.org conducts a similar annual survey with Forrester Research called “The State of Retailing Online.” Conversion rates in that study also average about 2%-3%.

A Nielsen//NetRatings report called “MegaView Online Retail” cited in Internet Retailer listed the top 10 US retail e-commerce sites in terms of conversion. Every site had a greater than 15% conversion rate, and nearly 25% of visitors to top site Proflowers.com bought something.

http://www.emarketer.com/Article.aspx?id=1004774&src=article1_newsltr 

Category : ecommerce

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There is a typo on this graphic… #15’s URL should read www.homedepot.com.

Category : ecommerce

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What happens when an online shopper doesn’t find what she wants? Like many retail shoppers, she goes to another store, according to “The Online Inventory Impact Survey.” The survey was commissioned by the e-tailing group and BetweenMarkets and conducted in May 2007.

While about half of respondents said they checked for the out-of-stock item at another site, 56% of online shoppers also said they simply checked back later for replenished stock, or signed up to be e-mailed when the item became available.

The Internet has made it easy for shoppers to check competing stores for merchandise. With inventory management more important than ever, 83% of online retailers have real-time inventory assessment on their product pages. Shoppers at three-quarters of online retail Web sites can also see if an item is in stock when using a virtual shopping cart.

Retailers with both online and offline stores are now concerned with maintaining a synchronized inventory for both.

Respondents to a Retail Systems Alert Group survey cited efficient inventory allocation as among the key opportunities for creating customer satisfaction. Over half of retailers selected synchronizing customer and inventory information as a high priority.

http://www.emarketer.com/Article.aspx?id=1005137&src=article1_newsltr

Category : ecommerce

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Note: *eMarketer’s 2003 baseline is from the Department of Commerce’s October 2003 estimate of Internet users who had access to the Internet at the time of the survey; **eMarketer benchmarks its retail e-commerce revenues figures against US Department of Commerce data, for which the last period measured was Q3 2005; the travel component was formulated based on aggregated data Source: eMarketer, December 2005

Category : ecommerce

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In May 2007, the Hitwise Shopping & Classifieds category received 24.95% of its upstream visits from search engines. This number increased by only 0.7% since May 2006, but the balance of search engines sending traffic has changed in favor of Google. Google was responsible for 15.55% of Shopping & Classifieds upstream visits in May 2007, an increase of 8.7% since May 2006. Google’s traffic, share of search, and impact on e-commerce websites have grown in lockstep over the past year.

MySpace is another growing source of traffic for shopping websites. In May 2007, 3.15% of Shopping & Classifieds site visits originated at MySpace, an increase of 86.1% since May 2006. This increase could be attributable to several factors:

1) the sheer increase in visits to MySpace (up 67.1% from May 06 - May 07, vs. the 6.6% increase in visits to the Shopping & Classifieds category), resulting in more non-referred traffic

2) increased retailer advertising on MySpace

3) the Google-MySpace search deal, which may have led to more general web searching on MySpace as well more potential retail contextual ads

The leading Shopping & Classifieds websites in MySpace’s downstream for the month of May largely resemble the top overall retail websites - 7 of the websites shown in the table below were also top 10 Shopping & Classifieds sites in May 2007.

http://weblogs.hitwise.com/leeann-prescott/2007/06/shopping_search_and_myspace.html

Category : search, social, ecommerce

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