Retailers are cautiously optimistic about the 2013 holiday season with 60% forecasting online sales growth of over 10%. Significant investments have been made in technology including mobile, SEO/SEM, and platform upgrades. While mobile revenue expectations are high with over 30% of retailers projecting it will be over 10% of sales, social media's revenue impact is seen as marginal. Retailers plan to be selective in their use of promotions with flash sales and social promotions being more widely used than store-only sales or rewards programs.

1. Holiday Predictions
Survey Results, July 2013

2. WHY WE CONDUCTED THE RESEARCH
• Check in on trends from previous research
• Understand what is most important to retailers today
• Hear from retailers on what they are doing that is new
• Learn from their feedback
• Provide consultative advice to our clients
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3. HOLIDAY PREDICTIONS 2013
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4. THE DEMOGRAPHICS: 77 RETAILERS
eCommerce as a % of Business
Company's Annual Revenue
Less than $20 million
33%
$21 to $50 million
$51 to $100 million
$101 to $200 million
13%
Less than 5%
6%
6% to 10%
17%
13%
$501 million to $1 billion
$1 to $5 billion
26% to 50%
9%
9%
More than $5 billion
17%
11% to 25%
10%
$201 to $500 million
16%
51% to 75%
More than 75%
7%
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4%
11%
35%
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5. TOPLINE THOUGHTS
HOLIDAY SPENDING
• Strong growth projected for 2013 holidays projected
increases in the 11-15% range
(Note: in line with industry projections)
• Mobile is making significant inroads while retailers are
challenged to see social’s revenue contribution
• Retailers are cautiously optimistic given customer
confidence levels; promotions are likely to be in play
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6. TOPLINE THOUGHTS
READINESS
• Retailer investment has been significant from marketing
(SEO/SEM) and platform upgrades with mobile and
retargeting also top-of-mind
• Customer experience investment tends to be “tactical”
starting with improving key pages, onsite search and
enhancing content
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7. TOPLINE THOUGHTS
PROMOTIONS
• Retailers are split regarding deploying promotions likely
based on category buying patterns with only 1/3 early birds
(October or before)
• Selectivity is key: protect profitability rather than a blanket
selling strategy
• Free shipping will also be deployed selectively most often
associated with a minimum purchase
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8. HOLIDAY SPENDING
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9. 60% of retailers forecast growth >10%
Almost 1-in-4 expect 21%+ increases
Q. How do you expect your overall online sales to
change during the 2013 holiday?
Down
Flat
5%
9%
+1% to +5%
12%
+6% to +10%
14%
+11% to +15%
23%
+16% to +20%
15%
+21% to +30%
12%
More than 31%
10%
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10. 60% of retailers allocate more than 1/5th
of their marketing budget to holiday
Q. What percentage of your annual online marketing
budget is allocated to the holiday season?
0% to 10%
11% to 15%
16% to 20%
12%
13%
15%
21% to 30%
21%
31% to 40%
More than 41%
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22%
17%
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11. The Forecast:
Retailers are cautiously optimistic, promotionminded and believe they will make their
numbers
Lack of customer confidence plays into caution & fear that aggressive plans
won’t be met
Q. Please note your level of agreement with the following statements.
Top-2:
Strongly to
Somewhat Agree
Neither agree
nor disagree
Top-2:
Strongly to
Somewhat Disagree
We’re cautiously optimistic that it will be a strong online holiday season
80%
12%
8%
The holidays will be promotion-centric so we are planning accordingly to ensure we deliver
from a bottom-line perspective
73%
18%
9%
The holidays will start out slowly but eventually gather momentum, and we’ll make plan
53%
30%
17%
It’s going to be a strong online holiday season
52%
30%
18%
We’re a bit nervous that we won’t make our aggressive plan
47%
19%
34%
Consumers still lack “complete” confidence in the economy so it’s going to be a flat online
holiday season at best
35%
26%
39%
We are pessimistic and have adjusted our forecast accordingly
14%
17%
69%
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12. MOBILE MATTERS
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13. Mobile revenue expectations are high
for the holidays
Mobile will be a significant part of our
revenue this holiday season
Top-2:
Strongly to
Somewhat
Disagree
38%
Neither
agree nor
disagree
9%
Top-2
Strongly to
Somewhat
Agree
53%
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14. 1 in 3 retailers project mobile will be more
than 10% of their holiday revenues
What percentage of your 2013 holiday revenue do
you anticipate will come from the mobile channel?
0%
8%
1-5%
29%
6-10%
29%
11-15%
16-20%
21%+
22%
7%
5%
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15. SYSTEMS READINESS
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16. SEO/ SEM and platform upgrades see
significant investment ahead of holiday
Mobile, retargeting and testing are also top-of-mind for retailers
Q. Please note your level of TECHNOLOGY investment in 2013 from no investment to
significant investment. If a particular feature or upgrade does not apply to your business,
please select N/A.
Answer Options
Significant Limited
No
Investment
N/A
46%
43%
SEO/SEM
ECommerce platform upgrades
Mobile enhancement (e.g. apps, mcommerce, in-store, SMS, QR codes, payment methods)
Retargeting/advertising
Logistical improvements (faster fulfillment, more delivery choices)
Testing
Cart abandonment strategies
Big data capture, retrieval and analytics capabilities
Social (e.g. Facebook, Twitter, Pinterest, social listening tools, blogs)
Paper catalog
Alternative payment methods (e.g. digital wallets, bit coin, touchless mobile-to-mobile
transactions, etc.)
Cross-channel logistics (e.g. in-store pickup, check in-store product availability, e-receipts)
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46%
38%
6%
15%
2%
4%
32%
50%
14%
4%
31%
26%
23%
19%
18%
17%
16%
59%
53%
64%
64%
50%
62%
25%
10%
18%
12%
14%
27%
20%
35%
0%
3%
1%
3%
5%
1%
24%
10%
24%
57%
9%
7%
34%
29%
30%
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17. Dedicated efforts to improve key pages,
enhanced site search and augmenting content
lead customer experience investments
Q. Please note your level of CONSUMER EXPERIENCE investment in 2013 from no
investment to significant investment. If a particular feature or upgrade does not apply to
your business, please select N/A.
Answer Options
Significant
Limited
No Investment
N/A
Improved key pages (e.g. home page, category page, product page)
48%
46%
6%
0%
Enhanced site search
37%
40%
22%
1%
Streamlined shopping cart
30%
49%
18%
3%
Increased content (e.g. documents, videos, tips)
30%
57%
10%
3%
Overall site redesign
29%
53%
17%
1%
Initiated or evolved loyalty program
18%
29%
40%
13%
Personalized zones site-wide from home page to follow up emails
17%
36%
44%
3%
User-generated content and tools (e.g. reviews, Q&A)
14%
55%
28%
3%
Rich media or related tools (e.g. zoom, alternative views)
13%
39%
39%
9%
Expanded customer service (e.g. 24x7 access)
4%
38%
51%
7%
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18. GIFTING
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19. Retailers are making limited or no
investment in gifting: most already have
requisite feature set
Q. Please note your level of GIFTING investment in 2013 from no investment to
significant investment. If a particular feature or upgrade does not apply to your
business, please select N/A.
Answer Options
Significant
Limited
No Investment
N/A
Ship to multiple addresses within a single checkout
4%
21%
58%
17%
Ability to hold gifts to ship later
5%
16%
57%
22%
Ability to store addresses of friends and family to access when sending gifts
2%
29%
52%
17%
Promotion of gift cards in personalization zones
4%
25%
52%
19%
Wish lists
6%
34%
45%
14%
Traditional gift certificates
1%
39%
42%
18%
egift or digital gift cards
9%
39%
38%
14%
7%
42%
34%
Enhanced gift center/gift suggestions
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17%
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20. TESTING
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21. Testing continues for 3 of 4 retailers yet only
a handful of retailers will increase frequency
Q. Which of the following best describes your
approach to testing during the holiday season?
12%
Test More
Frequently
12%
No Testing
17%
Testing
71%
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22. PROMOTIONAL STRATEGIES
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23. Retailers get a jump on the season: 1 in 3
deploy holiday campaigns in early October
……yet 40% will wait until November to initiate holiday marketing
Q. When do you plan to start your ONLINE holiday
marketing and promotion campaigns (choose 1)?
Week of 10/1 or earlier
Week of 10/7
Week of 10/14
Week of 10/21
30%
4%
7%
4%
Week of 10/28
16%
Week of 11/4
Week of 11/11
21%
5%
Week of 11/18 or later
14%
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24. Retailer promotion budgets vary
substantially: driven by product category and
brand orientation
Q. What percentage of your total 2013 promotion
budget is allocated to holiday?
0%-10%
13%
11% to 20%
25%
21% to 30%
31% to 40%
More than 40%
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22%
18%
22%
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25. Marketing and promotion budgets are
aligned for the holiday season
Budgets as a % of Revenue
0% to 10%
12%
13%
11% to 15%
13%
12%
16% to 20%
15%
13%
21%
22%
21% to 30%
31% to 40%
More than 41%
22%
18%
17%
22%
Marketing
Promotion
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26. CORE STRATEGIES: MOBILE
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27. Mobile significantly impacts revenue:
social impact seen as marginal
Q. What percentage of your 2013 holiday revenue do you anticipate will come from
each of the following channels?
0%
1%-5%
6%-10%
11%-15%
16%-20%
21%-30%
31%-40%
41%-50%
50%+
8%
29%
29%
22%
7%
4%
1%
0
0
33%
51%
7%
3%
3%
3%
0
0
0
41%
6%
5%
3%
3%
1%
4%
3%
34%
0%
7%
14%
2%
4%
9%
4%
7%
53%
Mobile
Social
In-Store
Online
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28. Social revenue trends <5% while the
majority project mobile >5%
What percentage of your holiday revenue do you anticipate
will come from mobile and social channels?
8%
0%
33%
29%
1-5%
6-10%
11-15%
16-20%
51%
29%
7%
22%
3%
7%
3%
Mobile
21%+
5%
3%
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Social
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29. CORE STRATEGIES:
CUSTOMER EXPERIENCE
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30. SEO/ SEM and platform upgrades see
significant investment ahead of holiday
Mobile, retargeting and testing are also top-of-mind for retailers
Q. Please note your level of TECHNOLOGY investment in 2013 from no investment to
significant investment. If a particular feature or upgrade does not apply to your business,
please select N/A.
Answer Options
Significant Limited
No
Investment
N/A
46%
43%
SEO/SEM
ECommerce platform upgrades
Mobile enhancement (e.g. apps, mcommerce, in-store, SMS, QR codes, payment methods)
Retargeting/advertising
Logistical improvements (faster fulfillment, more delivery choices)
Testing
Cart abandonment strategies
Big data capture, retrieval and analytics capabilities
Social (e.g. Facebook, Twitter, Pinterest, social listening tools, blogs)
Paper catalog
Alternative payment methods (e.g. digital wallets, bit coin, touchless mobile-to-mobile
transactions, etc.)
Cross-channel logistics (e.g. in-store pickup, check in-store product availability, e-receipts)
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46%
38%
6%
15%
2%
4%
32%
50%
14%
4%
31%
26%
23%
19%
18%
17%
16%
59%
53%
64%
64%
50%
62%
25%
10%
18%
12%
14%
27%
20%
35%
0%
3%
1%
3%
5%
1%
24%
10%
24%
57%
9%
7%
34%
29%
30%
30

31. Dedicated efforts to improve key pages,
enhanced site search and augmenting content
lead customer experience investments
Q. Please note your level of CONSUMER EXPERIENCE investment in 2013 from no
investment to significant investment. If a particular feature or upgrade does not apply to
your business, please select N/A.
Answer Options
Significant
Limited
No Investment
N/A
Improved key pages (e.g. home page, category page, product page)
48%
46%
6%
0%
Enhanced site search
37%
40%
22%
1%
Streamlined shopping cart
30%
49%
18%
3%
Increased content (e.g. documents, videos, tips)
30%
57%
10%
3%
Overall site redesign
29%
53%
17%
1%
Initiated or evolved loyalty program
18%
29%
40%
13%
Personalized zones site-wide from home page to follow up emails
17%
36%
44%
3%
User-generated content and tools (e.g. reviews, Q&A)
14%
55%
28%
3%
Rich media or related tools (e.g. zoom, alternative views)
13%
39%
39%
9%
Expanded customer service (e.g. 24x7 access)
4%
38%
51%
7%
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32. CORE STRATEGIES:
PROMOTIONS &
PROFITABILITY
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33. Promotion budgets vary substantially driven
by product category and brand orientation
Q. What percentage of your total 2013 promotion budget
is allocated to holiday?
0%-10%
13%
11% to 20%
25%
21% to 30%
22%
31% to 40%
18%
More than 40%
22%
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34. Retailers to be selective in timing promotions
offered to shoppers: flash sales & social lead
Outlets and coupons are the standard bears that are omnipresent for 1-in-3 retailers
Q. Which of the following promotions will be part of your holiday plan?
Answer Options
Select Times
All the Time
Will Not Use
Flash sales or limited time promotions
66%
16%
18%
Social promotions
Other incentives (e.g. buy 1 get 1 free, buy more save more, save X if spend X,
post-sale rebate)
64%
17%
19%
60%
21%
19%
Online-only sale
52%
30%
18%
Coupons ($ or % off)
52%
36%
12%
Mobile promotions
49%
10%
40%
Gift with purchase
45%
9%
45%
Store-only sale
38%
4%
58%
Outlet/clearance page
25%
43%
32%
19%
8%
73%
Q11
Rewards points
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35. Retailers must decide on free shipping and divided on
use with minimum purchase: most will use at “select”
times
Q. Which tactics and via what means will you employ shipping-related promotions
during the holidays?
Answer Options
Will Not Use
45%
30%
25%
44%
9%
47%
5%
55%
38%
9%
53%
23%
1%
76%
8%
1%
91%
8%
Free shipping – no minimum
All Season
40%
Free shipping – minimum purchase
Select Times
8%
84%
Free priority / 2-day shipping
Free shipping – select products
Free express / overnight shipping
Free same-day delivery
No free shipping offers
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36. 3 of 4 retailers will offer free shipping with a
minimum purchase sometime during the holiday
season
44% will not require a minimum threshold but only at select times of the year
Q. Which tactics and via what means will you employ
shipping-related promotions during the holidays?
Answer Options
Select Times
All Season
Will Not Use
45%
30%
25%
44%
9%
47%
38%
9%
53%
8%
8%
84%
Free shipping – minimum purchase
Free shipping – no minimum
Free shipping – select products
No free shipping offers
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37. <50% will selectively use free priority or 2-day
shipping; only 1 in 5 will extend free
express/overnight shipping
Q. Which tactics and via what means will you employ
shipping-related promotions during the holidays?
Answer Options
Select Times
All Season
Will Not Use
40%
5%
55%
23%
1%
76%
8%
1%
91%
Free priority / 2-day shipping
Free express / overnight shipping
Free same-day delivery
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38. Retailer Holiday Readiness Checklist
•
•
•
•
•
•
•
•
•
What % of your business is done during the holiday season?
Which tactics are core to your gifting strategy?
How will you leverage email over the holidays?
When is the right time to begin your first holiday campaign?
Have you developed a robust gift center that supports all of your gifting
needs?
Are gift cards both traditional and email integrated throughout the
shopping experience?
What plans do you have in place to ensure that gifting is visible
throughout your site?
Are there any last-minute changes you could make to your gifting strategy
in anticipation of the season?
Have you embraced newer technologies including mobile and social?
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39. Baynote, Inc. © 2013
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40. For More Information
Lauren Freedman, President
773-975-7280
lf@e-tailing.com
Marti Tedesco, Sr. Director of Marketing
650-255-4219
mtedesco@baynote.com
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