comScore: Cyber Monday up 15% ~ spike or trend?
comScore released their anxiously awaited numbers today on online Holiday spending this season. It was good news and consistent with the early returns.
When you look at the numbers for Thanksgiving Day through Cyber Monday (Nov 27th to Dec 1st) overall spending was up 12% over 2007 levels. Cyber Monday itself was up over 15%.
Ok, let’s look closer. Here’s the tabular data from comScore’s press release:
|
2008 Holiday Season To Date vs. Corresponding Days* in 2007 Non-Travel (Retail) Spending Excludes Auctions and Large Corporate Purchases. Total U.S. – Home/Work/University Locations. Source: comScore, Inc. |
|||
|
Holiday Season to Date |
Millions ($) |
||
|
2007 |
2008 |
Pct Change |
|
|
November 1 – December 1 |
$12,217 |
$12,025 |
-2% |
|
Pre-Thanksgiving |
$10,035 |
$9,588 |
-4% |
|
Thanksgiving and Later |
$2,182 |
$2,437 |
12% |
|
November 27 (Thanksgiving Day) |
$272 |
$288 |
6% |
|
November 28 (“Black Friday”) |
$531 |
$534 |
1% |
|
November 29-30 (Weekend) |
$645 |
$769 |
19% |
|
December 1 (“Cyber Monday”) |
$733 |
$846 |
15% |
*Corresponding days based on equivalent shopping days relative to Thanksgiving (October 27 - November26, 2007)
What the numbers are actually telling us is that online Holiday sales from Nov 1st through Dec 1st have been declining steeply with a huge rally from Thanksgiving on that nets out to a 2% year over year drop. As context, remember that ecommerce has enjoyed 13% to 20% organic growth in recent years. There should be strong natural year over year growth just because of the broader adoption of online shopping as part of the fabric of consumer’s lives and the progression of younger netcentric consumers entering the marketplace. I don’t think we are seeing that in these numbers.
What I suspect we are seeing is the initial ’shock and awe’ of the global financial crisis being processed by consumers and the combination of lowering energy prices and tremendous promotions online spurring a Thanksgiving to Cyber Monday rally. The big question is how that will be sustained through the Holidays. I think a lot depends on the macro economic news that impacts us in the next two and a half weeks…. up until the Holiday shipping cut off dates.
I think these numbers are really interesting… and definiately very good news. Yet, in the broader picture, they are not game changing and may not turn out to be sustainable. They remind me a bit of the huge stock market rallys of late… only to be reversed a short time later. The consumer retail market is fundamentally different from the equities market, but retail psychology applies in both cases. Overall comScore is predicting no (zero) growth online for the Holiday 2008 season. We’ll see! Let’s hope for the best.
Tell us what you think! Holiday 2008 online retail… boom or bust?
Comparison shopping channels show strong holiday growth
Mercent Corporation today released an analysis of their retail client’s year over year (2007 to 2008) sales growth numbers for Cyber Monday and the seven days prior. Mercent reported that its retailer’s comparison shopping and online marketplace sales were up 29.3% for Cyber Monday, and 25.6% for the previous 7 days.
For the 2007 base year Mercent excluded all retailers that launched on their platform, Mercent Retail, after Q3 2007. The growth numbers do take into account expanded distribution from new channels that the merchant may have adopted during the year. This is probably a good thing, as I’ve seen a big swing among given shopping channels in the last year, i.e. the rise of Google Product Search, the continued growth in Amazon and the relative softness in some other comparison shopping engines.
A few of the client’s on Mercent’s platform are: Nordstrom, REI, 1-800Flowers, GUESS, SmartBargains, Levenger, Car Toys among others.
What do you think? Does it makes sence that given the economy that more online shoppers are looking to the comparison shopping engines for deals? Will these channels continue to grow in the face of flat or year-over-year retail comp store declines? We’ll see… but numbers like these are encouraging for retail performance marketers.
Second look: adCenter Add-in Beta for Excel 2007
I want to tip the hat to the ultra cool adCenter Add-in Beta for Excel 2007. Initially released in January 2008 it is maturing as a tool and in my opinion sets a direction that native and 3rd party search engine management / optimization tools should follow.
It is so powerful to be able to have keyword discovery, traffic forecasting, and monetization info directly in Excel. The next logical step is that they need full campaign management via this add-in metaphor. Why ever is there a need to login to a search engine ad / keyword / campaign management UI?
Google’s Adwords Editor is a great tool also and of course includes full management features… but you end up exporting information out to Excel anyway. Why not just use Excel as the Adwords Editor client? Why not stream campaign / ad group / keyword reports directly to Excel?… or have them queued up on a server and once they are ready get a notification in Excel and then stream them in directly?
Salesforce.com power users have discovered the wonders of sForce Connector and the tools to get data base information in and out of Salesforce via Excel. It’s sooo nice. Microsoft is bringing similar functionality (we hope) to search marketing.
Whatever your persuasion is on Microsoft, they have spent billions of dollars building Excel into an amazing client for managing tabular and pivoted data. What not everyone may recognize is that Excel is also a Web services ready application platform as well.
Now, if Microsoft buys Yahoo!’s search business maybe we’ll have a material amount of referrals to use these tools to optimize our campaigns with!
As you can tell I love this concept
Will Site Performance Issues Effect Holiday Sales?
Cyber Monday is a bit too late to consider improving your web site performance… but the effects will likely not be felt greater than today.
Performance Points to Ponder
- With most shoppers using broadband connections is site performance that important anymore?
- How big of a factor is web site performance in the overall customer experience?
Here’s InstantROI’s take on it…
“Site performance matters in as much as it’s a distraction from the buying process”
With that premise in mind we turned to Yahoo Developer Network’s YSlow tool. YSlow is an awesome Firebug plugin for Firefox and does a great job of analyzing performance issues on a given web page and provides specific suggestions on how to improve performance. YSlow reports give an A to F letter grade and a performance score on a 1 to 100 scale.
Here’s how some of the major players for Cyber Monday ranked on their YSlow scores this afternoon:
| Site | Grade | Score |
| Amazon.com | B | 83 |
| Petsmart.com | B | 82 |
| Petco.com | B | 80 |
| Autoanything.com | C | 77 |
| Dell.com | C | 71 |
| GUESS.com | C | 71 |
| Shop.com | D | 67 |
| Onlineshoes.com | D | 67 |
| Rei.com | D | 66 |
| Samsclub.com | D | 65 |
| Buy.com | D | 63 |
| Radioshack.com | D | 63 |
| Frys.com | D | 62 |
| Walmart.com | D | 60 |
| Apple.com | D | 60 |
| Wirefly.com | F | 59 |
| Coldwatercreek.com | F | 58 |
| Sears.com | F | 56 |
| GAP.com | F | 55 |
| Costco.com | F | 52 |
| Officemax.com | F | 50 |
| Shoes.com | F | 50 |
| Crutchfield.com | F | 50 |
| Overstock.com | F | 48 |
| Bjs.com | F | 48 |
| Newegg.com | F | 45 |
| Bestbuy.com | F | 44 |
| Letstalk.com | F | 42 |
| Cartoys.com | F | 40 |
| Nordstrom.com | F | 38 |
| Circuitcity.com | F | 37 |
| Smartbargains.com | F | 30 |
As you can see, Yahoo! clearly feels many of these sites have some basic ‘blocking and tackling’ site performance best practices to implement. The reports for each site are full of detailed recommendations.
Source: YSlow, Yahoo! Developer Network.
Comments? What do you think? Are these numbers bunk and site performance tuning doesn’t matter even on peak sales days like Cyber Monday… or do the web dessign / development teams of these companies have more work they can do?
Ecommerce: Retail Merchandising Planning
Ecommerce Merchandising?
The purpose of this post is to kick off the topic of ecommerce merchandising planning. For me, retail ecommerce merchandising refers to the entire process of inventory planning and management in an ecommerce group.
Superior merchandising is fundamental to ecommerce success. Getting the merchandising right is arguably more important than marketing the assortment. The one precedes the other. Without buying right, you simply do not have a sustainable online retail business.
Merchandising planning
Here is how I break down the ecommerce merchandising planning process. I see it in terms of planning the right: products, vendors, terms, placement (bricks and/or clicks), quantity (inventory), quality, price point, mix (assortment), timing (product life cycle) and definitely the right measurements (the right GMROI?). I’ll touch on just a few of these points today with the intent of sharing few tips that may help you.
The Right Product
What to sell? The first way to answer that question is to find out what others are selling and what buyers are looking for. To do this you need to do some market research.
Here’s an easy and no-cost place to start: Amazon best sellers. View the best sellers on Amazon by category (browse node). You can do this directly by visiting Amazon.com or by leveraging their web services (AWS). In either case you’re monitoring two things, product best seller rank by category and Amazon sales rank by category (and product group). In both cases the lower the number the higher the sales velocity.
Armed with the best seller information you can do an ASIN search on Amazon or a UPC search on Google Product Search to understand the competitive offer landscape of those items.
The Right Terms
Once you know, 1) what you’d like to sell, and 2) what your offer needs to be in order to sell it, then you’ll need supplier terms that will allow you to market the products with above average conversion success. Before you pick up the phone and call suppliers, put together a spreadsheet model that calculates the terms you’ll need on a per product basis for landed product cost (including any co-op online advertising allowances). You should figure at least 10% of the price point in terms of marketing cost. It could be as high as 30% for some items.
MAP Pricing: Also, pay careful attention to issues such as minimum advertised pricing (”MAP”) restrictions. Probe the vendor as to what is allowed in terms of ways to “market around” these restrictions in advertising, on the product page and in the shopping cart.
Promotional bundling: If your supplier will not budge on MAP restrictions then make sure you ask for help in providing free or special pricing on accessory bundles or add-on products. This will help to increase the strength of and differentiate your offer from your competitors.
Return policies: Make sure you negotiate generous return policies that at least match your own company policies. This is key. You want to be able to offer a satisfaction guarantee on all the products you sell and you need your suppliers to support you in this.
The Right Offer
Online competitive offer intelligence in an ongoing process. Once you’ve committed to inventory or an ‘open to buy’ merchandising plan, then monitor your competitor’s offers online. Report competitor’s MAP violations to your vendor / supplier / OEM immediately. Document them clearly. You don’t always need to be the lowest price but you always need to have the best offer. Your offer is made up of: product price point, product availability, shipping latency, shipping offers and prices, promotional offers / rebates / coupons / bundles, etc. and your merchant ratings.
Questions/Comments? Let me know your thoughts? What’s important in ecommerce merchandising?
Cyber Monday is on! Microsoft Live Cash Back & Ebay lead the fray
As predicted, Microsoft Live Cash Back and eBay / PayPal are teaming up to offer perhaps the best discounts for Cyber Monday 2008.
Cyber Monday will be an online bargain hunters dream in many areas… and in cases like this it is writing a new page in the thin tome of the history of ecommerce.
On November 25th Mercent announced the lauch of SmartBargains on eBay with eBay’s new large seller initiative. It was just in time! This type of promotion should benefit large sellers like SmartBargins who have lots of inventory ond lots of in demand items. As a fixed price Pay Pal supporting eBay seller SmartBargain’s customers will be eligible for this promotion!
Here’s an example.
1) Search on Live.com for:
Pfaltzgraff Cuisine France 8pc Black Cookware Set
2) Click on one of eBay’s sponsored links at the top or on the side of the Live.com search results where the gold Live Cashback medallion is displayed along with the phrase “Live Search Cashback.”
3) You’ll land on eBay. Search again for the item. Purchase and you’ll be eligible for the promotion. And what do you know? There’s even free shipping!
4) Ofcourse, follow ALL the directions carefully… but it doesn’t look to hard.
Let’s see what the day brings!
———
Here’s the link to the offer on eBay: http://pages.ebay.com/coupon/couponcashback/
Here’s the email eBay send out this early Monday AM from to it’s account holders.
 Here’s how to save up to 40% with a coupon + Microsoft Cashback:1. Search for an item on www.live.com.2. Click the sponsored ad with the Microsoft cashback symbol  You’ll be taken to eBay.com.3. Make sure the item is Buy It Now and the seller accepts PayPal. If the item is eligible,you’ll see a cashback notice on the “commit to buy” page.4. Enter code: CSHOPEBAY2008. Pay with PayPal before midnight PT on Dec 1, 2008. |
*See Microsoft cashback terms and conditions.eBay Coupon Terms and Conditions
The offer will expire at 11:59:59 PM PT on December 1, 2008. Receive 10% off (maximum discount of $100) the purchase price (excluding shipping, handling, and taxes) of a single item on eBay.com. Recipients of the coupon must be registered eBay members and pay for the item with PayPal.
Pricegrabber’s new look
Pricegrabber.com has a fresh new Web 2.0 look… though it is only skin deep and extends just to the home page. You can see the new Pricegrabber home page here and the PG “Classic” comparison shopping home page format here.
As a product manager (and a user), I do like the new design. It features a larger more prominent search box and larger more prominent top-level category navigation. Links to shopping blogs and guides are easier to find.
In all I find it is a simpler more ’social web’ contemporary design that will likely increase user satisfaction with the Pricegrabber portal. Good job.
What do you think? Do you shop on Pricegrabber anyway?
Black Friday 2008 - The optimists may have it right!
Early returns on Black Friday sales on and offline look more positive than feared… but it looks like it may be a bargain hunters’ Christmas.
As we posted yesterday, Internet Retailer released the results of their Holiday Sales Retailer survey on November 11th. According the survey, retailers are putting on an optimistic game face with 81.1% believing that their holiday Internet sales will grow year over year. If early returns from Pricegrabber and ShopperTrak hold, their optimism may be vindicated.
The San Jose Merucury News reported that Pricegrabber.com was seeing double digit year-over-year traffic gains early in the day. This by itself may not have been indictive but coupled with year-over-year offline trends as reported by ShopperTrak t his is a hopeful note.
ShopperTrak reported today that retail sales increased 3.0 percent over 2007. The growth was down from 2007 which had seen more than 8% growth over 2006. Yet, any comp year-over-year growth this season is reason for some early Holiday cheer.
Now on to Cyber Monday!
I’m watching for the early indicators from Amazon. They made a huge Black Friday marketing pitch to their customer base and have agressive promotions this weekend and some targeted for Monday.
Let’s hope that ecommerce does outperform the rest of the economy as consumers look to stretch their dollar beyond the confines of Wal-mart… and that it somehow extends to at least modest comp sales growth for branded new goods full-priced retailers as well.
Comments? What do you think is going to happen this season? Let your Holiday 2008 predictions be known!
Branding in comparison shopping engines
The conventional wisdom has been that comparison shopping engines (”CSEs”) are at best neutral in terms of brand building. At worst it is thought that CSEs diminish the value of retail branding and tilt the balance of power in the buying cycle in favor of the consumer and the unbranded direct marketer.
I think the truth is that the CSEs do help build a brand and reinforce consumer brand perceptions.
In the absence of solid empirical data I’ll resort to observation and common sense to make this case.
Here are some observations…
CSE usage is growing: Comparison shopping engines as a group, including Google Product Search, are growing in reach much faster than the organic growth in online commerce.
Merchant ratings are considered: Merchant ratings by consumers along with product reviews and ratings are a key part of online comparison shopping. These ratings are the new factors in a ‘considered’ retail purchase.
Offline purchases still happen: Consumers not only use CSEs to make online purchases but to research offline purchases as well. Having an offline retail brand online at the points of highest purchase intent is a really really smart idea. This is one of the biggest reasons why branded merchants need to have a well managed presence on the shopping comparison sites.
Text ads brand: Google Adwords has demonstrated that a lack of graphics doesn’t mean a lack of brand association.
URL as the new brand: Even for large brick and mortar retailers, the URL is new brand. Bestbuy.com, GAP.com, they all brand the consumer especially the under 30 demographic.
Understated logos still brand: Have you heard of the favicon? It’s the tiny 16×16 pixel icon that shows up in your web browser address line and represents the brand of that site. If you drag that icon to your desktop or bookmark it… the favicon branding may come along with it. Amazing.
On comparison shopping sites companies that want to highlight their brand may purchase logo placement in search results listings and featured or sponsored merchant status. This is real branding that is charged per click!! Think of that. The company’s brand is getting 20x - 50X more impressions than clicks on those high purchase intent shopping search results pages… and the company only pays for the impressions where users actually clicked in the brand.
Ubiquity and cross channel branding matters: URL, text or icon your brand needs to be everywhere your target consumers are.
Branded retailers have an advantage: What a branded retailer can expect is that their brand will increase their click through rate (or conversion rate if you’re on a self-contained marketplace like Amazon or SHOP.com) independent of the strength of their offer. It gives the merchant an opportunity to merchandise to the consumer on their web site even if they don’t necessarily have the best ‘published offer’ on the CSE.
The success formula: The most consistently successful marketing formula I’ve seen on the CSE’s is: Strong Retail Brand + Strong Merchant Ratings + Best Offer. This provides a solid basis on which to further optimize shopping channel marketing with CSEO, CPC bidding and merchandising promotions.
So, in summary, what we observe is that branded merchants thrive alongside unbranded merchants on these CSE sites. In fact they thrive in a way and to a level that is not found on eBay but appears to be unique to comparison shopping engines, including Amazon.com and SHOP.com
What are your thoughts? What have you or your clients observed?
Black Friday 2008 Edition - Buy at Microsoft Live Cash Back
Ok, I didn’t get any money for that headline but you will if you make your purchases through Microsoft Live Cashback (formerly Jellyfish). A robust comparison shopping engine with cash back? You gotta love that…. and now so timely for the Holidays during a down economy!
Check it out. http://search.live.com/cashback
Retailers: If you’re not participating in Live Search Cash Back you should be. The order volumes are still low but they will become material this Holiday. Even better, this is a CPA (actually a bidded CPA) model. You can absolutely control your ROI (ROAS, GPROAS) on a per product basis. Here’s a link to their sign up form to get started, http://advertising.microsoft.com/advertising/LiveCashBack-Interest-form
What has your experience been with Microsoft Live Cashback? Is it a gimmick or the wave of the future?