Join eMarketer as we cover the lessons learned from holiday shopping 2014 and our insights on what needs to be improved, optimized or nixed in 2015. Topics in this webinar include: Why did mcommerce make such a big jump in holiday 2014? What is the best way to reach the omnichannel holiday shopper? How is the online holiday shopping calendar changing shape? What to expect in 2015—eMarketer’s ecommerce forecast revealed.

1. © 2015 eMarketer Inc.
Lessons from Holiday Shopping
2014 — What You Need to Know
for 2015
Yory Wurmser
Retail Analyst
March 26, 2015
Made possible by

2. © 2015 eMarketer Inc.
Agenda
 What happened in the 2014 holiday season?
 What should you expect in the 2015 holiday season?
 Which four trends from the 2014 holiday season will
drive ecommerce growth in 2015?
 What was the best way to reach mobile consumers
during the holidays?
 How is the online shopping calendar changing?

3. © 2015 eMarketer Inc.
What happened in 2014?

4. © 2015 eMarketer Inc.
The 2014 holiday season was moderately good
overall in the US, but was very strong online
16.0%
3.5%
Total Retail Ecommerce

5. © 2015 eMarketer Inc.
18.1% of 2014’s total retail sales occurred
during November and December
$850.58 billion in total retail sales
$72.03 billion in ecommerce sales

6. © 2015 eMarketer Inc.
Why wasn’t 2014 stronger overall?
Downward pressure
 Low labor market
participation
 Weak median
income growth
 Rising healthcare
costs
 Gas stations
Upward pressure
 Strong job
growth
 High consumer
confidence
 Rising stock
market
 Cheap gas
Source: rgbstock.com

7. © 2015 eMarketer Inc.
Core retail grew more strongly than total retail,
which was dragged down by gas stations
 NRF data shows
4.0% growth for
2014, up from
3.1% in 2013

8. © 2015 eMarketer Inc.
Foot traffic was down 7.1% between
Thanksgiving 2014 and January 3, 2015
“ There is this shopper that has greater
intent to purchase than we’ve seen
before. They come to the stores more
researched than they have before.”
—Chitra Balasubramanian, head of business
analytics at RetailNext

9. © 2015 eMarketer Inc.
Overall retail
performance
was
consistent
with previous
years, but
ecommerce
growth was
the strongest
since 2011

10. © 2015 eMarketer Inc.
What to expect in 2015

11. © 2015 eMarketer Inc.
Holiday 2015 overall will broadly follow 2014
patterns
14.4%
3.2%
Total Retail Ecommerce

12. © 2015 eMarketer Inc.
Ecommerce will make a big jump in percentage
of Q4 2015 total retail sales
Ecommerce’s
share of retail
sales always rises
in Q4, but 2015’s
spike will be
larger than usual

13. © 2015 eMarketer Inc.
Ecommerce will approach 10% of total holiday
retail sales in 2015
 Growth of
holiday season
ecommerce is
not slowing
6.80%
7.60%
8.50%
9.40%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
2012 2013 2014 2015
Retail Ecommerce Holiday Sales as %
of Total Holiday Retail Sales

14. © 2015 eMarketer Inc.
Trends that emerged in 2014 will drive
ecommerce in 2015
1. Mobile traffic and sales growth
2. Better online and offline integration
3. Improvements in fulfillment
4. A wider online shopping calendar

15. © 2015 eMarketer Inc.
Trend #1:
Mobile sales and influence
grew

16. © 2015 eMarketer Inc.
Traffic from mobile devices increased more than
expected
“ Mobile traffic in general jumped a lot
faster, a lot higher, than anybody
really expected. Our mobile traffic
increased by 78% vs. the previous
year.”
—Emily Pfeiffer, VP of brand development at
Berkshire Blanket

17. © 2015 eMarketer Inc.
Smartphones had strong growth in orders
generated, traffic and revenue
 Smartphone
orders grew at
twice the pace
of tablet orders
 MarketLive saw
mobile revenues
increase 111%

18. © 2015 eMarketer Inc.
Mobile traffic was nearly half of online shopping
traffic
44.6%
of online traffic during holiday 2014 came from mobile devices
Source: IBM, “Online Retail Holiday Shopping Recap Report 2014”

19. © 2015 eMarketer Inc.
Smartphone conversion rates still lagged far
behind desktop and tablet conversion rates
 Only 9.1% of
digital sales
came on
smartphones

20. © 2015 eMarketer Inc.
Mobile sales increased but still accounted for
roughly 1 in 5 digital holiday sales
 For 2014 as a
whole,
eMarketer
estimates that
19.0% of retail
ecommerce
sales occurred
on mobile
devices

21. © 2015 eMarketer Inc.
Why the big jump in mobile
commerce this year?

22. © 2015 eMarketer Inc.
Reason No. 1: More mobile shoppers and buyers

23. © 2015 eMarketer Inc.
Number of US mobile shoppers grew by
25 million in 2014
 150.4 million
mobile shoppers
by end of 2014
 171.0 million
mobile shoppers
by end of 2015
Increase
in mobile
shoppers:
+25.4M
in 1 year

24. © 2015 eMarketer Inc.
Number of US mobile buyers growing almost as
quickly as number of mobile shoppers
 104.8 million
mobile buyers
by end of 2014
 121.8 million
mobile buyers
by end of 2015
Increase
in mobile
buyers:
+22.1M
in 1 year

25. © 2015 eMarketer Inc.
Reason No. 2: Better user interfaces led to more
conversions
 Larger screen sizes
 More responsive design
 Easier payments

26. © 2015 eMarketer Inc.
Larger screen size correlates with lower cart
abandonment and higher conversion rates

27. © 2015 eMarketer Inc.
Traffic share in North America from large phones
more than doubled in 2014
 Website traffic
from large
smartphones
rose from 6.9%
to 17.9% in
12 months

28. © 2015 eMarketer Inc.
2014 holiday sales saw big growth in phablets

29. © 2015 eMarketer Inc.
Responsive design is spreading rapidly …
“ The biggest trend happening in our
industry right now is responsive
design. It’s taking off, and it’s taking
off very quickly. … So what’s driving
the mobile trend, really, is better
mobile design.”
—Ken Burke, CEO of MarketLive

30. © 2015 eMarketer Inc.
Responsive
design
performs
better

31. © 2015 eMarketer Inc.
… But responsive design is only part of the
solution
“ Understanding the customer
journey across device type and
adapting to it from a customer
experience perspective, and even
from a marketing perspective, is
absolutely critical. … Responsive
design is great … but that’s only the
tip of the iceberg.”
—Don Delzell, director of online at Sports
Chalet

32. © 2015 eMarketer Inc.
Easier
checkout
is the leading
factor that
would make
people spend
more on their
phones

33. © 2015 eMarketer Inc.
New payment options have potential to simplify
mcommerce, but are still lightly used
 Google Wallet led with an
18% adoption rate in
December 2014
 Apple Pay was used by
4% of US internet users

34. © 2015 eMarketer Inc.
Recap: Mobile conversions increased this
holiday season because …
 More mobile shoppers and buyers
 Better interfaces
– Bigger screens
– More responsive design
– Easier payment options

35. © 2015 eMarketer Inc.
Trend #2:
Better integration between
digital and offline shopping

36. © 2015 eMarketer Inc.
Consumers
have
integrated
their online
and offline
shopping

37. © 2015 eMarketer Inc.
Consumers expect seamless integration
between online and offline shopping
“ Mobile has evolved to become the remote
control for … the in-store experience of a
brand. Consumers expect that the mobile
[app] that a retailer or brand is offering
them can help them navigate the store
experience, and can help them do so in a
personalized way.”
—Maya Mikhailov, co-founder and EVP of client
strategy at GPShopper

38. © 2015 eMarketer Inc.
Consumers turned to mobile on Black Friday

39. © 2015 eMarketer Inc.
Most successful retailer apps anticipated
customer journey in the store

40. © 2015 eMarketer Inc.
Mobile
generated more
than 50% of
website traffic
for some big US
retailers in
December 2014

41. © 2015 eMarketer Inc.
Email was one of the best ways to reach
consumers on the go in holiday 2014
“ The key to winning this holiday
season, at least as far as online
shopping goes, was using email
marketing effectively.”
—Netta Kivilis, head of marketing at Custora

42. © 2015 eMarketer Inc.
Email generated a larger percentage of holiday
season digital sales in 2014
 Up 1.7 percentage points
for the season overall
compared to 2013
 During the Thanksgiving
to Cyber Monday period,
email drove 23.1% of
sales—top among
marketing channels

43. © 2015 eMarketer Inc.
Trend #3:
Improved fulfillment
boosted ecommerce

44. © 2015 eMarketer Inc.
Holiday 2013: Missed deliveries made headlines
 Midwest snowstorms hit
FedEx and UPS hubs
 Roughly 33% of major
etailers tracked by Stella
Service missed deliveries
 UPS delivered only 83% of
holiday express packages on
time, according to Shipmatrix
Image source: Shutterstock

45. © 2015 eMarketer Inc.
Fulfillment problems were largely eliminated
during the 2014 holiday season
98%
of holiday express packages arrived on time
Source: Shipmatrix

46. © 2015 eMarketer Inc.
In-store pick-up increased in 2014, but retailers
still lag behind consumer interest
“ Buy online and pick-up
in-store is growing, which is
good, although it’s not
growing as fast as it should.
… Consumers are demanding
it more than retailers are
providing it.”
—Ken Burke, CEO of MarketLive

47. © 2015 eMarketer Inc.
Trend #4:
Online shopping calendar
spreading out

48. © 2015 eMarketer Inc.
During the
2014 holiday
season, free
shipping
offers peaked
in early
November

49. © 2015 eMarketer Inc.
Holiday 2014’s online shopping surge was
earlier, spurred by big discounts
 Steepest
discounts on
Thanksgiving
(Nov. 27)
 Discounts on
Monday and
Tuesday before
Thanksgiving
exceeded Cyber
Monday

50. © 2015 eMarketer Inc.
Biggest online
shopping day
was still
Cyber Monday,
but gap
between it
and Black
Friday shrank

51. © 2015 eMarketer Inc.
Biggest sales increase of 2014 holiday season
was during weekend of December 20–21: 36%
 Increased in-store pick-up
 Later shipping cutoffs: Zappos, Apple and Nordstrom all
had December 23 shipping cut-off dates
 Extended free shipping: Amazon and Barnes & Noble
offered free shipping into Christmas week

52. © 2015 eMarketer Inc.
Takeaways
In 2014:
 US retail ecommerce sales grew 16.0% year over year
 More mobile shoppers, bigger screens and better interfaces
combined to increase the impact of mcommerce
 Email played an increasingly important role in holiday
marketing
 Fulfillment improved
 The digital holiday season spread out
In 2015, US ecommerce sales are expected to rise 14.4%

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57. © 2015 eMarketer Inc.
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Yory Wurmser
Lessons Learned from Holiday
Shopping 2014 — What You Need
to Know for 2015
 Holiday Shopping Preview
 Omnichannel Trends 2015: Mobile Is the New Retail Hub
 Mobile Apps vs Mobile Browsers: How Usage, Ad Spending
and Mobile Commerce Sales Differ by Channel
 Mobile Commerce Deep Dive: The Products, Channels and
Tactics Fueling Growth