2012 Internet Sales Trends

Michael Healey , President
Yeoman Technology Group
800-667-6098
mhealey@yeomantechnologies.com

©2012 Yeoman Technology Group – All rights Reserved – www.yeomantechnologies.com

Overview

Core Internet Trends

Major Trends by Channel

Q&A


Provide consulting, research, and channel
management services
Multi-Channel Distribution Approach
Focus on entire web
Segment into ‘channels’
Match customer buying patterns
Internet focus is on Sales, not Marketing
Rely on usage statistics to support any
assumptions


Direct
E-Tailer
8% 4% Bid
15% Supply
Referral
32% 29% Social

12%

Source: Yeoman study of US Dept of Commerce, Internet Retailer, IDC, & Gartner stats for product sales to
consumers, businesses, and institutions. Overlap between channels has been removed.

2011 US Internet Revenue - $575b. Does NOT include Ad/App related revenue.

Manufacturer
or Publisher

Distributor Partners Direct

Sales Team /
Retail OEM Consultant
Catalogs


Direct

ETailers

Manufacturer

Bid

Distributor Partners Direct
Supply
Chain

Retail OEM Consultant Sales Team
Referral

Social


2011 Global average speed increased 23% to 2.1 Mbps


Total Internet visitor growth rate slowed but usage increased (more time
online)
US growth slowest
Global visitors rising rapidly
Major sites across all categories outpaced overall growth
Major traffic consolidation trends continue

Source: Compete Web Data 2010-2011


Major Supply Referral /
Bid / Social
Direct Chain
E-Tailers Auction Associated Centric
Systems

There are groups of distinct sites and systems. Each has their own group of
competitors, sites, and systems. They ARE NOT searchable or accessible from one spot.


100

90
Go online
80
Use Social
70 Networking
Use IM
60
Use Email
50
Use Search
40
Get news
30

Buy Prodcuts
20

Bank online
10

Rate things
-
Millennials (18- Gen X (34-45) Younger Boomers Older Boomers Silent Generation
33) (45-55) (55-64) (65-73)

Time on social networks now surpasses time on search portals

Source: Pew Internet Trends Data: 2006 - 2011

Steady rise in 60
adoption, even with the 50
40
economy 30
Cost is the major factor 20 2009
2010
Steady increase in 10
0 2011
services and functionality
2012
NOTE: Usage is higher
when asked about
specific usage of cloud

Base: 4 year trend from IW surveys 2011-2012

Data: InformationWeek Analytics State of Cloud Computing Survey of business technology
professionals


Really just the evolution of
the core computing to Utilities
leverage:
Public Internet backbone
Distributed computing power / Backup Functionality
Virtualization
Multi-tenant architecture Raw

Classic economies of scale Security
•Database Computing
•Programming

and scope
Finished
Value and technology now •Application CPU Storage
•Suite
make sense for business Monitor
ing

KEY POINT: Moves internal
activities online

Good News Bad News
Continued heavy Will continue to
investment by Internet dramatically increase traffic
vendors and bottlenecks
More competition and Sales/distribution centric
lower prices vendors may lose focus on
More integration of primary business
Internet centric activity by The ‘cloud’ will still have
the core business outages, poor planning will
hurt business
Retail sites were already heavily cloud based but it is expected that most will abandon
internal or private hosting and go to cloud. 40% of Top 100 retailers currently leverage
cloud based hosting. (Compuware research)


• Continued “Consumerization” of all Direct
Internet transactions (including B2B)
• Users are expecting a consumer-like ETailers
experience for a business transaction
• Expect speed and content Bid

• Will access via any device
• Continued influence of reviews and ratings Supply
Chain
• Major challenge of ‘rogue’ product
information online Referral

• Cannot rely on downstream channel or
assume customers ‘are ok’ Social


• Google/Bing changes: Will have
updated search and pay models that Direct
will require revisiting of strategies
100%
ETailers
90%

80%

70% Bid
60%

50% 2010* Supply
40% 2011 Chain

30%

20% Referral
10%

0% Social
Search Social Email Referral Ads

“How have you found a site in the last 12 months?”
Forrester Dec 2011 Results - Summarized


US Search Engine Market Share
It’s a Google vs Microsoft 70
world 60
Core Bing engine now holds 50
30% of market 40
30
Major changes in Google 20
engines coming in 2012 10
Retooled results
0
Faster ‘instant’ Googl
Bing Yahoo Ask AOL
e
Rebound from slagging
revenue Nov-10 66.2 11.8 16.4 3.6 2
Nov-11 65.6 14.8 15.2 2.9 1.5
EXPECT ad biasing
Source: Comscore Historical Rankings

• Amazon Influence Continues: 35%
growth in Q4 2011 and a model to Direct
invest heavily in cloud and tablets.
Expect: ETailers

• More marketplace models
• More pressure on traditional retailers Bid

• Amazon will continue to push into
industrial and other channels Supply
Chain
• Major pressure on epub world
Referral

Social


Major players had big gains
Amazon led
EBay rebounded
Wal-mart rising
Marketplace model moving towards new norm
Sears, Buy, Best Buy, B&N, Etsy, Ecrater,


• FaceBook IPO will disrupt market as
the company will face new pressure to Direct
produce revenue:
• Difficult to prove ROI with existing ETailers
campaign
• Most valuable info stretches limits of Bid
privacy
Supply
Chain

• Will likely spur more Social Commerce
Tests Referral

Social


• Likely some major rules which will
impact all sales Direct

• Privacy Rules – EU will be first ETailers

• Copyright – US measure ‘tabled’ but not Bid

going away
Supply
Chain

• Tax Changes – Compromise plan may be
worked out this year Referral

Social


• Continued ‘roll up’ of sites/platforms
under one owner. Seen in all arenas Direct
(search, ecommerce, news, etc)
• Will limit the way users buy – restricting ETailers
flow between properties
• Manufacturers push harder in all channels Bid

• Largely unregulated and misunderstood
• Global Supply
Chain

Referral

Social


• Reset for Mobile Commerce: Retooled
for tablets Direct

• Niche sales opportunity with smart phones
• Low price point items ETailers
• Tickets, services, music, and apps dominate
• Little to no use for epub or higher ticket items
Bid
• Tablets change discussion
• Better form factor Supply
• Easier to use Chain

• Will provide a major boost for electronic
publications revenue growth Referral

• NOT the same site design Social


Mobile E-Readers
Heavy usage among adults Web based functionality at
83% of adults have cell phone low price point
(42% classified as “smart”) Strong correlation with
Ecommerce revenue digital publication sales
lacking except Usage small (<12% US
Tickets, Services Adults) but growing at rates
Music similar to games and smart
Apps / Games phones
Growing usage as
‘comparison’ shopping tool
Appx 20% used for price
review while in retail store*

Interesting note – average search length is 2.54 on mobile, 2.6 tablet, and 2.65 on desktop

• Reshaping of the referral site
landscape Direct

• Product details published freely to Google
• Decline of ‘shopping’ listing services ETailers

• Rise of ‘Groupon’ style services
• Continued growth of affiliate Bid

Supply
Chain

Referral

Social


• Steady decrease in visits and revenue.
• Flat to declining growth across market Direct

• eBay’s rebound is not from bids
• Finance / PayPal and as etailer with large set of ETailers
new products (aka marketplace)

Bid

Supply
Chain

Referral

Social


• Solid growth in online bid and RFP movement
• Overall volume up 22% in 2011 Direct
• City/Town and Mid-market provided
growth ETailers
• Rise of several niche players
• Major players are pushing for new revenue Bid
sources
• Sterling rolled into IBM Supply
Chain
• Ariba’s marketplace has lackluster launch
• Onvia still in turn-around mode Referral

• There are now 100+ viable players with
presales B2B transaction information. All Social
restrict traffic between each other.


Identify Customer Behavior Patterns by Channels
Presence – Are they there?
Propensity – Are they there with a potential to buy (or be influenced)?
Purchase – Is there evidence of purchasing behavior?
Where are you?
Direct
Downstream channel or partner
Absent (By Choice, By Mistake, By Accident)


2012 Internet Sales Trends

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