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Resource Interactive’s tenth annual qualitative
                 review of the online holiday experience.




Holi S P E C I A
    day          L FO
 Ten- Gifting C U S :
     Year           T
          Retr rends a
                  osp
                      ectiv nd
                           e
INTRODUCTION


                                                                                                                                                      How time flies. This year a
                                                                                                                                                      Resource Interactive e-retail
                                                                                                                                                      team stepped out into the field
                                                                                                                                                    to evaluate the holiday season e-commerce
                                                                                                                                                    experience for the tenth year in a row. With a
                                                                                                                                                    decade of hindsight, our multidisciplinary team
                                                                                                                                                    of researchers audited 50 top online retailers.
                                                                                                                                                    This study of the 006 holiday season spanned
                                                                                                                                                    seven weeks, and involved hours of site browsing,
                                                                                                                          product selecting, purchasing, contacting customer service and visiting
                                                                                                                          brick-and-mortar counterparts.

                                                                                                                          So what did we find? Online retailers ushered in the season by elevating
                                                                                                                          holiday gift guides, trumpeting cross-channel buying options and coming
                                                                                                                          out from behind the shadows of their offline counterparts. Cyber Monday
                                                                                                                          officially moved from industry term to consumer speak, and had the
                                                                                                                          promotional fanfare to prove it. By the week after Thanksgiving, we were
                                                                                                                          already getting “Last Chance for Holiday Savings” emails—setting a tone of
                                                                                                                          urgency for the season.

                                                                                                                          While a few years ago many web sites acted like digital versions of stores
                                                                                                                          or catalogs, this year they leveraged the channel and realized opportunities
                                                                                                                          all their own—much to consumers’ benefit. From sites that integrated the
                                                                                                                          product assortments of multiple brands for one-stop-shopping convenience
                                                                                                                          to product pages that let consumers examine the goods as if they were
                                                                                                                          actually holding them, traditional e-commerce barriers fell away.

                                                                                                                          Although brick-and-mortar retailers continued to edge out pure players in
                                                                                                                          the race for online sales supremacy, the continuously innovating
          Introduction  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 3           Amazon.com proved the exception with four million orders placed on
          Gift Guidance  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 4             December 11—breaking its previous sales records.
          Today Only . . .Until Tomorrow  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 8
                                                                                                                          Brands that tapped into their internet potential fueled a season that saw
          Smoother Channel Surfing  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 12                                  online sales climb to $.1 billion—6% more than 005, according to
          A Shift in Control  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 16                   comScore Networks Inc., and more than twenty times the $1.1 billion BCC
          Learning to Leverage  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 20                          Research (formerly Business Communications Company, Inc.) reported in
          Retrospective  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 21
                                                                                                                          1997, the year of our first study.

          Memory Lane  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 26




SPECIAL FOCUS: Holiday Gifting Trends
      ©007 Resource Interactive. All rights reserved.                                                               SPECIAL FOCUS: Holiday Gifting Trends and Retrospective
most likely for future purchases. Based on personality cues, Sephora’s
                                                                                               Fragrance Finder helped customers find a unique and personal gift by
                                                                                               navigating fine fragrance notes. Toys “R” Us’ Toy Guide for Differently-
                                                                                               Abled Kids explained how individual toys work, and what skills they
                                                                                               help children develop.

                                                                                                 Beyond gift ideas, retailers continued to offer shoppers a way to give
                                                                                                 back, announcing that a portion of proceeds would go to a worthy cause.
                                                                                                 More retailers became virtual middlemen for taking and delivering




01 GIFT GUIDANCe
                                                                                                 customer donations, with one-third of the sites we reviewed making
                                                                                                 philanthropic gestures. Williams-Sonoma solicited help for St. Jude
                                                                                                 Children’s Research Hospital through a link on its homepage. JCPenney
                                                                                                                                                  donated a portion of
                                                                                                                                                  its proceeds to an
                                                                                                                                                  after-school program.
                  Gift guides were in full force—on homepages, in navigation                                                                      Target’s online Angel
                  and emails. But while the ideas were plentiful, points of view                                                                  Giving Tree was a
                  were not. Rather than showcase their expertise, retailers                                                                       partnership with The
                  repackaged lists of “best sellers” or “what’s hot.” And                                                                         Salvation Army—an
                  while Amazon.com shoppers could browse by products                                                                              organization whose
                  with the most popular customer-created tags, few other                                                                          banishment from Target’s
                  brands leveraged customer favorites or their own research,                                                                      storefronts (honoring a
                  experience and insight to help shoppers find gifts for the                                                                      corporate no-solicitation
                  hard-to-buy-for. Among the standouts, Anthropologie’s                                                                           policy) brought
                  thoughtfully bundled cross-category gifts for “The Snow              Giving back: TARGET.COM                                    controversy back in 00.
                  Bunny,” “The Homebody” and “The Globetrotter” invited
                  exploration. Crate and Barrel’s “This and That” paired
                  complementary items for a well-rounded gift, but was                                  AMAzOn’S GIFT ORGAnIzER
                  removed from the site before the season was in full swing.                            One of the latest
                  Borders’ GiftSquad offered helpful suggestions— if only                               innovations from
                  the animated instructions that accompanied the experience                             Amazon.com was the
                  could have been skipped on repeat visits.                                             merging of multiple
                                                                                                        functionalities to help
                  Kudos to retailers that helped consumers shop outside their
                                                                                                        customers give during
                  comfort zones and beyond what’s familiar. Gifts for “the
                                                                                                        the holiday season
                  cook,” for example, are nice in theory, but customers not
                                                                                                        and beyond. By
                  culinarily-inclined needed a bit more help choosing between
                                                                                                        keeping track of not
                  a panini press and a griddle. Brands like Giggle and
                                                                                                        just what customers      A gift history hub: AMAzOn.COM
                  Gifts.com that suggested not just what to buy, but why
                                                                                                        are purchasing, but
                  to buy it increased shopper confidence this season, and
                                                                                                        whom they’re buying for and why, Amazon.com took steps
                                                                                                        toward a truly intelligent—and useful—gift guide.

SPECIAL FOCUS: Holiday Gifting Trends                                                 SPECIAL FOCUS: Holiday Gifting Trends                                              5
GIFT GUIDANCe


                REPACkAGEd nAvIGATIOn
                Any site that showed its everyday global navigation in green and                       Fruitless Searches
                red type, and called that a gift guide (you know who you are) gets                     While some shoppers go online with specific brands in mind, others
                our Blind Spot vote. There were so many we stopped counting.                           might only know that they want the season’s popular argyle sweater.
                                                                                                       Without the brand recall to go directly to a retailer’s site, these
                                                                                                       customers relied on search engines to lead the way. Unfortunately,
                                                                                                       because many of the best (and biggest) retailers didn’t put much
                                                                                                       effort into global search engine optimization, shoppers went where
                                                                                                       search engines took them—not necessarily where they needed to
                                                                                                       go. With nearly 7 billion searches being conducted every month in
                         HELP FOR THE HOLIdAYS                                                         the US, having a well-optimized site is now virtually a requirement for
                                                                                                       selling anything online.
                     As holiday online traffic increases overall, so does the                          We found that less than half of the retailers we measured were
                     number of new customers visiting your site . Some might                           implementing search optimization at a best-practice level, and
                     be new to your brand; others might be new to your                                 several retailers had significant barriers that stopped search engines
                     merchandise category . Just as you train seasonal store                           from indexing their product pages:
                     associates differently, you must also guide seasonal                                 Many retailer sites used highly-dynamic URLs that were not
                     customers differently . A gift guide needs to go beyond                               search friendly, causing product pages to be unindexable
                     product suggestions, and include confidence-building                                  by engines.
                     input to encourage these shoppers to buy .                                           While retailer product pages often had descriptive copy, there was
                                                                                                           often very little keyword-rich copy on home, landing or category
                                                                                                           pages. Paired with the dynamic URLs mentioned above, this left
                                                                                                           little usable copy for search engines to rank against.
                                                                                                          Page titling, an important aspect in ranking algorithms used by
                                                                                                           search engines, was frequently an issue.
                                                                                                       Who got it right: Bluefly and L.L.Bean used page titling to its
LOOkInG BACk: OUR 2003 HOLIdAY STUdY                                                                   fullest. Bluefly often included sale information in the title, and
While today gift guides are a holiday mainstay, it was as recently as 00 that                        L.L.Bean used highly descriptive titles that were frequently
                                                                                                       updated. Who didn’t: American Eagle used very short page titles
e-retailers first embraced the challenge of helping consumers find the perfect gift.
                                                                                                       that often lacked effective keywords and were not descriptive of
                                                                                                       page content. Anthropologie employed the exact same title for
                                                                                                       every page, missing a critical opportunity to provide accurate,
                Many more sites featured gift finders, guides                                          keyword-rich page descriptors for products.
                or idea sections this year, and with increased                                         Recent data from competitive intelligence service Hitwise concludes
                categorization… Too many sites focused on                                              that one out of every four visits going to a shopping site originated at
                elementary segmentations—namely gender—                                                a search engine. Without proper search optimization, the opportunity
                often leaving consumers to click through a                                             to reach a potential customer can be lost.
                mass of generic “gifts for her.”
                                                                                                       WE LOOkEd FOR:
                	         	        					—	E-Commerce	Watch	2003                                           9 Descriptive titles                    9 Meta data
                                                                                                          9 Search-friendly product pages         9 Keyword-rich copy


SPECIAL FOCUS: Holiday Gifting Trends                                                  6   SPECIAL FOCUS: Holiday Gifting Trends                                                  7
L.L.BEAn’S HOLIdAY COUnTdOWn CALEndAR
                                                                                                                                        L.L.Bean treated shoppers to
                                                                                                                                        a new gift suggestion on its
                                                                                                                                        site each day. While some daily
                                                                                                                                        messages announced promotions,
                                                                                                                                        other recommendations were just
                                                                                                                                        that—thoughtfully selected, can’t-




0                  TODAY ONLY...
                                                                                                                                        miss gift ideas.



                    UNTIL TOMORROW
                     At the peak of the holiday season, more than one-third of the
                     retailers in our study reached out to customers every  hours.                      Daily dose: L.L.BEAn.COM
                     Daily contact marked online retailers’ bold attempt to shift
                     consumers’ habits. Formal programs such as Bluefly’s “Steal-
                     a-Day” and Lands’ End’s “1 Gifts of Christmas” promoted
                                                                                                          SHOO, FLY!
                     habitual site visits. Unfortunately, when combined with urgent
                     “Last Chance” emails, it created unwanted angst about getting                        Frequent emails are the norm for discount designer goods
                     the best deal.                                                                       retailer Bluefly. But patience and trust wore thin when daily
                                                                                                          offers became difficult to distinguish from one another without
                                        Some sites used this increased frequency                          poring over a paragraph’s worth of fine print. With the seemingly
                                        to offer inspired suggestions, but far more                       random promotional cadence, we never knew when to buy…and
                                        common—and less enjoyable—were ever-                              therefore, never did.
                                        changing shipping and sales promotions.
                                        Overall, this strategy was novel, but everyday
                                        deals aren’t on brand for every retailer. The
                                        usually elegant gift site RedEnvelope tarnished
                                        its brand image with highly promotional
                                        emails—nearly 1 days in a row.




                                                                                                          Big gamble: BLUEFLY.COM
Inspiring daily gifts: FREEPEOPLE.COM




SPECIAL FOCUS: Holiday Gifting Trends                                                    SPECIAL FOCUS: Holiday Gifting Trends                                           9
TODAY ONLY...UNTIL TOMORROW



                         PLAY FAIR                                                                         Detouring Traffic Jams
                    Customers are savvy enough to realize that promotions                                  Perhaps it should go without saying, but you can’t make
                    increase and prices go down as the season progresses .                                 money if customers can’t get into your online store. Yet
                    So not only will they spot a misused sense of urgency                                  several of the 50 we audited—including Wal-Mart, Apple,
                    when you insist “Today Only!” when tomorrow’s deal                                     Urban Outfitters and Macy’s—experienced outages on
                    is better, they’ll also stop trusting you as well . Instead,                           easily predictable high-traffic days. Amazon.com screeched
                                                                                                           to a halt at precisely the day and minute it had invited us to
                    inspire customers with key items or promotions that
                                                                                                           purchase one of the 1,000 Xbox 60 game consoles at the
                    encourage purchase, not make them fearful to do so .                                   “Customer Vote” price of $100.
                    Even better, tell them what the rules of the sale are . And
                    if price adjustments are available for online purchases,                               Technical difficulties even crossed channels. One Resource
                                                                                                           Interactive researcher tested Circuit City’s “-minute
                    disclose details for how to get them .
                                                                                                           in-store pickup” on Black Friday only to find out upon
                                                                                                           arrival that the store systems were “four hours behind the
                                                                                                           internet.” Too late to wait on her television for Friday’s big
                                                                                                           game, she cancelled the order, forfeiting the free gift card
                                                                                                           that was part of their guarantee.
LOOkInG BACk: OUR 1998 HOLIdAY STUdY                                                                       Want more motivation? As we draw closer to a time when
                                                                                                           shopping via mobile device will be as second nature as
The abundance of promotions from e-retailers this year—with so many daily                                  purchasing off our laptops, the need for effective web
emails and updates—is in sharp contrast to their cautionary approach of 199.                              traffic forecasting tools is critical. Leading the charge to
                                                                                                           mobile will be Digital Millennials*—Gen Y, tech-savvy
                                                                                                           shoppers who don’t just expect instant gratification, they
                The holiday shopping season had little                                                     demand it. Sites that have traffic under control will reap
                                                                                                           the benefits of those disposable incomes, and will be light
                promotional activity. Most online merchants                                                years ahead of those retailers still refusing to plan.
                were already overwhelmed by volume and
                didn’t want to overload their systems during
                the most critical time of the year.
                	         	        			—	E-Commerce	Watch	1998




                                                                                                                        Used humor to soothe disappointed customers:
                                                                                                                        URBAnOUTFITTERS.COM

                                                                                                                        *Learn more about digital Millenials at www.resource.com.




SPECIAL FOCUS: Holiday Gifting Trends                                              10   SPECIAL FOCUS: Holiday Gifting Trends                                                       11
Several retailers used their cross-channel connections to increase
                                                                                              customer convenience. Notably, Crate and Barrel announced that same
                                                                                              day in-store pickup was a phone call away, while Circuit City positioned
                                                                                              “ Ways to Buy” prominently in emails. And Bath  Body Works’ Black
                                                                                              Friday promotion seamlessly integrated a Resource-created email blast
                                                                                              with its web site focus, in-store marketing and television ad. In our work
                                                                                              with Wal-Mart, we created online advertising to promote “secret”




0
                                                                                              in-store deals that were unveiled only online. This program helped

                   SMOOTHeR                                                                   Wal-Mart claim the top spot for online traffic on both Thanksgiving Day
                                                                                              and Black Friday.

                   CHANNeL SURFING
                    More brands than ever before reached out across channels to
                    their brand counterparts. Homepages touted multiple ways to
                    shop. Sister brands promoted one another. Web sites supported
                    in-store promotions. It wasn’t perfect, but it was progress.

                    Gap Inc.’s family of brands cross-promoted each other online
                    and in bouncebacks. Although a lackluster execution, Sears
                    Holdings Corporation brought together the combined
                    product selections of its Sears, kmart and Lands’ End brands
                                                                                              In-store specials, revealed online: WALMART.COM
                    for one-stop shopping. Crate and Barrel, which also promoted
                    sister home décor brand CB2 on its homepage, perhaps said it
                    best by inviting shoppers to “Think of [sister site The Land of           While many online venues gave shoppers great reasons to visit their
                    nod] as Crate and Barrel for kids.”                                       brick-and-mortar destinations, few offline stores returned the favor by
                                                                                              sending customers to their sites. Promoting a channel that offers the
                                                   Best Buy perfected its online-             convenience of expanded inventory combined with reduced waiting
                                                   offline connection with a web              seems obvious this time of year.
                                                   site tool that appeared during
                                                   its online Thanksgiving Day                Another benefit of driving traffic online is that even when the store is
                                                   sale, and facilitated Black                closed, the site is still open. Promotions for Thanksgiving Day specials
                                                   Friday shopping in-store.                  kept consumers busy through dessert. After presents were opened,
                                                   victoria’s Secret PInk used                shoppers on Christmas Day were lured online when visions of early sales
                                                   homepage real estate to send               danced in their heads. Retailers including Best Buy, victoria’s Secret
                                                   customers to stores for a                  and Eddie Bauer quenched the thirst for a deal, and helped customers
                                                   limited-editionT-shirt.                    spend their shiny new gift cards.

Promoting the big sale: BESTBUY.COM




SPECIAL FOCUS: Holiday Gifting Trends                                            1   SPECIAL FOCUS: Holiday Gifting Trends                                             1
SMOOTHeR CHANNeL SURFING


                GAP InC.’S CROSS-PROMOTInG GIFT CARdS
                Not every multi-brand                                                                         CHAnnELInG COnSISTEnCY
                company has a customer
                                                                                                          More and more retailers have discovered the benefits
                that shops more than
                                                                                                          of driving customers online, yet there is monumental
                one of its divisions.                                                                     progress to be made when retail store executives are
                Companies that do can                                                                     still viewing their own web site as a competitive threat .
                benefit from making                                                                       If the only option to promoting your site is a window
                cross-brand shopping                                                                      sticker in stores announcing “Shop Online 24/7,” then,
                easy. each Gap division                                                                   yes, sales may be the only thing customers think your
                offered gift cards (both                                                                  site is good for . It takes broader thinking to embrace the
                brand-specific and                                                                        fact that sales goals should transcend channels . Ideas,
                multibrand) for each of                                                                   inspiration, comparisons and product information are all
                its three big sites—Gap,                                                                  tools customers can use online before making a purchase
                                                                                                          in store . With Jupiter Research estimating that by 2011
                Banana Republic and
                                         Pick a card: OLdnAvY.COM
                                                                                                          nearly half of all U .S . retail sales will be transacted online
                Old navy. Available all
                                                                                                          or influenced by internet research, a united front across
                season long, and done perhaps in an effort to boost lagging sales,                        the entire business will allow channels to complement
                the transparency meant convenience for the cross-brand customer.                          each other, not compete .


                WILLIAMS-SOnOMA’S WRAP UP
                Williams-Sonoma stores delighted customers with several pre-
                wrapped items for ready-to-give convenience. Online, however,
                                                                                     LOOkInG BACk: OUR 1999 HOLIdAY STUdY
                the same items would have cost a $5 premium to look as nice.
                That lack of consistency was frustrating, especially when one        The sophistication of today’s multi-channel experience demonstrates that
                channel set the bar high, and another failed to clear it.            traditional retailers (those who started out as a store or catalog) have expertly
                                                                                     reclaimed the edge they lost early on to nimble pure players—Internet-only shops.


                                                                                                     This holiday, the six best total online shopping
                                                                                                     experiences were delivered by Internet-only
                                                                                                     retailers, displacing retail industry behemoths
                                                                                                     such as Walmart.com, disneyStore.com,
                                                                                                     nike.com, and Toysrus.com.
                                                                                                                             —	E-Commerce	Watch	1999


                Wrapped and ready: WILLIAMS-SOnOMA.COM




SPECIAL FOCUS: Holiday Gifting Trends                                           1   SPECIAL FOCUS: Holiday Gifting Trends                                                   15
the lines of communication open. Customers disappointed with the
                                                                                                   promotion were free to leave comments saying so, without diminishing
                                                                                                   the program’s popularity.

                                                                                                   Another important consumer control came in the form of product views,
                                                                                                   and the retailers who get it, got it big time this year. Eddie Bauer not only
                                                                                                   let consumers choose multiple views, but edited available views by product




0 A SHIFT IN CONTROL
                                                                                                   at the index page level, anticipating what customers would want to see.
                                                                                                   When customers rolled over dresses, the images transformed to show the
                                                                                                   back view. When browsing T-shirts, shoppers could preview the available
                                                                                                   color range. Newcomer shoe retailer Piperlime’s thoughtful array of shoe
                                                                                                   views (matched only by the post-holiday launch of Amazon.com venture
                                                                                                   Endless.com) made it easy to forget the computer screen that stood
                                                                                                   between customers and the adorable patent leather platforms.
                   The baseline for the customer experience has increased
                   dramatically in ten years of E-Commerce	Watch studies.                                                               Consumer-generated product
                   Consumers went from asking retailers whether they could pay                                                          reviews moved beyond electronics-
                   online to asking themselves which payment option they’d prefer.                                                      related sites to become a key
                   In addition, customers can now determine when to ship orders,                                                        decision-making feature. Macy’s
                   and—in some bold instances—which items go on sale.                                                                   even offered an incentive to leave
                                                                                                  Rating apparel: MACYS.COM             feedback with a sweepstakes entry.
                     Amazon.com pioneered with its “Customers Vote” campaign,                                                           evolving its everyday capabilities,
                     which let shoppers vote on their favorite of four items to                   Amazon.com’s flexibility to allow readers to rate, sort and verify ratings
                                                             be promoted at a                     upped the trust and relevance of feedback substantially. Unfortunately,
                                                             shockingly low price,                while cross-category product selling, mobile marketing, customized gifts
                                                             for later purchase.                  and RSS feeds were forecasted in years past to become highlights, all
                                                             Interestingly, it shifted            lacked prominence this year, leaving customers with fewer unique options.
                                                             to an experience that
                                                             lacked control, as the                Viral campaigns invited us to stay, play and pass it on, although in the
                                                             number of users trying                case of Office Max’s 0 unique microsites, felt like more of a distraction
                                                             to buy the chosen item                from the fact that the brand didn’t have much else to promote.
                                                             crashed the site. In the              (Although we will admit to spending entirely too much time “elfing”
                                                             end, it was quite literally           ourselves with the photo-on-a-dancing-elf animation.)
                                                             a game of chance,
                                                             with a lottery system
                                                             implemented to give
                                                             the lucky few the deal
                                                             of the season. However,
Rocking the vote: AMAzOn.COM                                 Amazon.com kept



SPECIAL FOCUS: Holiday Gifting Trends                                                 16   SPECIAL FOCUS: Holiday Gifting Trends                                               17
A SHIFT IN CONTROL



                         HAnd OvER THE kEYS
                                                                                                    Present Perfect
                     The line between internet-empowered consumers and                              In our first study ten years ago, we noted that online gift wrap
                     the companies they interact with has blurred . Moving                          options were limited, and a decade later not much has changed.
                     forward the most successful companies will be those                            While in the years in-between, customers were offered multiple
                     that share brand ownership with their consumers . In fact,                     gift wrap options, this year choice was once again limited. Crate
                     many consumers already interact with brands on a variety                       and Barrel went back to classic black and white, after offering
                     of levels—sanctioned or not (like SlaveToTarget .com, a                        more colorful choices last year. Target opted for silver. No one
                     blog created and run by customers) .                                           gave shoppers a meaningful choice of gift wrap—not even those
                                                                                                    retailers who readily offered up a dozen or more gift card designs.
                     Opening the brand to customers can be as simple as
                                                                                                    Ten months out of the year, we’re inclined to agree with the
                     frictionless transactions and alternate payment options
                                                                                                    operational decision to limit gift wrap. But at this business-critical
                     or as complex as consumer-generated media and                                  time of year, a choice may be in order. While RedEnvelope’s
                     crowdsourcing . Openness is something brands must                              classic red box and white bow is appropriate for the holidays and
                     understand, embrace and leverage . In Open Branding,                           beyond, Amazon.com’s light green paper felt more like spring.
                     our latest Thought Leadership initiative and forthcoming                       And if all other control-enhancing tactics are logistical nightmares,
                     book (Summer 2007), we examine the benefits of being                           moving the gift message from the packing slip (as seen with
                     an open brand and the pitfalls of being closed, and lay out                    Urban Outfitters and Piperlime) to a gift enclosure would be a
                     a strategic framework for how to engage the consumer .                         tremendous (and long-overdue) start.




LOOkInG BACk: OUR 1999 HOLIdAY STUdY
Control has long been a theme in analyzing the online customer experience, but
while customers today expect to influence their shopping trip from start to finish,
in 1999 having control meant substantially less.


                  The best practices to date put customers
                  in charge of their online experience by                                           Seeing green: AMAzOn.COM
                  providing adequate opt-ins and opt-outs.
                  However, consumers should have the option
                  to purchase as a registered member or shop
                  anonymously without account information                                                                              Impressed with thoughtful embellishments,
                  being saved.                                                                                                         if not choices: AnTHROPOLOGIE.COM

                                        —	E-Commerce	Watch	1999




SPECIAL FOCUS: Holiday Gifting Trends                                              1   SPECIAL FOCUS: Holiday Gifting Trends                                                      19
LeARNING TO LeVeRAGe                                                                                        ReTROSPeCTIVe
                  So what’s next? While we saw some retailers trying new
                  things this season, the majority of sites we audited lacked true
                  originality—original content, offerings, tools and services. We
                  want to see brands take advantage and even push the limits
                  of technology to deepen customer relationships. We want to
                  be inspired, surprised and delighted in 007. Be the site your
                  customer is looking for.
                                                                                                            A decade ago, consumers were just beginning to
                  9 Take cues from the customers’ in-store experience.                                      dabble online via 2800-baud modems, Amazon .com
                      Consider rich internet applications (RIA) that allow for better                       was a bookstore and Google (well, googol) was just a
                      visualization and customization—bring the product to life.                            number . That was when Resource Interactive President
                                                                                                            kelly Mooney decided we should get smarter about the
                  9 Make the connection from search to store seamless.                                      opportunities for our clients to sell their products online .
                      Leverage search engines through keyword-rich copy and
                      relevant page titles.                                                                 Since then, we’ve spent thousands of hours browsing,
                                                                                                            buying, returning, calling and emailing . We’ve seen
                  9 Bundle thoughtful gifts, including cross-category items that
                                                                                                            e-retailers do it all . And we leveraged our learnings to
                      complement each other. even better, include a loadable gift
                                                                                                            educate associates, fuel Thought Leadership and guide
                      card with every purchase to encourage additional site visits
                                                                                                            our clients .
                      and provide customers with a convenient last-minute gift.

                  9 Allow customers to check site and store inventory levels.                               To commemorate a decade of brilliance and blunders,
                      If an item is available in store only, help shoppers find the                         we’ve highlighted hurdles the industry has cleared,
                      nearest store that still has it in stock.                                             snapshots that capture today’s online experience and
                                                                                                            innovations that will shape the blueprint for tomorrow .
                  9 Provide updates via RSS and even mobile communication                                   Like any good history lesson, we hope this leaves
                      for consumers willing to opt-in (likely your best and most                            you with a better appreciation of the past and an
                      loyal customers).                                                                     enlightened perspective on the future .

                  9 Don’t assume that an “abandoned” cart equals a lost
                      customer. Remind them of items left there, update them if
                      the price has changed and alert them when inventory is low.

                  9 Develop a comprehensive shopping experience for the
                      customer who visits only during the holidays, as well as the
                      one who is with you year ‘round.
                  Until next year, have a happy and prosperous new year!




SPECIAL FOCUS: Holiday Gifting Trends                                              0   SPECIAL FOCUS: Holiday Gifting Trends                                               1
ReTROSPeCTIVe



    One Brand,                                      Signs of Trust                                       Help is Here                                    Tell Me More
    Many Channels                                   Initially, fear and doubt kept                       FAQs. email forms. Toll-free                    Retailers’ desire for consumers’
    The importance of bricks versus                 consumers from buying online but                     numbers. Live chat. So many ways                personal information and the
    clicks continues to be debated,                 best practices for safe shopping                     for consumers to find answers.                  technology to collect and store
    but the reality, of course, is that no          made e-commerce an everyday                          And after a decade of asking,                   it has persisted over time. The
    matter how a company views its                  convenience.                                         we’re starting to get faster, more              value is in what retailers do with
    channels, customers see one brand.                                                                   relevant responses.                             the information.




                  When asked, “Do you
                  sell this item on your web                      The threat of credit card                            Customers waited  hours
                                                                                                                                                                       Retailers’ data collection
 THEn




                                                 THEn




                                                                                                      THEn




                                                                                                                                                      THEn
                  site?”, a store employee,                       fraud and identity theft                             to get a unique response
                                                                                                                                                                       efforts served their needs
                  with the brand URL                              were barriers to making                              to their email inquiries, if
                                                                                                                                                                       more than the consumer’s.
                  emblazoned on his shirt,                        purchases online.                                    they were answered at all.
                  offered a blank stare.



                                                                  SSL technology and
                                                                                                                                                                       Retailers encourage
                  While brand web sites are                       well-written, easy-to-
                                                                                                                                                                       consumers to share
                  starting to show evidence                       find company policies                                Live chat makes
 nOW




                                                 nOW




                                                                                                      nOW




                                                                                                                                                      nOW
                                                                                                                                                                       personal information by
                  of integration, stores                          ease shoppers’ minds,                                customer service faster
                                                                                                                                                                       using it to enhance and
                  and catalogs still do little                    while consumer                                       and more human.
                                                                                                                                                                       customize the customers’
                  reciprocal reinforcement.                       recommendations are a
                                                                                                                                                                       online experience.
                                                                  key trust factor.


                                                                  Transparent
 On THE HORIzOn




                                                 On THE HORIzOn




                                                                                                      On THE HORIzOn




                                                                                                                                                      On THE HORIzOn
                                                                  communication and                                    Specialized customer
                  Store employees will
                                                                  consumer-generated                                   service advisors—from the                       Brands anticipate
                  enhance the brand
                                                                  content—including ratings,                           brand or the community of                       consumers’ needs and
                  experience by taking
                                                                  reviews, testimonials                                shoppers—will be ready to                       become virtual personal
                  shoppers online to close
                                                                  and open forums—are                                  share expertise via email,                      shoppers.
                  (and save) the sale.
                                                                  the quintessential trust                             phone or chat.
                                                                  builders for online brands.




SPECIAL FOCUS: Restrospective                                                                      SPECIAL FOCUS: Retrospective
ReTROSPeCTIVe



    The Tools to Choose                             Giftable Cards                                      Follow-Through                               Measures of Success
    The web brought a world                         Moving out from behind their                        eager to sell online, but lacking            Since our first study in 1997, we’ve
    of options to consumers                         reputation as the I-don’t-know-you-                 basic fulfillment capabilities, brick-       seen e-commerce evolve from an
    everywhere—overcoming                           well-enough-to-buy-you-a-real-gift                  and-mortar retailers are now taking          unemotional, isolated transaction
    geographical boundaries. But                    stigma, gift cards have skyrocketed                 cues from catalogers to meet                 to a frictionless, inspiring and
    without the right decision support              in popularity and evolved into the                  consumers’ delivery expectations.            empowering experience that
    tools, more choice can also be                  highly sought-after present for the                                                              leaves consumers eager to
    more trouble.                                   holidays and beyond.                                                                             reconnect with a brand.


                                                                  Premiering online as
                  A single, static product                        paper certificates or
                                                                                                                      The shock of gifts not
                  view and a list of product                      e-codes, gift cards                                                                              Success was measured
                                                                                                                      arriving in time to get
 THEn




                                                 THEn




                                                                                                     THEn




                                                                                                                                                  THEn
                  attributes were all that                        were first available                                                                             by the number of new
                                                                                                                      under the tree—or at
                  customers were given to                         in predetermined                                                                                 customers and dollars
                                                                                                                      all—damaged brands’
                  distinguish one product                         denominations and                                                                                spent online.
                                                                                                                      credibility.
                  from another.                                   redeemable only in
                                                                  one channel.


                                                                                                                      Retailers provide
                                                                  Creatively merchandised
                  Sophisticated filtering                                                                             order-status updates                         Success is measured by
                                                                  and available in fun,
                  tools and multiple product                                                                          and tracking services                        dollars spent online with
 nOW




                                                 nOW




                                                                                                     nOW




                                                                                                                                                  nOW
                                                                  customizable formats, gift
                  views help shoppers                                                                                 to boost consumer                            consideration for customer
                                                                  cards can be redeemed,
                  narrow choices and sort                                                                             confidence and ensure                        satisfaction, interaction
                                                                  registered and reloaded in
                  through them.                                                                                       on-time—and even                             time and repeat visits.
                                                                  any channel.
                                                                                                                      early—deliveries.
 On THE HORIzOn




                                                 On THE HORIzOn




                                                                                                     On THE HORIzOn




                                                                                                                                                  On THE HORIzOn
                                                                                                                      Retailers offer more                         Success will be measured
                  Ongoing two-way                                 Retailers will include                              consumer choices for                         by the quality of the
                  dialogues between                               loadable gift cards                                 delivery, including                          experience, the degree to
                  brands and consumers will                       with purchases to                                   scheduled ship dates,                        which consumers interact
                  result in the option to view                    provide additional,                                 in-store pick-up options,                    with and impact the brand,
                  tailored assortments.                           instant gift options.                               and hassle-free, cost-                       and the web’s contribution
                                                                                                                      free returns.                                to overall sales.




SPECIAL FOCUS: Retrospective                                                                      SPECIAL FOCUS: Retrospective                                                                5
MeMORY LANe...


     The interactive world has come a long way.
     And we’ve been here through it all. Our favorite
     moments from over the years are plentiful, but here are just a few highlights
     (or mishaps) for your added enjoyment. Cheers to ten more amazing years
     of studying, influencing and improving the e-commerce experience!




  YOUR InBOx                   CLOSEd                     WASTEd TIME:                   dOn’T MISS                   EARPLUGS PLEASE:        PAUSE-And-PLAY:
  IS FULL:                     CHECkOUT LAnE:                                            A dETAIL:
                                                          jcrew.com (‘99)                                             Amazon.com gave         Best Buy, L.L.Bean
  American Greetings           Using the back             and Blue nile (‘00)            eToys.com offered            toy buyers fair         and Gap incorporated
  sent us an individual        button during              failed to remember             the appropriate size         warning by providing    the same “save for
  email confirmation           Lands’ End checkout        account info upon              batteries for selected       noise samples .         later” convenience
  for each and every           emptied our                return visits .                toys at checkout .                                   that we fell in love
  item in our order.           shopping cart .                                                                                                with on Amazon.com .


                 ’9                         ’9               ’99-‘00                                  ’99                         ’99                     ’05
  TRY YOUR LUCk:                                          PLEASE STOP                    EvERYOnE WInS:                                       EARLY GIFTInG:
                                                          YELLInG:
  Sears.com warned                                                                       800.com encouraged                                   Amazon.com and
  shoppers that the                                       Ashford.com                    consumer-generated                                   niketown@nike.com
  “image shown                                            displayed return               content by entering                                  let customers pick
  may differ from                                         policy in ALL CAPS             authors of product                                   the exact day e-gift
  actual product                                          with textual errors .          reviews into a $2,500                                certificates were to
  appearance .”                                                                          shopping spree                                       be sent .
                                                                                         contest .

                 ’00                                                      ’00                           ’00                                                 ’00
  ALL OR nOTHInG:              TOO LITTLE                 FOURTH TIME’S                  SAvE TIME:                   WAkE-UP CALL:           SAY CHEESE:
                               TOO LATE:                  A CHARM:                                                    Target jump-started
  Barnesandnoble.com                                                                     Gifts.com reminded                                   Circuit City and
  said if we wanted to         Toysrus.com delivered      Egifts.com site                us about stored              Black Friday shopping   Wal-Mart offered
  gift-wrap one item in        our “in-stock” Furby       continually crashed            dates and recipient          with an early morning   personalized photo
  our order we had to          on January 27—after        in ’98 . It took us            profiles to prompt           phone call from the     gift cards.
  gift-wrap everything .       we had already taken       four tries before we           our gift giving,             consumer’s choice of
                               down our tree .            could order!                   as well as help us           celebrities .
                                                                                         manage it .

                 ’99                         ’00                          ’9                           ’05               ‘0-’05                           ’05
SPECIAL FOCUS: Retrospective                                                      6   SPECIAL FOCUS: Retrospective                                                  7
North Front Street, Columbus, Ohio 15
       ph 61 61  ph 00 550 515 fx 61 61 7

       www.resource.com




       For more information, contact:
       John kadlic
       Executive Director, Business Development
       Resource Interactive
       jkadlic@resource.com


       For press inquiries, contact:
       Holly Davis
       PR Specialist
       Resource Interactive
       hdavis@resource.com




©007 Resource Interactive. All rights reserved.

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Ecommerce Watch

  • 1. Resource Interactive’s tenth annual qualitative review of the online holiday experience. Holi S P E C I A day L FO Ten- Gifting C U S : Year T Retr rends a osp ectiv nd e
  • 2. INTRODUCTION How time flies. This year a Resource Interactive e-retail team stepped out into the field to evaluate the holiday season e-commerce experience for the tenth year in a row. With a decade of hindsight, our multidisciplinary team of researchers audited 50 top online retailers. This study of the 006 holiday season spanned seven weeks, and involved hours of site browsing, product selecting, purchasing, contacting customer service and visiting brick-and-mortar counterparts. So what did we find? Online retailers ushered in the season by elevating holiday gift guides, trumpeting cross-channel buying options and coming out from behind the shadows of their offline counterparts. Cyber Monday officially moved from industry term to consumer speak, and had the promotional fanfare to prove it. By the week after Thanksgiving, we were already getting “Last Chance for Holiday Savings” emails—setting a tone of urgency for the season. While a few years ago many web sites acted like digital versions of stores or catalogs, this year they leveraged the channel and realized opportunities all their own—much to consumers’ benefit. From sites that integrated the product assortments of multiple brands for one-stop-shopping convenience to product pages that let consumers examine the goods as if they were actually holding them, traditional e-commerce barriers fell away. Although brick-and-mortar retailers continued to edge out pure players in the race for online sales supremacy, the continuously innovating Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Amazon.com proved the exception with four million orders placed on Gift Guidance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 December 11—breaking its previous sales records. Today Only . . .Until Tomorrow . . . . . . . . . . . . . . . . 8 Brands that tapped into their internet potential fueled a season that saw Smoother Channel Surfing . . . . . . . . . . . . . . . . . 12 online sales climb to $.1 billion—6% more than 005, according to A Shift in Control . . . . . . . . . . . . . . . . . . . . . . . . 16 comScore Networks Inc., and more than twenty times the $1.1 billion BCC Learning to Leverage . . . . . . . . . . . . . . . . . . . . . 20 Research (formerly Business Communications Company, Inc.) reported in Retrospective . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 1997, the year of our first study. Memory Lane . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 SPECIAL FOCUS: Holiday Gifting Trends ©007 Resource Interactive. All rights reserved. SPECIAL FOCUS: Holiday Gifting Trends and Retrospective
  • 3. most likely for future purchases. Based on personality cues, Sephora’s Fragrance Finder helped customers find a unique and personal gift by navigating fine fragrance notes. Toys “R” Us’ Toy Guide for Differently- Abled Kids explained how individual toys work, and what skills they help children develop. Beyond gift ideas, retailers continued to offer shoppers a way to give back, announcing that a portion of proceeds would go to a worthy cause. More retailers became virtual middlemen for taking and delivering 01 GIFT GUIDANCe customer donations, with one-third of the sites we reviewed making philanthropic gestures. Williams-Sonoma solicited help for St. Jude Children’s Research Hospital through a link on its homepage. JCPenney donated a portion of its proceeds to an after-school program. Gift guides were in full force—on homepages, in navigation Target’s online Angel and emails. But while the ideas were plentiful, points of view Giving Tree was a were not. Rather than showcase their expertise, retailers partnership with The repackaged lists of “best sellers” or “what’s hot.” And Salvation Army—an while Amazon.com shoppers could browse by products organization whose with the most popular customer-created tags, few other banishment from Target’s brands leveraged customer favorites or their own research, storefronts (honoring a experience and insight to help shoppers find gifts for the corporate no-solicitation hard-to-buy-for. Among the standouts, Anthropologie’s policy) brought thoughtfully bundled cross-category gifts for “The Snow Giving back: TARGET.COM controversy back in 00. Bunny,” “The Homebody” and “The Globetrotter” invited exploration. Crate and Barrel’s “This and That” paired complementary items for a well-rounded gift, but was AMAzOn’S GIFT ORGAnIzER removed from the site before the season was in full swing. One of the latest Borders’ GiftSquad offered helpful suggestions— if only innovations from the animated instructions that accompanied the experience Amazon.com was the could have been skipped on repeat visits. merging of multiple functionalities to help Kudos to retailers that helped consumers shop outside their customers give during comfort zones and beyond what’s familiar. Gifts for “the the holiday season cook,” for example, are nice in theory, but customers not and beyond. By culinarily-inclined needed a bit more help choosing between keeping track of not a panini press and a griddle. Brands like Giggle and just what customers A gift history hub: AMAzOn.COM Gifts.com that suggested not just what to buy, but why are purchasing, but to buy it increased shopper confidence this season, and whom they’re buying for and why, Amazon.com took steps toward a truly intelligent—and useful—gift guide. SPECIAL FOCUS: Holiday Gifting Trends SPECIAL FOCUS: Holiday Gifting Trends 5
  • 4. GIFT GUIDANCe REPACkAGEd nAvIGATIOn Any site that showed its everyday global navigation in green and Fruitless Searches red type, and called that a gift guide (you know who you are) gets While some shoppers go online with specific brands in mind, others our Blind Spot vote. There were so many we stopped counting. might only know that they want the season’s popular argyle sweater. Without the brand recall to go directly to a retailer’s site, these customers relied on search engines to lead the way. Unfortunately, because many of the best (and biggest) retailers didn’t put much effort into global search engine optimization, shoppers went where search engines took them—not necessarily where they needed to go. With nearly 7 billion searches being conducted every month in HELP FOR THE HOLIdAYS the US, having a well-optimized site is now virtually a requirement for selling anything online. As holiday online traffic increases overall, so does the We found that less than half of the retailers we measured were number of new customers visiting your site . Some might implementing search optimization at a best-practice level, and be new to your brand; others might be new to your several retailers had significant barriers that stopped search engines merchandise category . Just as you train seasonal store from indexing their product pages: associates differently, you must also guide seasonal Many retailer sites used highly-dynamic URLs that were not customers differently . A gift guide needs to go beyond search friendly, causing product pages to be unindexable product suggestions, and include confidence-building by engines. input to encourage these shoppers to buy . While retailer product pages often had descriptive copy, there was often very little keyword-rich copy on home, landing or category pages. Paired with the dynamic URLs mentioned above, this left little usable copy for search engines to rank against. Page titling, an important aspect in ranking algorithms used by search engines, was frequently an issue. Who got it right: Bluefly and L.L.Bean used page titling to its LOOkInG BACk: OUR 2003 HOLIdAY STUdY fullest. Bluefly often included sale information in the title, and While today gift guides are a holiday mainstay, it was as recently as 00 that L.L.Bean used highly descriptive titles that were frequently updated. Who didn’t: American Eagle used very short page titles e-retailers first embraced the challenge of helping consumers find the perfect gift. that often lacked effective keywords and were not descriptive of page content. Anthropologie employed the exact same title for every page, missing a critical opportunity to provide accurate, Many more sites featured gift finders, guides keyword-rich page descriptors for products. or idea sections this year, and with increased Recent data from competitive intelligence service Hitwise concludes categorization… Too many sites focused on that one out of every four visits going to a shopping site originated at elementary segmentations—namely gender— a search engine. Without proper search optimization, the opportunity often leaving consumers to click through a to reach a potential customer can be lost. mass of generic “gifts for her.” WE LOOkEd FOR: — E-Commerce Watch 2003 9 Descriptive titles 9 Meta data 9 Search-friendly product pages 9 Keyword-rich copy SPECIAL FOCUS: Holiday Gifting Trends 6 SPECIAL FOCUS: Holiday Gifting Trends 7
  • 5. L.L.BEAn’S HOLIdAY COUnTdOWn CALEndAR L.L.Bean treated shoppers to a new gift suggestion on its site each day. While some daily messages announced promotions, other recommendations were just that—thoughtfully selected, can’t- 0 TODAY ONLY... miss gift ideas. UNTIL TOMORROW At the peak of the holiday season, more than one-third of the retailers in our study reached out to customers every hours. Daily dose: L.L.BEAn.COM Daily contact marked online retailers’ bold attempt to shift consumers’ habits. Formal programs such as Bluefly’s “Steal- a-Day” and Lands’ End’s “1 Gifts of Christmas” promoted SHOO, FLY! habitual site visits. Unfortunately, when combined with urgent “Last Chance” emails, it created unwanted angst about getting Frequent emails are the norm for discount designer goods the best deal. retailer Bluefly. But patience and trust wore thin when daily offers became difficult to distinguish from one another without Some sites used this increased frequency poring over a paragraph’s worth of fine print. With the seemingly to offer inspired suggestions, but far more random promotional cadence, we never knew when to buy…and common—and less enjoyable—were ever- therefore, never did. changing shipping and sales promotions. Overall, this strategy was novel, but everyday deals aren’t on brand for every retailer. The usually elegant gift site RedEnvelope tarnished its brand image with highly promotional emails—nearly 1 days in a row. Big gamble: BLUEFLY.COM Inspiring daily gifts: FREEPEOPLE.COM SPECIAL FOCUS: Holiday Gifting Trends SPECIAL FOCUS: Holiday Gifting Trends 9
  • 6. TODAY ONLY...UNTIL TOMORROW PLAY FAIR Detouring Traffic Jams Customers are savvy enough to realize that promotions Perhaps it should go without saying, but you can’t make increase and prices go down as the season progresses . money if customers can’t get into your online store. Yet So not only will they spot a misused sense of urgency several of the 50 we audited—including Wal-Mart, Apple, when you insist “Today Only!” when tomorrow’s deal Urban Outfitters and Macy’s—experienced outages on is better, they’ll also stop trusting you as well . Instead, easily predictable high-traffic days. Amazon.com screeched to a halt at precisely the day and minute it had invited us to inspire customers with key items or promotions that purchase one of the 1,000 Xbox 60 game consoles at the encourage purchase, not make them fearful to do so . “Customer Vote” price of $100. Even better, tell them what the rules of the sale are . And if price adjustments are available for online purchases, Technical difficulties even crossed channels. One Resource Interactive researcher tested Circuit City’s “-minute disclose details for how to get them . in-store pickup” on Black Friday only to find out upon arrival that the store systems were “four hours behind the internet.” Too late to wait on her television for Friday’s big game, she cancelled the order, forfeiting the free gift card that was part of their guarantee. LOOkInG BACk: OUR 1998 HOLIdAY STUdY Want more motivation? As we draw closer to a time when shopping via mobile device will be as second nature as The abundance of promotions from e-retailers this year—with so many daily purchasing off our laptops, the need for effective web emails and updates—is in sharp contrast to their cautionary approach of 199. traffic forecasting tools is critical. Leading the charge to mobile will be Digital Millennials*—Gen Y, tech-savvy shoppers who don’t just expect instant gratification, they The holiday shopping season had little demand it. Sites that have traffic under control will reap the benefits of those disposable incomes, and will be light promotional activity. Most online merchants years ahead of those retailers still refusing to plan. were already overwhelmed by volume and didn’t want to overload their systems during the most critical time of the year. — E-Commerce Watch 1998 Used humor to soothe disappointed customers: URBAnOUTFITTERS.COM *Learn more about digital Millenials at www.resource.com. SPECIAL FOCUS: Holiday Gifting Trends 10 SPECIAL FOCUS: Holiday Gifting Trends 11
  • 7. Several retailers used their cross-channel connections to increase customer convenience. Notably, Crate and Barrel announced that same day in-store pickup was a phone call away, while Circuit City positioned “ Ways to Buy” prominently in emails. And Bath Body Works’ Black Friday promotion seamlessly integrated a Resource-created email blast with its web site focus, in-store marketing and television ad. In our work with Wal-Mart, we created online advertising to promote “secret” 0 in-store deals that were unveiled only online. This program helped SMOOTHeR Wal-Mart claim the top spot for online traffic on both Thanksgiving Day and Black Friday. CHANNeL SURFING More brands than ever before reached out across channels to their brand counterparts. Homepages touted multiple ways to shop. Sister brands promoted one another. Web sites supported in-store promotions. It wasn’t perfect, but it was progress. Gap Inc.’s family of brands cross-promoted each other online and in bouncebacks. Although a lackluster execution, Sears Holdings Corporation brought together the combined product selections of its Sears, kmart and Lands’ End brands In-store specials, revealed online: WALMART.COM for one-stop shopping. Crate and Barrel, which also promoted sister home décor brand CB2 on its homepage, perhaps said it best by inviting shoppers to “Think of [sister site The Land of While many online venues gave shoppers great reasons to visit their nod] as Crate and Barrel for kids.” brick-and-mortar destinations, few offline stores returned the favor by sending customers to their sites. Promoting a channel that offers the Best Buy perfected its online- convenience of expanded inventory combined with reduced waiting offline connection with a web seems obvious this time of year. site tool that appeared during its online Thanksgiving Day Another benefit of driving traffic online is that even when the store is sale, and facilitated Black closed, the site is still open. Promotions for Thanksgiving Day specials Friday shopping in-store. kept consumers busy through dessert. After presents were opened, victoria’s Secret PInk used shoppers on Christmas Day were lured online when visions of early sales homepage real estate to send danced in their heads. Retailers including Best Buy, victoria’s Secret customers to stores for a and Eddie Bauer quenched the thirst for a deal, and helped customers limited-editionT-shirt. spend their shiny new gift cards. Promoting the big sale: BESTBUY.COM SPECIAL FOCUS: Holiday Gifting Trends 1 SPECIAL FOCUS: Holiday Gifting Trends 1
  • 8. SMOOTHeR CHANNeL SURFING GAP InC.’S CROSS-PROMOTInG GIFT CARdS Not every multi-brand CHAnnELInG COnSISTEnCY company has a customer More and more retailers have discovered the benefits that shops more than of driving customers online, yet there is monumental one of its divisions. progress to be made when retail store executives are Companies that do can still viewing their own web site as a competitive threat . benefit from making If the only option to promoting your site is a window cross-brand shopping sticker in stores announcing “Shop Online 24/7,” then, easy. each Gap division yes, sales may be the only thing customers think your offered gift cards (both site is good for . It takes broader thinking to embrace the brand-specific and fact that sales goals should transcend channels . Ideas, multibrand) for each of inspiration, comparisons and product information are all its three big sites—Gap, tools customers can use online before making a purchase in store . With Jupiter Research estimating that by 2011 Banana Republic and Pick a card: OLdnAvY.COM nearly half of all U .S . retail sales will be transacted online Old navy. Available all or influenced by internet research, a united front across season long, and done perhaps in an effort to boost lagging sales, the entire business will allow channels to complement the transparency meant convenience for the cross-brand customer. each other, not compete . WILLIAMS-SOnOMA’S WRAP UP Williams-Sonoma stores delighted customers with several pre- wrapped items for ready-to-give convenience. Online, however, LOOkInG BACk: OUR 1999 HOLIdAY STUdY the same items would have cost a $5 premium to look as nice. That lack of consistency was frustrating, especially when one The sophistication of today’s multi-channel experience demonstrates that channel set the bar high, and another failed to clear it. traditional retailers (those who started out as a store or catalog) have expertly reclaimed the edge they lost early on to nimble pure players—Internet-only shops. This holiday, the six best total online shopping experiences were delivered by Internet-only retailers, displacing retail industry behemoths such as Walmart.com, disneyStore.com, nike.com, and Toysrus.com. — E-Commerce Watch 1999 Wrapped and ready: WILLIAMS-SOnOMA.COM SPECIAL FOCUS: Holiday Gifting Trends 1 SPECIAL FOCUS: Holiday Gifting Trends 15
  • 9. the lines of communication open. Customers disappointed with the promotion were free to leave comments saying so, without diminishing the program’s popularity. Another important consumer control came in the form of product views, and the retailers who get it, got it big time this year. Eddie Bauer not only let consumers choose multiple views, but edited available views by product 0 A SHIFT IN CONTROL at the index page level, anticipating what customers would want to see. When customers rolled over dresses, the images transformed to show the back view. When browsing T-shirts, shoppers could preview the available color range. Newcomer shoe retailer Piperlime’s thoughtful array of shoe views (matched only by the post-holiday launch of Amazon.com venture Endless.com) made it easy to forget the computer screen that stood between customers and the adorable patent leather platforms. The baseline for the customer experience has increased dramatically in ten years of E-Commerce Watch studies. Consumer-generated product Consumers went from asking retailers whether they could pay reviews moved beyond electronics- online to asking themselves which payment option they’d prefer. related sites to become a key In addition, customers can now determine when to ship orders, decision-making feature. Macy’s and—in some bold instances—which items go on sale. even offered an incentive to leave Rating apparel: MACYS.COM feedback with a sweepstakes entry. Amazon.com pioneered with its “Customers Vote” campaign, evolving its everyday capabilities, which let shoppers vote on their favorite of four items to Amazon.com’s flexibility to allow readers to rate, sort and verify ratings be promoted at a upped the trust and relevance of feedback substantially. Unfortunately, shockingly low price, while cross-category product selling, mobile marketing, customized gifts for later purchase. and RSS feeds were forecasted in years past to become highlights, all Interestingly, it shifted lacked prominence this year, leaving customers with fewer unique options. to an experience that lacked control, as the Viral campaigns invited us to stay, play and pass it on, although in the number of users trying case of Office Max’s 0 unique microsites, felt like more of a distraction to buy the chosen item from the fact that the brand didn’t have much else to promote. crashed the site. In the (Although we will admit to spending entirely too much time “elfing” end, it was quite literally ourselves with the photo-on-a-dancing-elf animation.) a game of chance, with a lottery system implemented to give the lucky few the deal of the season. However, Rocking the vote: AMAzOn.COM Amazon.com kept SPECIAL FOCUS: Holiday Gifting Trends 16 SPECIAL FOCUS: Holiday Gifting Trends 17
  • 10. A SHIFT IN CONTROL HAnd OvER THE kEYS Present Perfect The line between internet-empowered consumers and In our first study ten years ago, we noted that online gift wrap the companies they interact with has blurred . Moving options were limited, and a decade later not much has changed. forward the most successful companies will be those While in the years in-between, customers were offered multiple that share brand ownership with their consumers . In fact, gift wrap options, this year choice was once again limited. Crate many consumers already interact with brands on a variety and Barrel went back to classic black and white, after offering of levels—sanctioned or not (like SlaveToTarget .com, a more colorful choices last year. Target opted for silver. No one blog created and run by customers) . gave shoppers a meaningful choice of gift wrap—not even those retailers who readily offered up a dozen or more gift card designs. Opening the brand to customers can be as simple as Ten months out of the year, we’re inclined to agree with the frictionless transactions and alternate payment options operational decision to limit gift wrap. But at this business-critical or as complex as consumer-generated media and time of year, a choice may be in order. While RedEnvelope’s crowdsourcing . Openness is something brands must classic red box and white bow is appropriate for the holidays and understand, embrace and leverage . In Open Branding, beyond, Amazon.com’s light green paper felt more like spring. our latest Thought Leadership initiative and forthcoming And if all other control-enhancing tactics are logistical nightmares, book (Summer 2007), we examine the benefits of being moving the gift message from the packing slip (as seen with an open brand and the pitfalls of being closed, and lay out Urban Outfitters and Piperlime) to a gift enclosure would be a a strategic framework for how to engage the consumer . tremendous (and long-overdue) start. LOOkInG BACk: OUR 1999 HOLIdAY STUdY Control has long been a theme in analyzing the online customer experience, but while customers today expect to influence their shopping trip from start to finish, in 1999 having control meant substantially less. The best practices to date put customers in charge of their online experience by Seeing green: AMAzOn.COM providing adequate opt-ins and opt-outs. However, consumers should have the option to purchase as a registered member or shop anonymously without account information Impressed with thoughtful embellishments, being saved. if not choices: AnTHROPOLOGIE.COM — E-Commerce Watch 1999 SPECIAL FOCUS: Holiday Gifting Trends 1 SPECIAL FOCUS: Holiday Gifting Trends 19
  • 11. LeARNING TO LeVeRAGe ReTROSPeCTIVe So what’s next? While we saw some retailers trying new things this season, the majority of sites we audited lacked true originality—original content, offerings, tools and services. We want to see brands take advantage and even push the limits of technology to deepen customer relationships. We want to be inspired, surprised and delighted in 007. Be the site your customer is looking for. A decade ago, consumers were just beginning to 9 Take cues from the customers’ in-store experience. dabble online via 2800-baud modems, Amazon .com Consider rich internet applications (RIA) that allow for better was a bookstore and Google (well, googol) was just a visualization and customization—bring the product to life. number . That was when Resource Interactive President kelly Mooney decided we should get smarter about the 9 Make the connection from search to store seamless. opportunities for our clients to sell their products online . Leverage search engines through keyword-rich copy and relevant page titles. Since then, we’ve spent thousands of hours browsing, buying, returning, calling and emailing . We’ve seen 9 Bundle thoughtful gifts, including cross-category items that e-retailers do it all . And we leveraged our learnings to complement each other. even better, include a loadable gift educate associates, fuel Thought Leadership and guide card with every purchase to encourage additional site visits our clients . and provide customers with a convenient last-minute gift. 9 Allow customers to check site and store inventory levels. To commemorate a decade of brilliance and blunders, If an item is available in store only, help shoppers find the we’ve highlighted hurdles the industry has cleared, nearest store that still has it in stock. snapshots that capture today’s online experience and innovations that will shape the blueprint for tomorrow . 9 Provide updates via RSS and even mobile communication Like any good history lesson, we hope this leaves for consumers willing to opt-in (likely your best and most you with a better appreciation of the past and an loyal customers). enlightened perspective on the future . 9 Don’t assume that an “abandoned” cart equals a lost customer. Remind them of items left there, update them if the price has changed and alert them when inventory is low. 9 Develop a comprehensive shopping experience for the customer who visits only during the holidays, as well as the one who is with you year ‘round. Until next year, have a happy and prosperous new year! SPECIAL FOCUS: Holiday Gifting Trends 0 SPECIAL FOCUS: Holiday Gifting Trends 1
  • 12. ReTROSPeCTIVe One Brand, Signs of Trust Help is Here Tell Me More Many Channels Initially, fear and doubt kept FAQs. email forms. Toll-free Retailers’ desire for consumers’ The importance of bricks versus consumers from buying online but numbers. Live chat. So many ways personal information and the clicks continues to be debated, best practices for safe shopping for consumers to find answers. technology to collect and store but the reality, of course, is that no made e-commerce an everyday And after a decade of asking, it has persisted over time. The matter how a company views its convenience. we’re starting to get faster, more value is in what retailers do with channels, customers see one brand. relevant responses. the information. When asked, “Do you sell this item on your web The threat of credit card Customers waited hours Retailers’ data collection THEn THEn THEn THEn site?”, a store employee, fraud and identity theft to get a unique response efforts served their needs with the brand URL were barriers to making to their email inquiries, if more than the consumer’s. emblazoned on his shirt, purchases online. they were answered at all. offered a blank stare. SSL technology and Retailers encourage While brand web sites are well-written, easy-to- consumers to share starting to show evidence find company policies Live chat makes nOW nOW nOW nOW personal information by of integration, stores ease shoppers’ minds, customer service faster using it to enhance and and catalogs still do little while consumer and more human. customize the customers’ reciprocal reinforcement. recommendations are a online experience. key trust factor. Transparent On THE HORIzOn On THE HORIzOn On THE HORIzOn On THE HORIzOn communication and Specialized customer Store employees will consumer-generated service advisors—from the Brands anticipate enhance the brand content—including ratings, brand or the community of consumers’ needs and experience by taking reviews, testimonials shoppers—will be ready to become virtual personal shoppers online to close and open forums—are share expertise via email, shoppers. (and save) the sale. the quintessential trust phone or chat. builders for online brands. SPECIAL FOCUS: Restrospective SPECIAL FOCUS: Retrospective
  • 13. ReTROSPeCTIVe The Tools to Choose Giftable Cards Follow-Through Measures of Success The web brought a world Moving out from behind their eager to sell online, but lacking Since our first study in 1997, we’ve of options to consumers reputation as the I-don’t-know-you- basic fulfillment capabilities, brick- seen e-commerce evolve from an everywhere—overcoming well-enough-to-buy-you-a-real-gift and-mortar retailers are now taking unemotional, isolated transaction geographical boundaries. But stigma, gift cards have skyrocketed cues from catalogers to meet to a frictionless, inspiring and without the right decision support in popularity and evolved into the consumers’ delivery expectations. empowering experience that tools, more choice can also be highly sought-after present for the leaves consumers eager to more trouble. holidays and beyond. reconnect with a brand. Premiering online as A single, static product paper certificates or The shock of gifts not view and a list of product e-codes, gift cards Success was measured arriving in time to get THEn THEn THEn THEn attributes were all that were first available by the number of new under the tree—or at customers were given to in predetermined customers and dollars all—damaged brands’ distinguish one product denominations and spent online. credibility. from another. redeemable only in one channel. Retailers provide Creatively merchandised Sophisticated filtering order-status updates Success is measured by and available in fun, tools and multiple product and tracking services dollars spent online with nOW nOW nOW nOW customizable formats, gift views help shoppers to boost consumer consideration for customer cards can be redeemed, narrow choices and sort confidence and ensure satisfaction, interaction registered and reloaded in through them. on-time—and even time and repeat visits. any channel. early—deliveries. On THE HORIzOn On THE HORIzOn On THE HORIzOn On THE HORIzOn Retailers offer more Success will be measured Ongoing two-way Retailers will include consumer choices for by the quality of the dialogues between loadable gift cards delivery, including experience, the degree to brands and consumers will with purchases to scheduled ship dates, which consumers interact result in the option to view provide additional, in-store pick-up options, with and impact the brand, tailored assortments. instant gift options. and hassle-free, cost- and the web’s contribution free returns. to overall sales. SPECIAL FOCUS: Retrospective SPECIAL FOCUS: Retrospective 5
  • 14. MeMORY LANe... The interactive world has come a long way. And we’ve been here through it all. Our favorite moments from over the years are plentiful, but here are just a few highlights (or mishaps) for your added enjoyment. Cheers to ten more amazing years of studying, influencing and improving the e-commerce experience! YOUR InBOx CLOSEd WASTEd TIME: dOn’T MISS EARPLUGS PLEASE: PAUSE-And-PLAY: IS FULL: CHECkOUT LAnE: A dETAIL: jcrew.com (‘99) Amazon.com gave Best Buy, L.L.Bean American Greetings Using the back and Blue nile (‘00) eToys.com offered toy buyers fair and Gap incorporated sent us an individual button during failed to remember the appropriate size warning by providing the same “save for email confirmation Lands’ End checkout account info upon batteries for selected noise samples . later” convenience for each and every emptied our return visits . toys at checkout . that we fell in love item in our order. shopping cart . with on Amazon.com . ’9 ’9 ’99-‘00 ’99 ’99 ’05 TRY YOUR LUCk: PLEASE STOP EvERYOnE WInS: EARLY GIFTInG: YELLInG: Sears.com warned 800.com encouraged Amazon.com and shoppers that the Ashford.com consumer-generated niketown@nike.com “image shown displayed return content by entering let customers pick may differ from policy in ALL CAPS authors of product the exact day e-gift actual product with textual errors . reviews into a $2,500 certificates were to appearance .” shopping spree be sent . contest . ’00 ’00 ’00 ’00 ALL OR nOTHInG: TOO LITTLE FOURTH TIME’S SAvE TIME: WAkE-UP CALL: SAY CHEESE: TOO LATE: A CHARM: Target jump-started Barnesandnoble.com Gifts.com reminded Circuit City and said if we wanted to Toysrus.com delivered Egifts.com site us about stored Black Friday shopping Wal-Mart offered gift-wrap one item in our “in-stock” Furby continually crashed dates and recipient with an early morning personalized photo our order we had to on January 27—after in ’98 . It took us profiles to prompt phone call from the gift cards. gift-wrap everything . we had already taken four tries before we our gift giving, consumer’s choice of down our tree . could order! as well as help us celebrities . manage it . ’99 ’00 ’9 ’05 ‘0-’05 ’05 SPECIAL FOCUS: Retrospective 6 SPECIAL FOCUS: Retrospective 7
  • 15. North Front Street, Columbus, Ohio 15 ph 61 61 ph 00 550 515 fx 61 61 7 www.resource.com For more information, contact: John kadlic Executive Director, Business Development Resource Interactive jkadlic@resource.com For press inquiries, contact: Holly Davis PR Specialist Resource Interactive hdavis@resource.com ©007 Resource Interactive. All rights reserved.