#monetatesummit

Lauren Freedman, Owner, the e-tailing group

Merchandising on Your Terms

Put the right products in front of the right people at the right time

the e-tailing group

• 20 years e-commerce consulting • Author, It’s Just Shopping • 50+ years traditional retail and catalog

experience • Fortune 500 client projects ranging from

strategic planning, merchandising, marketing, to technology development and messaging

• Cross-category and international projects spanning specialty retail to department stores

• Proprietary research studies on mystery shopping, merchandising, mobile and consumer behavior

The Voice of Cross-Channel MerchandisingStraight talk from “in-the-trenches” online merchandising experts

the e-tailing group

State of Merchandising• KPIs are flat • Merchandising is cookie-cutter where little differentiation exists from one retailer to the next

• Amazon is ever-present • Not all shopping is surgical so onsite search doesn’t always solve shopper problems

• Visualizing the assortment can be challenging

• Analyzing the data to impact future marketing and merchandising can be overwhelming

• Mobile forces retailers to reevaluate merchandising strategies and deliver a “responsive” approach

the e-tailing group

Conversion rates fixed in the 1-3% range

Q15

e-tailing group 2013 Merchant Survey

the e-tailing group

For half of shoppers most/all of their holiday purchases included a promotion

Q16

Gender*Note Women*significantly*more*likely*to*have*all*or*most*of*their*purchases*include*promo>ons

e"tailing)group)Holiday)‘13)Survey

the e-tailing group

Amazon is larger than the next dozen largest e-tailers

Holiday Hit Parade • Amazon customers order more than 36.8 million items on

Cyber Monday selling 426 items per second during its best ever holiday season

• More than 1 million customers around the world became new Prime members in the third week of December

• Amazon shipped to 185 countries during Holiday ’13 • Amazon customers purchased enough Rainbow looms

from third-party sellers that the bands can stretch around the circumference of the earth

• Amazon customers purchased enough winter boots to keep everyone living in three of the coldest cities in America-Duluth, MN, Butte, MT, Watertown, SD (warm for the winter)

the e-tailing group

Important brand factors start with price and promotion and are quickly followed by the website experience

Q21e"tailing)group)Personaliza9on)Survey;)2014

the e-tailing group

Most features are important to shoppers and expectations are high for ecommerce experiences in general

Q24 e"tailing)group)Holiday)‘13)Survey

1"in"3&desire&efficiencies&in&finding&product&and&checking&out&quickly&&

33% 33%

27% 27%

24% 18% 18% 18%

15% 14%

12% 10%

A simple, streamlined shopping cart that makes

Being able to find what I want on a retailer's site by

Seeing product on web pages that are

Seeing web pages that include robust photography

More accessible and responsive customer service

User-generated content and tools (e.g., reviews,

A frequent buyer or brand loyalty program

One-click checkout

Seeing web pages that include product videos that

Live chat (ability to message with customer service

Product recommendations that are tailored to me

Access to a creative gift center that includes ideas,

Q. How important are each of these areas when selecting a retailer?

Extremely Important

the e-tailing group

Mobile matters• Mobile e-commerce grew 50% year-over-year to account for 29% of holiday e-commerce sales

• More than one in four US e-commerce orders this holiday season came from mobile devices

• iOS devices made up 83% of mobile e-commerce sales

• 65% of marketing emails were opened on mobile devices during Q4’13

the e-tailing group

Challenges, Trends & Visualization Tools

Merchandising

the e-tailing group

The Challenges

• Weak visual display not in keeping with the brand

• Insufficient product information

• Only able to truly show limited assortment • Focus on the surgical and not the discovery

• Presence of features but poor execution

• Retailers may know what needs to be done but inadequate tools to accomplish the task at hand in a timely fashion

• Inability to direct the customer experience due to inadequate data

the e-tailing group

Top merchandising tactics that deliver from an ROI perspective

Q4A11e-tailing group 2013 Merchant Survey

the e-tailing group

EG100 Retailers1A800*Flowers Crutchfield J.Crew Overstock Target

Abt*Electronics Dean*&*Deluca JCPenney Party*City The*Body*Shop

Amazon Dell Jos.*A.*Bank Patagonia The*Children’s*Place

American*Eagle*OuUiVers Dick’s*Spor>ng*Goods King*Arthur*Flour Petco The*Home*Depot

Ann*Taylor Discovery*Channel L.L.Bean PetSmart The*Men’s*Wearhouse

Apple DSW*Shoes Lands’*End PoVery*Barn Things*Remembered

Aveda eBags Lane*Bryant Puma Tiffany*&*Co.

B&H*Photo Foot*Locker Lego QVC Title*9

Ballard*Designs Frontgate Lenovo Ralph*Lauren Toys*‘R*Us

Bare*Escentuals GameStop Lowe’s REI Tumi

Barnes*&*Noble Gap Macy’s Room*&*Board Ulta

Belk Garnet*Hill Michael*Kors RossASimons Under*Armour

Best*Buy Giggle Moosejaw Saks*Fich*Avenue Urban*OuUiVers

Bloomingdale’s GNC Neiman*Marcus Sears Victoria’s*Secret

Blue*Nile Godiva Newegg Sephora Volcom

Chico’s Golfsmith Nike Shop*PBS Walgreens

Clinique Gucci Nordstrom Staples WalAMart

Coach Harry*&*David Northern*Tool*+*Equipment Steve*Madden WilliamsASonoma

Cooking.com Hayneedle Office*Depot Sundance Wine.com

Crate*&*Barrel HSN Orvis Sunglass*Hut Zappos

#monetatesummit

Faceted Navigation EG100: 75%

Respect the role of search

#monetatesummit

Merchandised drop down EG100: 90%*

• Visual search • EG100: 29%

But foster discovery through navigation

#monetatesummit

Discover by trend

#monetatesummit

Embrace seasons & holidays

#monetatesummit

Gift Center EG100: 80% Score: 2.03/3.00 where 3 is best

Showcase the power of gifting

#monetatesummit

Educate to excite

#monetatesummit

Runway

Street Style

Imagery brings brands to life

#monetatesummit

Alternative Views EG100: 89%

But the devil is in the details

#monetatesummit

Video Gallery EG100: 42%*

Category Page EG100: 39%*

Video vaults in importance

#monetatesummit

Must-Haves Best Sellers EG100: 64%

Tactical merchandising tools set the tone for selling

#monetatesummit

Pinterest/Customer favorites EG100: 70%

Retailers embrace social dynamics

#monetatesummit

Lauren Freedmanlf@e-tailing.com773-975-7280

www.e-tailing.com

Remember, merchandising is both an art and a science