Baynote 4th Annual Holiday Survey Results

4th Annual Holiday

Shopper Survey January 7, 2014

the e-tailing group

Topics

• About the Survey

• Primary Findings

• Top Influencers on Holiday Shoppers

• Mobile is the New Normal

• Key Takeaways

1/6/2014 Baynote, Inc. © 2014 Confidential 2

the e-tailing group

About the Survey

WHAT? Measure holiday shopping behavior to understand the shifts in

consumer behavior over time and the influences of ecommerce

HOW? 1,000 respondents between December 3-6, 2013

- 50% female/50% male

- 100% owned smartphones/65% tablets

- 100% had made a holiday purchase online

WHO? Baynote in cooperation with Lauren Freedman, the e-tailing group


the e-tailing group

Demographics

30%

20%

20%

30%

18-34

35-44

45-54

55+

What age group do you fall within?

11%

23%

27%

16%

19%

4%

Less than $25,000

$25,000-$49,999

$50,000-$74,999

$75,000-$99,999

$100,000+

Prefer not to respond

What is your TOTAL annual pre-tax household income?

19%

15%

7%

58%

1%

One

Two

Three or more

None

Prefer not to respond

How many children <18 years of age are living at home with you?


the e-tailing group

What percentage of your holiday purchases

to date have been made online?


28%

24%

30%

11%

7%

25%

25%

29%

14%

7%

Majority (>75%)

Most (75-50%)

Some (50-25%)

Limited (25%-10%)

Very Little (Less than 10%)

2013

2012

1 in 2

shoppers

made at least

50% of their

holiday

purchases

online

Q5

the e-tailing group

Key Findings

• Promotions influence majority of holiday purchases; unconditional free shipping reigns

‒ Promotions fueled by mobile email

• Mobile usage accelerates; branded apps influence expands ‒ An important shift happened in 2013 as digital’s influence on in-store purchase patterns grew

• Shoppers demand a streamlined customer experience with easy access to information and integrated online and in-store tools

‒ Search results and paper catalogs continue to contribute

‒ Shoppers expect retail websites to support the entire shopping experience

• Ratings and reviews exert the greatest influence on both online and in-store shoppers

‒ Millennials push the limits of digital shopping tools 1/6/2014 Baynote, Inc. © 2014 Confidential 6

the e-tailing group

TOP INFLUENCERS ON

HOLIDAY SHOPPERS

the e-tailing group

92% of all

shoppers took

advantage of

some type of

promotion

11%

39%

24%

18%

5%

3%

All (100%)

Most (75%+)

Many (75-50%)

Some (50-25%)

Few (25-10%)

Very Few (<10%)

Q: Overall, what percentage of your purchases this

holiday season will include a promotion (e.g. free

shipping, % off, coupon, etc.)?

Q16 1/6/2014 Baynote, Inc. © 2014 Confidential 8

the e-tailing group By a 2-to-1 margin, shoppers always take

advantage of unconditional free shipping

Unconditional

free shipping

as a top

influencer

rose 58% over

2012

98%

86%

83%

82%

79%

85%

80%

67%

64%

42%

80%

47%

42%

39%

38%

37%

36%

31%

27%

18%

Unconditional free shipping (no minimumpurchase required)

Outlet/Clearance/Sale

Flash sales or limited-time promotions

Web-only promotions

Promotions received via email

Conditional free shipping tied to a minimumpurchase

Store-only promotions

Gift with purchase

Buy more save more

Facebook or other promotions received viasocial media

Top-3: Always/Frequently/Sometimes Top-2: Always/Frequently


Q17

the e-tailing group

Q: How important were these influencers when

making your final purchase?

Return policy &

merchant

reputation were

20% more

important for the

55+ age group vs

the 18-24 age

group

64%

60%

55%

49%

45%

39%

20%

15%

47%

38%

35%

33%

29%

24%

13%

10%

Final price including any promotional offers

Free shipping without conditions

Product in-stock and ready to ship

Merchant reputation

Product reviews

Return policy

Ability to receive rewards/loyalty points

Free shipping with a threshold (i.e. spend $100to receive free shipping)

2013 2012

Q15 1/6/2014 Baynote, Inc. © 2014 Confidential 10

the e-tailing group

Q: How often did the following channels influence your in-

store/online purchases?

Women are more

likely than men to

use email or text

promotions both in-

store and online 0

50

100

150

200

Email Promos Text Message Promos

Male (Always/Frequently)

Female (Always/Frequently)

In Store

0

50

100

150

200

Email Promos Text Message Promos

Male (Always/Frequently)

Female (Always/Frequently)

Online


Q11/12

the e-tailing group

Millennials (ages 18-34) embrace promotions

more than older shoppers

Top-2: Always/Frequently 18-24 25-34 35-44 45-54 55+

Spread

(55+/18-24)

Unconditional free shipping (no minimum required) 78% 83% 85% 76% 74% 4%

Outlet/Clearance/Sale 64% 54% 49% 46% 36% 28%

Flash sales or limited-time promotions 56% 55% 56% 34% 28% 28%

Promotions received via email 53% 49% 41% 32% 27% 26%

Web-only promotions 52% 49% 43% 33% 27% 25%

Store-only promotions 47% 40% 38% 39% 29% 18%

Conditional free shipping tied to a minimum purchase 44% 43% 44% 32% 31% 13%

Gift with purchase 44% 31% 36% 23% 20% 24%

Buy more save more 42% 29% 28% 28% 17% 25%

Facebook or other promotions received via social media 31% 27% 23% 12% 8% 23%

Q: Thinking about the range of promotions that retailers offer, how often will you likely take

advantage of each of the following over the holiday season?


the e-tailing group

74%

65%

61%

60%

47%

44%

38%

33%

34%

30%

41%

27%

23%

22%

I seek out stores that have price match guarantees

I ask an associate in a retail store to match a price onproducts I am considering

I have left a store after finding the product of interest onAmazon and later bought the product online

I have bought the product on Amazon or another competitor while in the store as the store wouldn’t match …

An associate reminds me of the retailer’s price match guarantee while I shop

I may pay somewhat more for a product while I was in thestore as I wanted to be finished with my shopping

An associate uses technology (i.e. mobile phone or tablet)to check prices at other competitors while in the store

Q: When shopping in a retail store for products where prices can be easily compared, please identify how often you exhibit or experience the stated behavior.

Top-3: Always/Frequently/Sometimes Top-2: Always/Frequently


Retailers and shoppers accept price

matching - the end of showrooming?

2/3 of shoppers seek

out retailers who price

match;

men are 30% more

likely to ask about

price matching in-

store than women

Q23

the e-tailing group

MOBILE IS THE NEW NORMAL

the e-tailing group

Q: How often did you use your smartphone during

the holiday season for any of the following?

The majority of

holiday shoppers

rely on

smartphones

for pre-shopping

research

70%

64%

63%

63%

62%

61%

58%

55%

52%

46%

45%

54%

49%

50%

46%

46%

45%

45%

43%

42%

39%

39%

Find a store or seek out store-based information(hours, directions, etc.)

Compare prices before a store visit

Browse websites to figure out what to buy in advanceof making purchases

Get coupons or offers

Compare prices while in the store

Redeem coupons during a store visit

Look at product ratings before visiting the store

Make a purchase directly on the website

Look at product ratings while in the store

Make a purchase using a retailer’s app (i.e. Nordstrom, Amazon, Zappos)

Scan a barcode while in a store to check the price atanother retailer

2013 2012

Top-3: Always/Frequently/Sometimes


Q18

the e-tailing group

Q: How often did you use your smartphone during

the holiday season for any of the following?

Smartphones

drive in-store

behavior: 62% of

shoppers

compared prices,

61% redeemed a

mobile coupon

70%

64%

63%

63%

62%

61%

58%

55%

52%

46%

45%

54%

49%

50%

46%

46%

45%

45%

43%

42%

39%

39%

Find a store or seek out store-based information(hours, directions, etc.)


Browse websites to figure out what to buy in advanceof making purchases



Redeem coupons during a store visit




Make a purchase using a retailer’s app (i.e. Nordstrom, Amazon, Zappos)

Scan a barcode while in a store to check the price atanother retailer

2013 20121/6/2014 Baynote, Inc. © 2014 Confidential 16

Q18

the e-tailing group

34%

66%

23%

77%

Yes

No

Q. Have you made any holiday gift purchases using a retailer-branded app on a smartphone or tablet (Nordstrom, Amazon, Pottery Barn, etc.)

this holiday season?

2013 2012

47%

43%

41%

26%

22%

18-24

25-34

35-44

45-54

55+

Q. Have you made any holiday gift purchases using a retailer-branded app on a smartphone or tablet (Nordstrom,

Amazon, Pottery Barn, etc. this holiday season?

Yes


Branded app usage grows 48% over 2012

Q20

the e-tailing group

Millennials 43% more likely to research stores & products via

smartphone than older shoppers Q: How often did you use your smartphone during the holiday season for any of the following?

Top-2: All the time/Frequently 18-24 25-34 35-44 45-54 55+

Spread

(55+/18-24)

Browse websites to figure out what to buy in advance of making

purchases 62% 56% 50% 32% 16% 46%

Find a store or seek out store-based information (hours, directions,

etc.) 62% 57% 55% 35% 33% 29%

Compare prices before a store visit 53% 57% 57% 35% 21% 22%

Get coupons or offers 50% 46% 47% 38% 23% 27%

Look at product ratings before visiting the store 45% 48% 39% 26% 18% 27%

Compare prices while in the store 48% 48% 46% 40% 23% 25%

Look at product ratings while in the store 45% 44% 36% 21% 21% 24%

Redeem coupons during a store visit 39% 46% 52% 36% 31% 8%

Scan a barcode while in a store to check the price at another

retailer 29% 33% 35% 16% 16% 13%

Make a purchase directly on the website 37% 39% 37% 25% 27% 10%

Make a purchase using a retailer's app (i.e. Nordstrom, Amazon,

Zappos) 32% 30% 32% 15% 14% 18%

Purc

hase P

re-s

tore

In

-sto

re


the e-tailing group

REQUIRED SERVICE,

CONVENIENCE & INFLUENCE

FEATURES

the e-tailing group

74%

71%

68%

68%

63%

55%

52%

49%

42%

42%

40%

32%

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…

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…

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?

Top-2: Extremely/Very Important Extremely Important1/6/2014 Baynote, Inc. © 2014 Confidential 20

Shoppers demand easy access, find-ability, a well designed

site and integrated tools

68% of shoppers

cite comprehensive,

well designed web

pages as extremely

important

Q24

the e-tailing group


Shoppers of all ages prefer to self-service

Pricing,

availability and

social tools

before a store

visit…

75%

69%

66%

64%

55%

45%

45%

44%

43%

42%

37%

37%

31%

29%

Read product ratings and reviews before visiting the store

Researched in advance of my store visit so I didn’t require the …

Took advantage of a promotion sent to me via email and made a…

Researched in advance of my store visit checking for inventory…

Used my mobile device to find a better price

Took advantage of a promotional text sent to me and made a…

Used a retailer’s app to find product information

Had an in-store associate check inventory at another store when…

Reserved a product online or via smartphone and picked it up in…

Downloaded a retailer’s app in advance of a store visit

Used a retailer’s app to find product in the store

Associate offered to look for inventory and arrange to send to…

Checked out by an associate who used a mobile device versus a…

Had an associate assist me in making the right product selection…

Q. In visiting retail stores over the past few months, please identify the frequency with which you conducted or experienced the stated behavior.

2+ times

…apps,

sales

support and

check out tools

for efficiency

in-store

Q22

the e-tailing group

82%

53%

49%

46%

45%

37%

33%

23%

If a site doesn’t have product in-stock I will go elsewhere

I look for store information on my smartphone in advance of avisit (e.g., hours, location, map, etc.) to make shopping more…

I research product availability in advance of every store visit toensure items are in stock

I use my smartphone to comparison shop ensuring that I’m paying the best price for products before I visit the store

I use my smartphone to make shopping more efficient

I seek out retailers where I can reserve the product in advanceto save time when picking it up in store

I typically don’t shop at retail stores where I cannot see product availability before I visit the store

I will not wait more than a day or two to receive my product

Q. In thinking about the meaning of convenience for you relative to shopping, please

state your agreement with the following scenarios. Top-2: Strongly/Somewhat Agree


Shoppers expect convenient cross channel tools

1 in 3 shoppers

want pricing, in-

store inventory

availability and

product pick up

visible on the

ecommerce site

Q21

the e-tailing group

Search, peer review & promotions are top influencers


Ratings & reviews

influenced 48% of

online shoppers,

(+45% over 2012)

and 37% of in-store

shoppers (+12%

over 2012)

48%

35%

31%

28%

17%

16%

14%

14%

13%

12%

11%

8%

37%

27%

20%

30%

14%

15%

10%

11%

15%

8%

9%

7%

Online ratings and reviews

Email promotion

Google search results that included…

Paper catalog

Facebook

Display advertising for product you…

eCommerce website

Product recommendation on…

Text messaging from retailers

Pinterest

Mobile advertising

Twitter

Q: How often did the following channels influence your purchases by channel?

Top-2: Always/Frequently

online in storeQ11/12

the e-tailing group

70%

64%

63%

63%

62%

62%

61%

58%

55%

46%

45%

71%

74%

76%

60%

43%

43%

44%

67%

63%

53%

37%

Find a store or seek out store-based information (hours,directions, etc.)


Browse websites to figure out what to buy in advance ofmaking purchases




Redeem coupons during a visit



Make a purchase using a retailer's app (i.e. Nordstrom,Amazon, Zappos)

Scan a barcode while in a store to check the price at anotherretailer

Q. How often did you use your MOBILE DEVICE for any of the following holiday shopping tasks?

Smartphone Tablet

Shoppers use smartphones and tablets for

different purposes

Tablets

stay at home

and support

pre-store

research

While

smartphones

go on the road

with the

shopper


Q18/19

the e-tailing group Millennials influenced by more channels

(i.e. social) than older shoppers Q: How often did the following influence your online purchase?


Spread

(55+/18-24)

Ratings and reviews 51% 62% 50% 40% 40% 11%

Facebook 30% 31% 18% 13% 7% 23%

Pinterest 21% 23% 12% 7% 3% 18%

Twitter 14% 13% 10% 4% 0% 14%

Email promotion from retailers 36% 40% 37% 30% 27% 9%

Google search results with pictured product available

by retailer 35% 40% 31% 28% 23% 12%

Display advertising 27% 20% 15% 11% 12% 15%

Product recommendation on eCommerce website 22% 19% 12% 13% 10% 12%

eCommerce website 20% 21% 15% 11% 10% 10%

Mobile advertising 20% 12% 14% 10% 4% 16%

Promotional text messaging from retailers 16% 15% 20% 10% 8% 8%

Paper catalog 35% 20% 25% 28% 32% 3%

Print

Mobile

D

igital S

ocia

l


the e-tailing group

Q: How often did the following influence your in-store purchase?

Print

M

obile

D

igital S

ocia

l


Spread

55+/18-24

Ratings and reviews 46% 37% 36% 34% 31% 15%

Facebook 20% 24% 16% 8% 6% 14%

Pinterest 16% 16% 9% 4% 2% 14%

Twitter 13% 13% 8% 3% 2% 11%

Email promotion from retailers 35% 25% 34% 23% 21% 14%

Google search results with pictured product

available by retailer 31% 22% 18% 19% 16% 15%

Display advertising 28% 16% 17% 10% 10% 18%


Product recommendation on eCommerce website 18% 13% 14% 9% 7% 11%

Promotional text messaging from retailers 22% 17% 20% 12% 9% 13%


Mobile advertising 19% 12% 12% 8% 4% 15%

Paper catalog 38% 25% 29% 28% 32% 6%

Millennials influenced by more channels

(i.e. social) than older shoppers


the e-tailing group

67%

42%

24%

21%

19%

When I am on Facebook, I’m in a social/communication mindset and do not click …

Pinterest gives me ideas for what to buy for thoseon my holiday list

I click on Pinterest links to make a purchase on an eCommerce, website but I can’t always find …

I click on Pinterest links to make a purchase on aneCommerce website

I look at the ads on Facebook and click through tomake a purchase

Q. Please share your agreement on shopping via these channels. If you don’t use a particular channel please select N/A.

Top-2: Strongly/Somewhat Agree


Not all social channels influence ecommerce equally

Over 2/3 of

shoppers are

“not in the

shopping

mindset” when

on Facebook Pinterest gives

42% of shoppers

gift ideas with

20% of links

converting to

purchase

Q15

the e-tailing group

KEY TAKEAWAYS


Influencers & Promotions • Influencers

‒ Digital influence on in-store purchasing is an important shift driven by millennials

‒ Ratings, email and paper catalogs hold their own as influencers knowing no channel boundaries

‒ Google search ads are more successful when based on price, offer and retailer familiarity

‒ Pinterest delivers gift ideas for 50% of shoppers; 20% click through to purchase where impact is strongest among millennials and women

• Promotions ‒ Consumers are truly price-sensitive

when making shopping decisions; they hunt for promotions and ask for price matching

‒ Consumers will take advantage of every promotion, but preference still lies with unconditional free shipping

‒ Millennials are aggressive in taking advantage of a range of deals

‒ Mobile devices are the price hunting tool of choice


Mobile & Shopper Convenience Features • Mobile

‒ Mobile usage accelerates across all age groups

‒ Shoppers use mobile devices to hunt for bargains, research stores and products helping them to find the right product at the right price whether in-store or online

‒ Tablet’s role is pre-store and purchase-oriented

‒ Smartphones play more dominant role both in-store role and as a transaction device

• Convenience Features ‒ Product availability really matters

‒ Shoppers seek out retailers who have cross-channel tools in place ex: in store pick up

‒ Smartphones connect consumers to stores especially millennial shoppers

‒ Shoppers secure the best possible price by hunting down deals via smartphone

‒ Price matching and in-store sales associates use of technology is becoming more commonplace

‒ Shoppers expect efficiencies from finding product through checkout and a superior user experience along the way

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