Holiday Strategies Unwrapped: A Look Back at Amazon, Walmart and Others

HolidayStrategiesUnwrapped

AlexanderRink,CEO,360piJennMarkey,VPMarkeBng,360pk

2 © 2017, 360pi Corporation. All Rights Reserved. 2 © 2017, 360pi Corporation. All Rights Reserved.

Please Note: This Exhibitor Insights session was developed and produced by the sponsor. NRF is not responsible for the content.


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Today’s Session • 2015 Holiday Retrospective• 2016: Online Accelerates

• New Holiday Tactics & Opportunities• What Can You Expect in 2017• Your Game Plan to Win• Q & A


360pi Holiday Insights Series

• 4th consecutive year• Campaign observes holiday product and

pricing tactics of Amazon and other majorretailers across several categories

• 53 Holiday Insight reports• 500+ unique subscribers• 100+ press mentions


360pi Holiday Insights Methodology With any commerce analytics exercise, it is extremely important to understand underlying assumptions.

• All data was extracted once daily with all products weighted equally.• Each sample includes available products only and prices do not include

shipping, taxes, or overlay offers such as coupons, “buy one, get one”),or cardholder discounts.

• Unless expressly stated otherwise, includes exact matched product to Amazon’sown assortment, not including third-party marketplace sellers.

• All charts and insights are based on specific extractions from the masterdataset; please refer to each caption for detailed information on sample size,dates, and category coverage.


2015 Holiday Retrospective

&

Longer Discount Periods

Dynamic Pricing

“Follow-the-Leader” Discounting

Growth of Marketplaces Battle of the Price Titans

$


2016: ONLINE ACCELERATES, REQUIRING NEW HOLIDAY TACTICS

EXECUTIVE INTELLIGENCE REPORT

1-855-360-0075 [email protected] www.360pi.com© 2017, 360pi Corporation. All Rights Reserved. 3

A Look Back at Last Year’s Holiday Predictions

Let’s start this year’s Executive Intelligence report with a look back to the 2015 holiday season to

see what remained the same during the 2016 holiday season and identify any significant

year-over-year shifts.

In last year’s Executive Intelligence report, we outlined predictions for this holiday season.

Were we right?

Early discounting and blurred shopping dates were evidenced at Walmart and Amazon,

both of which started to announce Black Friday deals while kids were still shaking off

their Halloween sugar high;

Increased diversity in tactics based on retailer market positioning was observed.1 For

example, Walmart, known for their “low price leadership”, held to that commitment with

an aggressive price campaign throughout the season;

Target proved us wrong by being a major retailer still using broad-based category

discounting and overlay promotions vs. being more price competitive at the item level;

While marketplaces continued to play a sizable role, Best Buy surprised us by shuttering

their marketplace in early 2016.2

____________________1 http://discover.360pi.com/acton/media/9666/e-commerce-redefines-retail-pricing-strategies--360pi2 http://www.ecommercebytes.com/C/blog/blog.pl?/pl/2016/2/1456267581.html


Convergence of Online & In-Store In 2016, 86% of Millennials used a mobile device while shopping in-store

52% compared prices 40% checked availability/inventory 37% got digital discounts or coupons 33% read reviews/ratings

And, 96% made a purchase from those retailers


Cyber Monday Surpassed Black Friday2016 Cyber Monday broke records, with $3.45B in online sales, including:

• 12.1% YOY increase in Cyber Monday online sales• $110M more online sales than Black Friday

– Adobe Digital Insights


Mining Retail & Shopper Big Data

Most sought brand: Keurig Most desired price range: $20-$50 Most popular type: Drip

Holiday Shopper Preferences for Coffee Makers



As well, our analysis revealed that single serve designs continued

to resonate well with a majority of shoppers, particularly in the

$20 to $50 price range. This is exactly the sweet spot occupied

by Bodum this past holiday, which offered an array of colorful

and affordable single serve french press options.

Another favored holiday shopping category is Toys, with LEGO being a perennial favorite gift for

kids of all ages. However, if you have toy shopped lately, you will know that there is a lot of LEGO

out there to choose from! Applying our GamePlan Market Index to LEGO sets this holiday, we

found the following three Minecraft sets were the “must haves” for the 8 to 12 year old group.

Less than 4%

of Coffee Maker brandsoffered for sale garnered

95%of shopper interest!

Based on a sample of 291 Coffee Maker brands observed on Amazon, Walmart, Target, Bed Bath & Beyond, and Overstock websites from November 2016 to January 2017. Includes all products including those sold by marketplace sellers.

Based on a sample of over 2,000 LEGO branded products as observed on Amazon, Walmart, Target, and Overstock websites in November 2016. Includes all products including those sold by marketplace sellers.


More Objective Reviews, More Important

Relative popularityof Shark brand

cut in halfpost Amazon policy

change.

Amazon cracks down on incentivized reviews.

Shopper Reviews for Vacuums on Amazon


Amazon MP = Assortment + Reviews


Assortment Games in Toys Virtually no overlap between retailer “hot” holiday toys

•  Only one toy common to Amazon, Walmart, and Toys “R” Us lists

Exclusives were the game for this holiday’s must-have toy, Hatchimals

UNWRAPPING HOLIDAY TOY STRATEGIES


Predicting top sellers each season is tricky business. No one anticipated the appeal and demand

for Tickle-Me-Elmo, not even the manufacturer, which led to serious inventory shortages and

missed sales opportunities at the time.

Looking at this year’s top Toy trends, we see a number of retailer exclusive products that

are analogous versions or expanded offerings straight from last year’s lineup, like Pie In the

Face Game, Zoomer Dino and Bunchems. It’s expected that next holiday, we will see retailers

endeavoring to win on lingering demand with expanded versions of trending 2016 products.

Which Toys Made Every Retailer’s List?

Further exploring retailers’ quests for exclusivity this holiday, we examined the amount of overlap

between hot holiday Toys by retailer. We compared the official press releases of four of the most

dominant retailers offering hot holiday Toys this season – Walmart, Target, Toys “R” Us, and of

course, Amazon. And as it turns out, there was virtually no product overlap between retailers.

Walmart’s and Target’s lists revealed the highest resemblance with a negligible eight of the same

products from lists of 30 and 50 products, respectively. Adversely, Amazon presented the least

amount of product overlap with sampled retailers, sharing half as many equivalent products (four)

with Toys “R” Us’ listing of 50 products.

Num Noms Lipgloss Truck Craft Kit was the only

common top holiday Toy product between Amazon,

Walmart, and Toys “R” Us, and while stocked by

Target, it was not mentioned on this retailer’s top

Toys list.



Before we delve into the details of holiday 2016, here’s a quick summary of the bigger surprises

this year:

• Reliance on exclusives to avoid direct price competition even in highly branded

categories like Toys;

• Broader price spread in Electronics relative to previous years;

• Target’s usage of broad-based promotions and overlay offers in hotly contested holiday

categories.

Lessons from Key Categories: Toys & Electronics

Reliance on Toy Exclusives

For many retailers, Toys & Games is the must-win holiday category, so it’s not unusual to see a lot

of price dynamism and price competition at this time of year. However, this year we saw retailers

resort to an increased use of exclusives in an effort to reduce direct price competition with every

major retailer carrying their own strain of the year’s most sought after toy, Hatchimals. This simply

wasn’t an option back in the heydays of Tickle-Me-Elmo and Furby.


Top Toys Not Necessarily Best Selling Limited alignment between “top” and “Best Selling” toys:

•  Only 7% of Amazon’s Top 100 Best Selling Toys referenced as top toys by other retailers

•  Even limited overlap between retailer top toys and own best seller lists

Only 5 of Amazon’s 23 top holiday

Toys predictions appeared in

their Top 100 Best-Selling

list as of October 31,

2016.

“”


Holiday Pricing Electronics on Black Friday Weekend


Holiday Dynamic Pricing Electronics


2016 Holiday Summary

Price continues to be important, but just one of many competitive tactics; assortment took center stage this holiday

•  Marketplace shelf advantage •  Exclusives •  Best Sellers

Amazon also got serious about review quality



A Look Back at Last Year’s Holiday Predictions

Let’s start this year’s Executive Intelligence report with a look back to the 2015 holiday season to

see what remained the same during the 2016 holiday season and identify any significant

year-over-year shifts.

In last year’s Executive Intelligence report, we outlined predictions for this holiday season.

Were we right?

Early discounting and blurred shopping dates were evidenced at Walmart and Amazon,

both of which started to announce Black Friday deals while kids were still shaking off

their Halloween sugar high;

Increased diversity in tactics based on retailer market positioning was observed.1 For

example, Walmart, known for their “low price leadership”, held to that commitment with

an aggressive price campaign throughout the season;

Target proved us wrong by being a major retailer still using broad-based category

discounting and overlay promotions vs. being more price competitive at the item level;

While marketplaces continued to play a sizable role, Best Buy surprised us by shuttering

their marketplace in early 2016.2

____________________1 http://discover.360pi.com/acton/media/9666/e-commerce-redefines-retail-pricing-strategies--360pi2 http://www.ecommercebytes.com/C/blog/blog.pl?/pl/2016/2/1456267581.html


2017 Prediction #1

Continued increase in assortment tactics, including product exclusives, specialty assortments, and private label growth


2017 Prediction #2

Increased use of retailer and now brand curated lists such as Best Sellers


2017 Prediction #3

Growing reliance on and battles within marketplaces; increasing pressure on brands and retailers to monitor third-party sellers and shopper experiences


2017 Prediction #4

Use of new and emerging online signals to identify and track shifts in shopper preferences


YOUR GAME PLAN


Brave New (Retail) World


The Rise of the Algorithms

Flight Pilots Autopilot Systems Drones

Financial Markets Floor Traders Back Office

Trading Algorithmic

Trading

Retail Merchants Pricing? Assortment?


Know Thy Self

• Define your identity and brand

• Choose your target market

• Establish your assortment andpricing strategy with identifiedkey categories and products


What do You Stand for?


Differentiate Your Assortment

•  Private Label •  Variants / Options •  Pack Sizes •  Bundles •  Services


Know Your Market – Brand Positioning

• Market Presence• Share of Shelf• MAP Compliance• Promotion Compliance• Content Compliance


Who is Offering What, When and Why


Content Matters

Rankings in Search Engines Ratings and Reviews Photos and Videos


Monitor and Update Your Content


Curated Product Lists & Event Pages

Powered by 360FlyerTM


Know Your Market – Retailer Pricing

•  Competitive Pricing •  Sales/Margin Opportunities •  Sales/Margin Threats •  Zone Pricing •  MAP Compliance


Get Creative About Pricing


Personalize and Engender Loyalty


Inspiration

•  Ace Hardware: expert, local service, relationships •  Build.com: curated collections, analytics •  Hayneedle.com: increased marketing, product count •  Jet.com: marketplaces, algorithmic basket pricing


Thank You!

Download our Executive Intelligence Report at bit.ly/2iNzPuQ

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