Online fashion sales to grow 25%

Online spending is expected to rise 15% on last year to £13.16 billion in the run up to Christmas as hard-up shoppers search for bargains on the internet, we see in Drapers.

Online spend on fashion, footwear and accessories is forecast to grow by 25% to £1.2 billion over the quarter according to a report from the IMRG and Capgemini.

Total average online spend per person will be £215. Although this is a growth of 15%, it is slower than the rate of growth in 2007 when final quarter online sales jumped 54% on 2006.

Monday December 8 is expected to be the biggest Christmas shopping day online when £320m is expected to be spent. Peak shopping time will be between 1pm and 2pm when shoppers are expected to spend £28m. This is double the amount spent by shoppers at last year's peak Christmas hopping hour, at midday on Monday December 11.

Luxury Online - upside in a cold climate

We went to the Walpole Society's conference on selling luxury brands online hel at the RAC club. The Walpole Society promotes the interests of the British luxury goods world. Its members include our clients Smythson and the Real Flower company. Online is one of two special areas for luxury markets, the other being China.

The penny has dropped
First off, the man from Barclays (the sponsors) told us that 75% of wealthy consumers use web for research and purchase and that they spent more time than any other group online. Not too earth shattering, but a sound introduction. Guy Salter - the Society's Deputy Chairman - characterised this universe as moving from the experimental to the penny-dropping, but with that comes the anxieties. At the end of the day, the devil is in the detail & execution. That said, Forrester reasearch (across 178 CEOs of luxury brands) revealed that only one third were selling online and amazingly, half of those who were not had no immediate plans. A quick show of the 300+ hands in the room revealed that pretty much EVERYONE was now transacting online - with one exception.

Google's take on luxury
Peter Fitzgerald, whom we knew when he was at Amazon and now Industry Leader for Retail at Google gave us Google's take. 84% of ultra-affluents (how do I become of these?) and 98% of millionaires have their purchase decisions influenced by the web. Interestingly, rich people make their purchases, then use the web to feel good about their decisions after the event: 33%
used it to validate their purchase post sale. Luxury web shoppers spend more (about $250k more per annum), are richer and younger. And Google thinks the UK is the most sophisticated online market (it spends 50% more per head than the USA) and digital ad spend is at 17% vs 9% across the pond.
"Where are the Ecommerce Directors on the Board?" he asked and exorted folk to be online, be part of the conversation and test. Google apparently launches something when it's 60% ready (and theories abound about Microsoft using customers as beta-testers). Nordstrom does 8% of its total sales - that's about $700m pa and Fitzgerald suggests that 6-12% of total sales
was about par for the course.

Getting religious about conversion
Regarding the testing part, Fitzgerald shared Google's own trial and error testing of its own Adwords (Google's online advertising platform) start page. Well, not so trial and error it seems. It mechanically tried different combinations of important elements of that page - and it's quite simple if you have a look - such as the header, blurb, image and button - and tracked everything using Website Optimiser, Google's A/B, split & mult-variate testing platform. By optimising the
combinations, Google reports a 56% increase in conversions, taking the politics out of design: "you have to monetise every pixel of your real estate."
He advised we all check out Google Insights for Search and Google Trends.

Ecommerce is not about the web
The very amusing Ian Jindal of Internet Retailer et al, chaired the next session of e-commerce practitioners with gusto. His view: one year, we all said "let's do e-commerce". You can go from late to great in 6 months, but that's not enough now. Brands' customers are being educated by fast-moving competitors and only one thing matters: sharp elbows and a willingness to
use them. It's about ruthlessly maximising £s per minute per pixel. Anyway, as we always say too, it's not about the website. It's about fulfilment, stock management, customer service etc, that is e-business simply has to be a business.

Ian's big question to his panel is how do you get sustainable advantage? E-commerce is hard work - you have translate and animate your products online, deal with complex stock issues across multiple channels and manage organisational silos and politics). And sadly, there's no magic wand (ie social media). At ASOS they simply can't innovate fast enough, so it has to
be about other stuff.

What do customers want in 2009?
People want simplicity, the panel agreed. 60% of visitors disappear at checkout and 90%+ don't come close. Customers want to feel like VIPs, so make it human and personal and as we're in the realm of automation, aspire to "the personal touch on an industrial scale". Take it further, let customers do the personalising themselves.

Exit panel one, enter panel two - the brands themselves...

Mulberry presented a very candid and informative case study (well done - have a free link as a leading purveyor of Luxury English Fashion). Nick Roberts, Mulberry's Retail Director, explained that Mulberry had been transactional since 2001, and was now on V3 of a bespoke e-commerce website which was now part of "Retail", not "Marketing", showing the corporate emphasis on web sales. It's now nearly the highest grossing store with 55% YOY sales growth (and it plans to double sales in the next few years) and there are no signs of slowing.
Mulberry attracts 140,000 unique visitors per month, with a 1.5% conversion ratio and a £200 average order value. Investment in the site is constant, but measured and must be profitable (which it is, much more so than a store) and it's ran as a retail store with a fully-costed budget). Mulberry dispatches an email per month to its 60,000 database, always communicating
in the "luxury way" and a call to action. Google ad spending for small businesses can be very expensive, and Mulberry puts 35% of its online marketing budget into PPC (the rest on goes on social media and email). It spends a lot of time managing communications with the blogging community - a practice we can only commend.

The audience seeemd to ponder the issue of cannibalisation between online and off (irrelevant in the main as consumers will demand a choice out of convenience, if nothing else). Would it matter if Prada came next to Gucci in a search result or price comparison engine? Not in the least, said the lady from Burberry. Brands love to be next to each other - as they are in
Harrods, vogue and New Bond Street.

Brian Tickle, who runs Luxury Travel.com - owned in part by the Orient Express - is creating a portal to attract luxury travel customers. His problem was that he could do well in Google for "Cipriani Hotel" or even "Venice Hotel", but scaling oftier heights such as "luxury hotels in Italy" was extremely hard work. His new portal - content rich and search-engine-sexy means he can fish in a bigger pond with a larger rod. The message for brands - brand/luxury is about content and that's the differentiator (so syndicate it across the web). Folks' internet time is a clear indicator: 5% is spent in search, 50% in content.

The best thing about online is the immediate metrics.
Bec Astley Clarke founded Astleyclarke.com, an online jewellery boutique "pureplay" (which means online only) which is 2 years old. She's is backed by Index Ventures, a serious VC outfit (so sadly she coudn't disclose numbers, except her goal to do "several £ms this year" and a planned average order value of £150, which she's exceeding. She wants her website to be a
luxury end-to-end experience - exclusively next day delivery, expensive gift wrap and the works. For Bec, the whole business is a steady marketing and technology evolution, driven by careful attention to the metrics: traffic sources, conversions, drop-offs et al on a daily business. She tries everything - but measures. Astley Clarke gets best results from PR, SEO, and
email as well as partnering with other brands on joint promotions. Her killer stat: she spends 5 times more on natural search than paid search for the same number of sales - just shows how much work getting those top search results are.
The panel agreed that the No. 1 driver of profitability is repeat business, as its so expensive acquiring new customers: lifetime value is critical.

Part Two was all about "social media"
That'll be blogs and Facebook, then, and as Mr. Salter said: "we just can't avoid it". We all loved Forrester's Christine Spivey Overby with her shiny black hair, a perfect white smile and wearing a nice, big shiny black belt over her black woollen dress. She spoke in American and we enjoyed her US pronunciation of our cherished olde worlde European brand names as she discussed "social strategies that work". (I was hoping this would improve my cocktail party patter).

Well, it transpires the audience was heavily signed up already: 50% use it/them for personal stuff, 20% use it/them to enhance their brands and 5% do it succcessfully. Ultimately, she said, social media is about people getting things from each other, not institutions (or advertising they no longer trust). More dialogues are now happening online between customers
about the brand, rather than between the brand and the customer.

She had some great content - such as the dog that rolls in nothing but Gucci on Flickr. Forrester's reasearch shows that luxury brands are participating and about one fifth pursue most of the obvious social media channels. Christine's message was
basically to be clear on one's marketing objectives. Breaking down usage into spectators, creators, critics, collectors and the rest, here are the stand out stats:

- 47% in the mass affluent class spectate (read, listen, watch social media), versus 40% in all other classes;

- 11% in the mass affluent are creators (create blogs, upload content etc) vs. elsewhere

- In fashion its a lot higher: 58%+ spectate and 20% create.

You can download her slides at http://www.forrester.com/walpoleluxury

The panel that followed presented various social media platforms - which we shall skip for the time being - but concluded that whatever you say or might think, there are growing numbers of people doing it and people are coming together in these new ways - but what's the tipping point? Ultimately, brands should treat it all as they treated brand communications all along: it's about driving messages to targetted influencers. Sounds just like PR, I guess.

Good piece in The Times on the growth of internet retailing: here's a few excerpts:

"More than half of all the sales growth in Britain's retail sector over the next four years is expected to come from the internet as more consumers switch their preference from the high street to the worldwide web. "

"A new survey claims that the value of online retail sales is expected to soar from £20billion this year to as much as £50billion by 2012 - nearly 15 per cent of the total retail market. "

"Despite all the optimism, there are clouds in cyberspace. Last week IMRG indicated that some internet retailers were beginning to feel the effects of the credit crunch, with year-on-year sales growth slowing to 15 per cent in August, against 30 per cent earlier in the summer. "

Online sales growing at 37% YOY on average

Screen Pages analysis from August 2008.

Fashion online sales up 23%

Online fashion and footwear sales grew by 23% in July as people opted to shop from the comfort of their living room in the wet weather and to take advantage of special offers on the internet - according to Drapers.

Total online spend rose by 11.3% to £4.8 billion against June, which works out at an equivalent spend of £79 for every person in the UK according to the IMRG Capgemini Index, which measures online sales from 60 retailers including Arcadia Group, Asos, John Lewis, Next and Otto UK. Against July 2007, online sales were up 15.2%, and within that fashion, footwear and accessories sales recorded an uplift of 25.9% online.



The online sales rise is in stark contrast to the British Retail Consortium's figures for high street sales in July, which fell 0.9% on a like for like basis against July 2007. Total high street sales were up 1.7% on the previous year but fashion sales were in negative territory. The BRC pointed to the clothing sector as having suffered one of the biggest effects of the slowdown in consumer spending as shoppers move further away from discretionary and frivolous spending.

High street retailers winning online shopping battle

Retailers who operate other channels are pulling ahead of "pure play" internet only wesbites, says Hitwise.


Summarises Robing Goad: "High street retailers are pulling ahead of their online only counterparts when it comes to online shopping in the UK. As the chart below illustrates, the internet properties of the 100 largest online high street retailers in the UK, such as Argos, Next, and Marks and Spencer, received 19.3% more UK Internet visits during July 2008 than the 100 largest online only retailers, such as Amazon, Play.com and ASOS."

Online shopping saves on gas prices

Well, that's a new angle to recession & increased fuel prices - shop online. Relevant article from New York times citing Gap. Victoria's Secret, Sears & JC Penney: "With gas being such an issue, we know that mall traffic is down more than off-mall traffic,” said Mike Boylson, chief marketing officer for J. C. Penney, which had an 8.7 percent increase in Internet sales in the first quarter of this year.

That is in contrast to a 7.4 percent decrease in sales at stores open at least a year, known as same-store sales and a measure of retail health. “We see more people turning to online because it’s much more efficient in terms of time and money,” Mr. Boylson said.

"Victoria’s Secret's ....catalog and Internet sales were up 11 percent in the first quarter of this year while same-store sales declined 8 percent. Gap had an 11 percent decline in same-store sales in the first quarter, but a 21 percent increase in online sales."

Online sales up 38% in first half

UK shoppers spent over £26.5 billion online in the first six months of this year despite the credit crunch, up 38% on the first half of 2007.

According to figures from the IMRG Capgemini e-Retail Sales Index, 17p in every pound was spent online during the first half of the year. Clothing is faring well out of the reported online boom, with £1.76 bn spent on clothes online by UK shoppers in the first half 2008. James Roper, chief executive and founder of IMRG, said that online shopping growth continues to out-perform the high street and predicted that 30% to 50% of all retail will be online in the next five years. He said: "As tight budgets and poor weather keep people at home where they can shop online for bargains.

"Clothing and footwear sales were the biggest losers in physical stores in June, with sales either flat or lower than last year despite heavy and widespread discounting.

"However, online they were big winners. Internet clothing sales were up 32%, while lingerie sales rose by 37% and footwear 38%." Shoppers spent a record amount on clothes in March, a month-on-month growth of 21.8%, and 31.2% more than March last year.

LIVEmark Retail Benchmarks

Yearly and monthly April 2008 benchmark figures from Coremetrics LIVEmark figures.

Top 10 Online Retailers by Conversion - April 2008

Article by Bryan Eisenberg

Here they are, the top 10 converting retail sites for April 2008*…

1. Proflowers.com -27.5%
2. Office Depot - 25.8%
3. Lands End - 24.8%
4. QVC - 19.4%
5. CDW - 19.1%
6. HSN - 16.8%
7. Vistaprint - 16.8%
8. Oriental Trading Company - 16.5%
9. Williams-Sonoma - 15.6%
10. eBay - 14.8%

Cart Abandonment Statistics

Statistics from MarketLive show that shopping cart abandonment rates have jumped considerably in the past year, as have site bounce rates.

Additionally, bounce rates are also increasing considerably.

The reasons for the increases likely boils down to economic reasons; people are just even more jumpier now about spending cash and the smallest “gotcha” can throw them off. The increase in popularity of comparison shopping also plays a role.

If you leave adding extra charges onto a purchase until the very last page or inflating shipping charges in order to try and get by the consumer and make a few extra bucks, it’s probably a really bad idea - sticker shock sends people packing quick smart and makes them feel decieved.

Lingerie lingers longer

The latest figures from the IMRG Capgemini e-Retail Sales Index reveals that poor weather conditions appear to boost online clothing sales whilst driving people away from the high street.

Online Customer Satisfaction Improves Despite Economy

A retailer's ability to keep consumer's happy is what gives it the edge in today's volatile economy. The "Spring 2008 Top 100 Online Retail Satisfaction Index," an annual report, finds an overall improvement among the top retailers.
Four major components drive satisfaction: price, merchandise, availability of products, and brand. Price is thought by some to be a factor, in a down economy.
Netflix continues to be rated as the top online retailer based on customer satisfaction. The online film rental service recently addressed recent delivery issues before most customers were even aware of the problem, which gained the company good favor.
Investment in customer satisfaction goes a long way, especially in a tough economy, said Freed. "Satisfaction matters and it's what's going to drive financial success. A dissatisfied consumer becomes a liability. Not only are they not going to purchase from you again, they may go out there and say bad things about you. Focusing on satisfying a customer is going to pay off for retailers."

Retail E-Commerce and the Economy (US)

An interesting report produced on online shopping trends.

The US Department of Commerce released retail e-commerce sales data last Thursday. Online sales grew by only 13.4% during Q1 2008 over Q1 2007.

E-commerce sales growth is still higher than overall retail sales growth, which has been 6% at most over the past five to six years. In contrast, retail e-commerce sales growth has been about 25% or more during the same time.

The Future Of SEO

A glimpse into the thoughts of SEO in the future;

More effort will be placed on feeds to search engines. Not just XML feeds into paid inclusion and shopping comparison, but also feeds with other types of information, such as local, financial, news, and other verticals. Mobile will become much more popular, search will gradually become more of a personalized experience.

Personalization and digital asset optimization will end 1999-style ranking reports, as search engine results will be based on blended results from end-user specifics, such as geographic location, time of day, previous searching history, and peer group preference.

Online, monitoring the customer voice will become more important than pushing a brand message. Reputation management will become more important as marketing continues its reversal from a broadcast medium to a listening medium.

Marketing into networks will see huge growth, and social search will grow with it.

Targeting With Culture in Mind

Behavioral targeting has evolved from tracking consumers' online action to evaluating their mindsets and personality traits. As technology continues to help marketers understand the consumer, the next advancement in behavioral targeting methodology should incorporate culture into the targeting mix.

Here's why culture should be the next big focus in behavioral targeting.

• Culture Affects Behaviors
• Get the Timing Right
• Culture Matters

Ecommerce Study: Free Shipping Is Out, Social Networking Is In

The report states that while free shipping offers have been effective in the past, retailers are less interested in promoting free shipping options this year. Instead, retailers are eager to experiment with "social computing" initiatives to attract customers: 65 percent and 55 percent of retailers, respectively, said that social network advertisements and widgets would be categories of increased focus this year.

eCommerce Still Growing in a Slowing Economy

With shoppers trying to save money as much as possible, shopping online makes economical sense. With the ability to shop with coupons and coupon codes to save on everything from the most popular shoes to groceries, shoppers are learning how to stretch their dollars. MyCoupons.com offers coupons and coupon codes for thousands of online merchants as well as grocery coupons to use in your local grocery store.
The State of Retailing Online 2008 Marketing Report shows five shopping categories drove almost half of retail sales in 2007 and a similar pattern will continue in 2008. Among those categories are computer hardware, software, consumer electronics, apparel, accessories, and footwear.

Internet merchants turn to analytics to help boost conversion rates

Online merchants are reporting lower conversion rates as online shopping matures and a recession looms, according to E-Tailing Group ‘s 7th Annual Merchant Survey of more than 200 merchants in the first quarter of 2008. To combat the trend, more are using analytics to better market themselves to potential customers.

Online Video Ads: Ready to Roll!

Research into online video advertising, what it is, who uses it and the formats it comes in.