MCM Outlook 2012-13: Ecommerce adapts to online behaviors

Jun 02, 2012 7:04 AM  By

Holiday 2011 went down in the books as the busiest one ever for ecommerce. ComScore reported that consumers spent $35.3 billion at consumer ecommerce sites between Nov. 1 and Dec. 26, a 15% increase over the corresponding days in 2010.

Retailers saw tremendous lifts in online sales—from online accessories seller eBags (up 32% overall) to old-school department store Macy’s (which saw its ecommerce sales rise 40.3%). But were these kinds of numbers only a sign that the U.S. economy has rebounded? Or was something else at work?

Based on the results of the MCM Outlook 2012-13 Survey—coupled with an overall 2011 holiday sales growth of 4.1% as reported by the National Retail Federation—it’s evident that merchants have responded to consumer shopping behaviors and adapted to maximize their online sales.

There were seismic shifts in several merchant behaviors, including how they communicate with customers via social media, the value they put on search engine marketing, how they keep buyers from abandoning carts, and how they have adopted the use of QR codes.

We’ve highlighted some of the ecommerce trends in this article, and you can download the entire MCM Outlook 2012-13 survey report at http://multichannelmerchant.com/research/2012/.

Social media is growing up

Last year, thanks to the antics of Charlie Sheen, “Winning” became a big social media catchphrase. The word was one of the most popular hashtags on Twitter, and images of Sheen with the meme flooded Facebook news-feeds. But as 2011 came to a close, the social media landscape had begun to grow. Instead of winning, social media users were suddenly “pinning.”

Pinterest, a virtual bulletin board that allows users to share images and links that can be pinned by other users, grew by leaps and bounds during the second half of 2011, and multichannel merchants took an interest, according to the MCM Outlook 2012-13 Survey.

Although no respondents to 2011 MCM Outlook Survey said they were using the social media, 34.2% of merchants who took the 2012-13 Survey said they maintain an active presence in Pinterest.

Which is not to say that has Pinterest overtaken the two social media juggernauts: 87.4% of merchants maintain an active presence in Facebook, up 10 percentage points compared to last year; and 74.8% said they are actively tweeting, up 17.3 percentage points from 2011.

But merchants are clearly getting their feet wet with Pinterest.

In February, custom T-shirt seller Threadless ran a Valentine’s Day contest to encourage community engagement and received a “whopping” 366 entries, according to its blog. As a result, it added a Pinterest button on submission pages so its users could post right from Threadless to their pin boards.

Pinterest wasn’t just for the pure plays—multichannel merchants like Lands End Canvas added “Pin It” buttons to their product pages so that users could seamlessly pin items they like or want to their boards. Merchants also created their own boards as another way pinners could virally spread product info.

Pinterest wasn’t the only newcomer to the social media landscape. The MCM Outlook 2012-13 Survey also showed big steps for Google Plus (Google+): 29.7% of respondents said they maintain an active presence there.

But is it an “active presence,” or just a presence? Because Google includes a Google+ presence as a part of its algorithm, merchants are taking a minimal approach to Google+ to keep from getting penalized in the search rankings.

Take L.L. Bean, for example. The outdoors apparel merchant uses Facebook to tell its brand story and engage with followers on a daily basis. But it engages its followers on Google+ with offers and incentives on a less frequent.

A little more than 500 Google+ users have L.L. Bean in their circles, while more than 100,000 people on Facebook “like” L.L. Bean.

While merchants see social media as a place to listen to and engage with customers and prospects, they don’t see it as a place to sell. Just 6.7% of respondents said they have a Facebook commerce store, and only 8.4% said they use Facebook commerce sales to measure success in social media.

Last year, merchants told Multichannel Merchant that they were testing the waters to see how Facebook commerce could work for them. While smaller niche sellers such as Beaded Impressions saw some sales and exposure with outsourced Facebook commerce apps, larger merchants like Roaman’s and Express created inhouse solutions, just in case Facebook commerce took off.

But merchants did use social media to listen to consumers—76.9% said they use it to monitor what consumers are saying about their brands, up 19.4% from 2011. And 74% said they use social media to engage in conversations with their customers—that’s up 5.1% from last year.

Computer seller Dell said last year that it uses social media to drive relationships and engagement, and that it needs to drive a value-add for the customer. It also said social media has seven-times more impact on its business-to-business customers than on its business-to-consumer buyers.

However, the MCM Outlook 2012-13 Survey respondents who identified themselves as doing 60% or more business in the b-to-b space didn’t place as much value on social media as Dell does. Two-thirds said they are using social media to monitor what consumers are saying about their brands (which is up significantly from 38.1% in 2011), and 54.2% said they use social media to engage in conversations with their customers—down from two-thirds last year.

Seizing the search engines

There was a time when search engine marketing, search engine optimization and pay-per-click advertising were overlooked by online merchants. Now, however, merchants have not only discovered the value of those three search engine tactics, they are finding better ways to measure and improve on their efforts.

In last year’s MCM Outlook Survey, 80.2% of merchants cited sales as the number-one way they measured their SEO and SEM efforts. That number dipped 2.8%, to 77.4%, according to the MCM Outlook 2012-13 Survey. And sales was replaced at the top by traffic.

A distant second last year, traffic was cited by 86.1% of respondents in this year’s poll as the top way merchants measure SEO and SEM efforts (an increase of 15.9 percentage points).

Three other answers to that measurement question grew by double-digits in the MCM Outlook 2012-13 Survey. Total conversions as a measurement tool grew by 19.3%, clickthroughs by 15.7% and rankings by 11%.

Merchants still felt that optimizing landing pages was the best way to improve their search engine ranking, but that also had the largest drop of all the answers (down 8 percentage points, to 62.6% in 2012).

Three-fifths of the respondents (60%) said they are reaching deeper into their analytics, an increase of 10.4 percentage points from last year; and 42.6% said they are increasing PPC terms (up 15.7 percentage points from 2011).

Merchants also upped their SEM budgets 5.59% overall, to an average of 23.54% of their overall marketing budget. An average of 43.39% of their search marketing budgets is going toward PPC (up 8.82 percentage points), while 25.77% is earmarked for SEO (down 1 percentage point).

QR code adoption rises

It’s hip to be square.

QR code usage soared after last year’s MCM Outlook Survey was completed.

At that time, the United States Postal Service had announced a “summer sale.” Mailers that used a QR code on or in a direct marketing piece in July and August 2011 were offered a 3% discount. The USPS said nearly one-third of all standard mail during that timeframe contained a QR code.

And with the USPS recently announcing a similar sale for 2012, the number of merchants using QR codes has grown by close to 40 percentage points. The number not using QR codes as a part of their marketing strategy has dropped 33.6 percentage points.

The USPS seems to have changed the way merchants look at QR codes as a part of their marketing campaigns. The MCM Outlook 2012-13 Survey shows that 63.2% of respondents are using them in print catalogs (up 28.2 percentage points from last year), and 47.4% have them on postcards and other non-catalog mail pieces (up 12.4 percentage points).

Capturing cart abandoners
As ecommerce grows in volume, so does the number of abandoned shopping carts. And it seems that merchants have begun paying attention to this lost revenue opportunity.

Last year’s results showed that, aside from email reminders, 60.9% of merchants did not market to people who had abandoned carts. That number dropped to 38.3% in the MCM Outlook 2012-13 Survey.

The ways merchants have marketed to shopping cart abandoners has also grown. For example, 37.4% have offered cart abandoners a special offer via email, up 13.9 percentage points from last year. And 29.9% are remarketing to abandoners via remarketing ads. That’s up 18.6 percentage points from 2011.

Methodology
An online survey was fielded by Multichannel Merchant beginning on April 19. Subsequent mailings were sent to Multichannel Merchant’s subscriber list, as well as to those of sister publications Chief Marketer and DIRECT. Emails were also sent to members of Multichannel Merchant’s two LinkedIn groups (Multichannel Merchant and O+F Operations & Fulfillment). A link to the survey was also tweeted via Multichannel Merchant group and individual accounts.

As an incentive to participate, survey respondents were offered the chance to win a $200 American Express gift card.

When the survey closed on May 21, there were 952 respondents. Of those, 654 (69%) indicated that their company was an online merchant, retailer, manufacturer, publisher/media or a wholesale distributor. Those active respondents form the basis of the survey results.