Electronic Marketing Survey

Here’s as sure a sign as any that e-commerce has come of age: There are no radical year-over-year changes in responses to Catalog Age’s exclusive Electronic Marketing Survey. For instance, 18% of this year’s survey participants still did not have an online catalog, compared with 20% of last year’s respondents. Only 9% of respondents participated in online malls or co-ops, the same percentage as last year. And e-mail remained the top means of promoting a Website, followed by references in print catalogs.

Dollars and cents

Smaller catalogers saw a steeper increase in maintenance costs than their larger counterparts, however. Respondents with annual sales of less than $10 million spent an estimated mean $53,204 on annual Website maintenance — including staff, promotions, and order fulfillment. That’s up 29% from the mean $41,144 spent among last year’s smallest respondents. Mid-size respondents — those with annual sales of $10 million-$49.9 million — spent a mean $172,593, up 28% from last year’s mean $135,349. But respondents with annual sales of at least $50 million saw their Web maintenance costs rise only 12%, from a mean $322,931 to $362,500.

As a percentage of their overall budget, however, Website expenditures decreased for the smallest respondents. Last year participants with sales of less than $10 million said they spent a mean 11.4% of their budget on their Website; this year they estimated that only 8.6% of their budget went to the Web.

Among midsize and large catalogers, though, the percentage of budget dedicated to site maintenance rose. Respondents with sales of $10 million-$49.9 million spent a mean 10.7% of the budget on their Website, up from a mean 5.9% last year. Those with sales of at least $50 million spent a mean 8.0%, compared with 7.5% last year.

But while catalogers were spending more on their Websites, they were also making more from them. The smallest respondents received a mean 34.6% of their direct (nonstore) revenue from their Websites, compared with 22.6% last year. The Web accounted for a mean 26.7% of the direct sales of midsize respondents, compared with 21.0% last year. And for catalogers with sales of at least $50 million, the Web accounted for a mean 25.4% of direct sales, up from 21.4% last year.

Business-to-business respondents, incidentally, saw a greater increase in online sales as a percentage of direct revenue. Last year, the Web accounted for a mean 14.5% of b-to-b catalogers’ direct sales; this year that portion rose to 22.6%. Among consumer catalogers, the Web accounted for a mean 31.9% of direct sales, up from 27.7% last year.

All told, 82% of consumer catalog respondents and 81% of the b-to-b respondents said that their annual online sales had increased in 2003. Less than 1% of the consumer catalogers had seen Web sales decline, though 5% of the b-to-b catalogers had. Among all consumer respondents, Web sales increased a mean 32.6% between 2002 and 2003. Among their b-to-b counterparts, the increase was a mean 36.1%.

Smaller catalog marketers saw greater gains than larger ones. Respondents with annual sales of less than $10 million enjoyed an impressive mean increase of 42.6% in Web sales. Among respondents with sales of more than $50 million, the increase was a less startling but still significant 27.9%. For midsize respondents, the mean increase in Web sales was 29.6%.

Form and functions

Certain Website features have become standard regardless of the size or type of cataloger. Take secure socket connections for credit-card purchases: 86% of the smallest respondents offered it, as did 94% of the largest. Likewise, 91% of consumer respondents and 82% of b-to-b participants had secure socket ordering.

But the availability of other features varied. For example, only 74% of the b-to-b respondents sent e-mail confirmation of orders, compared with 88% of consumer respondents. Automatic calculation of sales tax and shipping and handling was also far more prevalent among consumer catalogers: 78% provided it, compared with 55% of b-to-b respondents. And while 42% of the consumer catalogers surveyed provided real-time stock availability, only 31% of the b-to-b respondents did.

Then again, an equal percentage of consumer and business catalogers — 48% — offered online order tracking. And real-time customer service, such as an online connection to an order-taker, was more common among b-to-b catalogers, with 24% offering it compared with 13% of the consumer catalog respondents.

Consumer catalogers appeared to be more aggressive in promoting their Websites than b-to-b marketers. For instance, 83% of the consumer respondents sent e-mails to tout their online catalog, compared with 66% of the b-to-b participants. Nonetheless, e-mail was the most popular promotional tool of both groups.

E-mail was also the most popular tool among catalogers regardless of their size. The larger respondents were most likely to take advantage of it, though: 85% of those with sales of at least $50 million (and 84% of those with sales of $10 million-$49.9 million) used e-mail to promote their Website, compared with 63% of catalogers with sales of less than $10 million.

And interestingly, given that doing so costs next to nothing, the smallest catalogers were the least likely to promote their sites in their print catalogs. Only 54% of those with sales of less than $10 million used print catalogs to drive business to their online catalogs. In comparison, 73% of the midsize respondents and 79% of the largest respondents did.

Catalogers with sales of less than $10 million were also the least likely to feature a user registration option on their site. Forty-three percent did not have any sort of online registration feature, compared with 11% of those with sales of $10 million-$49.9 million and 13% of those with sales of at least $50 million. Among respondents with user registration, only 25% required users to register; for the other three-quarters of catalogers, registration was optional.

Smaller catalogers were least likely to use their Website to liquidate overstock. Sixty-four percent of those with sales of less than $10 million purged overstock on their site, compared with 74% of the midsize respondents and 80% of the largest. And consumer catalogers were much more likely to get rid of excess inventory on their Website: Four out of five consumer respondents did so, compared with half of the b-to-b participants.

Mean annual Website maintenance costs

(includes staff, promotions, order fulfillment)
Consumer marketers $197,935
B-to-b marketers $125,611
Sales less than $10 million $53,204
Sales $10 million-$49.9 million $172,593
Sales at least $50 million $362,500

Mean percentage of total budget spent on Website

Consumer marketers 9.8%
B-to-b marketers 8.4%
Sales less than $10 million 8.6%
Sales $10 million-$49.9 million 10.7%
Sales at least $50 million 8.0%

Mean number of full-time Website employees

Consumer marketers 2.4
B-to-b marketers 1.9
Sales less than $10 million 1.4
Sales $10 million-$49.9 million 2.0
Sales at least $50 million 3.5

Percentage with no full-time Web employees

Consumer marketers 13%
B-to-b marketers 28%
Sales less than $10 million 31%
Sales $10 million-$49.9 million 13%
Sales at least $50 million 9%

Top methods for promoting online catalog

CONSUMER E-mail 83%
Search engines 70%
Promotions in catalogs 69%
Print ads 40%
Links with portals/online malls 38%
B-TO-B E-mail 66%
Promotions in catalogs 62%
Search engines 61%
Direct mail (other than catalogs) 56%
Print ads 43%

Percentage not taking orders via Website

Consumer marketers 6%
B-to-b marketers 18%
Sales less than $10 million 10%
Sales $10 million-$49.9 million 13%
Sales at least $50 million 4%

Methodology

On March 25, Primedia Business e-mailed 3,739 Catalog Age subscribers, selected on an nth-name basis, an invitation to an online survey. The invitation contained an embedded URL linking the recipients to the Website where the survey was located. Respondents were offered a chance to be entered into a drawing for one of four $50 Amazon.com gift certificates. A follow-up e-mail was sent on March 30. By April 9, Primedia Business had received 294 completed surveys; 493 of the outbound e-mails were undeliverable, and 47 surveys were returned incomplete. The effective response rate was 9.1%.

This study provides data on a variety of e-commerce resources and capabilities that multichannel companies devote to the online channel. You’ll learn which departments run the online catalog; how much is invested each year on site maintenance; what user information is collected and for what purpose; percentage of sales that’s generated online; and much more. The cost of the study is $299.

Click here to purchase the full study of the 2005 Multichannel Merchant E-Commerce Benchmark $299.00 (462.7 kb/55 pages)

If you have any questions or comments please contact:
Lynn Adelmund
Phone: (913) 967-1897
Email: lynn.adelmunc@penton.com

Partner Content

The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.
Strategies for Maximizing Mobile Point-of-Sale Technology - NetSuite
Learn the top five innovative ways to utilize your mobile POS technology to drive customer engagement, increase sales and elevate your brand.