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

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