Performance Index: Why smartphone optimization is a top 2015 priority

Final results are in for the fourth quarter of 2014, and a clear priority has emerged for merchants: smartphone optimization.

Data from the MarketLive Performance Index shows that year over year mobile usage surged by close to 50%, with fully 44% of all traffic to merchant sites and 25% of all revenues derived from mobile visits.

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What’s perhaps surprising is the marked surge in smartphone contributions specifically. Not only did smartphones’ share of revenues surge close to 125%, but conversion rates on smartphones jumped as well, by 88%.

Tablet growth, meantime, was more moderate, with traffic actually dropping year over year, share of revenue increasing by just under 12%, and conversion by 21%. While these numbers are solid, they represent a marked slowdown from just a year ago, when tablet traffic and revenue both grew by more than 50%, overshadowing smartphone activity.

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Now the situation is completely reversed — and the trend is set to continue. Indeed, MarketLive forecasts that smartphone contributions to the bottom line will overtake tablets in the second quarter of this year.

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In the past, tablets’ relatively large form-factor compared with smartphones allowed merchants to skate by with near-replicas of the desktop experience — if not with sites that failed to optimize for mobile altogether. With tablet conversion rates edging close to those on the desktop browser, and with order sizes and overall revenue contribution higher than smartphones, predictions were rife (including on this blog) that tablets were the key to achieving mCommerce success.

Now, though, merchants can no longer be complacent and rely on tablet performance to shore up mobile sales. Instead, they must re-imagine their businesses to cater first and foremost to smartphone shoppers — and confront and master the challenges of delivering a user-friendly, secure and context-aware smartphone experience for both research and purchasing. In so doing, merchants will be positioning themselves well to take advantage of two key trends driving smartphone primacy:

The tablet plateau. Forecasts call for tablet penetration to plateau in coming years, with growth in the number of worldwide users set to dip below 20% this year and into single digits by 2018 as the market for tablets matures and stabilizes in the U.S. and other developed regions. With tablets perceived as an optional second device after the mobile phone, their penetration into emerging — and high-growth — markets is in doubt. By contrast, smartphones are poised for worldwide ubiquity, with some forecasts calling for fully 90% of the world’s population over the age of six to own one by 2020. Even within the U.S. smartphone ownership has the potential to growth significantly, with ownership hovering just below 70%.

The seamless store. As discussed in our 2015 trends  webinar, the surge in smartphone usage is leading more and more shoppers to consult mobile devices in physical store outlets. During the 2014 holiday season, more than 45% of shoppers said they planned to consult price and product information in-stores, as well as access promotional offers and coupons, according to the MarketLive Consumer Shopping Survey. That usage is paying off for brick-and-mortar retailers: Performance Index data shows that merchants with physical store outlets saw the percentage of revenue from smartphones jump from 5.02% to 13.18% — a whopping increase of more than 162%.

Our trends presentation outlined a few of the ways merchants can cater to smartphone shoppers — digitized store experiences, adoption of responsive design, and platform-agnostic loyalty rewards. We’ll explore each of these topics in greater depth in the month to come, as well as dive deeply into mobile KPIs and best practices and further emerging trends influencing smartphone usage.

Meantime, consult the official Performance Index press release and download the report with data tables for more in-depth analysis of Q4 performance.

Why responsive design is the starting point for 2015 success – webinar recap

As our prior post explained, the need for merchants to unite their disparate online commerce initiatives into a cohesive brand presence has never been greater. But it’s a tall order to tie  together touchpoints to create a shopping experience that’s both consistent and context-relevant, and for many small-to-mid-sized merchants, defining a starting point — and a starting budget — can be a tricky process.

To help merchants get the ball rolling, last week MarketLive CEO and Founder Ken Burke hosted a webinar outlining the top strategies to support the goal of unified commerce. Underpinning them all: the need for a responsive design framework to support nuanced and highly-differentiated iterations of brand sites.

Responsive design — which uses a single code base to deliver information across touchpoints — is on the upswing, thanks in large part to merchants acknowledging the need for comprehensive mobile sites. In 2014, 63% of online business leaders ranked responsive design as a technology priority. That’s a jump of nearly 58% compared with 2013, when just 40% did so. Specifically within retail, just 9% of the top 100 sites employ responsive design — but among mobile leaders, the number is much higher, with more than 20% of Internet Retailer’s Mobile 500 using responsive techniques, according to MarketLive and Fit for Commerce.

But many merchants face significant hurdles when it comes to implementing responsive design. After all, the pitfalls of a poorly-executed responsive design project are by now well-known, and require significant time and investment to avoid; by one measure, the development timeframe can average anywhere from 25% to 200% longer than a conventional desktop-based site relaunch.

To justify investment in responsive design, merchants should factor in the potential gains across touchpoints. By investing in responsive, they can more easily execute Total Commerce strategies across touchpoints, including:

The united storefront. Overwhelmingly, shoppers turn to their mobile devices when seeking information while in stores. Consumers by far prefer to consult their phones to check product prices, seek further product information and even to find out where an item is located in the store, rather than seeking out a store kiosk or a live sales associate. And they expect product, price, and promotional information online to be consistent with what they see on store shelves; more than 75% of participants in the 2014 MarketLive Consumer Shopping Survey said consistency in those three categories was crucial. Responsive design supports that consistency by serving content across touchpoints from a common database, making in-store/online connections more seamless.

Loyalty 2.0. With the growth rate for U.S. eCommerce revenues projected to slow to below 10% by 2016, competition for digitally-savvy shoppers’ loyalty will become increasingly fierce. To win repeat business, merchants with rewards programs must update their offerings to include seamless portability among touchpoints, so that shoppers can tap exclusive content and offers in whatever format they choose. And merchants must also recognize new forms of loyalty, from new social followers to shoppers looking to save cart contents for later access on mobile devices. Responsive design enables functionality across touchpoints to unlock the benefits of deep brand engagement — as on the sites for Beauty Brands, where members of the Take 10 program can access their account both on the desktop or laptop site and via mobile device.

20150113_080805beautybrands_desktop_loyaltyEach of these topics — responsive design, digitization of the physical store, and loyalty 2.0 — will be the subject of an upcoming whitepaper. Meantime, download the trends webinar replay and the companion whitepaper for further details and more 2015 priorities. Is responsive design on your 2015 to-do list, and why or why not?

Why unified total commerce should be your top 2015 priority – webinar preview

If there’s one lesson merchants should take away from the 2014 holiday season, it’s that plenty of opportunity remains to perfect brand offerings to match the new shopping reality — and to realize significant gains, even with the eCommerce market maturing.

Revenue growth for the holidays was strong, according to MarketLive Performance Index data — thanks to continued traffic growth and steady average order values that indicated merchants were winning the battle for sales without resorting to desperate discounts. But while holiday mobile traffic and revenue soared year over year, sub-par mobile performance dragged down overall conversion rates and pushed cart and checkout abandonment upwards.

And mobile is just one area ripe for improvement. With more than half of all retail transactions set to be influenced by the Web this year, according to technology researcher Forrester, merchants should be focused on delivering fluid brand experiences across the board, not just on individual devices, social networks or browsers. That’s a change for most merchants, who tend to design single-platform linear experiences, resulting in fragmented brand strategies and internal silos that can stymie sales and loyalty.

For 2015, then, merchants must adopt the consumer point of view — one that calls for a unified approach. After all, while consumers appreciate the convenience of being able to shop via a variety of touchpoints, research shows they also crave consistency when it comes to products, pricing and promotions. When asked which aspects of the shopping experience should be consistent, participants in the 2014 MarketLive Consumer Shopping Survey ranked product pricing, free shipping policies, and other promotions as the three key areas where they sought a standardized approach.

In response to this expectation, merchants should approach shopping tasks from the consumers’ point of view of the brand as a single entity, and strive to understand at what points different research tools come into play and what spurs purchase decisions, whether in-store or browsing a tablet. Then, by offering contextually-relevant products, content and offers that match shoppers’ needs in the moment, merchants can create a truly meaningful brand experience — one that has the potential to create a lasting connection.

Join us tomorrow for a webinar with MarketLive founder and CEO Ken Burke to examine how the concept of unified total commerce translates into 2015 strategies — including the five key areas merchants should prioritize to position their brands for success in the year ahead.

You can download the companion whitepaper now, and moving forward, look for in-depth whitepapers and blog posts exploring in detail each of the five focus areas over the coming months.

What are your top 2015 priorities, and how do they serve the unified total commerce imperative?

MarketLive News: Forrester Recognizes MarketLive for its Global eCommerce Suite

MarketLive’s global commerce suite has been recognized by Forrester Research in its most recent analysis of commerce vendors.

The just-released research study, titled “The Forrester Wave™: B2C Commerce Suite Q1 2015,” evaluated the leading 11 vendors of enterprise-class suites, as determined by selection criteria including revenues, mindshare and market share. The report cites MarketLive’s positive momentum:

“…with the return of founder Ken Burke to the helm, things are looking up for MarketLive. The core commerce engine is effective with a surprisingly robust feature set and the firm has a positive client win momentum. MarketLive is having success closing larger enterprise level deals, bringing it upmarket from its previous focus on SMB and midmarket online retailers. In support of this goal, MarketLive has been maturing the platform by migrating its cloud infrastructure over to Amazon Web Services (AWS) and focusing on improving its upgrade processes.”

The report also points out that MarketLive has seen strong client growth and fills a gap in the market between SMB solutions and the larger enterprise vendors.

“We’re always pleased when a top-tier analyst firm like Forrester recognizes what we feel is MarketLive’s significant contribution to the commerce sector,” said Ken Burke, founder and CEO of MarketLive Inc. “Among other things, we believe the report validates our market focus and the tremendous investments we’ve made in our technology and in servicing our customers.”

Forrester Research forecasts the market for commerce suite technology to almost double in size in the next five years from $1.2 billion in 2014 to $2.1 billion in the US alone by 2019.

Read the full press release for more details, and watch for final Q4 2014 results as reported by the MarketLive Performance Index later this week.

MarketLive News: Astound Commerce Joins MarketLive ‘Implement’ Program to Scale Platform Sales Globally

MarketLive announced today the selection of Astound Commerce, a leading integrator of e-commerce solutions, to its ‘MarketLive Implement’ certification program. Under the terms of the agreement, MarketLive will license its award-winning platform while Astound Commerce will promote MarketLive’s platform globally to its customer base as well as sell deployment and integration services.

MarketLive’s scalable, non-proprietary SaaS ecommerce platform, was a perfect match for the needs of Astound customers.  Built in Java on the latest technology stack, the platform scales with retailers as they grow while still maintaining a competitive price. MarketLive’s architecture allows new features to be implemented quickly and in many cases the platform becomes less expensive as retailers expand.

“Astound Commerce is looking to expand its technology platforms practice to serve unmet demand among our mid-market customers, and MarketLive is the undisputed leader in that segment. There is a great need for an affordable but full-featured commerce platform,” said Igor Gorin, CEO of Astound Commerce. “MarketLive has mature technology and compelling features at a price that makes sense for mid-market retailers.”

For more information, read the full press release or visit MarketLive at NRF’s Big Show, booth 4448.

MarketLive Performance Index: Holiday season finishes strong

The 2014 holiday season has drawn to a close, and the initial results from the MarketLive Performance Index are promising. From the period beginning the Monday before Thanksgiving and ending the Sunday after New Year’s Day, revenues are up 11.7% compared with the corresponding timeframe in 2013, and traffic grew 13.3%. The average order size grew a substantial 4.2%, suggesting that Index merchants held the line when it came to pricing and devised creative promotional strategies that succeeded while maintaining margins.

Mobile shopping made its mark, with fully 46% of all eCommerce site traffic generated by smartphones and tablets. And more than a quarter of total online revenues were attributed to mobile devices — with smartphone revenue in particular growing exponentially, at 111%.

But the surge in mobile usage proved a double-edged sword. Overall conversion rates for the season dropped by 4.8% and cart abandonment rose by 3% due to mobile users either consulting sites and adding items to the cart purely for research — or, worse, finding mobile usability impediments too great to continue with their purchases. With mobile poised to make an even greater impact throughout 2015, improving the mobile site experience should remain at the top of merchants’ priority lists.

Holiday results from the MarketLive Performance Index

In addition, the results suggests merchants should:

Front-load the holiday 2015 calendar.  Despite criticism of stores doing business on Thanksgiving day and hand-wringing over tepid Black Friday sales, Index results show that the first part of the holiday season is crucial, with fully 65% of holiday revenue earned before Dec. 14 and the conversion rate for the season peaking on Cyber Monday, Dec. 1, at 5.2%. Data from IBM Digital Analytics suggests that holiday impacts were felt even before Thanksgiving, with revenues the weekend before Thanksgiving surging more than 18% thanks to pre-Black-Friday and “Black Friday Week” deals.  As merchants look ahead to the fourth quarter of 2015, they should plan to launch and promote holiday initiatives earlier than ever in order to accommodate shoppers who seek to buy gifts early in the season.

Develop a refined promotions strategy to maintain margins. Index merchants successfully navigated the holiday season without sacrificing average order value — but with competition tightening for online attention and dollars, they must deliver ever-savvier promotions to entice shoppers to buy. In 2015, with mobile usage poised to dominate, merchants should focus on relevance as the primary goal of promotions — delivering the optimal pricing, products and information to consumers exactly when and on which touchpoint they need it. Connecting in-store and online promotional strategies is an important step toward the goal; with usage of mobile devices to download coupons, check prices and access additional product information while in-store at an all-time high, the time is ripe to develop messages targeted at these online/offline crossover users.

Stay tuned for further discussion of mobile and in-store strategies, plus a 2015 trends webinar and more resources for planning the year ahead. Meantime, how was your holiday, and how will the results impact your 2015 plans?

MarketLive Performance Index: Holiday sales growth accelerates, with help from social (yes, social!)

With the holiday shopping season entering the home stretch, merchants are on track to achieve solid sales growth. While much media hand-wringing ensued following smaller-than-anticipated increases in revenue on Thanksgiving weekend, results from the MarketLive Performance Index show that once off the starting block, merchants are seeing increased sales growth rates as the season progresses.

For the week that included “Green Monday,” Dec. 8, MarketLive merchants achieved a year-over-year revenue growth rate of 11.5% — especially impressive given that visits grew just 8.6%. With the conversion rate trailing last year’s by more than 5% and abandonment up 6.7%, the revenue growth is likely thanks to merchants holding the line on pricing — and, indeed, average order size for the week was up 4.6% year over year.

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Combined totals for the season to date follow the same trend, with revenue up 9.4% on increased visits of 13.5% and average order values averaging 4.1% higher than last year.

 

The increased average order size is especially impressive given the continuing downward price pressure exerted by the largest online mass merchants. The growth in average order value demonstrates that MarketLive merchants are presenting unique finds, relevant promotions for their target audience and stellar service that trump bargain-basement pricing.

In this light, the potential value of social media becomes clear, as it connects merchants with an audience predisposed to be receptive to their products and offers. Although overall, the percentage of visits and revenue directly attributable to social media remains small, a select group of MarketLive merchants have capitalized on the opportunity social media affords to drive a significant percentage of sales and visits from social networking sites.

For the season to date, the merchants with the 15 highest sales figures attributed to social media achieved average social media revenue gains of 212.31% and average social traffic gains of 210.12% year over year — significantly higher than the Index as a whole, which saw gains of 135.7% for social revenue and 113.1% for social traffic. Some individual sites among the top 15 are seeing more than 20% of their traffic and 10% of their revenues originating from social media.

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To maximize social impact in the remaining days of the holiday season — and in the year to come — merchants should:

Display an array of targeted discounts. Merchants can avoid decimating their margins by judiciously targeting discounts to focus on top gift categories, and then promote them socially using imagery that displays the full array of possibilities on offer. MarketLive merchant The Cartoon Network Shop employed this strategy for its extended Cyber Monday sale, offering an array of discounts on top items that were promoted via its Facebook page with a large image showing an assortment of products.

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Showcase social recommendations. Social media is a rich source of word-of-mouth recommendations, and merchants should capitalize on them by boosting visibility of endorsements and reviews. Developing last-minute campaigns focusing on top-reviewed products is one way to go, but merchants should also boost visibility within social media itself using the “share”, “retweet” and other like functions. MarketLive merchant Neutrogena actively retweets posts featuring product recommendations. Not all of them are gift-related — such as a post from BeautyBlitz promoting the opportunity to win makeup removal wipes, which “every girl needs … near her bed,” the post points out, especially during the busy holiday social season. Also retweeted by Neutrogena: mentions in major media outlets such as InStyle, whose feature on celebrity gift picks lends authority to the brand.

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Watch for our final wrapup of holiday results after the New Year, along with 2015 trendwatching and more.

MarketLive Performance Index: Mobile sales zoom as holiday season peaks

As the peak holiday period passes the midpoint, the latest data from the MarketLive Performance Index shows that merchants are continuing to achieve year-over-year revenue gains — with the biggest spoils going to those brands who’ve optimized their mobile experiences.

In the week that started with CyberMonday, shoppers flocked to mobile devices to browse deals and make purchases. A whopping 43% of all online traffic was on mobile devices, and those visits generated 24% of total online revenues. While tablet revenues increased year-over-year by an impressive 42%, smartphone revenue growth was even more impressive, at 107%, accounting for $1 out of every $10 spent online.

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Overall, seasonal growth remains steady, with merchants seeing revenue gains of more than 9% on increased traffic of more than 18%. But while the add-to-cart rate is showing a modest year-over-year increase of 1.3%, the conversion rate has slipped by two-tenths of a percentage point, for a drop of 5%.

The gap suggests that merchants are missing the opportunity to win sales from highly-qualified shoppers who’ve engaged with the site, identified relevant products, and gone so far as to place them in the cart.

Usage of the cart to to research total order costs is likely partly to blame; past research suggests that more than half of shoppers add items to the cart with no intention of buying in the first place, and a similar percentage use the cart to stash items for further perusal later — an activity that has doubtless spiked as shoppers research on phones and complete purchases on desktop or laptop computers, or in stores.

But with the explosive growth in mobile visits and sales, mobile usage is likely contributing to the conversion gap in another way as well — thanks to checkout experiences that are cumbersome on smaller touchscreens. Indeed, half of online consumers say “easier checkout” would spur them to buy more via mobile devices, while a third specifically cited one-click checkout, according to the 2014 MarketLive Consumer Shopping Survey.

While it’s far too late to streamline checkout processes for this year’s peak season, merchants whose holiday mobile numbers are lackluster so far may be able to institute small changes that have big potential to smooth the mobile path to purchase — and salvage sales. Worth considering:

Prominent customer service messaging. The mobile checkout process should include a prominent link to customer service throughout, including a live chat option and preferably with click-to-call functionality built in.  Merchants who don’t already display that information should investigate whether they can adjust their checkout templates.

Promotion of account creation and wish lists. Another way to combat cart abandonment is to offer viable alternatives for researchers who wish to save items for later access across touchpoints. Merchants should consider promoting wish list and account creation, using prominent messaging in the cart, in email campaigns and on social media to get the message across.

MarketLive merchant The Room Place encourages mobile users to save cart contents with a prominent button. Shoppers who click the link are invited to create an account with a streamlined form that doesn’t require entering delivery or billing addresses or other extraneous data.

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Watch for more holiday results updates through Christmas and a season-end wrap-up after the New Year.

Performance Index: Cyber Monday gains cap successful holiday kickoff weekend

The results are in for the final salvo of the 2014 Thanksgiving weekend and the results confirm that merchants are off to a strong start — even as consumers appeared to experience promotion fatigue, slowing Cyber Monday revenue gains.

Merchants in the MarketLive Performance Index achieved year-over-year sales growth of 7.3% for CyberMonday, driven by an increase in traffic of more than 20% and an increase in average order value of more than 4%. Mobile saw especially strong revenue gains, with sales from mobile devices up 141%.

Both comScore and Adobe reported double-digit eCommerce revenue gains for CyberMonday — but, tellingly, Adobe separated results for the industry’s top 25 retailers, who each generated more than $30 million on Cyber Monday alone, from smaller merchants generating $2 million or less that day. Adobe’s data found that the mega-merchants achieved 25% growth on Cyber Monday, while the smaller merchants saw 5% year-over-year sales gains.

That widening gulf presents a unique challenge for small- to mid-sized merchants. Not only must they contend with the deep discounting strategies of the online mass merchants who are dominating market share, but they must also find ways to stand out among the torrent of promotions offered by those retailers, whose reach is often deep and wide.

One approach is to manifest brand identity consistently across touchpoints by presenting products and offers that resonate deeply with the target audience. Among the ways to do so:

  • Offer discounts that support brand identity. Small-to-mid-sized merchants can’t match the deep discounting strategies of mass merchants — so instead, they should use discounts as a means to demonstrate their knowledge of the needs and priorities of their target audience. That can mean offering free shipping or a discount on a particular category of products, or gift-with-purchase incentives that strike a chord.
  • Put the spotlight on exclusive products. 43% of shoppers say they’d pay full price for a holiday gift that perfectly matches the recipient, and 37% say they’d pay full price for hard-to-find items, according to the 2014 MarketLive Consumer Shopping Survey. Merchants should emphasize unique finds and exclusive sets.
  • Roll out the customer service red carpet. Merchants should strive to provide personal service on a level the big mass merchants can’t match — and to market their customer service offerings as they would a valuable product. MarketLive merchant Title Nine heightens customer service visibility on the all-important shopping cart page with an invitation to engage in live chat and a concise description of the brand’s product guarantee.

cybermonday_brandbuildserviceFor more Cyber Monday and Thanksgiving weekend details, read the full MarketLive press release. And stay tuned for further holiday results next week.

Performance Index: MarketLive merchants see strong Black Friday gains, with mobile leading the way

The numbers are in for Black Friday weekend, and amidst slumping overall sales eCommerce has once again proved a bright spot. Merchants in the MarketLive Performance Index achieved year-over-year revenue gains of 16.2% during the four-day Thanksgiving weekend.

That performance trumps the flat online sales growth reported by the National Retail Federation and the 9.48% gain reported by IBM. At the same time, the growth rate for Thanksgiving and Black Friday was slower than in previous years, suggesting that shoppers visiting MarketLive merchant sites weren’t immune to promotions fatigue — or perhaps they expect the near-constant drumbeat of specials to continue, and are holding out for even better deals.

“We coached our customers and cautioned the industry that pre-empting Black Friday with early discounts is not healthy,” said Ken Burke, MarketLive founder and CEO. “This year saw an unprecedented number of retailers ‘jumping the gun’ on holiday sales and discounts which drove pre-Thanksgiving sales.”

Mobile sales jumped by more than 50%, with close to 30% of revenues originating from a mobile device. MarketLive merchants saw fully half of their visits coming from mobile devices, raising the prospect of shoppers on the go using their devices purely for research versus purchasing, and thereby causing key metrics to slump. Cart abandonment rates did, indeed, increase over the holiday weekend compared with 2013. But conversion rates and average order size held steady or increased, suggesting that merchants have improved their mobile experiences to meet the increased potential for sales.

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The Index and industry results demonstrate that merchants will have to work hard for the remainder of the season if their offers are to stand from the crowd of promotions. Among the tactics to consider:

  • Go for quality vs. quantity with email. As we discussed in one of our recent holiday tips, merchants should aim for maximum relevance when designing email campaigns, and should avoid sending multiple emails per day unless deals really are changing that rapidly. One merchant who shall remain nameless sent five nearly-identical Cyber Monday messages all containing the same content, with only the Subject: line changing — a sure-fire way to irritate consumers and guarantee that future messages will be summarily dismissed.
  • Use social to up visibility of promotions — and monitor their reception. Merchants should go beyond a single status-update post to Facebook and Twitter and find innovative ways to showcase deals via social media. MarketLive merchant Marc Jacobs Beauty promoted its “Blaquer Friday” deals across a range of social networking sites, including Google Plus and Instagram, and even devised a hashtag to increase visibility. And it’s important not to “set it and forget it” when it comes to sharing promotions socially. When a follower complained that exclusive gift packs were sold out by the Saturday after Thanksgiving, a  Marc Jacobs Beauty representative responded within an hour to reassure followers that inventory was still available.

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For more, view the official MarketLive Black Friday press release. And watch for Cyber Monday results and analysis coming momentarily, with weekly updates to continue through Christmas.