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  • 2018

    HOLIDAY FORECASTS

    SEPTEMBER 13, 2018

    netelixir.com/holidays

  • WE HELP ECOMMERCE BRANDS FIND & ACQUIRE NEW CUSTOMERS ONLINE

  • EMPLOYEES130+

    GLOBAL OFFICES3+

    RETAIL CLIENTS120+

    CERTIFICATIONS315+

  • Own the search bar, everywhere

    OUR SOLUTIONS:

    PAID SEARCH

    ORGANIC SEARCH

    PAID SOCIAL

    AMAZON ADS

    ANALYTICS

    OUR INTEGRATED

    DIGITAL MARKETING APPROACH

    AIMS TO HELP BRANDS

  • ABOUT UDAYAN BOSE

    Founder & CEO of NetElixir

    Founded PartyBingo.com (PartyGaming, Plc)

    Guest Lecturer: • Johnson School of Management, Cornell

    University • City University of New York, Baruch • Indian School of Business

    linkedin.com/in/udayanbose

  • AGENDA • BASIS OF OUR FORECAST &

    METHODOLOGY

    • HOLIDAYS 2018: 2 QUESTIONS

    • 2018 HOLIDAY FORECAST

    • 3 HOLIDAY RESOURCES

  • BASIS OF OUR FORECAST

    • Ongoing analysis of ecommerce and search engine marketing metrics for our customer base of mid-size and large customers with > $600 MM online holiday revenue (November 22 -December 25).

    • 320 Million+ unique website visits (forecasted for the upcoming holidays) across five main Holiday verticals – Gourmet Food, Apparel and Shoes, Home & Décor, Gifting and Consumer Electronics.

    • We have been aggregating this data since August 2008. This is our 11th Annual Holiday Forecast.

  • FORECAST METHODOLOGY

    • Our forecast uses actual week-wise website visits, website sales, channel-wise investments and CPC data. Based on these primary variables, we build our set of key metrics (calculated) and track them on a weekly basis starting the 1st day of the year.

    • The above data is segmented into mobile and desktop data sets and Y/Y comparison is conducted with the previous 2 years (for this year, 2017 and 2016, week-wise key metrics).

    • Our forecasting model has a significant weightage (>15%) placed on the Back to School metrics.

    • Since 2015, we have included in our forecasting model indicative Amazon sales data for those customers in our dataset that have an active presence on Amazon Marketplace.

    • Our model places significant weightage (>20%) on prior year Holiday Trends with a special emphasis on the inflection points (if any).

  • HOLIDAYS 2018

    2 QUESTIONS

  • WHAT WERE SOME OF THE

    KEY ECOMMERCE AND CHANNEL TRENDS

    THAT YOU HAVE OBSERVED DURING THE FIRST HALF OF 2018?

    HOW SHOULD RETAILERS BE THINKING ABOUT THEIR

    SEARCH MARKETING GOING INTO THE HOLIDAY SEASON?

    ANY GUIDANCE WITH RESPECT TO TRADITIONAL ENGINES LIKE

    GOOGLE VS. ECOMMERCE PLATFORMS LIKE AMAZON?

  • Y/Y GROWTH HAS

    BEEN STRONG (JANUARY - AUGUST 2018)

    Source: NetElixir’s customers with over $600 MM in projected 2018 Holiday Ecommerce Sales (own website)

    18% 16%

    19%

    15% 16% 15%

    -2% -5%Q1 Q2 JULY-AUG

    Y/Y Growth (JAN-AUG 2018 VS. 2017)

    Orders Revenue AOV

  • BACK TO SCHOOL

    RESULTS HAVE BEEN

    STRONG

    17%

    14%

    -4%

    ORDERS REVENUE AOV

    Back To School Y/Y Growth

  • • Around 12% of a retailer’s total online sales

    (website + marketplaces) now happens on

    Amazon (Up from 9% in Q4,2017).

    • Mobile devices drive over 42% of total website

    sales (up from 34% in Q4,2017).

    • GDPR (and the Facebook/Cambridge Analytica

    fiasco) has led to stronger data privacy

    regulations.

    • Back to school y/y sales growth numbers have

    been stronger than previous years.

    KEY ECOMMERCE

    TRENDS (JANUARY – AUGUST 2018)

  • • Amazon continues to increase its dominance on

    product searches (we estimate 62%+ of all

    product searches now happen on Amazon).

    • % of all search queries that are voice activated

    (voice search) continues to grow quickly (we

    estimate 30% of all mobile searches to be voice

    activated).

    • Primary channels like Google, Bing and

    Facebook have made this a year of AI.

    • Consolidation of Marketing Assets into a unified

    marketing platform (Google Ads and now,

    Amazon Ads).

    KEY CHANNEL

    TRENDS

    (JANUARY – AUGUST 2018)

  • AMAZON’S SHARE

    OF TOTAL ONLINE

    HOLIDAY SALES

    IS POISED TO CROSS

    40% THIS HOLIDAY

    SEASON

    22% 26%

    30% 35%

    40%

    2014 2015 2016 2017 2018 (EST.)

    Amazon's Share of Total US Online Sales % Share

  • • No online customer acquisition plan can afford to

    ignore Amazon.

    • Create a Voice Search SEO Playbook for your

    business, NOW!

    • Product Listings ads are expected to drive 65%+ of

    total paid search sales this holiday season. Ensure

    that your PLA set up in well optimized.

    • With the exponential growth in local + mobile

    searches, you can use local inventory ads and

    location targeted ads and capture instore signups.

    But first, you need to have a mobile site that loads in

    less than 3 seconds.

    HOW SHOULD YOU

    BE THINKING ABOUT

    YOUR SEARCH

    MARKETING

    PROGRAM

    HOLIDAYS 2018

  • 17

    2018 HOLIDAY

    FORECAST

  • NETELIXIR PREDICTS STRONG GROWTH IN

    ONLINE SALES THIS HOLIDAY SEASON

    15% Y/Y GROWTH

  • Y/Y GROWTH (%)

    ORDERS: 17% REVENUE: 15%

  • STRONGER

    GROWTH THAN

    PREVIOUS YEARS

    Y/Y, US Ecommerce Growth (NRF)

    2012 14%

    2013 10%

    2014 13%

    2015 13%

    2016 10%

    2017 13%

    2018 15% (NetElixir Forecast)

    Source: NetElixir’s customers with over $600 MM in

    projected 2018 Holiday Ecommerce Sales (own website)

  • CATEGORY LEVEL

    Y/Y GROWTH

    FORECASTS

    Source: NetElixir’s customers with over $600 MM in projected 2018 Holiday Ecommerce

    Sales (own website)

    Revenue Order AOV

    Gourmet

    Food 17% 17%

    No

    change

    Apparel

    & Shoes 19% 23% -3%

    Home Décor 13% 15% -1%

    Gifting 15% 13% +1%

    Consumer

    Electronics 15% 17% -2%

    Y/Y Change (2018 vs. 2017)

  • TRENDS TO WATCH OUT FOR THIS HOLIDAY SEASON

    • Holiday gifting related search query volume picks up from the Sunday after

    October 20th. (10/21/2018)

    • The number of days between Thanksgiving and Christmas is higher than previous

    years (33 days). This will drive an incremental sales volume, as well.

    • We anticipate 3 peak online shopping periods: 5 day period from Thanksgiving to

    Cyber Monday (11/22-11/26); Green Monday Period (12/9-12/12); Mobile

    Shopping Spike (12/18-12/21).

  • Mobile Shopping will continue to surge.

    • We estimate 42% of all online purchases will happen through

    mobile phones.

    Growth of Voice search

    • Lowering of friction in the search to purchase will to an increase in

    purchase frequency as well as quicker purchase of staples due to

    the shortening of search-shop-buy path.

    Heavy Discounting by larger online retailers

    • Will grow overall online sales (however, smaller merchants may

    face the brunt) and also add to the continuing shift from brick and

    mortar to online.

    Strong Macro economic factors

    • A strong economy that’s expected to top 3% GDP growth for this

    calendar year, low unemployment %, increase in wage rate and

    consumer sentiment returning to levels on par with early 2000s

    4 FACTORS THAT WILL HELP DRIVE 15% Y/Y

    ECOMMERCE REVENUE GROWTH

  • THE BIG WINNER WILL BE

  • 15% Y/Y GROWTH ~ $97B (TOTAL US ECOM SALES)

    INCREMENTAL $ GROWTH ~ $13B

    LETS DO SOME MATH…

  • AMAZON’S SHARE

    WILL GROW TO 40% (FROM 35% IN 2017)

    • 2017 Amazon Holiday Sales

    Projection:

    40% x $97B = $38.8B.

    • 2017 Amazon Holiday Sales:

    35% X $84 B = $29.4 B.

    • Amazon’s additional holiday

    bounty: $9.4B.

  • PROJECTED INCREMENTAL REVENUE

    GAIN BY OTHER RETAILERS AND ONLINE MARKETPLACES

    (AGGREGATE ADDITIONAL ONLINE HOLIDAY SALES)

    $3.6B

  • SUMMARY

    • NETELIXIR PREDICTS A STRONG HOLIDAY SEASON

    WITH 15% Y/Y GROWTH IN

    ECOMMERCE REVENUE.

    • AMAZON’S SHARE OF TOTAL ONLINE HOLIDAY SALES

    THIS YEAR IS LIKELY TO EXCEED 40%.

    • MOBILE SHOPPING WILL CONTINUE TO SURGE AND EXCEED 42% OF TOTAL ONLINE SALES.

  • 3 RESOURCES

    FOR

    2018 HOLIDAY SUCCESS

    netelixir.com/holidays

  • 31

    HOLIDAY READINESS WORKBOOK FOR

    20 PROVEN HOLIDAY SUCCESS STRATEGIES

    netelixir.com/holidays