Date: 17 March 2010

Webloyalty etail Strategy Summit 2010 – Event summary

Webloyalty, a leading provider of incremental revenue for online businesses and facilitator of the event, announces the findings of the recent Webloyalty etail Strategy Summit 2010.

With online retail and travel giants such as bmibaby, thetrainline.com and Asda alongside retail researchers Verdict Research and online intelligence provider Experian Hitwise, London’s Cabinet War Rooms were a fitting setting to discuss strategies for achieving post-recession etail success, with multichannel emerging as the dominant theme throughout the event.

Martin Child, MD Europe of Webloyalty, commented: “With the etail market becoming more mature and shoppers more savvy, there is a demand for more sophisticated strategies. It is important to recognise the value online plays in multichannel marketing. It needs to work hard to maximise revenue and play a driving role in supporting the other channels.”

Social Media As Traffic Driver:

At the event, Experian Hitwise presented its statistics on 2009 trends and predictions for 2010. A major finding, and opportunity for online retailers, is driving traffic from social media. With currently only 7.51% of all traffic to transactional sites coming from social networking and forums, compared to 40.87% of all traffic from search engines, there is clearly a major opportunity for increasing traffic.

Robin Goad, Research Director at Experian Hitwise: “Search engines are still the key driver of traffic to transactional sites. However, a clear opportunity for retailers lies in increasing traffic from social media sites. A handful of retailers are ahead of the curve with this, particularly in the fashion and entertainment sectors, but many others are missing a trick and therefore potential untapped revenue.” Experian Hitwise’s statistics show that both Music etailers as well as Video and Games etailers receive 8.9%, and Apparel and Accessories etailers receive 8% of their traffic from social networks. These etail sectors are ahead of the pack, as in comparison House & Garden etailers, for instance, only receive 3.5% from social networks.

The online travel sector is also beginning to recognise the potential for growth through the social media channel. Ian Stewart, Head of eCommerce at bmibaby reported that currently 4% of its traffic is driven by social media and the airline realises the huge potential for this figure to increase in 2010 and beyond.

mCommerce:

Some etailers are actively researching mCommerce as an additional channel. One of the etailers that has taken advantage of mobile is thetrainline.com who launched its free iPhone app in October 2009. The app has become a huge success with over 400,000 downloads, that means that roughly 1 in 5 UK iPhone owners have downloaded the app. Although the app is currently only informational and not transactional, it has become a major driver for sales and customer loyalty.

Along with thetrainline.com, other key players in the travel sector are noticing a demand for mobile information. For example, bmibaby explained that currently it does not have a tailored mobile site, however one million visitors to www.bmibaby.com still came from mobiles during 2009, illustrating an evident appetite for the mobile channel amongst consumers.

Browsing Online To Buy In The Store:

As well as retailers, customers are increasingly becoming more multichannel minded too. Robin Goad, Experian Hitwise commented: “One of the finest recent examples of multichannel retailing was the 2009 post-Christmas sales peak. There was a very obvious spike in searches for sales and bargains online, with people using the online channel to inform their decisions on high street purchases.” Experian Hitwise reported that on Boxing Day 2009, 14.54% of all online searches containing the search term “sale” were for retailer Next and 3.69% for Debenhams. Meanwhile online-only retailers saw a big drop in visits a few days before Christmas, which continued beyond Christmas.

Robin Goad commented: “Multichannel retailers should recognise this as an indication that online and physical channels need to work well hand-in-hand and not be seen as separate entities. Online-only retailers will need to learn to make the shopping experience more engaging and interactive to replicate the more tactile experience of a high street store in order to steal market share in key sales periods.”

One retailer that actively integrates multiple channels is Asda which demonstrated its ‘Asda multi-channel strategy’, with new routes to market by creating online order and collection points in its stores. Christine Smith, General Manager Digital Trading and Web Merchandising at Asda said: “Ultimately the customer decides how and when they want to shop. We want to cater to this with our multi-channel strategy by providing various customer touch points, in store, online, mobile and in catalogues. All your everyday needs in your store, on the move, to your door.”

Loyalty:

Retail researchers Verdict Research presented the ten key trends to etail success in 2010. Key findings were that retailers will have to work much harder just to stand still. In terms of online spending, Verdict predict an annual growth of just 11% from 2010 onwards compared to almost 30% pre-2009.

Neil Saunders, Consulting Director at Verdict Research commented: “With growth of new customers levelling off it becomes increasingly important to change marketing strategies to focus on growing loyalty and increasing repeat visits rather than acquiring new customers.”

Verdict expects one of the remaining growth opportunities to lie in “channel blind customers” who use traditional channels such as online, stores, catalogues and phone and combine them with emerging channels such as social media, affiliates, kiosks and mobiles. The etailer that can encourage cross-channel interaction will see an increase in spend.

However, there will be a greater struggle for customer loyalty with the number of sites visited per purchase rapidly increasing. The average number of sites visited per purchase for ‘Clothing and Footwear’, the category with the most visits per purchase, were a mere 1.5 in 2005 and 2.1 in 2009, in 2013 Verdict expects it to reach 2.9. For ‘Homewares’ these numbers are 1.1, 1.8 and 2.1 respectively, the largest relative increase of all categories.

Verdict Research presented a number of recommendations to overcome this. Fewer clicks to make a purchase, introducing click-to-call, cutting out surprise costs and reducing basket abandonment by emailing the basket to the customer are key ways to enhance sales. At the event, bmibaby reported a 30% conversion rate on abandoned basket call backs, through experimenting with these methods.

Press Contacts:

Gill Hynes
Webloyalty: 020 7291 8724
gill.hynes@webloyalty.co.uk

Verity Lowe or Lennard van Otterloo
MS&L: 020 7878 3286
webloyalty@mslworldwide.com

About Webloyalty:

Webloyalty (www.webloyalty.co.uk) partners with over 150 online retail and travel businesses globally to help them drive incremental revenue and repeat purchases. Through its savings, discount and protection programmes, such as Shopper Discounts & Rewards, Webloyalty offers consumers who make a purchase at partners' websites the opportunity to benefit from discounts of up to 20% at over 900 top online retailers, as well as ongoing cash back incentives for repeat purchases at the partners’ website.

Webloyalty has approximately 400 employees in 8 different locations across the US and in Europe.

For further information please visit:
www.webloyalty.co.uk
www.shopperdiscountsandrewards.co.uk