What will the Holiday Season be like for Online Retailers?

More than half of online retailers (56.1%) expect their holiday sales to increase at least 15% over last year - although last year's survey had found that three-fourths (77.5%) expected their sales to grow more than 15%.



Overall results show that “Retailers will be heavily promotional to attract shoppers on a budget, but have also invested in new site features to improve the online buying experience," according to executive director of Shop.org - retailers will suffer from the economic slowdown but nevertheless they are believed to be resilient.

What are retailers doing to manage the economic slowdown this holiday season? What online strategies will be applicable this year?

1. Majority of retailers (78%) plan to offer free shipping with conditions* at some point during the holiday season, consistent with last year’s levels.
2. Compensating for increased shipping costs by renegotiating terms with shipping providers (40.4%), closely managing company headcount (33.3%), and reducing other promotions (15.8%).
3. One-fifth (21.3%) of retailers will require a higher purchase amount for customers to be eligible for free shipping, and one in ten (10.6%) will cut back on usage of free shipping with no conditions.
4. 42.9% of retailers added or improved their website since last holiday season, to help customers navigate sites more easily.
5. Websites now provide product video (42.6%) and customer reviews (32.7%) can give shoppers more information to make buying decisions.
6. Website enhancements in clearance-sale pages (27.1%) and featured-sale pages (31.3%).
7. Nearly one-fourth (25.0%) of online retailers added a Facebook page this year

What are buyer behaviors (consumer patterns) this holiday season?

1. Consumers acknowledge that 24-hour shopping convenience is one of the main reasons they choose to buy online (58.6% this year vs. 58.5% last year).
2. Shoppers’ other top reasons for buying online instead of in stores include not wanting to fight crowds (41.1%), easy price comparisons (36.4%), and free shipping (33.3%).
3. Nearly one in four shoppers (23.1%) says they are spending more online due to high gas prices, more than double the number which said the same last year (9.0%).
4. One in five shoppers (20.1%) say they simply have less money to spend this year for the holidays, while 10.6% cited a poor economy as a factor.
5. One in ten (11.0%) plans to spend less online this year due to high shipping charges.

Findings shown here are from the eHoliday Study conducted by BizRate Research, a Shopzilla company, for Shop.org, surveyed 2,040 online buyers (defined as anyone who has made an online purchase in the last 12 months) from September 29 to October 3, 2008, as well as 60 online retailers from October 1-20, 2008.

Google Getting Sued Again! This Time By Viacom Bec Of Piracy Issues On Youtube

There have been just articles upon articles on privacy issues for online use. And I agree that is imperative that people be able to retain online privacy at some point. Companies like Google though make a living out of collecting personal information from users. This allows them to profile clients, enhance advertising and improve the user experience online.

But in cases like this when Viacom sues them, that information also becomes a threat. After illegally posted clips of "The Colbert Report' was posted on Youtube, Viacom cried foul and demanded to know who was doing this.

This then started the avalanche of online piracy and online privacy nightmares for everyone concerned. The judge just ruled that Google would have to turn over user information for Youtube, and although I don't think it's really a big deal as long as they find the culprit and put the case to rest just so we can all go on with our lives, it's still sensitive that this amount of powerful data can fall indeed be transferred and can indeed fall into the wrong hands.

At this point though, Google and Viacom have come out publicly to say that they will do everything they can to retain people's anonymity. Yeah right!

Want To Start Your Own Business? Why Not Start Online?

From the article, Start a Web business in an extra few minutes By Anupreeta Das taken from Reuters. The sample highlighted here is Zlio.com where you can make your own store and this is their story.


When David Pangelinan isn't logging 14-hour days driving a fuel tanker, he's at his computer indulging his latest hobby: building a succession of online stores in minutes.

Pangelinan has built four online stores offering hundreds of products for sale, from Bulova watches to Betty Boop pillows, using the Web site Zlio.com.

"It was real easy," said Pangelinan, 43, who lives in Columbus, Georgia.

Pangelinan said he's still learning the finer points of e-commerce, and spends time browsing through thousands of products on Zlio.com's catalogue that he could sell.

"I just went in there and started jotting down the products that were interesting and caught my eye," said Pangelinan, who spends six to 10 hours a week tending to his shops.

Zlio.com, which launched in France in 2006 and in January in the United States, allows people to form online stores for free. Users can choose a name, address and template for the store they want to create and then begin displaying wares, say an iPod or a T-shirt.

It's a simple tool, with none of the typical hassle of designing a site, setting up a payment gateway and keeping stock of merchandise and shipping.

Once signed up, a new shopkeeper can choose from more than 3 million products offered by 120 merchants, including Barnes & Noble Inc, Zappos, Gap Inc and Apple Inc. They can then invite friends and relatives to shop.

"It's the Tupperware party concept gone online," said Zlio.com founder and Chief Executive Jeremie Berrebi. "But people are defining the concept of the shop."

Berrebi, an Internet journalist-turned-entrepreneur, said he meshed the idea of a Tupperware party with social recommendation features in which users turn to friends for shopping suggestions to create Zlio.

The notion of helping people create online stores is nearly as old as the commercial Web itself. Major e-commerce players eBay Inc and Amazon.com Inc have helped Web entrepreneurs set up hundreds of thousands of independent online stores.

Sites such as CafePress.com have been around since 1999, allowing Web users to create stores to sell personalized accessories like coffee mugs. Zlio offers a far wider range of goods for sale and takes more of a social networking approach.

Zlio also provides some marketing help. They can put a widget on their Facebook or other social networking page, or use Google Inc's AdSense software to direct traffic to their sites.

So far, people have created more than 250,000 stores, many organized around themes. One was devoted to all things red, another sold only hot sauce, a third focuses on The Beatles.

John Holsen, who runs a small publishing business in Kansas City, Missouri, recently started a shop with his wife, a yoga teacher, to sell yoga gear.

"It started as an experiment to see if I could build an e-commerce site in five minutes," Holsen said. "And you can."

He said his site gets up to 5,000 hits a month and makes about $300-$400 on monthly revenue of $3,000. "You won't get wealthy off of it, but if you built enough sites, you can probably make a decent income," he said.

On average, shopkeepers make about $300 a month, but top sellers can make as much as $3,000, Zlio spokeswoman Rachel Bremer said.

Merchants share the revenue with Zlio and the seller based on the number of clicks and sales. Shopkeepers display wares and can earn up to 10 percent commission through eBay's PayPal online payment service, either on every sale or on every click generated. They don't have to worry about shipping orders because the companies take care of it.

Last year, Zlio generated $12 million in sales for the companies with which it has tie-ups, Berrebi said. He refused to disclose how much money the site makes. He also has seen some business interest in the site. Mangrove Capital, which was an early investor in eBay's popular Skype Internet phone service, is backing Zlio, too.

As for the name Zlio itself, Berrebi said it doesn't mean anything. "It's just a four-letter word."

From Reuters via Yahoo News

Google Has The Business Model To Beat -- Sucking The Life Out of Competitors And Old Meda

Henry Blodget, a Wall Street analyst during the dot-com heyday who now runs Silicon Alley Insider, published a report Friday that examines Google's advertising growth in 2007 against those of 17 online and traditional media rivals, including Yahoo, Microsoft, Time Warner, Disney, Viacom, CBS, and Clear Channel.

From the story:

"The year-over-year growth of revenue (in 2007) on Google.com (U.S.)--approximately $2 billion--was more than twice as much the growth of ad revenue in all of the offline media companies in this sample combined. This is such an amazing fact that it bears repeating: A single media property, Google.com (US), grew by $2 billion. All the offline media properties owned by the 13 offline media companies above, meanwhile--all of them--grew by about $1 billion."

Here are the statistics on Google's growth

• Total US ad revenue across all 17 companies grew 9% from 2006 to 2007, from $53 billion to $58 billion

• Online ad revenue grew 28%, from $14 billion to $18 billion.

• Offline grew only 3%, from $39.5 billion to 40.6 billion. This was helped significantly by the inclusion of affiliate fees and (and global revenue) at CBS, Viacom, and News Corp.

• Online ad revenue grew by $4 billion.

• Offline ad revenue--in all other media--grew by $1 billion.

So advertising revenue is flowing online at a frantic rate. That's the whole story? No. Let's look at how that online revenue breaks down.

• Online ad revenue grew 28%, or $4 billion.

• Online ad revenue at Google grew 44%, or $2.7 billion.

• Online ad revenue at Yahoo, Microsoft, and AOL grew only 15%, or $1.3 billion.

• Google captured 2X as much revenue as its closest three competitors combined.

The confirms it, Google has got the business model to beat at this point. Because right now Google is sucking the life out of old media and greatly shifting ad spend towards its direction.

Management Advice For Yahoo

Many have made it a big deal how Yahoo has become so deep in trouble with regards to legal issues and other management concerns. Here are some advice from analysts and opinionated individuals as reported by Businessweek.com

1. Bernstein Research analyst Jeffrey Lindsay advised in a Jan. 11 report that Yahoo fire 2,000 employees. He said that would give Yahoo more profits to pursue initiatives such as mobile search and video as well as acquisitions. The company is mulling layoffs, but more in the range of hundreds of employees. Deeper cuts, flagged privately by people at Yahoo as unlikely, sound more like wishful thinking by investors than sound advice. They presume that Yahoo is stumbling toward death's door when it's not: In its fourth-quarter report Jan. 29, the company is expected to show a 15% gain in sales, to $1.4 billion, though profits are expected to fall.
   

   Yahoo's major acquisitions over the past year, such as Right Media, BlueLithium, and Zimbra, surely created redundant positions. If they haven't been eliminated already, it's time.
   
   

2. Lindsay and others also think Yahoo should give up on its search efforts and just pay Google to drive its search engine. It's easy to understand why. Yahoo keeps losing search market share to Google, whose engine handles from 56% to 66% of all queries, depending on who's counting. By contrast, Yahoo's share is usually from 18% to 21%. "The text-ad war has been lost," says Scott Rafer, CEO of ad network Lookery and former CEO of MyBlogLog, which Yahoo bought a year ago.

   But others think Yahoo would be crazy to cede such an important front, not to mention control of the Web's most lucrative advertising opportunity. "It's a pretty critical component of getting people to start with Yahoo and stay there," says Ned May, director and lead analyst at market researcher Outsell. Just as important, data from searches, still the most important indication of a user's intention to buy, ultimately may prove crucial for targeting display ads to individuals as well.

   Notably, marketers and ad firms are rooting for Yahoo because they want a stronger No. 2 just to keep Google honest. "I would hate to see Google become almost a monopoly," says Lee. If Yahoo can keep making even mild progress in search advertising—its revenue per search rose 20% in the third quarter—keeping it in-house seems worthwhile.

3. If there's one rumor that keeps coming back again and again, it's this one. And with every replay, the speculation seems ever more driven by investors looking for a quick exit than by any actual deliberations by Yahoo or Microsoft. The software giant, which only last year spent the most it has ever put into an acquisition with the $6 billion purchase of aQuantive, seems unlikely to put up the upwards of $27 billion it would take to buy Yahoo. Such a deal would also carry big risks, as the merged company would likely lose even more ground to Google in the time it would take to integrate Yahoo's and Microsoft's operations and businesses.



4. In an impassioned call on the blog GigaOm on Jan. 22, Mitra advised Yahoo to forget about downsizing and "please put up a fight." She said Yahoo has an unmatched opportunity on the emerging new Web, which she views as being dominated by highly specialized services. So, she advises, Yahoo should consider buying jobs site Monster.com (MNST) to complement Yahoo HotJobs, photo service Shutterfly to go with Yahoo's Flickr site, travel sites such as Expedia (EXPE) or Priceline (PCLN) and more, to fill out the portal's strengths in these specialized markets.

   Problem is, Yahoo doesn't seem to have the resources to get this aggressive. Its cash position of $2.2 billion trails laughably behind Google's $13 billion stash and Microsoft's $19 billion trove. And the stock market clearly isn't valuing Yahoo's shares enough to make them a powerful currency for deals. As much as Yang may want to follow this path, it's unlikely he can.

When Are People Spending? Online Retail Spending Peaks Mid-Day

During this year's holiday season comscore reports that online spending has peaked during the middle of the day, driven by the heavy influence of shopping from work, which has accounted for 45 percent of all e-commerce dollars spent this holiday season.

More than half of all online dollars were spent between 9:00 AM and 3:00 PM, with the heaviest spending (26.9 percent) occurring during the 12:00 PM - 3:00 PM time segment. Nearly 10 percent of online spending occurred from 10:00 AM to 11:00 AM and 1:00 PM to 2:00 PM, making them the peak individual hour segments during the day.



Some additional findings from comscore for the week ended Dec. 9:

• Consumer electronics experienced a strong week of online sales, up 43 percent versus year ago, outpacing its 23 percent growth rate for the season to date.
  
• Event tickets also had a particularly strong week, gaining 70 percent versus the corresponding period last year.
  
• Apparel outperformed its season-to-date growth rate of 16 percent with a 22 percent gain during the most recent week.
  
• Toy sales grew just 3 percent during the past week, lowering overall growth for the season to date to 14 percent.

Evaluate Your Holiday Online Marketing Campaigns

A recent article on Search Engine Land called for online retailers to perform post mortem analyses on their holiday marketing campaigns. I couldn't agree more. The article goes on to say that, marketer's shouldn't assume that people are done shopping on December 22nd. Sure, most retailers experience a sharp decline in activity post holiday, but the 2006 drop-off wasn’t nearly as significant as in years past, and we do not expect it to be that dramatic in 2007 either. The reason? Maybe it’s the increasing effect of gift cards, or that most shoppers realize that the real deals happen after the holidays. Either way, savvy marketers should be prepared to capture post-holiday activity.



And in order to make the most of this post mortem analysis, here are a list of questions that have been recommended to accurately define how the online campaigns worked or didn't work:

• Did messaging target your customer base, data should reveal the information you need to tweak your messaging so it is more closely aligned with the language of your customers
• What were the best moving or most profitable items?
• Can you identify compatible product combinations?
• Have you aligned website promotions and product availability to influence overall merchandising strategy?
• Research competitor performance in comparison with your own history

Search engine land recommends you perform post mortem reports on your holiday campaigns. And with good reason - the holidays bring in more than 50% of the average monthly sales for most retailers. This is painstaking and probably time consuming for most companies that do their own analytics, especially during the holidays. But the results from this study will provide you with elements and capacities to improve your campaigns and set it on a competitive position as you once more launch campaigns in the first quarter of 2008.