Holiday Shopping In An Omnichannel Retail World

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Holiday Shopping In An

Omnichannel Retail World

A Snapshot Of How Personalized

Deals, Showrooming And Digital

Video Are The Gifts That Keep On

Giving To Omnichannel Retailers

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Introduction ... 3

Methodology & Objectives ... 3

Major Findings ... 4

Survey ... 6

Conclusion ... 14

About G/O Digital ... 15

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Introduction

The winter holidays are a joyous time worldwide. With technology at the forefront of every single consumer experience, today’s holiday shoppers continuously move across screens and channels – from desktop to smartphone to tablet to stores and then back again. They’re researching the best offers, clipping coupons and scouring retailers’ sites in between watching television and comparison-shopping directly from their mobile devices.

This holiday season, in particular, poses some unique challenges for brands and retailers. Not only is the selling season shorter between Thanksgiving and Christmas, but even more promotions will be released in the hopes of capturing the attention and dollars of impatient and demanding consumers. These circumstances only add to the mounting pressure among brands and retailers to make every single marketing dollar and tactic deliver optimal ROI.

Accounting for all of these factors, retailers can no longer afford to relegate “omnichannel retailing” as simple marketing jargon. Rather, they must acknowledge how it reflects a complex pattern of consumer behaviors. Retailers must build their marketing strategies around this concept in order to get their slice of the holiday sales pie. According to eMarketer, U.S. retail sales will climb 5 percent in November and December – a significant improvement from last year’s growth rate of 3.4 percent. And holiday ecommerce sales will grow 16.6 percent to $72.41 billion.

As Vicky Cantrell wrote in a recent NRF blog: “Today, of course, holiday planning is an exercise as much about digital touch points as it is the store – and most assuredly how all of them work together to meet the customer’s needs and expectations. And while customers set a high bar for retailers, retailers are investing accordingly. Mobile-optimized websites top the list of features and services that retailers have invested in significantly this year as they plan for the holiday season.”

The winning brands this holiday season will go the extra mile to create mobile-friendly, locally relevant and contextually targeted experiences. They will give shoppers what they want, how they want it, when they want it. And ultimately, they will deliver on these promises through content, ads and experiences that are easy-to-use, personalized and engaging across all of the devices and channels shoppers use.

Methodology & Objectives

G/O Digital conducted a research study to better understand the omnichannel intentions of holiday shoppers with national brands and retailers. The survey was fielded from August 15, 2014 through August 24, 2014 to 2,000 U.S. adults, aged 25-55 years old, who are interested in holiday shopping from national brands/retailers and own at least one desktop/laptop computer and a smartphone or tablet.

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When given a choice, 75 percent of respondents

prefer shopping either online or in-store with

national retailers and brands. That’s compared

to 18 percent who choose Amazon.

MAJOR FINDINGS

Nearly half (45 percent) of respondents plan to

complete their holiday shopping in the first three

weeks of December.

Big-box retailers fight to

push Amazon back from

their turf.

Procrastinating holiday

shoppers are prime

targets for last-minute

retail promotions.

30 percent of shoppers “always” use their desktop/

laptop computers to look for on-sale items. An

additional 25 percent go online to “compare

products and prices between retail stores.”

Webrooming pays off

and brings shoppers back

into stores.

35 percent of respondents believe local search results

- online and mobile - have the power to influence

purchasing gifts in-store.

Local search sparks

brand consideration.

21 percent of respondents are inclined to head

into retail stores if they can buy online and pick

up in-store.

Online-to-offline integration

drives more

brick-and-mortar sales.

65 percent of shoppers believe mobile deals and

promotions are powerful enough to influence

them to buy holiday gifts in-store on Black

Friday, Thanksgiving – and even Cyber Monday.

Personalized content and

mobile deals kick offline

sales into high gear on

Black Friday - and even

Cyber Monday.

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72 percent of respondents are inclined to use

their smartphones and tablets to research

holiday gifts when watching TV.

MAJOR FINDINGS

28 percent of mobile users “always” research

on-sale items while standing in-store and another

27 percent turn to their mobile devices in-store

when they are looking for a larger selection of

product styles and sizes.

Second screens transform

multi-tasking TV watchers

into mobile shoppers.

Price and product

comparisons drive

showrooming behavior.

38 percent of respondents are most likely to

click on mobile banner ads when browsing/

shopping for holiday gifts from national

retailers. Plus, 20 percent of respondents are

most likely to click on mobile video

ads during their search for holiday gifts.

Interactive and non-intrusive

mobile ad formats click with

holiday shoppers.

43 percent of shoppers believe online and mobile

video ads are useful in learning more about

products and prices available in-store and 24

percent believe they make it easier and more

efficient to buy items in-store.

Local activation raises

the standards of online

and mobile video ads.

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Big-Box Retailers Fight To

Push Amazon Back From

Their Turf

When given a choice, 75 percent of respondents declared their preference to shop either online or in-store with national retailers/brands - that’s compared to 18 percent who chose Amazon. While Amazon’s approach to retail and ecommerce is both innovative and formidable, it’s not as simple as saying consumers have a linear purchase path. Rather, it’s more of a curved path whereby consumers move back and forth between online, offline and multichannel touch points.

As consumers have more control, choice and access than ever before, the challenge for national retailers then becomes about

cutting through the noise to reach shoppers. But cutting through the noise is not an easy feat. And this is where “webrooming” - or as some call it “reverse showrooming” - is a valuable asset to retailers and brands. Why? To put it simply, it closes the loop from consumers’ exposure to online and mobile promotions and products actually purchased in-store. If these findings prove anything, it’s that webrooming sits at the critical intersection of the digital and physical retail worlds.

Procrastinating Holiday Shoppers Are Prime Targets For

Last-Minute Retail Promotions

Waiting until the last minute to get all shopping completed will always be part and parcel of the holiday experience. So it isn’t surprising nearly half (45 percent) of respondents fully expect to procrastinate, with 36 percent saying they will wait until early December and 9 percent waiting until one week prior to Christmas.

Sticking with tradition, national retailers and brands will want to release a steady stream of holiday promotional content throughout the season. This will help them grab the attention of early shoppers, but also stay top-of-mind with those latecomers who hold off buying gifts until the very last minute. Additionally, given the lack of confidence many consumers feel about online orders arriving in time for the holidays, serving coupons and offers redeemable in-store – via online, social, email and mobile – is an effective way to boost foot traffic and generate in-store sales.

When do you complete the majority of your holiday shopping?

Black Friday Cyber Monday Early December

(first 2 weeks) November One week prior

to Christmas September - October Thanksgiving Day

10%

2%

36%

24%

9%

17%

2%

Banner ads Digital promotions/circulars Digital videos Emails/newsletters Facebook Local desktop/laptop search results Local mobile search results Pinterest Retailers' websites, mobile sites or apps Twitter Websites/blogs of shopper magazines and other special-interest publications

Note: Figures may not add to 100, due to rounding. Note: Figures may not add to 100, due to rounding.

Given the choice, where do you prefer to do your holiday shopping?

Amazon In-Store (national retailers/brands) Local/small businesses Online (national retailers/brands)

18%

37%

7%

38%

Online (Retailers) In-Store (Retailers) Local

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Local Search Sparks Brand Consideration

Paid local search remains effective because it connects consumers to the most relevant products and offers related to their interests, while also empowering them to fulfill their wants and needs at a nearby store. This paired with specific store inventory and pricing answers each point of the well-known adage “right message, right place, and right time.” It is a promise that should be mandatory – not optional – for all retailers and brand marketers to deliver against.

As the G/O Digital study found, 37 percent of respondents named local search as the marketing tactic most likely to persuade them to interact with/click on a holiday offer from a national brand/retailer – whether they use a desktop/laptop computer, smartphone or tablet. Meanwhile, an additional 35 percent stated local search results – both online and mobile – have the power to convince them to buy holiday gifts in-store.

Note: Figures may not add to 100, due to rounding.

What is MOST LIKELY to persuade you to interact with/click on a holiday offer from a national retailer/brand on your desktop/laptop computer, smartphone or tablet?

6%

15%

3%

10%

7%

33%

4%

1%

18%

1%

4%

What is MOST LIKELY to persuade you to buy holiday gifts in-store from a national retailer?

5%

17%

2%

10%

5%

30%

5%

1%

20%

1%

5%

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Online-To-Offline Integration

Drives More

Brick-And-Mortar Sales

While the popularity of online shopping isn’t expected to slow down, the vast majority of shoppers still value the experience of exploring, touching and buying products in-store. The G/O Digital study found a number of reasons causing shoppers to abandon online and mobile shopping carts, such as shipping costs and delivery time-related frustrations, which accounted for almost a third of all responses. These are issues retailers and brands must address to win customer dollars across channels. In the meantime, retailers should also provide customer-centric experiences and locally relevant, personalized deals. After all, consumers don’t have a channel strategy; they have a shopping strategy. And no matter how dependent they become on digital and mobile technology, they still spend 90 percent of their dollars in-store. How can retailers capitalize on this behavior? For one, they can

promote special offers and discounts redeemable at nearby/local stores. This type of online-to-offline integration is so compelling that 35 percent of respondents believe it will influence them to buy holiday gifts in-store from national retailers. Another 21 percent are inclined to head into retail stores if they can buy online and pick up in-store. These responses all indicate how important it is to integrate the shopping experience – digital to physical – to attract new customers and retain loyal ones.

What is the NUMBER 1 reason you would abandon your online/mobile shopping cart when holiday shopping?

Catalog doesn't show real-time list of products and prices Difficult to view/click through site on mobile Information about shipping costs and delivery times is not provided before checkout Messages/offers are not personalized based on my previous purchase history Pages and images take too long to load Required to login and fill out long forms before checkout

15%

16%

33%

7%

12%

17%

Which of the following factors is MOST LIKELY to persuade you to buy holiday gifts in-store from a national retailer/brand?

If I can buy online, pick up in-store If I get a push-notification on my phone while in-store If I receive a personalized email informing me of a nearby store with special sales/discounts If I see an ad or coupon on my phone while in-store If the retailer offers free gift wrapping in-store If the retailer/brand offers same-day delivery If there is an in-store only special offer/discount that can only be redeemed at a local/nearby store

21%

5%

6%

14%

3%

16%

35%

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Webrooming Pays Off & Brings Shoppers Back Into Stores

Consumers no longer feel compelled to shop with brands and retailers out of loyalty. Instead, they will do whatever it takes and use as many devices pre-store and in-store to find the best deals and prices. As the G/O Digital study found, 30 percent of desktop/ laptop users “always look for sales/promotions in advance.” Now add to that another 25 percent of respondents who use their desktop/laptop computers to compare products and prices between retail stores. For these price-conscious deal seekers, “webrooming” is an ideal way to stay informed on the latest and greatest products and deals that won’t break their banks. This urge to webroom is actually the best gift brands and retailers could ask for this holiday season. For example, during the research and early consideration stages, webrooming allows retailers to offer up reviews and product information that spark brand consideration. Meanwhile, this trend of searching for deals before stepping in-store – which has sometimes been perceived as negative – actually equips retailers and brands to fight toe-to-toe with competitors by showing better prices and deals in real-time.

How do you use your desktop/laptop computer to research holiday gifts “on sale” BEFORE visiting a national retailer?

I always look for sales/promotions in advance I compare products and prices between online ecommerce sites and physical retailers I compare products and prices between retail stores I do all of the above I don't do digital research

30%

11%

25%

28%

5%

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Personalized Content And

Mobile Deals Kick Offline

Sales Into High Gear On

Black Friday – And Even

Cyber Monday

Today’s consumers are highly engaged with mobile devices at multiple stages of their buying journey, even if they still make their final purchases on another device or in-store. First, 38 percent of respondents intend to use their smartphones and tablets to research deals on Black Friday, Thanksgiving and Cyber Monday. Interestingly, 65 percent of shoppers believe mobile deals and promotions are powerful enough to influence them to buy holiday gifts in-store on Black Friday,

Thanksgiving – and even Cyber Monday.

These results align with the continued surge in mobile device adoption and usage. Smartphones alone are expected to be in the hands of 163.9 million people in 2014. As a pivotal channel for promotional exposure and brand consideration, retailers and brands should raise their mobile advertising budgets and content plans this holiday season if they want to see their engagement, average order values, conversions and sales rise.

Would deals/promotions discovered while researching from your smartphone/tablet influence your decision to buy holiday gifts

in-store from national retailers/brands on Black Friday, Thanksgiving and Cyber Monday?

No Yes

65%

Yes

35%

No

How likely are you to do shopping-related searches from your smartphone/tablet on Black Friday,

Thanksgiving and Cyber Monday?

I won't search on my mobile device

It will depend on my mood and schedule

It's guaranteed; I will absolutely search on my mobile device There's a high likelihood I will search on my mobile

33%

29%

16%

22%

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Second Screens Transform Multi-Tasking TV Watchers

Into Mobile Shoppers

Today’s consumers have limited attention spans and more often than not, multi-task across multiple devices – all while glancing up occasionally to watch their favorite television shows. As the G/O Digital study found, nearly half (45 percent) of tablet users and 39 percent of smartphone users admit to surfing the Web while watching television.

These shorter attention spans represent a viable marketing opportunity for retailers and brands. Why? For one, consumers are more willing and able to view retailers’ content and advertising at any time. But more importantly, they are primed to act on the right promotional content and ads that address their local needs and solve their pain points fastest. In fact, the study revealed almost three quarters (72 percent) of respondents have a propensity to use their smartphones or tablets to search for holiday gifts when watching TV. By offering greater accessibility to promotions and advertising on mobile devices, identifying a nearby store location where they are guaranteed in-store fulfillment and pickup, or even providing a direct line to purchase, marketers can ensure shoppers actually purchase what piqued their interest on other screens.

When watching TV, how likely are you to use your smartphone and/or tablet to search for holiday gifts?

It's 100% guaranteed It's a possibility Not likely at all There's a high likelihood

11%

35%

28%

26%

Note: Figures may not add to 100, due to rounding. It's 100% guaranteed It's a possibility Not likely at all There's a high likelihood Which one of the following activities are you MOST LIKELY to do from your tablet when watching TV this holiday season? Buy a specific product/service being advertised on TV Buy products/services Check sports scores Email/text friends Look up info on brands and retailers Plan my week Read discussions on social media sites Research products and prices Surf the web

2%

5%

6%

11%

6%

5%

4%

16%

45%

Which one of the following activities are you MOST LIKELY to do from your smartphone when watching TV this holiday season? Buy a specific product/service being advertised on TV Buy products/services Check sports scores Email/text friends Look up info on brands and retailers Plan my week Read discussions on social media sites Research products and prices Surf the web

1%

5%

22%

5%

4%

15%

39%

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Price & Product Comparisons Drive Showrooming Behavior

According to the G/O Digital study, 28 percent of mobile users “always” research on-sale items while standing in-store and another 27 percent turn to their mobile devices in-store when they are looking for a larger selection of product styles and sizes. To win with today’s shoppers, the focus must always be on the customer experience – be it in the performance and ease-of-use of a retailer’s site, email marketing campaign, seasonal promotion, mobile coupon, social offer or even merchandise displays in-store.

As these findings indicate, showrooming behavior will only continue to grow as consumers become more price-conscious and mobile savvy. Rather than fear and fight it, national retailers and brands should serve their messages, emails, promotions, coupons and ads to consumers in real-time. By doing so, they will have a greater likelihood of converting mobile-savvy deal hunters into in-store buyers.

What information is most important for you to find when searching for a holiday gift from your smartphone and/or tablet?

Delivery timing/availability Free shipping or shipping promotions Information and photos about products/services Maps and directions to nearby stores Phone number for local/nearby stores Prices for merchandise at nearby/local retail stores Prices for merchandise at other retailers' stores (comparison shopping) Product availability Product reviews and ratings

4%

9%

3%

6%

5%

24%

25%

16%

10%

Do you plan to use your smartphone/tablet to compare products and prices while standing in store? (Select all that apply) No, I don't like to use my smartphone/tablet while I'm in-store Yes, I always research product prices and promotions/sales while in-store Yes, if I'm looking for a larger selection of product styles and sizes

51%

28%

27%

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Interactive & Non-Intrusive Mobile Ad Formats Click

With Holiday Shoppers

As much as shoppers want every marketing message and tactic to be personalized and locally relevant to them, they have a similar affinity for interactive and non-intrusive ad formats. This aligns with the findings of the G/O Digital study, wherein 38 percent of respondents are most likely to click on mobile banner ads when browsing and shopping for holiday gifts from national retailers. Another 20 percent of respondents are most likely to click on mobile video ads during their search for holiday gifts.

So what ad formats are less likely to resonate with mobile shoppers? As the study revealed, only 6 percent of mobile users are likely to click on pop-up ads when searching for holiday gifts from national retailers. Therefore, it’s recommended that national retailers and brands serve up real-time offers via rich media ads or video units that refresh content programmatically.

Which one of the following types of mobile ads are you most likely to click on when browsing/shopping for holiday gifts from national retailers?

Banner ads Digital video ads Pop-up ads Same ads that appear across different sites

38%

20%

6%

36%

Local Activation Raises Standards Of Online

And Mobile Video Ads

According to the G/O Digital study, 43 percent of shoppers believe online and mobile video ads that show real-time prices of products available at local stores are “useful in learning more about products and prices available in-store.” Another 24 percent believe online and mobile video ads make it easier and more efficient to buy items in-store.

Scaling local marketing is hard. And versioning a brand’s creative assets down to the local store level with price and item content to drive a brick-and-mortar sales outcome has been a complete impossibility or at minimum, extremely challenging – that is, until now. Technological advances now empower marketers to easily and seamlessly take the creative assets of a single ad and localize it into hundreds of thousands of digital video units distributed at national scale with hyperlocal precision, down to the current price and quantity available in-store for the featured products. Advances like these have further increased the value of online and mobile video advertising offered by retailers and brands alike.

How do you feel about online and mobile video ads that show real-time prices of products available at local stores?

I find them convenient in researching additional items from the same brand in-store I find them useful in learning more about products and prices available in-store They make it easier and more efficient to buy items in-store

34%

43%

24%

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Conclusion

Consumers are highly demanding and impatient – regardless of what device or channel a brand interaction occurs. They’re not only extremely price-conscious, but they tend to favor retailers offering unlimited product choice at a greater convenience. In fact, IBM’s 2014 U.S. Online Retail Holiday Readiness Report found consumers were only spending approximately 7 minutes on retailer websites and bounce rates have risen to 34.5 percent on desktop/laptop devices. Meanwhile, engagement with retailer mobile sites were even worse, at approximately 3.5 minutes with a 43.4 percent bounce rate. And this is despite the rising use and proliferation of mobile devices.

It’s clear that consumers are increasingly digital and increasingly local. They want messages that are relevant to them – for the products they want, at the prices they need and available at the stores in their neighborhood. While retailers have been focused on what’s next in local - iBeacons, iPayments, geofencing and other localization technologies - local, mobile marketing needs to be personalized, contextually targeted and engaging. In other words, retailers must consider how consumers already use their digital devices to research products and interact with brands and ultimately, shape their marketing strategies accordingly.

“

... they tend to favor

retailers that offer

unlimited product choices

and greater convenience.”

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About G/O Digital

The G/O Digital vision: To Transform Local Marketing and #WinLocal.

For Local Businesses, G/O Digital, a Gannett company, is a one-stop shop for local businesses looking to connect with consumers through digital marketing, from search to social and everything in between. For National Brands and Agencies, G/O Digital delivers local digital activation at national scale with push-button simplicity powered by G/O Digital brands Shoplocal, BLiNQ Media and Key Ring.

G/O Digital partners with more than 5,000 of the nation’s top brands and retailers, including P&G, Target, Walmart and Walgreens and leads digital marketing programs with thousands of local businesses across more than 110 local markets. For more information, visit godigitalmarketing.com.

Contact Us

For Media Relations/PR:

Erin Ranando

Account Director

Blast PR for G/O Digital Tel: (203) 640-9180 Email: Erin@blastpr.com

For Corporate Communications:

Donna August

Senior Director, Product & Brand Marketing

G/O Digital, A Gannett Company (GCI) Tel: (312) 768-7501

Holiday Shopping In An Omnichannel Retail World