Shopping Blog

Mondays have always gotten a bad rap. ‘Monday Morning Quarterbacks’ are known as know-it-alls who complain without adding value -- and when you have a slow week, ‘every day feels like a Monday’. All of this could lead one to wonder why The Adams Family’s morose daughter wasn’t named Monday.

The Bangles so eloquently gave song to the feelings of worker bees across the country when they sang, “Just another manic Monday…wish it were Sunday,” but for online retailers this holiday season, Monday seems to be the best day of the week. According to Wikipedia “In some cultures, Monday is held to be the first day of the week… many languages refer to Monday as the ‘day of the beginning.’” In our 9-5, 24/7, "Mo Money Mo Problems" culture, Monday has morphed into the “day we spend shopping online for holiday gifts”. According to comScore Inc., in 2007, the Monday before the Christmas Shopping deadlines (12/10/07) was the biggest shopping day ever online. What will this year hold? The verdict is still out; it looks like consumers may just be waiting til the last possible minute to buy gifts, maybe even until December 22^nd, the Monday before Christmas.

The National Retail Federation reports that by the second week in December, only 47% of consumers had completed their Holiday shopping, compared to 53% last year. By early December, a whopping 41 Million people had not started their Holiday Shopping and only 8% reported completely finishing their holiday gift buying, compared to 12% last year. Many of those feet draggers plan to avoid the holiday masses at the mall and surf the web instead, with 40% of consumers planning to shop online, up significantly from 35% in 2007. NRF's 2008 Holiday Consumer Intentions and Actions Study.

With shipping deadlines as late as December 23rd, there is still plenty of time to sway consumers to shop your site. According to Hitwise, Google search driven traffic is up across most retail categories year over year, with categories like Consumer Electronics (28%), Home improvement (27%) and Office Supplies (26%) all up significantly. Even Apparel (24%), Home Furnishings (16%), Toys (16%) and Sporting Goods/Fitness (11%) saw a jump over the same week in 2007. Hitwise weekly upstream traffic % increase/decrease for week ending 12/13/08 over week ending 12/15/07. This weekend's weather washout in parts of the country may keep shoppers inside cruising the keys instead of the mall. If last year is any indication then this coming Monday will be one to watch. Retailers be prepared, the shopping season is not close to done, keep your physical and virtual doors open, keep the emails coming and make sure your sites are prepared for the increased traffic (even on Christmas Day!). Here’s hoping your holiday sales do indeed have a case of “The Mondays”.

Posted by the Google Retail Team

Who is doing it right?

In part III of our video interview series with Avinash we learned about the meaning and the importance of the "non-line world".

Today, we ask Avinash a very important question..."In the retail space, who is doing an excellent job of understanding and measuring the online impact on offline sales?"

Did Avinash name your company? Watch the video below to find out!

If you missed the earlier installments you can find them by searching the blog for "Avinash".

Posted by the Google Retail Team

I sat down with Ken Cassar, VP of Industry Insights at Nielsen Online, to discuss the findings of his report called "Pinpointing the Value of Multi-Channel Behavior". In part I of the video interview series Ken shared his thoughts about why Nielsen had embarked on this piece of research. Today, we dive into the meat of the findings and speak specifically to the key questions on all of our minds:

• What is the actual value of a multi-channel consumer (one who shops on your website and in your store) versus a single channel consumer (one who shops only in your store)?
• Recommendations for retailers on how to measure multi-channel behavior?
• and...what was surprising, even to Ken; a seasoned online consumer researcher, about the findings???

Please watch the following two videos to get the answers.

Posted by Emma Weisberg, the Google Retail Team

What to do to Boost Year End Sales Figures and Close Out 2008 with a Bang

From Cyber Monday to December 5th, online spend is up 9% over 2007, according to comScore. With 50% of shoppers planning to purchase gifts throughout December¹ and more key shopping days just around the corner, it’s important to not lose momentum as the holidays approach. And even as we begin wrapping up the holiday season, many new opportunities will arise that will carry on into the new year. To help you prepare for the home stretch and beyond, we've compiled some recommendations:

1. Will Santa arrive on time? Online shoppers will be interested in knowing whether their gifts will arrive on time so set the correct expectations in your creatives.

• Call out the last ship-in-time-for-Christmas date in your creatives. Have new promotional creatives ready to be switched on after this deadline.

• Promote expedited shipping options that guarantee Christmas delivery and when this option ends (i.e. Order by 12/23 for guaranteed Christmas Delivery!)

• If your business can automatically upgrade customers to expedited shipping for free, call this out; it is a great way to earn goodwill and leave a lasting memory of excellent customer service

• If its not possible to upgrade everyone, be selective in how you offer this incentive: for example, do so for shoppers that use your private label credit card, for specific order sizes (i.e. Orders of $100 or more), for a very limited time (i.e. 3 days only), or for a discounted rate (i.e. 2-day shipping for only $5)

2. Promote in-store pick-up: If you offer buy online and pick-up in-store options, consider using geographic targeting to promote products and product categories in the regions where selection is ready.

3. Promote the multi-channel experience: If you are a multichannel merchant, consider using your online ads to invite shoppers to visit your physical store locations. After shipping deadlines have passed, last minute shoppers will be interested in store locator pages that feature your business address, extended store hours, and driving directions -- make sure these are easy to locate on your website.

4. Budget Within Your Means: If you’re going to be out of the office for a few days, make sure to set your Adwords spend at a comfortable level. Leave your daily budgets and bids at a level that will allow you to be competitive and allow for plenty of shoppers to see your ads.

5. Multiple Holidays, Multiple Opportunities: Santa isn’t the only gift giver this holiday season. Don’t forget to build campaigns around other key holidays, such as Hanukkah (Dec 22-29) and Kwanza (Dec 26 - Jan 1). Search interest in Hanukkah generally upticks 2 weeks prior to the start (Dec 5 in 2007) and search interest in Kwanza upticks a month before the holiday.

6. Post-Holiday Sales: Roughly 10% of sales during the November-December holiday season happen the week after Christmas.² If you’re closing out inventory or having a year-end sale, ensure that your ad texts reflect this. You can also expand your advertising efforts by placement targeting ads on consumer-tips sites in the Google Content Network or by driving traffic to your brick-and-mortar store with Local Business Ads.

7. Gift Card Redemption: Last year 42% of consumers planned to redeem their holiday gift cards after January,³ and every year many of those gift cards simply go unused or unredeemed.4 Make sure every gift card dollar counts: Have a post-holiday campaign ready to target gift card receivers; and for those who don't sell gift cards, use your ad creatives to target the many consumers who get non-store-specific gift cards backed by major credit card companies (i.e. "We accept all major credit cards.").

8. Reach the Resolutionaries: Every year millions of Americans make New Year's resolutions. The most popular resolutions revolve around decreasing debt, losing weight, developing a healthy habit, spending time with family, and getting organized.⁵ If you have products that relate to these resolutions, you might consider building a campaign around these products.

9. Think Small, Think Big: Historically search interest for occasions like prom, wedding planning and the presidential inauguration increases significantly in late December and January. Even if your niche isn't prom, wedding, or politics, think of any complementary products that you do sell (i.e. flowers, jewelry, home furnishings, party favors or even gourmet food) that can benefit from this potential traffic and start getting creative with your ad texts.

1. Google Consumers Intentions Survey, November 2008.

Posted by the Google Retail Team

Where is Dear Abby when you need her most? Dear Abby, the ubiquitous advice column launched in 1956 and now published in over 1,400 newspapers, always has the right answer to life's most perplexing situations. Not sure how to deal with pushy in-laws? Wondering how to write a condolence letter? Dear Abby always has a simple, uncomplicated answer.

As retailers deal with one of the most challenging quarters in recent times, what might Dear Abby advise? Is there some simple, straightforward advice that might help all retailers navigate today’s challenges?

Dear Abby,

I am so confused by the sales on my website (which sells a unique assortment of this and that.) This quarter, everything seems to have stopped! Earlier this quarter, lots of shoppers were coming to the site, looking around, spending more time than ever…but just not buying. I have to admit my traffic and sales increased between Black Friday and Cyber Monday….but now I’m seeing a slowdown again.

My products haven’t changed. My marketing is the same. It all used to work so well! Why aren’t people buying these days? What is this nonsense of “trading down and across?” I’m so confused - should I quit spending on search and banners? Can I just turn off the site, bunker down at home and flip the switch on again next spring?

Signed,

Perplexed

We believe that Dear Abby would offer some basic, no-nonsense recommendations that any retailer could follow.

Dear Perplexed – This is certainly not the time to shy away from the challenge! You need to maintain your focus and work through the remainder of this quarter. Your efforts today will not only help you weather today’s troubling economy, but will help build a stronger foundation for the future.

Want to continue to drive sales? This is the time to continually test and optimize. One of the benefits of digital marketing is the ability to test different messages quickly and relatively inexpensively. Consider A/B testing to find those tactics that lead to an online sale. Try offering free or reduced shipping to a select group of consumers and watch the impact on sales. Continually refine your offers, landing pages and promotions. Pay attention to what your consumers are reacting to – and stop wasting time (and money) on those that aren’t.

Ted Vaughan, from the Retail and Consumer Product Practice at BDO Seidman, reminded us in a recent article "the Internet makes it so easy to browse; they (consumers) will be able to find other products they may not have had in mind”

Greg Thomas, the Director of research and programs at The Emory Marketing Institute agrees, recently advising retailers to “…shift assortments and promotions toward a value focus.” So listen to these experts - be creative, suggest cross sells, accessories and upsells to your site visitors – make it easier for your consumers to find new and unexpected items to add to their shopping cart.

While you’re testing offers, don’t lose site of the value of your brand. Ensure consistency across your channels so that every touchpoint with the consumer works to reinforce your brand. Don’t confuse them with different colors or offers on your site. Snowflakes in your store? Then make sure they’re on the site. Circuit City’s “One Price Promise” is the latest example of brand consistency across channels…can you say the same about yours?

This is not the time to lose market share to your competitors. Although it’s tempting to reduce spend, the competition is still spending. Maintain those marketing expenses that provide the strongest return. Make sure you continue being top of mind and part of the consideration set for your existing customers. Those same messages reinforcing your brand to existing customers will introduce your brand to new customers, giving you an opportunity to increase your customer base for future growth.

The Internet may be an accepted channel for those of us in the business, but many Americans have yet to discover the convenience and ease of online shopping. Use this time to learn more about your customers, test your marketing and reinforce your brand so that you’re even stronger for future opportunities.

- Abby

Posted by Kathy Daly-Jennings, the Google Retail Team

…Friday that is. Fashionistas and Frugal Freddies alike hit the keyboards in record numbers this Cyber Monday. According to comScore, the four days from Black Friday to Cyber Monday saw spending online up 13%. Black Friday, a day traditionally reserved for lamenting that extra helping of stuffing and hitting the mall saw a 1% increase in online sales year over year. The National Retail Federation reports that during this year’s Black Friday weekend 34% of consumers did their holiday shopping online.

This year’s Monday after Thanksgiving saw 2 million more consumers shopping online than Cyber Monday 2007, a 22% increase according to comScore. Consumers surfed, saw and shopped their way through the many discounts offered across the web representing a whopping 15% increase in spend over last year, the second heaviest online spending day ever! (comScore) In addition, we looked at a sample of advertisers in various retail verticals and compared the ad clicks they received during Thanksgiving week (Tuesday-Monday) for 2007 and 2008. We saw increases in several retail categories, such as Department Stores (39%), Books & Magazines (28%), Comparison shopping (25%) and Sports & Fitness (24%). Even categories like Apparel (9%) and Home Furnishings (14%) were up. (Note: this is a sample of retailers only and should not be viewed as indicative of our financial performance during this period.)

If the Retail Pundits are right, the online holiday shop-a-thon will continue well into the Holiday Season. According to Forrester, 27% of US online consumers expect to spend more online this holiday season, with 47% expecting to spend about the same. Those making over $100k plan to increase their online spending this year by 15% with those in the mid to low income brackets upping their online spend by about 3%. (Forrester, Outlook For US Online Holiday Sales, 10/22/08)

Consumers will likely continue to shift their holiday gift buying online this season. Gas prices, free shipping and discounts are all contributing to this migration. Nielsen reports that convenience tops the list of reasons people choose to shop online. Seventy-six percent of consumers cited ability to shop 24 hours a day and 74% cited time-savings as reasons to click their way through the holidays. Not surprising, 53% of shoppers this year (compared to 46% in 2007) cited price as a reason to buy online.

Post-Thanksgiving not only are consumer’s pants tighter, but so are their budgets. It seems like everyone is looking for a deal; this Thanksgiving searches for terms with Black Friday and Cyber Monday were up like the calorie count (Figure 1). Searches for keywords like ‘coupons’ jumped from 30% of the most popular search term in November to 60% in December (Figure 2). Retailers did not disappoint coming out strong with record discounts and sales online. Also increasing in these first couple of days of December were searches for keywords like ‘gift ideas’ and ‘christmas’.

With 5 fewer days between Turkey Day and Christmas, what can retailers do to keep the Thanksgiving Gravy Train chugging along? Like Aunt Petunia’s Pumpkin Pie, keep it coming. Don’t cap your search budgets; if consumers are looking for you, make sure you can be found. Green Monday (12/8) and the Christmas shipping deadlines are fast approaching so communicate these important dates to your customers in your advertisements. Those days will have heavy traffic, so be prepared. Use the Google content network to attract consumers when they are interested. If you have videos, put them up on YouTube (and don’t forget to promote them). Whether your consumers are channeling Carrie Bradshaw or George Costanza, make sure your messages are hitting them when and where they choose to shop.

Posted by Paulita David, The Google Retail Team

Today is Cyber Monday which we all know is one of the top online shopping days of the year. Therefore, we felt it was the perfect time to share part III of our five part interview series with Avinash Kaushik, Analytics Evangelist.

In part III Avinash discusses the concept of the "non-line world", which is key for all multi-channel retailers to internalize and embrace. Avinash also shares recommendations around how retailers can leverage cookie data to best understand the online shopper as he/she moves across channels.

If you missed the earlier installments, please take a minute to view Part I and Part II at your leisure. And always feel free to post comments and send feedback.

Posted by Emma Weisberg, the Google Retail Team

Part II: Drive Profits by Understanding Catalysts for Holiday Spend Patterns

In Part I of this series, we discussed strategies for reaching the value-driven consumer. Today, we will explore the mind of the consumer by analyzing shoppers' historical spending patterns and highlighting the best dates to focus on targeting the cost-focused vs. convenience-driven consumers.

Targeting Cost-Focused Customers on Black Friday and Cyber Monday:

Black Friday, the Friday after Thanksgiving, which falls on November 29^th this year, has traditionally been one of the busiest shopping days of the year for brick-and-mortar retailers. Today, many customers are looking for Black Friday savings online as well; online Black Friday spending reached at $531M in 2007 [1].

Cyber Monday, which falls on December 1^st in 2008, is the online retailers' response to Black Friday. It takes place on the Monday following Thanksgiving, and last year, consumers' enthusiastic response brought in $733M in additional online consumer spending [1].

Historically, consumers have been particularly receptive to shopping on websites that advertise for Black Friday and Cyber Monday promotions, and this year, given the current economic mood, more consumers are actively seeking deals and using the online marketplace to find them. In fact, in a survey from Harris Interactive, 54 % of respondents noted that limited-time offers such as sales or free shipping would significantly influence their decisions, and, in certain instances, might cause theme to buy immediately rather than continue shopping around.

This year, in order to match consumer mood, retailers are heavily leveraging discounts and promotions. In a recent Shop.org survey, more than a quarter of retailers said they would increase online marketing of Black Friday promotions this year, while 84% said they will host special Cyber Monday sales--a 12% increase from last year.

To maximize profits, retailers also might consider targeting Generation Y, one of the brightest spots this holiday season. Having never experienced a real recession, Generation Y (13-26) tends to be fashion-forward and impulsive. Further, according to Maritz Holiday Shopping Poll 2008, this generation doesn't plan on cutting back on holiday spend and are the most likely to take advantage of Black Friday and Cyber Monday deals.

Green Monday Targeting: The Convenience Shopper:

Green Monday, the second Monday in December, is the date when consumers make their last-minute purchases online so they can be shipped in time to reach loved ones around the country in time for Christmas. Green Monday, which will fall on December 8^th this year (if you go by the definition that Green Monday is the second Monday in December), set a record in 2007 as the heaviest online spending date in history with $881 million in sales.

So let’s think about this year’s calendar and what will motivate shoppers in this critical period. According to a recent AdWeek poll, the number one reason why consumers purchase online, rather than in stores, remains convenience. The 2008 calendar will likely prompt additional online convenience shopping this holiday season; there are five fewer shopping days than last year between Thanksgiving and Christmas which creates a shorter shopping window for buyers who don’t start making their holiday purchases until after Thanksgiving.

The last-minute shoppers would like their online buying experience to be fast, convenient, and easy, after all, in the highly connected world where we live, they are likely multi-tasking as they buy. Shopping at work is also becoming increasingly commonplace; the National Retail Federation says that 55.8% of workers with Internet access, or about 73 million people, plan to do their shopping from the comfort of their own cubicle.

Additionally, despite the economy, according to a study by Harris Interactive, we can expect some impulse buying this holiday season from the convenience shopper. Fifty-nine percent of online shoppers would be likely to make an impulse shopping decision if they saw something online that is perfect for someone they know and more than 50% plan to take advantage of promotions and sales to buy something for themselves this holiday season.

Source: [1]comScore

Posted by Yael Davidowitz-neu, the Google Retail Team

In the months leading up to the presidential election, individuals worldwide held their breath at what promised to be a historic event. Political programs shot up the ratings chart as Americans tuned in to hear the latest poll numbers and pundit commentary, front lawns became littered with political signage, and Tina Fey put Saturday Night Live back on the cultural map with her famous impersonation. Regardless of what side of the party line you fall on, the anticipation was great.

The anticipation seemed all the more intense given our current economic situation so we wondered how this election sentiment has been affecting consumer behavior and in which direction it's been moving online retail.

Prior to the election, economic conditions set the shopping climate for consumers. Our unemployment rate was on the rise, consumer prices fell at a record pace, food costs were up, and new-home building slumped to fresh lows. The status of the economic downturn excerpted consumer confidence which dropped 38.1% last month, the worst decline ever for the consumer confidence index.1 Good news came in the form of oil prices dropping 22% per barrel from September to October,2 a typical pre-election sign according to David Blue, executive director of the International for Ecological Agriculture.3 A six-day run beginning October 28 also left the major indexes up by at least 17.7%.4 Aside from economic conditions affecting the retail industry as a whole, the fact that 2008 is an election year also affects the outlook. Using Hitwise market share data for online shopping and classified sites, we mapped 2008 data (blue trend line) against 2007 data (yellow trend line). In the months leading up to the election we saw substantial year over year growth in the market share of online shopping and classified sites. Market share, as is typical throughout the year, peaked on weekends and were stronger and generally in line with the same days in 2007.

On Tuesday night we witnessed Obama's historic victory as he became our president-elect, but in the wake of post-election Wednesday, our nation found itself in what has been deemed by some "a collective political equivalent of December 26"6 as we faced our economic reality again. That day the DOW shed nearly 500 points and consumers were not inclined to do as much holiday shopping or research online as in non-election years. As William Rutherford, president of Rutherford Investment Management explains, "yesterday there was a certain euphoria about the election, but today they are focusing on the market fundamentals, and they don't look so good."7[1] 2008 Market Harmonics, Consumer Confidence Index, 11/1/08.
[2] U.S. Department of Labor
[3] New York Times, Ken Belson, A Post-Election Bump at the Pump?, 11/6/08.
[4] The Wall Street Journal, David Gaffen, What to Do When Everything Rallies, 11/5/08.[6] New York Times, Tara Parker-Hope Quoting Robert Thompson, The Post-Election Blues, 11/5/08.
[7] CNN Money, Alexandra Twin, Dow Sheds 486 Points, 11/5/08.

Posted by Julia Tang and Eric Lopez, the Google Retail Team

We know this is a challenging Holiday Season for both merchants and consumers, but, despite consumer concerns about the health of the US economy, predictions of growth in e-commerce spending represent a significant opportunity for retailers to reach active shoppers. Forrester Research projects that online holiday sales will grow 12% over 2007 to a healthy $44 billion even as same store sales remain flat. [1]

Shopping drivers of convenience, selection, and perceived value will continue to attract buyers to the Web this holiday season - over 91% of online shoppers plan to purchase the same number or somewhat more gifts online this year.[2]

To maximize the value of your marketing dollars, we wanted to offer some relatively simple best practices for converting cost sensitive consumers:

·Sweeten the Deal by Offering a Holiday Perk in Your Ad Text: Frugal shoppers want to find the best overall value online – regardless of whether you typically compete on price, you still might consider sweetening the deal with complimentary gift wrapping or shipping.

·Consider Removing Negative Keywords like ‘Free’ or ‘Discount’ From Search Campaigns: While normally, some retailers benefit by filtering out users looking for discounts, this may prevent your ad from showing to value-seeking consumers who may inadvertently wind up buying from a higher cost competitor. To do this effectively, you may want to use negative exact match keywords like ‘-[Free "brand name" Purse]’, which filter out unnecessary clicks as you likely don’t intend to give away a free purse, without preventing your ads from showing to potential buyers who are hoping for ‘free shipping’.

Visit the AdWords Help Center section on Keyword Types to learn more.

·Increase Profits by Offering Discounts that Encourage Shoppers to Buy More: Consumers typically need to buy multiple gifts at this time of year and you want them to purchase presents for multiple people on their list when they visit your website. Consider an offer such as ‘buy two, get the third 30% off’ rather than offering 10% off per single item; you offer the same savings per item, but encourage volume purchasing. As an additional benefit, if the shopper’s mother, daughter, and sister all love their new sweaters, you’ve managed to kill two birds with one stone by spreading your brand as well.

·Avoid Major Site Changes: With value-focused users visiting multiple sites before making purchases, they may visit your site a few times before making a purchase. To avoid confusing them, make sure they can use the same navigational path to complete purchases.

·Employ Values Marketing: With a reduction in consumerism comes a cultural shift that breeds a focus on self-sacrifice, reassigned priorities, and a return to those things that really matter. Shoppers are spending more time at home this season and spending time with family and friends. Advertising that echoes consumer priorities is more likely to breed an emotional connection with your brand - increasing both conversions and brand loyalty.

·Engage in Successful Price Discrimination by Targeting Promotions Based on Search Behavior: If you are a branded retailer, you're likely have a segment of your customer base searching for promo codes for use in your online store or coupons to bring with them into your brick-and-mortar location. Consider building a landing page specifically targeted to this search behavior - you'll to show your cost-conscious brand enthusiasts that you've anticipated their needs and further increase brand loyalty.

Posted by Yael Davidowitz-neu, the Google Retail Team

I spent my first 4 years at Google aggregating "Retail best practices" and sharing them with advertisers. During this time, the majority of these "best practices" were focused on driving greater cost effective e-commerce. Over the years, retailers and their marketing partners/agencies have become more open to ideas of cross-channel inclusion and testing.

Over the last year, I've shifted my focus a bit. While there is so much that marketers CAN DO in online advertising - I feel like we online marketing enthusiasts sometimes become blind to what we SHOULD DO. In this vein, I've tried to focus on what Retail marketers do in other media channels - so we can apply those concepts to the online marketing channel without re-inventing the wheel.

I've often asked the question - "What works for Big Box Retailer X?" The answer .... "Circulars" Why do retailers love circulars? ... Some (and not all) reasons include:

They work! Retailers (and manufacturers) can track on a local level the sales lift of products in circulars and compare to the cost of the circular - which almost always shows a positive return - and most importantly - moves large volumes of product.
Consumers find value in them - Research shows that consumers still love their Sunday FSIs.

• Costs are usually shared between retailers and their manufacturer supplier.

The conversations I have with retailers are not about how they need to SHIFT marketing dollars away from the circular and into digital media merely because of media consumption trends. Conversations I try to have, especially in these economic times, are about optimal merchandising that will net the best, accountable sales results...and in the online channel - I believe there is TREMENDOUS opportunity... The paid results you see are what I'm calling "The Virtual Aisle" or "The Virtual Shelf Space." I like to equate this to walking into a store and asking the clerk where they sell printers. In most cases, the clerk will say (for example), "Aisle 7." As you, the consumer, approach aisle 7, you will often be greeted by an "end cap" merchandising display, usually promoting manufacturer brands (that are funded by these manufacturer partners). Additionally, when you walk into aisle 7, the top-to-bottom shelving order is often based on merchandising relationship with manufacturers as well. In the online world - there are very few "Virtual End caps" to point to.

If manufacturers want to reach consumers who come to "aisle 7" - I can't think of a reason why they wouldn't want to reach a much larger audience of extremely qualified shoppers (people searching thousands of variations of the keyword "printers"). Furthermore - when retailers reach the consumers looking for printers - I believe their is an untapped merchandising expertise that can lead them to more creative ways of driving sales than the message: "Find Printers at Retailer X"... For e-commerce - that messaging works, but e-commerce only represents 6% of total sales. The internet effects a lot more than 6% of sales (89% of shoppers say they use the internet before purchasing products*) - but the digital merchandising to date has not matured to this story - and again - this is what I talk about around the enormous opportunity...

Posted by Brett Goffin, Google Trade Promotion Team

Unemployment is up, Consumer confidence is down, is this really the season to be jolly?! If ever we needed retail therapy its now! And shoppers have gone to the couch in huge numbers…with laptops in hand. Google search driven traffic is up nearly 30% over last year in categories like Home Furnishings, Home Improvement, Consumer Electronics and Jewelry and Watches. Even Apparel and Office Supply search driven traffic is up almost 25% year over year.

If predictions by the National Retail Federation ring true the forecasted holiday sales growth in Retail overall will be hovering around 2%. But for online retail the outlook is a bit more festive with Forrester Research predicting retail sales this holiday season will grow 12%. Online will play a role in 86% of the upcoming holiday shopping season both as a research tool and to make purchases; beating out "in-store" (54%) 2008 Google/OTX Holiday Shopping Intentions Study . According to the latest Internet Retailer survey, 81% of retailers believe their holiday web sales will grow this season. Shop.org reports, in their 2008 eHoliday Study conducted by Shopzilla, that 56% of online retailers expect their holiday sales will grow at least 15% year over year.

So what can retailers do to channel Dr. Phil? Shoppers are beginning their holiday research and shopping earlier this year so make sure your sites are ready to accommodate the increased traffic. Free shipping and promotions are already in full swing. To ensure you are there when and where shoppers are looking for you don't cap your search budgets (would you close your doors at 2pm because there were too many people trying to enter your store -- we know Dr. Ruth wouldn't). Consumers are expected to spend more time researching this holiday season, so give these info hungry shoppers everything they need. According to Shop.org, 33% of retailers have added reviews and 43% have added video to their sites. If you have product videos load them up on YouTube, its free and a great way to reach consumers. Lastly, if you are reading this post you are probably already know all about search but don't ignore the power of display advertising. Search is great and Display is great but together they are like Frasier and Niles.

Posted by Paulita David, the Google Retail Team

Did you know that YouTube is the second largest search engine on the web, after Google?

YouTube Sponsored Videos now allows marketers, content partners and users to take advantage of the YouTube search functionality by promoting their content in a dynamic auction-based marketplace. Similar to Google AdWords, YouTube Sponsored Videos leverages keyword targeting and Cost-per-Click bidding within YouTube search results.

To promote their back-to-school penny product sale, OfficeMax created a series of eleven hidden camera videos in which pranks are pulled on unsuspecting strangers. With just six weeks to drive buzz and awareness before the back-to-school season came to an end, OfficeMax did not have time to let an audience form organically over time. To drive immediate awareness of their videos and generate viral views, OfficeMax participated in the beta release of YouTube Sponsored Videos. When users searched on “OfficeMax”, “funny pranks” or “penny pranks”, for example, an OfficeMax ad appeared next to search results, directing the user to watch the video.

Watch the OfficeMax video case study to learn more about the success of the “Penny Pranks” campaign and the power of YouTube Sponsored Videos.

For more information about YouTube Sponsored Videos, visit: https://ads.youtube.com/

Posted by the Google Retail Team

Have you reached nirvana?

Two weeks ago we debuted Part I of our five part video interview series with Avinash Kaushik, Analytics Evangelist. The post received very positive feedback and we are excited to share Part II of V with you today.

The interview focuses around the theme of online activity driving in-store sales and how retailers can measure this impact. In part II Avinash continues to share pertinent recommendations for measurement including the “holy nirvana” of measurement.

Posted by Emma Weisberg, Google Retail Team

Over the past few posts we have been examining the impact that online has on in-store sales. So far we have approached this from a few angles; measurement and testing methodology. Today we are going to approach the topic from another angle; custom research.

Ken Cassar, VP of Industry Insights at Nielsen Online, has joined us to share the findings of his report called "Pinpointing the Value of Multi-Channel Behavior". For the research Ken used Nielsen's online and Homescan panels which allows Nielsen to track online website visitation as well as actual offline purchases. Therefore, Ken was able to measure the effect of website visitation on offline sales and to better understand the role of the Internet in both high consideration and low consideration purchases.

Please watch the video interview below and you can download the report here:

Posted by Emma Weisberg, Google Retail Team

Last week we heard tips from Analytics Evangelist Avinash Kaushik on how to measure the in-store impact resulting from online investments. Today we are continuing in this vein and discussing ways for retailers to test the online-offline impact for themselves.

The average American spends as much time on the Internet as they do watching TV (31 percent of total media consumption is online, Source: Jupiter Research/Ipsos Insight Entertainment and Media Consumer Survey, 08/07, US online consumers only), and yet advertisers only spend around 6 percent of their total media spend on online advertising. One big reason for this, at least in the retailing world, has been the difficulty of showing how online advertising affects consumer purchasing behavior in stores.

According to a study done last year by Yahoo! and comScore, 89 percent of consumers look for information about products online. While selling products online is a great source of revenue, perhaps the true value of online advertising is its effect on what consumers do in store. So how can you figure out the effect that your online advertising has on offline purchases?

One of the most common methods is to look at the individual consumer. This can be done through online coupons, credit card tracking, individual surveys, or Nielsen's HomeScan tracking data (where people who opt in, physically scan products they buy using a bar code reader in their home). Although the individual consumer method can surely provide interesting results, it is often too difficult and too expensive for most advertisers.

Another approach that seems to be more scalable is randomized test and control, which is similar to the method used for FDA drug testing. The three basic elements are designing the test, running the rest, and analyzing the results. The design is perhaps the most important element, because if your design is poor the results will be meaningless. Although this method can have dozens of variations, I'll give a simplified over view of the design to get you thinking about how you can measure the online/offline impact.

First, you would choose cells, each with multiple metropolitan test areas. The test areas should have similar attributes – population, sales, etc., and each cell would be exposed to different variations of advertising. Here is one possible design:

Cell 1: No online ads in test product categories

Cell 2: Existing online ads, no change from campaigns prior to test

Cell 3: Max out Google Search and max out potential keywords, but use no Display

Cell 4: Max out Google Search and layer on Display ads to boost reach

A few things to consider are the timing, the product categories that are tested, the number of test areas, and the spend level. You should try to avoid testing when there is a lot of other noise, such as seasonal promotions and holidays. The product categories can also have a big effect on the test. If you choose categories that typically have big revenue numbers it is more difficult to see changes caused by your test, so it is usually better to pick categories with smaller sales numbers. And lastly, the number of test areas and the amount spent on the test go hand-in-hand. If you choose too many test areas your testing dollars will be spread very thin and it will be difficult to make an impact. But if you choose too few test areas the test won't be statistically significant. So it is important to pick a middle ground that allows you to put a significant amount of testing dollars into each test area.

Online product research has become an integral part of the consumer shopping experience, and your online presence surely contributes significantly to your ROI beyond what is sold online.

As Jeff Smith of Accenture Retail said, "Instead of replacing bricks and mortar stores, the Internet is an extension of consumers' in-store shopping experience providing a resource to research product and price. Retailers and manufacturers must understand this consumer behavior trend in order to reach shoppers, educate them, serve them and earn their loyalty."

Now you just have to test it for yourself.

Posted by Google Retail Team

If two percent of your site visitors convert to sales on site, what happens to the other ninety-eight percent of the traffic on your site? Do they buy in-store?

One of the biggest challenges facing retailer marketers today is measuring the impact of online investments on in-store sales. To help address this issue, John McAteer, Director of Retail at Google interviews Avinash Kaushik, Analytics Evangelist at Google and author of the popular blog Occam’s Razor in a five part series for the Google Retail Blog.

Please view Part I of V of the video interview series below. In part I Avinash shares two basic ways to measure offline impact.

Posted by Emma Weisberg, Google Retail Team

A few weeks ago, Hal Varian, Google's Chief Economist, had a post on "Clicks, Christmas and Conversions". In the post, Hal talks about the importance of understanding the inter-play between CPCs (Cost-per-click), conversion rates (CR) and CPAs (Cost-per-acquisition). Hal stresses that retailers need to focus on the CPA when evaluating the success of their online campaigns and not get hung up on rising CPCs during the holiday season, because they are only one factor in the equation of success. (Of course we could get into a much meatier conversation around ROI and how to accurately measure ROI of online campaigns which it is much more complicated than simply dividing the cost of online advertising/online sales. The true ROI model should include a metric for offline sales generated by online advertising among other metrics...but this is a discussion for a later date)

Therefore, the answer to why we shouldn't get hung up on rising CPCs during the holiday season is: although CPCs rise, conversions rise at a more rapid clip which in turn serves to depress CPAs. The upfront rise in CPCs during the October-November research period is offset by spiking conversions and the resultant plunge in CPAs in the December purchasing period. CPAs are the bottom line!

Taking another look at the graph above, which Hal provided, it is also interesting to note that the CPA does exactly what it should on Black Friday (and the following weekend) and dips down from where it was on Thanksgiving Day. According to Hitwise, Thanksgiving day sees record visits to retail websites (Hitwise Retail Index December 2007 reported that Thanksgiving was when the highest market share of US visits to the Hitwise Retail Index occurred; online traffic to retail websites increased 20% from 2006).

Traffic is high on Thanksgiving day (now often referred to as Brown Thursday) but it is not the peak day for conversions or purchases because consumers are in the research phase on Thanksgiving day, planning out their online purchases and in-store shopping trips for the next day, Black Friday. Black Friday is when retailers traditionally start offering large price discounts. Additionally, Cyber Monday (the Monday after Thanksgiving), known for its high online retail sales, sees a slight dip in CPA and then December 1 rings in the purchasing season. We also see the clear and expected conversion rate increase on Green Monday (Dec. 10, 2007/ second Monday in December) which has been noted as being the strongest online retail sales day. If the trend holds, the highest online retail sales day of 2008 will fall on December 8th.

Finally, in thinking about the 2008 winter holiday season, here's what we know:

1. Both research and shopping will start early this year: 31% of consumers plan to start holiday shopping and research before Halloween and a majority (57%) will start before Thanksgiving.¹ Therefore, the shopping has already begun...is your marketing strategy ensuring that your brand is top of mind throughout the entire research-purchase process and making it into the consideration set early on?
2. Consumers will spend more time looking for deals: 43% of consumers say they plan to spend more time this year shopping around for gifts because of the current state of the economy.¹ Consumers are taking the time to research the right purchase...Brands will need to focus on having a strong presence and clearly expressing their value proposition to guarantee inclusion in the consideration set.
3. There are 5 fewer shopping days this year, between Thanksgiving and Christmas, than last year: This is when the peak of conversions happen; therefore, retailers need to be wary of the tightened timeline and put strategies in place to lessen the crunch, by urging consumers to start purchasing before Thanksgiving!

1.OTX/ Google 2008 Holiday Shopping Intentions Survey, 9/16-9/24 2008, n=10,039

Posted by Emma Weisberg, Google Retail Team

Wireless Shoppers: How Consumers Shop for Phones and Wireless Service

Google and Compete, Inc. Webinar on how consumers shop for phones and wireless service

These are challenging and turbulent times for the wireless industry. As mobile phone ownership approaches saturation, both carriers and device manufacturers need to attract new subscribers from competitors while retaining their existing customer base. In the current economic climate and on the verge of holiday shopping season, understanding how and why wireless consumers do what they do is more important than ever.

Join us on Tuesday, October 28th at 2:00 pm EST, as Karen Parker, Managing Director of the Telecom and Media practice at Compete and Sara Kleinberg, Head of Industry Marketing at Google, present research on:

• How internet research and search play into the decision making process of wireless buyers
• How to reach high value consumers online
  
• How quickly consumers make purchase decisions about wireless devices and services, and how you can reach them at the right time

Please click here to sign up for Wireless Shoppers

Posted by Sara Kleinberg, Google Retail and Tech-Comm Team

We are now just days shy of Halloween, but despite consumer uncertainty in a tightening economy, retailers at large should be able to calm their fears as we step into the ‘scariest’ holiday of the year.

According to the National Retail Federation’s Halloween Consumer Intentions and Actions Survey, more consumers plan on celebrating Halloween this year, spending more on average this holiday.

64.5% of adults (18+) will celebrate Halloween this year, up from 58.7% last year. Consumers will spend on average $66.54 on this holiday, totaling $5.77 billion and an increase of 13.8% over 2007. As Phil Rist, Vice President of Strategy at BIGresearch, said, “After months of bleak economic news, consumers are looking for a reason to let loose. And with Halloween falling on a Friday this year, consumers may plan to celebrate all weekend long.”

Looking to escape from the volatility of recent days, adults are not only dressing themselves up but also having their children and pets join in for some Halloween fun. 36.4% of their Halloween spend will be on costumes, 30.7% on candy, 27.4% on decorations, and 5.5% on greeting cards. So even for retailers whose niche is not in costumes, there just might be a treat in it for everyone.

But Halloween’s just the beginning. We took a look at the trend line for shopping click volume on Google.com from 2007 and mapped it against this year’s upcoming holidays; what we noticed was a significant surge in click volume immediately after Halloween, a trend we expect to see again this year:

This finding is echoed by the OTX/Google 2008 Shopping Intentions Survey highlighted in a previous blog entry, which shows a large percentage of consumers planning to start their holiday shopping and research sometime between Halloween and Thanksgiving this year. So gear up - the Halloween kick-off is just around the corner!

Posted by Julia Tang and Eric Lopez, Google Retail Team

To help you with your holiday preparations, we've compiled a list of tools and tips from Google that can help retailers optimize their ad campaigns and websites, drive free traffic, and control their marketing budgets.

We know that the fourth quarter is the busiest and biggest shopping season for retail advertisers and merchants. We also know that inventory is top of mind this year for all retailers. IHS Global Insight Economist Paul Bingham said, “Getting caught with unwanted inventory when demand is falling and commodity prices are falling anyway is to be avoided as much as possible and the risk of stock-outs is less of a concern than having to dispose of inventory at distressed inventory prices” (as reported by Logistics Management on 10/20/2008). Retailers should consider investing more heavily in the potential of search advertising to drive increased in-store sales this year and move that inventory off of the shelves; 89% of consumers research products online¹ and exposure to search ads has proven to double in-store sales.²

In addition, Google offers other tools that retailers can use to help drive additional traffic and sales this holiday season, such as Google Product Search, which allows shoppers to search for and find products they want to buy online. As a merchant, you can use Google Product Search to target users shopping on Google and promote your products for free. Visit our Google page on holiday success to see a full list of tools and tips.

Please note that Google Checkout is currently available only to merchants in the US and UK, and Google Product Search is currently available only to merchants in the US, UK, and Germany.

¹Yahoo! and comScore Study Finds Online Consumers Who Pre-Shop on the Web Spend More In-Store. July 2007

²Magid Abraham, “The Off-Line Impact of Online Ads,” Harvard Business Review, April 2008

Posted by The Google Retail Team

Google's clicks and impressions are up dramatically from this time last year, in most categories, for both search and content. According to a Google & Compete, Inc. report on Online Research and Purchase Activity (Sept 2008), 40% of general online consumers made a retail purchase online in Q2 2008, an 18% increase over the same time frame last year. Similarly, consumers have visited retail websites more frequently than they did last year, likely in an effort to shop smarter in a rough economy by investing more time looking for quality products at the right price.

New research suggests that we will continue to see an increase in online traffic and shopping in relation to the upcoming holiday season. An OTX/ Google 2008 Holiday Shopping Intentions Survey (Sept 2008) reports that 86% of consumers plan to do online research this year to plan their holiday shopping. 31% of consumers plan to start holiday shopping and research before Halloween and a majority (57%) will start before Thanksgiving.

36% of consumers say that Search engines are their go-to source for gift ideas this holiday season and according to the Google & Compete, Inc. report 16% of online retail conversions in Q2 2008 were referred by Search, up 12% over last year, so make sure your holiday campaigns are up and running. The E-Tail Group's recently released annual "Mindset of the Multi-Channel Shopper Holiday Survey," reports that this year the internet is the preferred shopping channel for multi-channel consumers! Nearly half of consumers surveyed said they planned to do their Holiday gift buying online with 72% of consumers saying they plan to do their research for holiday gifts on the web. The majority of consumers E-Tail surveyed (91%) plan to purchase and spend the same on (or slightly more) holiday gifts this year online.

Your consumers are researching their online and in-store purchases online and they are buying online; make sure you are there!

Posted by The Google Retail Team

Google and Unity Marketing Webinar on the Ultra-Luxury Consumer and the Role of the Internet in their lifestyle.

Pam Danziger, president of Unity Marketing, will present the results of an in-depth study, sponsored by Google, examining the role the Internet plays in the lifestyles of the ultra-affluents (consumers with incomes corresponding to the top 2 percent of U.S. households, with household incomes of $250,000 or more). The results provide powerful insights for all luxury brands, into how to reach and interact with these important consumers.

For this cash-rich and time-poor group of ultra-affluent consumers, Internet shopping offers the kind of customer service they value most: access to their favorite brands, when and where they choose to shop. Luxury marketers who want to learn how to more effectively connect their brands with these customers should make a point to attend the webinar.

Webinar Info:

If you missed the presentation or would like to watch it again please feel free to click on the link below to view the recorded version: Luxury Webinar

Posted by Paulita David, Google Retail Team

The holiday period will soon be arriving and retailers want to know what to expect. Last year Hal Varian, Google's Chief Economist, provided us with data and analysis to better understand the trends relating to online consumer research and purchase behavior during this critical period. The information proved to be invaluable to our retail clients in preparing for the holidays and understanding the week by week holiday traffic and associated cost and click metrics. Therefore, we are once again turning to Hal to analyze the 2007 data.

Lots of people focus on CPC (cost per click) but ultimately the performance measure that really matters is CPA (cost per aquistion). These two metrics are tied together by the conversion rate:

CPA = (cost/click)/(conversions/click) = CPC/CR.

The chart below shows median CPC, median conversion rate, and median CPA during the 2007 holiday season for US Google AdWords advertisers who use conversion tracking. The series have been normalized so they all start at the same point on October 1. Click on graph below.

Posted by Emma Weisberg, Google Retail Team and Hal Varian, Chief Economist, Google