State of Retailing Online 2006

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State of Retailing Online 2006 JUNE 1 1230 ET/
1130 CT / 1030 MT / 930 PT Dial-in
800-862-9098 or 785-424-1051 Conference
ID Shop.org Moderator Carrie Johnson, VP
Research Director, Forrester Research Panelists R
ichard Last, VP, Merchandise, jcpenney.comJohn
Lazarchic, VP, E-Commerce, PETCO
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Early Deadline Tomorrow Online Merchandising
Workshop

• Retailers Friday, June 2 is the EARLY DEADLINE
  to receive your companys free pass and also to
  save over 300 on subsequent passes!
• July 19-21 Hilton La Jolla Torrey
  Pines La Jolla, CA
• www.shop.org/merch06

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RETAILER FREE PASS DEADLINE IS JULY 14
www.shop.org/summit06
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State of Retailing Online StudyPerformance
Benchmarks Report

• Pre-order the Performance Benchmarks Report
  today!
• Answer questions like
• What percent of revenue did companies like mine
  spend on marketing?
• What kind of operating margins did companies like
  mine experience?
• How much did companies similar to mine spend on
  their affiliate marketing programs?
• www.shop.org/soro06
• click on the ORDER button

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Methodology 174 retailers participated
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Summary and agenda

• Across the board, the industry continues to
  thrive
• eCommerce receives more attention and help --
  from offline counterparts
• Retailers test new tactics to keep the sales
  needle moving
• Multichannel retailers get pickier about
  cross-channel tactics and integration efforts

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Online sales grew by 25 in 2005
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All categories will grow in 2006
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All categories will grow in 2006
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New categories outpace industry growth
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Even old stand bys hold their own
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Online sales account for nearly 7 of the total
retail market
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Online sales account for nearly 7 of the total
retail market
Without auto, travel, and grocery, online sales
total 10 of the retail market
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Online retailer profitability
2005 operating margins
Web-based
Store-based
Catalog-based
21
27
32
2004 operating margins
Percent with positive operating margins
75
88
83
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The Web gets more attention from offline divisions

• Retailers integrate organizations
• Many online retailers share resources with
  offline divisions
• Retailers spend online to drive offline sales

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Retailers integrate organizations
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Retailers share operational resources
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Online marketing budget allocation
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Traditional portal deals top the list!
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SEO rises quite a bit too
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Retailers optimize sales in new ways

• As retailers try new ways to boost sales
• they perform well on key metrics

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Retailers try to ease online shopping hurdles
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Many sellers step up security measures
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Some retailers test payment alternatives
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Metrics are going in the right direction
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Retailers continue to integrate channels

• Usage of many less effective or financially
  viable tactics decreased from last year

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Retailers create consistent multichannel
experiences
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Retailers create consistent multichannel
experiences
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Retailers fine tune multichannel operations
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Retailers fine tune multichannel operations
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Summary

• 2005 was another great year for eCommerce
• The Web gets more attention from other retail
  divisions
• Retailers organize and try out new tactics to
  succeed

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QA