Industry Watch: Shopping May Be Dropping
Ecommerce may be down, but it's far from out
It's no surprise that people spent less on gifts this holiday season, but a somewhat surprising Nielsen survey reveals that of those dollars being spent, even less went online. Bargain hunting is the norm during the holiday season, and this year it seems that shoppers used the Web more to compare and contrast than to purchase.
According to Nielsen, 42 percent of respondents stated that compared to a year ago they were planning on spending less money on holiday gifts in 2009. Only 4 percent said that they intend to spend more.
Of the money that consumers plan to part with this holiday season, 63 percent of survey respondents said that they would do at least some holiday shopping online - down 10 points from 2007. Seven percent of respondents said they would not do any shopping online, compared to just 1 percent in 2007.
Online retailers need to make the most of their ad spend by being "laser-targeted" to their specific audience, according to Scott Jones, CEO of the search engine ChaCha.
"For example, designer sunglass advertisers can now target specifically to only 18- to 24-year-old males in the 90210 ZIP code via mobile phones," Jones tells OMMA. "Advertisers can become more visible to youthful audiences more cost effectively through social networking and mobile texting," says Jones.
MasterCard Gift Finder Helps the Clueless
Just in time for the holiday shopping season, MasterCard Worldwide launched an online tool designed to drive e-commerce by helping online shoppers narrow gift choices based on price and the personality of the recipient.
The Priceless Gift Finder then displays appropriate gift selections, along with ratings and reviews from Amazon. Purchases can be made at Amazon directly through the Gift Finder. Shoppers have access to a budget calculator to track the cost of gift selections and can build shopping lists from their roster of Facebook friends (via Facebook Connect), as well as family and friends who are not on Facebook. They can also spread the news about the MasterCard Priceless Gift Finder by posting a URL link to the tool on social networking sites.
The MasterCard Priceless Gift Finder is "hosted" by NFL quarterback Peyton Manning and actress Alyson Hannigan, who offer humorous "not-so-perfect" gift suggestions to visitors through a series of video vignettes, prior to the tool's actual recommendations.
The :30 TV spot is built upon the same premise. At a holiday house party, Manning gives teammates Jeff Saturday and Ryan Diem a gift and says, "You'll never guess what it is," though it is obviously a wrapped football, while Hannigan, at a holiday party "on the set," gives two bald crew members a shampoo gift basket. The spot wraps with the voiceover: "Getting them something they'll actually enjoy. Priceless. This year let Peyton and Alyson help you get the perfect gift at priceless.com."
For every purchase made at Amazon with a valid MasterCard that comes through the Gift Finder, shoppers will receive credit for $10 in MP3 downloads from Amazon's MP3 store (courtesy of MasterCard).
"The MasterCard Priceless Gift Finder represents a significant focus by MasterCard on driving e-commerce this holiday season," says Cheryl Guerin, senior vice president of U.S. and digital marketing at MasterCard Worldwide. "The utility of this tool makes it easy to select these perfect gifts while tracking a budget, managing a holiday shopping list, and using social media applications that are already a part of many shoppers' daily lives."
Shopping with a Conscience
Online shopping mall and search engine goodshop.com and goodsearch.com hope that the economic downturn will inspire more people to both save money and help their favorite causes raise funds. GoodShop donates a percentage of each purchase to the charity of the shopper's choice. Consumers choose from more than 1,400 well-known retailers including Target, Apple, Macy's, Best Buy, Barnes & Noble, Gap and PETCO. The shopping experience and the prices are exactly the same as going to the retailer directly, but by going through GoodShop, up to 30 percent of the purchase price is donated to the user's favorite cause. The site also provides hundreds of coupons and deals such as free shipping.
GoodSearch, powered by Yahoo, donates about a penny per search to a user's favorite school or nonprofit. Individuals can add the GoodSearch toolbar to their browsers, allowing them to automatically generate donations every time they search or shop online - without going to GoodSearch or GoodShop first.
There are currently more than 85,000 organizations earning money from the sites. What makes the system so compelling is that it doesn't cost the users (or the organizations) a thing.
GoodSearch and GoodShop have quickly spread via word-of-mouth, the blogger community, and a number of celebrities and their foundations, including Jessica Biel, Montel Williams, Jeff Bridges, Faith Hill and Tim McGraw.
"The response to this idea has been truly overwhelming," says Ken Ramberg, cofounder of GoodSearch, who was previously president of JobTRAK, the online career site for college students which was acquired by Monster. "More than 100 new nonprofits and schools register daily [with] GoodSearch and GoodShop and they are making a difference in communities across the country. They are alleviating the strain in resources and making it possible for everyone, regardless of how much time or money they have, to give back."
Little St. Nick
Traffic to toy sites grew 9 percent in October, according to comScore, as some parents got an early start on holiday gift ideas. Toys "R" Us sites led the category, growing 24 percent versus September to 8.1 million visitors. The LEGO group attracted 3.4 million Americans, followed by Disney Shopping with 2 million visitors and American Girl with 1.3 million visitors.
Toys "R" Us is offering free shipping on many items at its Web site. To help overwhelmed shoppers, the retailer is also offering a gift finder, which helps identify the perfect toy when users answer a few basic questions about the recipient.
Toys "R" Us isn't taking any chances on missing out on sales whatever way possible. The retailer has opened more than 80 locations on short-term leases in malls and shopping centers across the country, as well as 260 temporary stores within Babies "R" Us locations.
The holiday push this year represents an additional million square feet of selling space, according to chairman and CEO Jerry Storch, who says that "the last thing parents will cut back on is that trip to Toys 'R' Us to buy the holiday present for their kids." To entice online shoppers, the retailer has its holiday "Big Book of Savings" online offering $5,500 in coupons.