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February 8, 20111HousekeepingDial-in Information:1 (312) 878-0218Access Code: 292-093-510Audio PIN: Shown after joining the WebinarWebinar ID:272-346-304

All slides will be available after the webinarAll registrants will receive a copy of the full report the week of January 21st.22Todays Presenters3

Lauren FreedmanPresidentthe e-tailing groupwww.e-tailing.com

Rita BrogleyCEOAmadesawww.amadesa.com

3About Amadesa

Amadesa helps online marketers make their websites better through testing and targeting, resulting in an optimal user experience and increased revenue, conversions and ROI. Ease of use and implementation combined with powerful functionality are benchmarks of our products. Because our product suite is so easy to use, many of our clients are self-service; however we have an expert services team available for full service or on-demand needs to ensure your success.

4The Voice of Cross-Channel MerchandisingStraight talk from in-the-trenches online merchandising experts16 years e-commerce consultingAuthor, Its Just Shopping50+ years traditional retail and catalog experienceFortune 500 client projects ranging from strategic planning, merchandising, marketing, to technology development and messagingCross-category projects spanning specialty retail to departments Proprietary research studies on mystery shopping, merchandising, mobile and consumer behavior

5Todays Agenda2010 Holiday Trends and TakeawaysHighlights from The Amadesa/e-tailing group Merchant Testing Survey5 of the 7 Secrets of Successful TestingTesting-Ready Checklist6I. 2010 Holiday Trends and TakeawaysUS Internet sales rose 15.4% to $36.4 billion where sales over the Internet now account for about 10% of all retail sales 1Retail sales rebound rising 5.5% up from 3% predictions earlier in the year 2Category increases were seen in Apparel (11.2%), Jewelry (8.4%) and Luxury Goods (6.7%) 1Cyber Monday was the first billion-dollar spending day in history (1 of 6), and the first time weve witnessed Cyber Monday rank as the heaviest online spending day of the year. 3 Ecommerce holiday spending climbed 10% per transaction in 2010 versus 2009 1Retailers targeted many of their promotions even earlier than usual and reaped the benefits1) MasterCard 2) NRF 3) comScore72010 EG100 Merchants81-800 FlowersCliniqueGardeners SupplyLowe'sShop NBCABTCoachGarnet HillMacy'sStaplesAltrecCooking.comGiggleNational GeographicSundanceAmazon.comCrate & BarrelGNCNikeSunglass HutAmerican GirlCrutchfieldGodivaNordstromTargetAppleDellGolfsmithOffice DepotThe AvenueArmani ExchangeDicks Sporting GoodsGreen MountainOrvisThe Container StoreArtful HomeDiscovery ChannelHarry & DavidOverstockThe Home DepotAvedaDisney.comHP Home and Home OfficePetSmartThings RememberedBarnes & NobleDrs. Foster & SmithHSNPoloTitle 9Bath & Body WorksDSW ShoesImprovements CatalogPottery BarnToys R UsBest BuyeBags.comiRobotQVCUltaBlue NileEBGamesJ. CrewRadioShackUrban OutfittersBlueflyEileen FisherJCPenneyRedenvelopeVictorias SecretBoden USAeToysKing Arthur FlourREIWalgreensBordersFamous FootwearKohlsRoad Runner SportsWal-MartBrooks BrothersFoot LockerL.L. BeanSaks Fifth AvenueWilliams-SonomaBrookstoneForever 21Lamps PlusSearsWine.comBuy.comFrontgateLands EndSephoraZalesCabelasGapLegoShop BopZappos8The Customer Experience is Ratcheted Up

Seasonal PromosLimited-time only dealsBranding and Manufacturer videosTop sellersHSN AnywhereMobile App EG100 80+ INDEX WINNERSOrvisSearsGolfsmithHSNL.L.BeanAbtCrutchfieldTargetREIBest Buy9Elevated Search Tools Drive Shopping Efficiency10

70 EG100 merchants smartly leverage navigational drop downs with 48 merchandised for greater effectiveness10Promotional Creativity Bolstered By Everybodys Favorite: Free ShippingFree shipping was used in more than half of all e-commerce transactions this season, up significantly from last year -comScore

4Q104Q09Limited hour specials (lunch time, 4 hour)50%40%Offer Free Shipping on all Products7%4%Offer Conditional Free shipping on All Products 52%*40% *Offer Conditional Free shipping on Certain Products43% *47% *Free Shipping For Frequent Buyers25% *N/AConditional Free shipping to a store28% *26% *11Product Information Is Category and Consumer-centric

Screen ShareGalleryFeaturesVideoRatings and Reviews4Q10 4Q09 Product Page/Product Enhancement Ratings/ Reviews 87% 74% Depth of Reviews (1-3 3=extensive) 2.27 * 2.27 * Zoom 86% 89% Alternate views 80% 76% Color Change 61%* 64% * Guides/How Tos on Product Page 39% 30% Tips/Glossaries on Product Page 26% 24% Ask and Answer/ Q & A 18% N/A 3D 18% 21% Shop with a Friend 4% N/A 12Video Role Expanded and Sees Strong Customer Engagement4Q104Q09Videos/Audio88%64% Location: Home Page16%*N/A Category Page36%*N/A Brand Boutique41% *N/A Product Page73% *55% Other75% *N/A Type: Branding Content69% *N/A Manufacturer Content47% *N/A Category Content53% *N/A Product Content76%*N/A Guides/ How To's33% *N/A

Retail site visitors who view video stay two minutes longer on average and are 64% more likely to purchase than other site visitors.

-comScore13Mobile and Social on the Fast Track

CommunityEQ100 4Q10 EG100 4Q09 % ChangeSocial Networking Links 83% 60% 38% Facebook 96%* 85%*13% Twitter 87%*73%*19% You Tube 43%*35%*23%"Like" Button 36% N/A N/AShare 75% 67% 12%Blog 50% 36% 39%Mobile Commerce 44% 13% 238%Mobile Alerts 29% 21% 38%Community Boards 28% 29% -3%Mobile and social make strong inroads Black Friday 2010 as consumers using mobile devices accounted for 5.6% of visits to retail websites - a 50-fold increase over 2009 when it was just 1%

-Coremetrics

14The Amazon Effect Continues

63.7% of consumers who shopped among 20 leading e-commerce sites in December say they shopped at Amazon.com, up from 55.1% a year ago.

-Kantar Retail ShopperScape survey15Customer Service Means Better Meeting The Needs of Todays Consumers1-800-FlowersAbtCoachDrs Foster and SmithFoot LockerKing Arthur FlourLands EndOrvisSaks Fifth Avenue

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2010 EG100 Customer Service Winners16The Stakes are HigherMerchants Must Ratchet up the Shopping Experience as Customer Expectations Continue to Ascend

Testings Time is Now17

II. Highlights from the Amadesa/e-tailing group Testing Survey

18The Future of Testing is NowHaving a great website is no longer optional

If youre not testing today, you should bewebsite optimization is mission critical

Testing is easy

19If youre not testing today you need to be. Most online marketers are having great success with driving high volumes traffic; therefore, you must ensure that you are making the most of all that traffic. Website optimization is mission critical.Testing is easy.

LF To be competitive, having a great website is no longer an optionIts all about conversion. Testing can give you the answers about whats working and whats not and from there you can smartly optimize the site experience. The tools are available and it is not a difficult process.19Methodology and ObjectivesGoal: Explore retailer sentiment regarding testing online and cross-channel along with desire to add the capability in the future

Methodology: 160 merchants completed an online survey to explore retailer sentiment regarding testing online and cross-channel or ones desire to add the feature in the future where 79% (127) were testers/ 21% (33) were non-testers

Survey Objective:To understand the following surrounding testing:current statetools and tactics employedorganizational approachperformance resultsperceptions20Topline FindingsTesting emanates from a culture that believes in its valueMost merchants believe testing is valuableWhen not testing they are simply resource-challengedMerchants perceive strong ROI results will be forthcoming from testing where both user experience and improved site conversion are seenA/B testing is the favored methodology while a broad array of areas are being tested

2121Testers tend to be either very active (33%) or once in a while users of the tool (38%) 2271% of respondents are versed in testing! Thats a great step towards greater utilization, and it speaks volumes that no respondent to our survey used to test but no longer does today. As we expose several of our testing secrets, think about where you may fit in the chart, and ultimately how testing can become an active component of your marketing plans.

22Testing has the most impact on improving the user experience (61%) and increasing site conversion (57%) but also has influence on multiple areas of the siteClearly the two core, most fundamental reasons to test aspects of your website are to improve the user experience and site conversions. In this day and age, both are prerequisites to driving brand, engagement and loyalty. Also, the key to success is to weave detailed key performance indicators into these two themes. Such detailed KPIs include time on site and page view data, survey responses to measure loyalty, revenue, site conversion and average order value for both new and returning visitors, plus other custom metrics you may wish to track.

23A/B testing is the standard (82%);other tools are deployed based on merchant choiceQ7The most common method for testing is the tried and true AB split option. It is certainly the easiest to set up, it provides clear metrics on one choice vs another, and offers an incremental test plan that can be completed in a timely manner. More and more respondents are incorporating the use of various targeting methods to hone in on relevant messaging on a per-group basis.

2463% of those who test, do so monthly or more frequently25Designing test plans for success really means a few key concepts:Develop a rhythm to testing. Building a level of discipline means the organization will soon look for results (because tests are occurring with greater frequency)Focus on implementing a test at least monthly. Define a variety of tests, and rank them by ease of set up vs length of time to run, and begin with the top of the list.

25III. 7 Secrets to Successful Testing

Well go through 5 today!26TESTING SECRET #1TRY IT!

Always test first, be it style, content, functionality or features. Go out on a limb!

EG Extra Credit Points In the BeginningKeep a rolling list of testing ideas as part of your everyday dealings and create a forum to share with your teamStart small by looking for quick wins prior to elevating to more sophisticated strategiesReach out to industry peers to learn what works and what may be problematicAdopt learning as it fits your needs and meshes with your business model

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What are the three key actions to get started?

There are 3 things you must accomplish before you dive in. When thinking about testing in the first place:

1st: Understand internal metrics and KPIs. Know what your problems are and where you can be better.2nd: Assess your resources. Know what people and financial resources you have to work with to get the job done3rd: Make a Plan. Keep in mind your KPIs, which help guide you in planning. Make a list of things that you want to change or test on your current site. Put together a timeline of when you want to get started and what internal team members will be involved in the process. Investigate testing and targeting solutions/partners that align with your objectives, your team, and your resources.

28TESTING SECRET #2: SEEK SHORT-TERM WINS

29creative execution (65%) and copy (50%) are the two areas tested most, followed by promotions (46%), marketing campaigns (45%), images (43%), key page templates (42%), and moreSee the full report for the rest

Avoid the temptation to start testing on a highly complex process, such as a checkout flow or multi-stage lead generation experiences. Begin with landing pages where traffic is clearly defined, and focus on the creative aspects of the page itself. Over time, testing templates, new functionality or more advanced test plans will seem less daunting and easier to tackle.

29TESTING SECRET #3 SEEK SHORT-TERM WINS

The KIS (Keep it Simple) FactorStart smallThink apples and oranges

Extra Credit Points - TacticalDivide up testing creative The more specific you can fashion the test the betterTest items individually and hone in on themGive tests enough time to reach statistical confidence levels

Start small with a limited number of testsKeep number of variables minimal to know which factors make a differenceBe mindful of potential trade-offs when seeking large dollar impact strategies yet understand that many lesser trafficked areas can still be optimized via testingMove deliberately, making each test incrementally better by reviewing results and building visibility as well as credibility within the organization

30Where should merchants begin?

Based on the analysis that youve already done on your KPIs, wheres the biggest abandonment/low-hanging-fruit?Get your feet wet with simple testsFollow a roadmap that allows you to build incrementally on each successive test, working from the simple tests to more detailed areas on the siteDont change and test too many things at once or you wont know what made an impactShare results with your team along the way which builds excitement and ideas for future tests plus credibility among key stakeholders Move into case study slides: Pillsbury and MEC31

Control

AmadesaQ: Should we start the form on the homepage?

Showing the first step of the form increased member registrations by 113.8% after one week!General Mills: PillsburyA: Yes!113.8% Conversion Rate Lift

Simple Hide/Show Test: Testing the effect of showing the first step of the registration on the homepage Test Type: A/B Placement: Pillsbury.com Homepage Time: 7 days Lift: 113.8% KPI: Member sign-up (conversion) Statistical Significance Reached: Yes Confidence Level: 99.9%32

Q: Can we remove product description, move products above the fold without impacting revenue?MECHiding the product description moved more products above the fold AND increased revenue per visit by 12.2% after only 9 days!A: Yes!

12.2% RPV Lift = $1.6MM added annuallySimple Hide/Show Test: Testing the effect of hiding product description Test Type: A/B Placement: MEC Product Listing page Time: 9 days Lift: 12.2% KPI: Revenue per Visit Statistical Significance Reached: Yes Confidence Level: 90%

33TESTING SECRET #4 TARGET WISELY Know your user groupsIdentify which groups are most impactful to KPIsTest within each segment

34Use your analytics data to uncover initial segments for testing purposesLook for diversity in your user groups.does visitor history make a difference? Does geography/time of day/browser make a difference?Once you identify diversity, investigate which are most impactful to your KPIs Follow the process of testing alternatives to all traffic, then targeting to key segments, and ultimately testing within those segments to truly measure lift Test a range of different promotions and merchandising tactics to understand level of acceptance by segment

34Q: Does message matching enhance user experience and increase revenue?A: Yes!Showing a geo targeted value proposition message across the entire site increased revenue per visit between 8% - 25%!New Car

Used CarHome, MortgageCredit CardsGeneral Terms

45% RPV Lift 70.7% RPV Lift Message Matching Targeted Test: Testing the effect of showing a content that matches based on paid search, affiliate and display advertising messaging Test Type: A/B & Content targeted Placement: Landing page Time: varied Lift: varied KPI: Revenue per Visit Statistical Significance Reached: varied Confidence Level: varied

Note: In this example were taking 1 generic landing page and dynamically creating almost 40 based on search term and ad seen!35TESTING SECRET #5SELECT THE RIGHT PARTNER

The Four Pillars

Information Technology

Strategy and Planning

Creative Development

Budget

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Information Technology: Determine how accessible your IT team is to you and your testing goals; this departments availability will help you assess which integration and usage method will be a good fit with your organization

Strategy and Planning: Decide who will own the testing process for your organization and be sure that you have a team of people invested in providing feedback and guidance; vendors have various levels of support available for strategy and planning services so you will want to know from the start if you need to rely on outside help, and to what degree

Creative Development: Whether you will be testing different promotional offers or images, you will need someone to handle the creative development and execution of each site area or element that you test

Budget: Taking all of the above needs into account will help you construct an appropriate budget; vendor technology, professional services, and creative costs can vary widely so you want to be realistic about your ability to support the range of options

36What should a retailer look for in an ideal testing partner?

Helps you quickly prove ROIUnderstands your metrics and drives toward their improvementProvides a low-friction solution from integration to utilizationAdvocates use of testing across the entire website (not just landing pages)Adds automation options to scale testing opportunitiesOffers services that are flexible to your needs and budget

EG Extra Credit Points - Partnering SmartDeliver a flexible and scalable product that can evolve with your companys changing needsFind a partner who will provide proof-of-concept in advance of contractual phasePre-discuss strategic approaches to assess partnership success likelihood37

D.TESTING-READY QUESTIONS

StrategicIs my organization ready for testing?What is the right way to sell in testings value to my organization? How can I justify the investment?What performance expectations should our team have in place?How can we best create a testing plan and how in-depth should our strategy be?What industry or retailer insights can be shared regarding testing proof-of-concept and potential ROI?Resources Who are the right members of our team to drive the testing initiative?What level of investment is required to do testing right?Can we handle it internally or should we seek the support of a designated testing partner? How much time should we expect to allocate to our testing efforts in Year 1? Year 2? ExecutionWhat should we test first and where do we build from there?How can we maintain testing momentum within the designated group to continue improving on performance results? How do we best read the results and subsequently share within our organization?What is the optimal process that we should follow to test smart?

38Q & ALauren Freedmanthe e-tailing groupLF@e-tailing.com773-975-7280www.e-tailing.com

Rita BrogleyAmadesarita@amadesa.com866-321-8245www.amadesa.com

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