Date of the presentation

Connecting with Shoppers in the Digital Age

Kevin Mathers, Industry Leader, Technology UK

THE JOY OF DATA

COPY

COPY.

MAKING IT UNIVERSALLY ACCESSIBLE AND USEFUL

THE JOY OF DATA – REALTIME INSIGHTS

MOST ADVANCED ECOMMERCE MARKET IN THE WORLD

The largest per capita e-commerce market

Second largest online advertising market after the US

The UK has above average internet penetration within Europe

Average spend per internet shopper doubled between 2006 and 2010,

In 2009 the Internet economy was worth £100bn or 7.2% of GDP - larger than the UK's construction, transport and utilities industries, and slightly smaller than the finance industry (at 9% of GDP). 

The UK internet economy is forecasted to grow at 10% y/y, and to constitute 10% of GDP by 2015

DATA DRIVEN DECISION MAKING

Before After

20% reduction in bounce rate

7% increase in conversion rate

Website usability improves user experienceand therefore conversion rates

Multi-variant test and learn, based on the DATA

CONNECTING ONLINE DATA TO OFFLINE SALESNUMBER OF PEOPLE MAKING DECISIONS IN STORE HAS HALVED

Source: Longitudinal Economic Study Series, IRI Attitude Link, n = 1,000+ shoppers. CPG Purchase Decisions. IRI, 2009.

The Zero Moment of Truth

CONNECTING ONLINE DATA TO OFFLINE SALES

The First Moment of Truth

ONLINE ACTIVITY TO OFFLINE SALES CAN BE MODELED

June July August

Paid Search+3%

October

2009 2010November December January February March April May

TV, Print, Outdoor

Base Sales 33%

Seasonality

Pricing

Offline Sales Volumes (Sony AU)September 2009 – August 2010

DRIVERS OF SONY BRAVIA OFFLINE SALES

CONNECTING ONLINE TO OFFLINE BY TESTINGGEO-TARGETED EXPERIMENTATION

1 Search marketing is a strong driver of footfall1.9% lift in visitors as a result of increased online spend

2Search marketing influences offline sales Sales lift of 1.5% in test markets compared to the control markets (up to 10.5% in specific categories, SIM only)

3 Positive 400% return on investment in offline channels Vodafone received £4.26 in profit for every £1 spent

4 An even greater impact on in-store sales than online1.75 in-store connections are driven by every 1 online

“Vodafone’s additional investment in generic and upper funnel keywords was an effective way to drive incremental in-store sales. We now have a better understanding of the impact of online research on retail purchase behaviour and we’ll have to rethink the way our current attribution model works.”

-Mike Durbridge, Head of Direct Sales, Vodafone UK

WE HAVE DONE MANY EXPERIMENTS TO PROVE THE THEORY

Offline lift Halo effect

ROPO ROAS

Increase in store sales through online advertising*

1.5% – 4.4%

Increase in store sales of non-tested categories from online advertising*

Up to 3.5%

% of all retail sales researched Online prior to Offline purchase**

31% - 48%

Average offline gross margin driven by online advertising***

12.5 : 1

* Based on 40+ studies conducted in the US and Europe in 2009 and 2010** Consumer Commerce Baromerter Western Europe, Google/ IAN/ TNS 2010 (Multiple Retail categories in DE, Es, FR, IT, NL & UK)*** Based on 7x EMEA Retail studies covering Retail categories

BUT CLOSING THE LOOP ONLINE TO STOREHOW DO WE GET IT TO BE REALTIME?

South Korea Tesco Case Study

MOBILE CAN START TO CLOSE THE LOOP

Google Wallet

‘MOBILE FIRST’THE LOOP WILL CLOSE

WHAT WILL YOU DO WITH ALL THE DATA?

“I keep saying the sexy job in the next ten years will be statisticians. People think I'm joking, but who would've guessed that computer engineers would've been the sexy job of the 1990s?” – Hal Varian

Chief Economist, Google

THANK YOU!