THESTATEOFONLINERETAILING

THIRDQUARTER2001UPDATE

December10,2001BACKGROUNDThisdocumentprovidesthefindingsfromtheThirdQuarter2001Updateof“TheStateofOnlineRetailing”,aSsurveyconductedbyTheBostonConsultingGroupThethirdquarterfindingsarebasedondataprovidedby63onlineretailerswhocompletedthesurvey,supplementedwithretailerinterviewsconductedbetweenNovember27andDecember4Datacollectedwereforthecalculationofourcoremetrics,whichrepresentasubsetoftheperformancebenchmarkspublishedinourmostrecentannualreport,TheStateofOnlineRetailing4.0PROGRESSIVEREDUCTIONINACQUISITIONCOSTCONTINUED

Thirty-ThreePercentDeclineSoFarThisYearCustomerAcquisitionCost($)2000Average($29)Source: TheStateofOnlineRetailingThirdQuarter1999Update,3.0,FirstQuarter2000Update,SecondQuarter2000Update,ThirdQuarter2000Update,4.0,FirstQuarter2001Update,SecondQuarter2001Update,andThirdQuarter2001Update,SsurveysconductedbyTheBostonConsultingGroupMarketing33%USEOFOFFLINEMEDIADOWNMORETHAN

HALFVERSUS2000AVERAGEShareofMarketingSpend(%)51413645394959645561Offlinemedia2000OfflineAverage(46%)1999OfflineAverage(62%)OnlineMediaSource: TheStateofOnlineRetailingFirstQuarter2000Update,SecondQuarter2000Update,ThirdQuarter2000Update,4.0,FirstQuarter2001Update,SecondQuarter2001Update,andThirdQuarter2001Update,SsurveysconductedbyTheBostonConsultingGroupMarketing29712278CATALOGSREMAINTHEONLYSIGNIFICANTOFFLINEMEDIUMMarketing(1)Includesnewspaperinserts(2)IncludesdirectmailSource: TheStateofOnlineRetailing4.0,FirstQuarter2001Update,SecondQuarter2001Update,andThirdQuarter2001Update,SsurveysconductedbyTheBostonConsultingGroupOnlinePortalE-mailBannerAffiliateprogramTotalOfflinePrintCatalogDirectmailNewspaperinsertsTVOtherofflineTotal2000FullYear27%13%9%6%54%22%8%7%9%46%Q123%19%13%6%61%10%8%7%3%2%9%39%PerformanceBenchmarks(1)

(2)

Q223%21%13%14%71%5%13%1%2%<1%8%29%2001Q328%19%22%9%78%2%12%2%1%<1%5%22%IncreaseinportalsandbannersreflectiveofincreasedonlinemediaspendingExpensive,lessefficientmarketingprogramssuchasTV,Print,NewspaperinsertshaveallbeendramaticallyreducedHOLIDAYMARKETINGEFFORTSAIMEDATCLOSINGTHESALEHolidayPreparationsWhichofthefollowingmarketing/promotionalactionshaveyoutakenorarecommittedtotakeinspecificpreparationfortheupcomingholidayseason(Thanksgiving-Christmas)?(1)

CommentaryRetailersarelookingforeasywaystoclosethesale45%intendtoofferfreeshippingwithconditions,upfrom28%ayearearlierNearlytwo-thirdsareofferinggiftcertificatesonlineAlthoughtheresultssuggestadecreaseduseofonlinemedia,overallusehasincreasedthroughouttheyearsotheneedtospecificallyuseonlinemediafortheholidayshasdecreasedIntendtosellgiftcertificates(regularorelectronic)Increasede-mailadvertisingspendingIntendtoofferfreeshipping,withconditionsSignednew/revisedportaldealstosecureprominentplacementIntendtoofferfreegiftwithpurchaseIncreasedofflinemediaspending(excludingTV)Signednewpartnershipdealswithcontentsites(attractmoretargetedshoppers)Intendtoofferfreeshipping,withnoconditionsIncreasedTVadvertisingOtherNospecificactionstaken/plannedQ3200165%

56%45%

31%

27%26%

26%

13%

10%13%8%Q3200054%

62%28%

39%

29%33%

36%

12%

4%9%11%(1) Multipleresponsesallowedunlessindicatedthatnospecificactionstaken/plannedSource: TheStateofOnlineRetailingThirdQuarter2000UpdateandThirdQuarter2001Update,SsurveysconductedbyTheBostonConsultingGroupCHANNELINTEGRATIONEXPECTEDTOBESTRONGERTHISHOLIDAYSEASONHolidayPreparationsForcompanieswithstoresand/orcatalogs,whichofthefollowingwereorwillbeinplaceinanefforttobetterintegrateyourchannels?(1)

CommentaryRetailersareembracingwaystomigrateordersonline51%ofretailersnowenablequickcatalogordersonsite,anincreasefrom32%ayearagoIn-storekiosksareusedby29%ofretailers,almostdoublethatof2000FurtherintegrationofgiftcertificatepurchasesnecessaryOnly32%ofretailersenableonlineredemptionofoffline-purchasedcertificates,whereas63%enableofflineredemptionofonline-purchasedcertificatesOnlinestoreincreasinglybeingviewedasvehicletodisposeofexcess/obsoleteinventory44%ofretailersliquidateonlineandofflineinventoryonlineTomitigateconsumerconcernsoverfulfillment,moreretailersshouldconsiderin-storepick-upMoreretailersarecurrentlyofferingin-storeinventoryonline,whichisanaturalfirststepIn-storeorin-catalogmarketingofonlinechannelGiftcertificatespurchasedonlineandredeemableofflineIn-storereturnofonlineordersQuickcatalogordersonsiteOnlinestoreusedtoliquidateonlineandofflineinventoryGiftcertificatespurchasedofflineandredeemableonlineIn-storeInternetkiosksReal-timein-storeinventoryavailableonlineIn-storepick-upofonlineordersHolidaySeason200176%

63%

61%51%44%

32%

29%27%

17%HolidaySeason200068%

49%

51%32%27%

22%

15%24%

15%(1) MultipleresponsesallowedSource: TheStateofOnlineRetailingThirdQuarter2001Update,SsurveysconductedbyTheBostonConsultingGroupMARKETINGMETRICSMetricAcquisitioncostpernewcustomerRetentioncostperrepeatbuyerMarketingspendonlineMarketingspendofflineMarketingspendoncustomeracquisitionMarketingspendoncustomerretentionMarketingspendonbrandawarenessDefinitionMarketingspenddedicatedtocustomeracquisition(includingacquisitionportionofbrandbuilding)dividedbythetotalnumberofnewcustomersacquiredMarketingspenddedicatedtocustomerretention(includingretentionportionofbrandbuilding)dividedbythetotalnumberofrepeatbuyersPercentageofmarketingbudgetspentononlinemarketingandadvertisinginsupportoftheonlinebusinessPercentageofmarketingbudgetspentonofflinemarketingandadvertisinginsupportoftheonlinebusinessPercentageofmarketingbudgetdedicatedtoacquiringnewonlinecustomersPercentageofmarketingbudgetdedicatedtoretainingexistingonlinecustomersPercentageofmarketingbudgetdedicatedtoenhancingorimprovingoverallbrandawarenessoftheonlinebusinessDefinitions9、靜夜四無鄰，荒居舊業(yè)貧。。12月-2212月-22Tuesday,December20,202210、雨中黃葉樹，燈下白頭人。。13:10:5613:10:5613:1012/20/20221:10:56PM11、以我獨沈久，愧君相見頻。。12月-2213:10:5613:10Dec-2220-Dec-2212、故人江海別，幾度隔山川。。13:10:5613:10:5613:10Tuesday,December20,202213、乍見翻疑夢，相悲各問年。。12月-2212月-2213:10:5613:10:56December20,202214、他鄉(xiāng)生白發(fā)，舊國見青山。。20十二月20221:10:56下午13:10:5612月-2215、比不了得就不比，得不到的就不要。。。十二月221:10下午12月-2213:10December20,202216、行動出成果，工作出財富。。2022/12/2013:10:5613:10:5620December202217、做前，能夠環(huán)視四周；做時，你只能或者最好沿著以腳為起點的射線向前。。1:10:56下午1:10下午13:10:5612月-229、沒有失敗，只有暫時停止成功！。12月-2212月-22Tuesday,December20,202210、很多事情努力了未必有結(jié)果，但是不努力卻什么改變也沒有。。13:10:5613:10:5613:1012/20/20221:10:56PM11、成功就是日復(fù)一日那一點點小小努力的積累。。12月-2213:10:5613:10Dec-2220-Dec-2212、世間成事，不求其絕對圓滿，留一份不足，可得無限完美。。13:10:5613:10:5613:10Tuesday,December20,202213、不知香積寺，數(shù)里入云峰。。12月-2212月-2213:10:5613:10:56December20,202214、意志堅強的人能把世界放在手中像泥塊一樣任意揉捏。20十二月20221:10:56下午13:10:5612月-2215、楚塞三湘接，荊門九派通。。。十二月221:10下午12月-2213:10December20,202216、少年十五二十時，步行奪得胡馬騎。。2022/12/2013:10:5613:10: