DEATH OF PUREPLAY RETAIL

INTELLIGENCE REPORT DEATH OF PUREPLAY RETAIL CUSTOMER ACQUISITION

“Walk In Traffic” Doesn’t Exist Online Despite significant budget allocation from retailers, paid search listings account for just 10 percent of consumer clicks from Google results. 8 The remaining 90 percent of clickshare goes to organic listings—suggesting natural search optimization is essential to maintaining online traffic and e-commerce market share for all retailers. Just 5 percent of consumers visit the second page of Google search results, and 1 percent visit the third page. 9 Thus, having a meaningful share of the digital shelf—and by extension, consumers’ consideration set—requires appearing organically on the first page of search results for priority keywords. L2 analyzed organic search visibility for pureplay and evolved retailers on Google.com, using 1,231 unbranded category-specific keywords (selected based on per-category search volume). On average, retailers playing in highly fragmented categories, including Baby and Men’s and Women’s Apparel, appeared on the first page of results for no more than 5 percent of unbranded searches. Moreover, in every category except Women’s Sportswear and Bags, pureplay e-tailers and evolved retailers fell to the second or third page of results in terms of average organic placement—translating to invisibility. These retailers face stiff competition from Amazon.com, which maintains a significantly higher share of first-page organic results for almost all categories. The analogy? “Walk in traffic” in an online capacity is non-existent for small and mid-sized retailers, as most lack the first-page visibility required to drive organic search traffic versus scaled competitors.

Death of Pureplay Retail: Average Retailer Visibility for Unbranded Category Keywords Percentage of Keywords for Which Retailer Appears on First Page of Organic Search Results October 2015, n=23 Pureplay Retailers, n=16 Evolved Pureplay Retailers,* n=1,231 Keywords ■ Pureplay/Evolved Pureplay Retailers ■ Amazon

Accessories n=71 keywords Baby n=62 keywords Bags n=31 keywords Furniture n=130 keywords Fine Jewelry n=43 keywords Luxury n=218 keywords

15% 30% 5% 44% 69% 47% 34% 35% 42% 5% 2% 15%

Men’s Apparel n=207 keywords Shoes n=138 keywords Watches n=51 keywords

1% 22% 20% 21% 14% 69%

Women’s Apparel n=187 keywords Women’s Sportwear n=87 keywords

4% 9%

15% 30%

Source: L2 Intelligence Report: Death of Pureplay Retail, January 2016. * Excluding categories with only one brand.

Death of Pureplay Retail: Average Organic Search Position on Google,* by Category October 2015, n=23 Pureplay Retailers, n=16 Evolved Pureplay Retailers, n=1,231 Keywords ■ First Page (100% Click Rate) ■ Second Page (5% Click Rate) ■ Third Page (1% Click Rate)

20

3rd Page

16

16

14

14

13

13

12

2nd Page

10

8

5

1st Page

Accessories n=71

Baby n=62

Bags n=31

Furniture n=130

Fine Jewelry n=43

Luxury n=218

Men’s Apparel n=207

Shoes n=138

Watches n=51

Women’s Apparel n=187

Women’s Sportwear n=87

Source: Web Ranker; L2 Intelligence Report: Death of Pureplay Retail, January 2016. * For keywords for which the brand is present in Google Search results.

8. “ The First Page of Google, by the Numbers ,” Protofuse, April 30, 2014. 9. Ibid.

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January 12, 2016