Multichannel trend report uncovers Marketing Opportunities.

According to Epsilon Targeting, the newly formed data division of Epsilon, online sales continue to grow and certain product categories remain popular among consumers despite a challenging economy. Epsilon Targeting’s Annual Multichannel Trend Report, which is based on aggregated merchandise purchase data from the Abacus Cooperative database, indicates the need for marketers to target customers based on past purchase behavior, geography and economic conditions.

“As marketers adjust their campaigns to account for the economic climate, the Multichannel Trend Report provides unique and valuable insights to help drive these initiatives and effectively target today’s budget conscious consumer,” said Brian Rainey, president of Epsilon Targeting. “Utilizing a data-driven, highly measurable multichannel strategy will provide the most return on marketing investment by effectively identifying and reaching existing and potential customers in the shopping and purchasing channels they prefer.”

Sales Continue to Shift to Online Channel

The study found that the percentage of online purchases continues to grow as the proportion of retail sales was flat and call center sales declined. The percentage of sales taking place online has grown by 30% over the last four years with 8% growth in the most recent year alone. Average dollar per online transaction has also steadily increased over the last four years. In addition, online sales showed the strongest growth across all Census Divisions – in most regions online was the only channel with growth.

Average sale and spend per household declined in 2008 from 2007 for all channels except the online channel. Although the rural buyers preferred to purchase through call centers, both urban and rural buyers make a large share of their recorded transactions online.

Across all channels, 2008 sales declined 3% over the prior year due to a combination of fewer active buying households, lower frequency of purchase and lower average sales. In an early glimpse at Q1 2009, sales are declining over previous first quarters.

The Valuable Multichannel Buyer

The study examined the behavior of multichannel buyers versus individuals who purely shop online, at retail locations or by call center/mail and found that multichannel buyers are highly valuable to business-to-consumer and business-to-business marketers. Business-to-consumer, multichannel buyers continue to play an integral role, representing 67% of total repeat buyers with the highest spend and transactions per household. Compared to exclusive retail buyers, multichannel buyers are more active and have higher spend per household despite lower average sale. This indicates that multichannel buyers provide greater return-on-investment as they are exhibit a higher level of engagement with a marketer’s brand. For business-to-business marketers, multichannel buyers are also the most valuable segment, at $686 per contact.

‘State’ of Marketing Affairs

According to the findings, sales grew in the first quarter of 2009 for some Metropolitan Statistical Areas (MSA’s) compared to the same time period in 2008 and the same was true for full year 2008 sales compared to 2007. Nearly half the top 20 MSA’s ranked by percent of sales dollar growth were in Texas, indicating that growth is occurring predominantly in energy-producing regions. The bottom 20 MSA’s declined on average 10% in sales. The state of Florida accounts for over one-third of the bottom 20 MSA’s.

The top 20 MSA’s based upon population accounted for 55% of sales in 2008 and 46% of buyers. In these established areas, sales declined by 3% – the same as the national average.

A Peek Inside Consumers’ Shopping Carts

Sales trends varied significantly by product category in 2008, ranging from lifts of 19% to declines of 30%. The top five growing categories were High-Ticket Male & Female Apparel (19%), Male & Female Shoes (14%), Female Active Wear (14%), Senior Health Hard Goods (13%) and Environmental/New Age (10%). The categories which saw the greatest declines were Meats & Seafood (-30%), Mid-Ticket Gifts & Merchandise (-29%), Professional Business Merchandise (-28%), High-Ticket Bed, Bath & Linens (-22%) and Country/Rural Home Decor & Gifts (-18%).

Growing categories reflect major trends such as the popularity of the green movement (Environmental/New Age), an increased focus on health and fitness (Female Active Wear) and the Aging of America (Senior Health Hard Goods). Female and Male Apparel, Senior Products, and Media were the only categories with sales growth in 2008. These categories may represent an opportunity for product line expansions, acquisitions, or spin-offs.