The data this year in the run up to Valentine's Day is especially insightful, as it reveals three key trends in the retail market that all search engine optimisation specialists will be considering as they plan future ecommerce strategies.
1. Big brands still have the advantage
Firstly, the results show that it's still the big brands who are leading the way. Tesco Flowers were at the top of the Hitwise table for market share of UK internet visits in the week prior to Valentines Day for the second year in a row, with 4.45% of the overall visits to the Flowers and Gifts sector. In second place were Tesco's major rivals in this space, Interflora UK, with 3.94% of the market share.
Both Tesco and Interflora rank very well for the generic term 'flowers' on Google UK. Tesco have the slight edge on this keyword but Interflora rank ahead on the other popular term 'Valentines Flowers', so both brands are evenly matched on the organic SEO front. The other brand which performs very well in the organic search space on Google UK is Serenata Flowers but, crucially, this site does not appear in the Hitwise table. The difference here is that Interflora and Tesco both possess the brand trust factor and the mass appeal that attracts consumers, giving them a big advantage over pure play competitors who don't have the same offline presence.
Nielsen NetRatings recently released figures which highlighted that as many as 45% of online shoppers still have concerns about the handling of credit card and personal details when buying from ecommerce sites. This backs up the fact that shoppers are more likely to trust the brands they shop from regularly as opposed to the ones who might have the best deal. Evidently, the brand and brand reputation is still a crucial component to winning the battle for online spending.
2. The Top 10 are having their market share squeezed
By analysing Hitwise statistics from 2005 and 2006, it can be seen that this year's results indicate the changing market share of the top ten sites in comparison to previous years. If we analyse the chart below we can see how the landscape has changed in just two years.
The chart indicates that a greater number of competitors are taking a piece of the pie at the expense of the top ten (who remain largely similar), squeezing the amount of traffic by nearly 15% in two years. The big players will be glad to see their names remain at the top of the list, but at the same time they will want to reverse this trend and grab a greater share of the market.
3. Key Influence Forums can have a significant impact
Hitwise analyst Heather Hopkins picked out Moonpig in her recent blog post as the real winners this Valentines Day. Moonpig, a company behind personalised cards certainly had a bumper year, rising from 31st place in the chart in 2006 to 3rd this time around. Hopkins' picks out huge traffic increases to Moonpig from two community sites, Hot UK Deals and Martin Lewis's MoneySavingExpert.com, as a key reason behind the surge in traffic prior to February 14th, and also suggests that the site went viral as referrals from MSN hotmail had increased significantly.
It is no doubt that these two Key Influence Forums can be a major factor in whether a site experiences a huge traffic spike. However it's likely that Moonpig were not major benefactors, since a leaked promotional code allowed thousands of users to obtain free (or close to free) Valentine's Day cards.
A post in a forum of Hot UK Deals (viewed over 17,000 times) explaining how to get free cards again and again looks to be the real reason Moonpig jumped up in the Hitwise table, and although we can't be certain, it is likely Moonpig found out too late to change the offer before thousands of web users had taken advantage of it.
So the lesson here is that these forums can make an offer go viral (and drive significant uplifts in sales), but it's still important that retailers are aware that promotional and discount codes are likely to be shared on a mass scale if the offer is exceptional.
In summary, as the numbers of online shoppers continues to rise, so do the challenges facing the major ecommerce players fighting for the spend around big events like Valentine's Day. Big brands look set to continue to lead the market on the back of their brand trust and reputation, but the growing competition from all angles will be a concern.
Elsewhere it's important all retailers are aware of the influence of community sites and how promotional codes can go viral so quickly that retailers have to react fast to make sure an offer isn't running at a significant loss. It seems the majority of UK online shoppers love a free bargain - and will be keen to share a freebie to all their friends, family and work colleagues if an offer is too good to turn down.
Thanks to all at Hitwise for providing the data used in this article.
