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<strong>GE</strong> <strong>Capital</strong> Retail Finance<br />
Holiday 2012
Key insights<br />
1<br />
2<br />
3<br />
4<br />
5<br />
Holiday sales up 3% vs. last year, below forecasts and compared<br />
to +3.8% last year<br />
Online sales soared this year, up 14% vs. last year. mCommerce<br />
sales +81% driven by tablet shoppers<br />
In store & online boundaries increasingly blurred, not ‘either/or’<br />
anymore. Most shoppers purchased both online & in store this year<br />
Gift cards don’t look as important as last year and not providing the<br />
same January spend bump, based as early indicators<br />
Flash etailers report sales growth up to 50% in the fourth quarter<br />
with almost half the traffic coming from mobile<br />
2
Holiday Results<br />
($B)<br />
Total Sales* Nov./Dec.<br />
$503.4 $505.4<br />
$533.4<br />
$563.0<br />
$579.8<br />
2008 2009 2010 2011 2012<br />
3% increase in total retail sales for holiday<br />
Source: NRF: *11/1 - 12/31; NRF redefined base for Retail Sales in September. Now include nonstore<br />
retailers & auto parts, acc. & tire stores.<br />
Category Sales: Store Performance<br />
1. Clothing and clothing accessories<br />
2. Electronics and appliances<br />
3. Furniture and home furnishings<br />
4. General merchandise<br />
5. Health and personal care<br />
6. Sporting goods, hobby, book & music<br />
Unadjusted YoY sales for December<br />
+2.5%<br />
-0.4%<br />
+3.0%<br />
-3.4%<br />
-0.7%<br />
+9.6%<br />
Source: NRF<br />
($MM)<br />
+32%<br />
633<br />
479<br />
1<br />
TG Day<br />
+28%<br />
1042<br />
816<br />
Black<br />
Friday<br />
Online Spending<br />
1187<br />
1031<br />
BF<br />
Weekend<br />
1465<br />
1275<br />
1251 1133<br />
Cyber<br />
Monday<br />
Green<br />
Monday<br />
2012 2011<br />
1013<br />
575<br />
76% increase on Free Shipping Day<br />
16%<br />
30%<br />
35%<br />
288<br />
212<br />
Free Xmas Day<br />
Shipping<br />
Day<br />
Online & In-store Shopping<br />
62%<br />
+15%<br />
+17%<br />
+13%<br />
21%<br />
17% 18%<br />
7% 6%<br />
20%<br />
+76%<br />
61%<br />
Source: comScore, Inc.<br />
77%<br />
+36%<br />
Online only In store only Both<br />
Black Friday sales drove significant traffic both<br />
in-store and online this year<br />
Source: Crowdtap<br />
3
Holiday 2012 Trends<br />
More Mobile Than Ever<br />
Shoppers this year used mobile devices more<br />
than ever<br />
• 33% of smartphone owners<br />
used a mobile coupon during<br />
the holiday season, up from<br />
18% last year.<br />
• In 2013, we’ll see greater<br />
expansion of online purchasing<br />
in furniture, home décor &<br />
cosmetics<br />
Source: SapientNitro /GfKRoper survey;eMarketer<br />
Source: csmonitor<br />
Price Match<br />
Offer the best of both worlds or a differentiated in<br />
store experience<br />
• Best Buy, Sears and<br />
Target matching price<br />
on identical, in-stock<br />
items from local and<br />
select online retailers<br />
• Target announced it will<br />
price match year-round<br />
Source: comscore<br />
Free Shipping<br />
Free shipping now a priority and same<br />
day/free returns provides advantage<br />
• 40% of retailers offered<br />
free shipping on Black<br />
Friday &/or Cyber Monday<br />
• Free shipping average<br />
purchase $137 vs. $91 with<br />
shipping fees<br />
• Free return shipping with<br />
purchases $50+<br />
Flash etailers<br />
• 2012 sales from U.S. flash<br />
etailers more than $2 billion<br />
• On average, 65% of sales<br />
occur between 12 and 1:30ET<br />
daily with 30% via mobile<br />
• At noon, over 3,000 versions<br />
of messaging sent<br />
Walmart “To Go”<br />
$10 flat rate same-day<br />
shipping<br />
Check out with PayPal and get<br />
Return Shipping for the full<br />
holiday season<br />
In 5 years: from splash to concern to<br />
mainstream<br />
Source: NRF<br />
Source: cmsoforum.mckinsey; IBISWorld<br />
4
Voice of Customer for Holiday<br />
Black Friday still considered prime holiday savings<br />
Shoppers still consider Black Friday savings best for online & in-store savings<br />
When are the best online deals Took advantage of BF deals online Took advantage of BF deals in-stores<br />
56% of customers report Price most important in deciding where to shop<br />
Influence of Coupon Code on Purchase<br />
Decision<br />
Price & Savings Significant Influence on Purchase Decision<br />
Most Important Factor When<br />
Deciding Where to Shop<br />
56%<br />
Source: Crowdtap, n=500, January 2013<br />
20% 18%<br />
Best Prices Free Shipping Quality of<br />
Merchandise<br />
Source: Crowdtap, n=500, January 2013<br />
5
Mobile apps: “Shop Your Way”<br />
Sears and Kmart mobile app offered special benefits for customers<br />
to capture last-minute sales<br />
Last minute sales promotion:<br />
app allowed customers to<br />
purchase gifts on their mobile<br />
device and text a store associate<br />
for curbside pickup<br />
• Members offered last minute special gift of up to $10 in points for<br />
purchases between Dec. 21 and Dec. 24.<br />
• Daily sweepstakes, personalized deals and other customized<br />
benefits<br />
• Check inventory online for local same-day store pickup<br />
6
Target & Neiman Partnership<br />
Target and Neiman Marcus holiday partnership:<br />
50 gifts designed by 24 designers<br />
THE NEIMAN MARCUS – TAR<strong>GE</strong>T<br />
HOLIDAY SHOP COLLECTION IS NO<br />
LON<strong>GE</strong>R AVAILABLE<br />
• Viewed as unusual combination<br />
and not likely to be repeated<br />
• Target started markdowns the<br />
week before Christmas, just 3<br />
weeks after the launch, and<br />
discounts ranged from 50 to<br />
70%<br />
• Neimans did not take<br />
markdowns before Christmas<br />
December sales results:<br />
Target : +0.8%<br />
NM: quarterly results Feb 2013<br />
7
2000<br />
2012<br />
Holiday Shopping 2000 vs. 2012<br />
12 years of change in the shopping landscape<br />
Shopping Experience<br />
Internet Usage<br />
Amazon<br />
Black Friday<br />
•Waiting and watching for<br />
the flyers<br />
• Map out plan by store<br />
location and driving<br />
routes<br />
• Navigating the crowds,<br />
the parking<br />
and your<br />
packages<br />
•Only 22% of<br />
internet users<br />
made a purchase<br />
online<br />
•7% looked up<br />
product<br />
information online<br />
Amazon sales not on the radar<br />
yet:<br />
• Served 20 million customers,<br />
up from 14 million in 1999<br />
• Sales grew to $2.76 billion in<br />
2000 from $1.64 billion in<br />
1999<br />
• Limited distribution<br />
Source: Pew Internet<br />
Black Friday<br />
• Opt for in-store and/or<br />
online experience<br />
• Savings start earlier &<br />
at your fingertips<br />
• Mobile, Price Match,<br />
Flash Sales, curbside pickup<br />
& pop-up<br />
stores all part of the<br />
experience now<br />
•88% of internet users<br />
researched or<br />
purchased online<br />
•66% of smartphone<br />
owners used their<br />
mobile device to<br />
research or shop<br />
• 2012 sales - holiday<br />
season biggest ever - 26<br />
million items ordered<br />
worldwide on Cyber Monday<br />
• Amazon purchased robot<br />
maker to service warehouses<br />
• Amazon ‘lockers’ in Staples &<br />
7-Eleven locations<br />
• TBD – impact of sales tax<br />
Source: eMarketer<br />
Source: Reuters<br />
8
Wrap up<br />
1<br />
2<br />
3<br />
4<br />
5<br />
Holiday sales up 3% vs. last year, below forecasts and compared<br />
to +3.8% last year<br />
Online sales soared this year, up 14% vs. last year. mCommerce<br />
sales +81% driven by tablet shoppers<br />
In store & online boundaries increasingly blurred, not ‘either/or’<br />
anymore. Most shoppers purchased both online & in store this year<br />
Gift cards don’t look as important as last year and not providing the<br />
same January spend bump, based as early indicators<br />
Flash etailers report sales growth up to 50% in the fourth quarter<br />
with almost half the traffic coming from mobile<br />
9
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