The acquisition will add more than 300 products to L’Oreal’s lineup.
And women want more deals and discounts than they did last year, finds IBM.
Mobile commerce accounted for more of all online sales in the second quarter than in the first, rising to 15.1% of all online sales from 13.3%, but social commerce fell more in the same period, to 1.9% of all online sales from 2.4%, according to IBM Corp.’s retail online index for Q2. Social commerce in this case refers both to sales made directly through social networks as well as those resulting from social media referrals.
The index is built from the aggregated data IBM collects for retailers using its analytics software, including Coremetrics and Cognos Consumer Insight.
Total online sales were also down 2.3% for the quarter. IBM did not provide total sales figures for the quarters. However, the average number of items purchased and average online order values in the index rose by 2.6% and 2.3% respectively.
“That means the number of people shopping has dropped. Also, people who did buy did more of it,” says Michael Haydock, a chief scientist at IBM who has been tracking retail trends for more than 20 years as part of his work on business analytics optimization. The catch, he continues, is that more people overall must have bought in the previous quarter. IBM does not have comparative data for last year, as this is a new type of analysis for the company.
In another recent index, IBM studied social sentiment, or whether online comments are positive or negative, in more than 200,000 comments on Twitter, message boards, blogs and news sources.
The ratio of positive to negative comments about online retail promotions dropped 20% year over year, from 4.2 to 1 in 2011 to 3.35 to 1 in 2012. This is not for lack of interest from consumers: Compared with last year, 50% more consumers use the Internet to find and share promotions, like coupons and sales, which many retailers offer through social media. The study suggests that consumers are still deal hungry, but aren’t seeing their desired value from retail promotions—and they’re expressing it online.
The sentiment study also measured affinity for promotions and found that discounts and sales are more important to women than they were last year.
“Women have pent up demand from the recession,” said Ellen Davis, senior vice president of the National Retail Federation, in a roundtable discussion about IBM’s social analysis. Since the recession, women have been holding back on purchasing for themselves in favor of their families, she explained, and they’ve also became more accustomed to deep discounts and deals. Now that the economic tides are shifting, women are eager to buy for themselves again but demand competitive promotions to do so. This presents a challenge for retailers who may not be able to sustain the extreme sales they began offering in 2008 and 2009, she said.
Around 2009 consumers also began “category rotation,” or buying different types of items in a staggered manner instead of all together, for example buying kids’ clothes one month and men’s the next, added Haydock. Now he says category spending is spreading out, which he predicts will become apparent in this year’s back-to-school season; Last year back-to-school spending almost all took place in July, he says, but this year it will likely continue from July into September.