n our 4th Annual Holiday survey conducted with Lauren Freedman of the eTailing group, we surveyed 1,000 shoppers right after Cyber Monday in early December, 2013. With four years of holiday shopper surveys, we are really starting to see some interesting trends emerge.

1. 4th Annual Holiday
Shopper Survey
January 7, 2014

2. the e-tailing group
Topics
• About the Survey
• Primary Findings
• Top Influencers on Holiday Shoppers
• Mobile is the New Normal
• Key Takeaways
1/6/2014 Baynote, Inc. © 2014 Confidential 2

3. the e-tailing group
About the Survey
WHAT? Measure holiday shopping behavior to understand the shifts in
consumer behavior over time and the influences of ecommerce
HOW? 1,000 respondents between December 3-6, 2013
- 50% female/50% male
- 100% owned smartphones/65% tablets
- 100% had made a holiday purchase online
WHO? Baynote in cooperation with Lauren Freedman, the e-tailing group
1/6/2014 Baynote, Inc. © 2014 Confidential 3

4. the e-tailing group
Demographics
30%
20%
20%
30%
18-34
35-44
45-54
55+
What age group do you fall within?
11%
23%
27%
16%
19%
4%
Less than $25,000
$25,000-$49,999
$50,000-$74,999
$75,000-$99,999
$100,000+
Prefer not to respond
What is your TOTAL annual pre-tax household
income?
19%
15%
7%
58%
1%
One
Two
Three or more
None
Prefer not to respond
How many children <18 years of age are living at
home with you?
1/6/2014 Baynote, Inc. © 2014 Confidential 4

5. the e-tailing group
What percentage of your holiday purchases
to date have been made online?
1/6/2014 Baynote, Inc. © 2014 Confidential 5
28%
24%
30%
11%
7%
25%
25%
29%
14%
7%
Majority (>75%)
Most (75-50%)
Some (50-25%)
Limited (25%-10%)
Very Little (Less than 10%)
2013
2012
1 in 2
shoppers
made at least
50% of their
holiday
purchases
online
Q5

6. the e-tailing group
Key Findings
• Promotions influence majority of holiday purchases; unconditional free shipping
reigns
‒ Promotions fueled by mobile email
• Mobile usage accelerates; branded apps influence expands
‒ An important shift happened in 2013 as digital’s influence on in-store purchase patterns grew
• Shoppers demand a streamlined customer experience with easy access to
information and integrated online and in-store tools
‒ Search results and paper catalogs continue to contribute
‒ Shoppers expect retail websites to support the entire shopping experience
• Ratings and reviews exert the greatest influence on both online and in-store
shoppers
‒ Millennials push the limits of digital shopping tools
1/6/2014 Baynote, Inc. © 2014 Confidential 6

7. the e-tailing group
TOP INFLUENCERS ON
HOLIDAY SHOPPERS

8. the e-tailing group
92% of all
shoppers took
advantage of
some type of
promotion
11%
39%
24%
18%
5%
3%
All (100%)
Most (75%+)
Many (75-50%)
Some (50-25%)
Few (25-10%)
Very Few (<10%)
Q: Overall, what percentage of your purchases this
holiday season will include a promotion (e.g. free
shipping, % off, coupon, etc.)?
Q16
1/6/2014 Baynote, Inc. © 2014 Confidential 8

9. the e-tailing group
By a 2-to-1 margin, shoppers always take
advantage of unconditional free shipping
Unconditional
free shipping
as a top
influencer
rose 58% over
2012
98%
86%
83%
82%
79%
85%
80%
67%
64%
42%
80%
47%
42%
39%
38%
37%
36%
31%
27%
18%
Unconditional free shipping (no minimum
purchase required)
Outlet/Clearance/Sale
Flash sales or limited-time promotions
Web-only promotions
Promotions received via email
Conditional free shipping tied to a minimum
purchase
Store-only promotions
Gift with purchase
Buy more save more
Facebook or other promotions received via
social media
Top-3: Always/Frequently/Sometimes Top-2: Always/Frequently
1/6/2014 Baynote, Inc. © 2014 Confidential 9
Q17

10. the e-tailing group
Q: How important were these influencers when
making your final purchase?
Return policy &
merchant
reputation were
20% more
important for the
55+ age group vs
the 18-24 age
group
64%
60%
55%
49%
45%
39%
20%
15%
47%
38%
35%
33%
29%
24%
13%
10%
Final price including any promotional offers
Free shipping without conditions
Product in-stock and ready to ship
Merchant reputation
Product reviews
Return policy
Ability to receive rewards/loyalty points
Free shipping with a threshold (i.e. spend $100
to receive free shipping)
2013 2012
Q15
1/6/2014 Baynote, Inc. © 2014 Confidential 10

11. the e-tailing group
Q: How often did the following channels influence your in-
store/online purchases?
Women are more
likely than men to
use email or text
promotions both in-
store and online
0
50
100
150
200
Email Promos Text Message Promos
Male (Always/Frequently)
Female (Always/Frequently)
In Store
0
50
100
150
200
Email Promos Text Message Promos
Male (Always/Frequently)
Female (Always/Frequently)
Online
1/6/2014 Baynote, Inc. © 2014 Confidential 11
Q11/12

12. the e-tailing group
Millennials (ages 18-34) embrace promotions
more than older shoppers
Top-2: Always/Frequently 18-24 25-34 35-44 45-54 55+
Spread
(55+/18-24)
Unconditional free shipping (no minimum required) 78% 83% 85% 76% 74% 4%
Outlet/Clearance/Sale 64% 54% 49% 46% 36% 28%
Flash sales or limited-time promotions 56% 55% 56% 34% 28% 28%
Promotions received via email 53% 49% 41% 32% 27% 26%
Web-only promotions 52% 49% 43% 33% 27% 25%
Store-only promotions 47% 40% 38% 39% 29% 18%
Conditional free shipping tied to a minimum purchase 44% 43% 44% 32% 31% 13%
Gift with purchase 44% 31% 36% 23% 20% 24%
Buy more save more 42% 29% 28% 28% 17% 25%
Facebook or other promotions received via social media 31% 27% 23% 12% 8% 23%
Q: Thinking about the range of promotions that retailers offer, how often will you likely take
advantage of each of the following over the holiday season?
1/6/2014 Baynote, Inc. © 2014 Confidential 12

13. the e-tailing group
74%
65%
61%
60%
47%
44%
38%
33%
34%
30%
41%
27%
23%
22%
I seek out stores that have price match guarantees
I ask an associate in a retail store to match a price on
products I am considering
I have left a store after finding the product of interest on
Amazon and later bought the product online
I have bought the product on Amazon or another
competitor while in the store as the store wouldn’t match…
An associate reminds me of the retailer’s price match
guarantee while I shop
I may pay somewhat more for a product while I was in the
store as I wanted to be finished with my shopping
An associate uses technology (i.e. mobile phone or tablet)
to check prices at other competitors while in the store
Q: When shopping in a retail store for products where prices can be easily compared,
please identify how often you exhibit or experience the stated behavior.
Top-3: Always/Frequently/Sometimes Top-2: Always/Frequently
1/6/2014 Baynote, Inc. © 2014 Confidential 13
Retailers and shoppers accept price
matching - the end of showrooming?
2/3 of shoppers seek
out retailers who price
match;
men are 30% more
likely to ask about
price matching in-
store than women
Q23

14. the e-tailing group
MOBILE IS THE NEW NORMAL

15. the e-tailing group
Q: How often did you use your smartphone during
the holiday season for any of the following?
The majority of
holiday shoppers
rely on
smartphones
for pre-shopping
research
70%
64%
63%
63%
62%
61%
58%
55%
52%
46%
45%
54%
49%
50%
46%
46%
45%
45%
43%
42%
39%
39%
Find a store or seek out store-based information
(hours, directions, etc.)
Compare prices before a store visit
Browse websites to figure out what to buy in advance
of making purchases
Get coupons or offers
Compare prices while in the store
Redeem coupons during a store visit
Look at product ratings before visiting the store
Make a purchase directly on the website
Look at product ratings while in the store
Make a purchase using a retailer’s app (i.e.
Nordstrom, Amazon, Zappos)
Scan a barcode while in a store to check the price at
another retailer
2013 2012
Top-3: Always/Frequently/Sometimes
1/6/2014 Baynote, Inc. © 2014 Confidential 15
Q18

16. the e-tailing group
Q: How often did you use your smartphone during
the holiday season for any of the following?
Smartphones
drive in-store
behavior: 62% of
shoppers
compared prices,
61% redeemed a
mobile coupon
70%
64%
63%
63%
62%
61%
58%
55%
52%
46%
45%
54%
49%
50%
46%
46%
45%
45%
43%
42%
39%
39%
Find a store or seek out store-based information
(hours, directions, etc.)
Compare prices before a store visit
Browse websites to figure out what to buy in advance
of making purchases
Get coupons or offers
Compare prices while in the store
Redeem coupons during a store visit
Look at product ratings before visiting the store
Make a purchase directly on the website
Look at product ratings while in the store
Make a purchase using a retailer’s app (i.e.
Nordstrom, Amazon, Zappos)
Scan a barcode while in a store to check the price at
another retailer
2013 2012
1/6/2014 Baynote, Inc. © 2014 Confidential 16
Q18

17. the e-tailing group
34%
66%
23%
77%
Yes
No
Q. Have you made any holiday gift purchases
using a retailer-branded app on a smartphone or
tablet (Nordstrom, Amazon, Pottery Barn, etc.)
this holiday season?
2013 2012
47%
43%
41%
26%
22%
18-24
25-34
35-44
45-54
55+
Q. Have you made any holiday gift purchases using a
retailer-branded app on a smartphone or tablet (Nordstrom,
Amazon, Pottery Barn, etc. this holiday season?
Yes
1/6/2014 Baynote, Inc. © 2014 Confidential 17
Branded app usage grows 48% over 2012
Q20

18. the e-tailing group
Millennials 43% more likely to research stores & products via
smartphone than older shoppers
Q: How often did you use your smartphone during the holiday season for any of the following?
Top-2: All the time/Frequently 18-24 25-34 35-44 45-54 55+
Spread
(55+/18-24)
Browse websites to figure out what to buy in advance of making
purchases 62% 56% 50% 32% 16% 46%
Find a store or seek out store-based information (hours, directions,
etc.) 62% 57% 55% 35% 33% 29%
Compare prices before a store visit 53% 57% 57% 35% 21% 22%
Get coupons or offers 50% 46% 47% 38% 23% 27%
Look at product ratings before visiting the store 45% 48% 39% 26% 18% 27%
Compare prices while in the store 48% 48% 46% 40% 23% 25%
Look at product ratings while in the store 45% 44% 36% 21% 21% 24%
Redeem coupons during a store visit 39% 46% 52% 36% 31% 8%
Scan a barcode while in a store to check the price at another
retailer 29% 33% 35% 16% 16% 13%
Make a purchase directly on the website 37% 39% 37% 25% 27% 10%
Make a purchase using a retailer's app (i.e. Nordstrom, Amazon,
Zappos) 32% 30% 32% 15% 14% 18%
PurchasePre-storeIn-store
1/6/2014 Baynote, Inc. © 2014 Confidential 18

19. the e-tailing group
REQUIRED SERVICE,
CONVENIENCE & INFLUENCE
FEATURES

20. the e-tailing group
74%
71%
68%
68%
63%
55%
52%
49%
42%
42%
40%
32%
33%
33%
27%
27%
24%
18%
18%
18%
15%
14%
12%
10%
A simple, streamlined shopping cart that makes…
Being able to find what I want on a retailer's site by…
Seeing product on web pages that are…
Seeing web pages that include robust…
More accessible and responsive customer service…
User-generated content and tools (e.g., reviews,…
A frequent buyer or brand loyalty program
One-click checkout
Seeing web pages that include product videos that…
Live chat (ability to message with customer…
Product recommendations that are tailored to me…
Access to a creative gift center that includes ideas,…
Q. How important are each of these areas when selecting a retailer?
Top-2: Extremely/Very Important Extremely Important1/6/2014 Baynote, Inc. © 2014 Confidential 20
Shoppers demand easy access, find-ability, a well designed
site and integrated tools
68% of shoppers
cite comprehensive,
well designed web
pages as extremely
important
Q24

21. the e-tailing group
1/6/2014 Baynote, Inc. © 2014 Confidential 21
Shoppers of all ages prefer to self-service
Pricing,
availability and
social tools
before a store
visit…
75%
69%
66%
64%
55%
45%
45%
44%
43%
42%
37%
37%
31%
29%
Read product ratings and reviews before visiting the store
Researched in advance of my store visit so I didn’t require the…
Took advantage of a promotion sent to me via email and made a…
Researched in advance of my store visit checking for inventory…
Used my mobile device to find a better price
Took advantage of a promotional text sent to me and made a…
Used a retailer’s app to find product information
Had an in-store associate check inventory at another store when…
Reserved a product online or via smartphone and picked it up in…
Downloaded a retailer’s app in advance of a store visit
Used a retailer’s app to find product in the store
Associate offered to look for inventory and arrange to send to…
Checked out by an associate who used a mobile device versus a…
Had an associate assist me in making the right product selection…
Q. In visiting retail stores over the past few months, please identify the frequency with which you
conducted or experienced the stated behavior.
2+ times
…apps,
sales
support and
check out tools
for efficiency
in-store
Q22

22. the e-tailing group
82%
53%
49%
46%
45%
37%
33%
23%
If a site doesn’t have product in-stock I will go elsewhere
I look for store information on my smartphone in advance of a
visit (e.g., hours, location, map, etc.) to make shopping more…
I research product availability in advance of every store visit to
ensure items are in stock
I use my smartphone to comparison shop ensuring that I’m
paying the best price for products before I visit the store
I use my smartphone to make shopping more efficient
I seek out retailers where I can reserve the product in advance
to save time when picking it up in store
I typically don’t shop at retail stores where I cannot see product
availability before I visit the store
I will not wait more than a day or two to receive my product
Q. In thinking about the meaning of convenience for you relative to shopping, please
state your agreement with the following scenarios.
Top-2: Strongly/Somewhat Agree
1/6/2014 Baynote, Inc. © 2014 Confidential 22
Shoppers expect convenient cross channel tools
1 in 3 shoppers
want pricing, in-
store inventory
availability and
product pick up
visible on the
ecommerce site
Q21

23. the e-tailing group
Search, peer review & promotions are top influencers
1/6/2014 Baynote, Inc. © 2014 Confidential 23
Ratings & reviews
influenced 48% of
online shoppers,
(+45% over 2012)
and 37% of in-store
shoppers (+12%
over 2012)
48%
35%
31%
28%
17%
16%
14%
14%
13%
12%
11%
8%
37%
27%
20%
30%
14%
15%
10%
11%
15%
8%
9%
7%
Online ratings and reviews
Email promotion
Google search results that included…
Paper catalog
Facebook
Display advertising for product you…
eCommerce website
Product recommendation on…
Text messaging from retailers
Pinterest
Mobile advertising
Twitter
Q: How often did the following channels influence your purchases by
channel?
Top-2: Always/Frequently
online in store
Q11/12

24. the e-tailing group
70%
64%
63%
63%
62%
62%
61%
58%
55%
46%
45%
71%
74%
76%
60%
43%
43%
44%
67%
63%
53%
37%
Find a store or seek out store-based information (hours,
directions, etc.)
Compare prices before a store visit
Browse websites to figure out what to buy in advance of
making purchases
Get coupons or offers
Compare prices while in the store
Look at product ratings while in the store
Redeem coupons during a visit
Look at product ratings before visiting the store
Make a purchase directly on the website
Make a purchase using a retailer's app (i.e. Nordstrom,
Amazon, Zappos)
Scan a barcode while in a store to check the price at another
retailer
Q. How often did you use your MOBILE DEVICE for any of the following holiday shopping
tasks?
Smartphone Tablet
Shoppers use smartphones and tablets for
different purposes
Tablets
stay at home
and support
pre-store
research
While
smartphones
go on the road
with the
shopper
1/6/2014 Baynote, Inc. © 2014 Confidential 24
Q18/19

25. the e-tailing groupMillennials influenced by more channels
(i.e. social) than older shoppers
Q: How often did the following influence your online purchase?
Top-2: Always/Frequently 18-24 25-34 35-44 45-54 55+
Spread
(55+/18-24)
Ratings and reviews 51% 62% 50% 40% 40% 11%
Facebook 30% 31% 18% 13% 7% 23%
Pinterest 21% 23% 12% 7% 3% 18%
Twitter 14% 13% 10% 4% 0% 14%
Email promotion from retailers 36% 40% 37% 30% 27% 9%
Google search results with pictured product available
by retailer 35% 40% 31% 28% 23% 12%
Display advertising 27% 20% 15% 11% 12% 15%
Product recommendation on eCommerce website 22% 19% 12% 13% 10% 12%
eCommerce website 20% 21% 15% 11% 10% 10%
Mobile advertising 20% 12% 14% 10% 4% 16%
Promotional text messaging from retailers 16% 15% 20% 10% 8% 8%
Paper catalog 35% 20% 25% 28% 32% 3%
PrintMobileDigitalSocial
1/6/2014 Baynote, Inc. © 2014 Confidential 25

26. the e-tailing group
Q: How often did the following influence your in-store purchase?
PrintMobileDigitalSocial
Top-2: Always/Frequently 18-24 25-34 35-44 45-54 55+
Spread
55+/18-24
Ratings and reviews 46% 37% 36% 34% 31% 15%
Facebook 20% 24% 16% 8% 6% 14%
Pinterest 16% 16% 9% 4% 2% 14%
Twitter 13% 13% 8% 3% 2% 11%
Email promotion from retailers 35% 25% 34% 23% 21% 14%
Google search results with pictured product
available by retailer 31% 22% 18% 19% 16% 15%
Display advertising 28% 16% 17% 10% 10% 18%
eCommerce website 19% 9% 11% 8% 6% 13%
Product recommendation on eCommerce website 18% 13% 14% 9% 7% 11%
Promotional text messaging from retailers 22% 17% 20% 12% 9% 13%
eCommerce website 19% 9% 11% 8% 6% 13%
Mobile advertising 19% 12% 12% 8% 4% 15%
Paper catalog 38% 25% 29% 28% 32% 6%
Millennials influenced by more channels
(i.e. social) than older shoppers
1/6/2014 Baynote, Inc. © 2014 Confidential 26

27. the e-tailing group
67%
42%
24%
21%
19%
When I am on Facebook, I’m in a
social/communication mindset and do not click…
Pinterest gives me ideas for what to buy for those
on my holiday list
I click on Pinterest links to make a purchase on an
eCommerce, website but I can’t always find…
I click on Pinterest links to make a purchase on an
eCommerce website
I look at the ads on Facebook and click through to
make a purchase
Q. Please share your agreement on shopping via these channels. If you
don’t use a particular channel please select N/A.
Top-2: Strongly/Somewhat Agree
1/6/2014 Baynote, Inc. © 2014 Confidential 27
Not all social channels influence ecommerce equally
Over 2/3 of
shoppers are
“not in the
shopping
mindset” when
on Facebook
Pinterest gives
42% of shoppers
gift ideas with
20% of links
converting to
purchase
Q15

28. the e-tailing group
KEY TAKEAWAYS

29. 1/6/2014 Baynote, Inc. © 2014 Confidential 29
Influencers & Promotions
• Influencers
‒ Digital influence on in-store
purchasing is an important shift
driven by millennials
‒ Ratings, email and paper catalogs
hold their own as influencers
knowing no channel boundaries
‒ Google search ads are more
successful when based on price,
offer and retailer familiarity
‒ Pinterest delivers gift ideas for 50%
of shoppers; 20% click through to
purchase where impact is strongest
among millennials and women
• Promotions
‒ Consumers are truly price-sensitive
when making shopping decisions; they
hunt for promotions and ask for price
matching
‒ Consumers will take advantage of
every promotion, but preference still
lies with unconditional free shipping
‒ Millennials are aggressive in taking
advantage of a range of deals
‒ Mobile devices are the price hunting
tool of choice

30. 1/6/2014 Baynote, Inc. © 2014 Confidential 30
Mobile & Shopper Convenience Features
• Mobile
‒ Mobile usage accelerates across all
age groups
‒ Shoppers use mobile devices to hunt
for bargains, research stores and
products helping them to find the right
product at the right price whether in-
store or online
‒ Tablet’s role is pre-store and purchase-
oriented
‒ Smartphones play more dominant role
both in-store role and as a transaction
device
• Convenience Features
‒ Product availability really matters
‒ Shoppers seek out retailers who have
cross-channel tools in place ex: in store
pick up
‒ Smartphones connect consumers to
stores especially millennial shoppers
‒ Shoppers secure the best possible price
by hunting down deals via smartphone
‒ Price matching and in-store sales
associates use of technology is becoming
more commonplace
‒ Shoppers expect efficiencies from finding
product through checkout and a superior
user experience along the way

31. The contents of this document are copyrighted by
Baynote, Inc.
Redistribution or reproduction is prohibited without
express, written consent from Baynote.
For written approval to redistribute or reproduce content
included in this document, please contact
marketing@baynote.com
Legal Disclaimer
1/6/2014 Baynote, Inc. © 2014 Confidential 31