Press Release: Paypal Gets Holiday Season Promotion Boost
comScore, Inc. (NASDAQ: SCOR) , a leader in measuring the digital world, today released findings from a study of the impact of holiday promotions on PayPal’s use at major online retailers during the 2008 holiday season. As merchants and payment services prepare for a competitive 2009 holiday season, understanding the lifts from prior promotions is critical in assembling marketing programs that positively impact consumer preferences and drive share.
The results of the comScore study show that PayPal promotions launched in Q4 2008 caused a significant increase in the payment method’s share of dollars spent at major retailer sites, including Overstock.com, Walmart.com and others, as consumers capitalized on attractive online deals. These and other relevant findings are covered in detail in the comScore report, Alternative Payment Types Online: The Rise and Maturity of PayPal and Others Across the e-Commerce Landscape, which is currently available for purchase.
Holiday Promotions Drive Increase in PayPal Dollar Share
During Q4 2008, PayPal announced attractive promotions at several online retailer sites resulting in significant increases in its dollar share among partner retailer sites. Overstock.com customers were presented with 15 percent cash back on a $100 purchase when using PayPal, which helped push its dollar share up 3.6 percentage points to 18.6 percent. Walmart.com, which launched its partnership with PayPal in early October 2008, offered $20 off a purchase of $50 or greater when customers used a PayPal account to checkout, resulting in a 9.0 percent dollar share during Q4. Dell.com gave PayPal preferential treatment, positioning the payment option right under Dell’s payment plan and above all other credit card options, helping to boost PayPal’s share to 7.0 percent in Q4 2008, an increase of 5.1 percentage points from the previous quarter.
PayPal Share of Dollars at Online Retailer Site
Q4 2008 vs. Q3 2008
Total U.S. Home/Work/University Locations
Source: comScore, Inc.
----------------------
Dollar Share
------------
Point
Q3 2008 Q4 2008 Change
------- ------- ------
Overstock.com 15.0% 18.6% 3.6
------------ ---- ---- ---
Walmart.com N/A* 9.0% N/A
----------- --- --- ---
Dell.com 1.9% 7.0% 5.1
-------- --- --- ---
AE.com 3.0% 8.0% 5.0
------ --- --- ---
*PayPal payment option was not implemented until October 2008 at
Walmart.com
"PayPal’s aggressive promotion strategy during the 2008 holiday season helped the popular online payment method carve out a significantly higher share of wallet at several major retailer sites," said Matt Archer, comScore senior manager, financial services. "Despite the limited duration of the promotions, PayPal has managed to retain a notable share of wallet at most of these retailer sites in subsequent time periods.
As merchants and payment services make decisions related to 2009 holiday promotions, the positive impact of prior programs in growing share of dollars and transactions represents critical information."
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