Cisco Retail Study Reveals 86% of E-Commerce Sites Use Video to Sell Products

In an effort to help retail customers stay competitive and increase profitability by providing a rich customer experience, Cisco® (NASDAQ: CSCO) today announced the results from its second annual e-commerce study. Scion, a marque from Toyota Motor Sales, U.S.A., Inc., ranked highest providing a stunning example of how to build a unique customer experience for the under-35 consumer. Scion edged out other retail giants such as Sears, Target, Circuit City and Wal-Mart. The study was conducted by Cisco's Internet Business Solutions Group (IBSG), a business strategy consulting group that works with clients around the world to transform the way they do business.

Forrester Research forecasts that online sales will reach $329B in the United States by 2010. The IBSG study provides a timely comparative assessment of 27 north American Web sites in three categories -- Global 300, Web 15 and Innovators. The study focused on five distinct categories: ease of use, personalization, content, interaction and transactions. In addition, the survey looked at two different aspects of online shopping from a consumer's point of view. The first is foundational capabilities, which are non-negotiable "must have" characteristics including an intuitive graphical user interface, search capabilities, and the convenience of the purchasing process. Second is emerging capabilities, which are the more sophisticated aspects that add even greater value to the customer's experience, such as community and social networking and multi-channel integration.

"As retailers look to provide a more interactive, engaging experience and as video becomes more ubiquitous, retailers will start to use a YouTube-type approach to connect with and get closer to customers," said Mohsen Moazami, vice president of Cisco retail and consumer products. "We believe video is driving an increase in customer loyalty and profitability."

Newcomer Scion Leads the Pack

Scion, who was not part of the ranking last year, catapulted to the survey's #1 spot. Overall top 10 rankings include:

1.  Scion                6.  Best Buy
2.  Sears                7.  Amazon
3.  Target               8.  Cabela's
4.  Federated            9.  Home Depot
5.  Circuit City         10. Wal-Mart

Scion, founded in 2003 to appeal to the growing number of Generation Y consumers, has emerged as a brand with 80% name recognition for young buyers. One reason for the spectacular success with their target market is the interactive and community-oriented nature of the Scion online experience. This includes:

--  Clear customer focus -- Scion has structured the site to meet the
    needs of its target market -- what they drive, wear and listen to.
    Scion.com offers a boom box feature that enables users to listen to "Scion"
    music while they browse the site.  Scion selects music from a roster of
    artists who reflect their customers' musical tastes.  In addition, Scion
    offers concerts by these artists in venues across the U.S. -- all concert
    information is offered on Scion.com.
--  Sophisticated customization tools -- Users can build their own car
    while on the site, selecting the model, transmission, exterior color, and
    available accessories which they can then save as "My Scion."  Scion
    provides links to other sites that provide aftermarket options, enabling
    users to further customize their ride or purchase.  The Scion site also has
    a complete financing section where buyers can calculate payments and even
    apply for a car loan.
--  Integration between online and offline channels -- Once a potential
    buyer has specified the model, color, and transmission, the details for
    their car can be emailed from the site to a local dealership.  The
    dealership can then find that specific vehicle and arrange for the
    potential buyer to come in for a test drive.
--  Social networking and community participation -- Scion.com has a
    section of the site devoted solely to registered users, most of whom own
    Scions.  Scion.com also offers customers the opportunity to have a one-on-
    one chat with a Scion Customer Experience representative.  In addition,
    Scion sponsors a variety of special events for its customers throughout the
    country.  In short, owning a Scion enables a buyer to become part of a
    community that feels like an exclusive club with a unique lifestyle that's
    supported through Scion.com.

Leading the way in the category of Foundational Capabilities are Scion, Sears, Target, Macys, Staples and Cabela's. The following are highlights in this category:

Foundational Capabilities

--  Consistent use of Web navigation rules provides a user-friendly
    interface that's easy to navigate
    --   96% of sites have an intuitive interface, while 75% have a simple,
         easy-to-navigate layout
    --   44% display Security & Privacy assurances throughout the site
--  Basic search capabilities are a given
    --   96% of sites provide search by product category
    --   82% enable search by item number
--  96% of sites recommend companion items at some point
--  Retail sites use historical information to simplify the purchasing
    process
    --   96% maintain purchasing history
    --   78% enable users to save shipping information
--  Basic integration of online and offline channels is inconsistent
    --   56% provide an online link to a catalog
    --   44% provide only a store locator feature
    --   33% provide "What's in Store" detail
--  Retailers recognize the value of allowing customers to register their
    preferences
    --   75% of sites offer either gift registry or wish list capabilities,
         up from 52% last year
--  Retailers generally make purchasing easy
    --   90% enable users to track shipment status online
    --   75% support redemption of online gift certificates/vouchers
    --   60% provide check out in 5 clicks or less
--  Returns are more challenging
    --   45% require contact to initiate returns
    --   41% require either a return authorization or provide no return
         packaging/instructions