SOR Q1 2011
Transcript of SOR Q1 2011
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May 2011
State of the U.S. Online Retail Economy in Q1 2011
Gian Fulgoni, Chairman, comScore, Inc.
Andrew Lipsman, Sr. Director, comScore, Inc.Note: A copy of this presentation will be sent to all attendees within 24 hours of todays webinar
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Data sourced from comScores global panel of 2 million Internet
users
E-commerce data includes all worldwide buying on U.S.sites
Unless explicitly stated otherwise, the term e-commercerefers to online retail spending, as measured bycomScore, which excludestravel, autos and auctions
Behavioral activity through March 2011 measured via thefixed Internet
Survey issued in April 2011, n=1087
Consumer Measurements:
Site Visitation
Online Buying
Attitudes and Sentiment Demographic Segments
Retailer Views:
Large vs. Small Retailers
Multi-Channel vs. Pure-Play Retailers
Deal-a-Day Sites
360
View of Consumer Behavior Analysis Parameters
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Validation of comScore Sales Data:Comparison of comScore data to U.S. Department of Commerce
*Note: To be consistent with DOC, comScore estimate excludestravel and event tickets but includes auction fees and autos.
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State of the Economy:
A Review of Key Macroeconomic Trends
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U.S. e-Commerce Dollar Sales Growth ($ Billions)Source: comScore e-Commerce Measurement
In Q1 2011, e-Commerce spending continued to rebound from recession
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Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
E-commerce growth significantly exceeds the growth of total retail
Quarterly e-Commerce Sales Growth vs. YASource: comScore e-Commerce Measurement
Quarterly Retail & Food Services Sales Growth* vs. YASource: U.S. Department of Commerce (DOC)
17%
23%
19%
11% 13%
6%
-3%
0% -1% -2%
23%
3%
10% 9%
*Note: The U.S. Department of Commerce calculation includes totalretail and food service sales, which also includes motor vehicles andparts dealers.
12%
9%
4% 4% 3%5% 4%
2% 1%
-8%-10% -9%
-7%
2%
6% 7%
5%
8%
7%
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
When excluding autos, gasand food/beverage, Q1 retail
sales growth was +6%
11%
Preliminary April e-commerce datashows a +15% growth rate
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E-commerce hit the highest share percentage yet seen, as onlinesales continue to gain share versus offline
*Note: e-Commerce share is shown as a percent of DOCs TotalRetail Sales excluding Food Service & Drinking, Food & Bev. Stores,
Motor Vehicles & Parts, Gasoline Stations and Health & PersonalCare Stores.
e-Commerce Share of Corresponding Retail Spending*
Source: comScore for e-Commerce & U.S. Department of Commerce (DOC) for Retail
e-CommerceS
hare
e-Commerce share peaks incolder seasons (Q4 & Q1)
4.3%
3.7%4.0%
4.6%
5.1%
4.3%4.5%
5.3%
5.9%
5.0%5.3%
6.4%
6.7%
5.9%6.3%
7.4% 7.3%
6.5%6.6%
7.6% 7.7%
6.8%6.9%
7.7%8.1%
7.1% 7.1%
8.0%
8.6%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
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Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 11
Beginning with Q4 2009, e-Commerce dollar sales have seen positive gainsY/Y for six straight quarters
B
illions($)
$31.2 $30.6 $30.3
$38.1
$30.2 $29.6
e-Commerce Dollar Sales ($ Billions)Source: comScore e-Commerce Measurement
$31.0
+19% +11% +13% +6% -3% 0% -1% -2% +3% +10% +9% +9% +11% +12%
% Chg vs.YA
$39.0
$33.9 $32.9 $32.1
$43.4
$39.1 $38.0
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$11.5$12.1
$10.5
$15.1
$12.4
Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11
+14% +17% +6% +9% +8%
+3% -2% +11% +6% +2%
$7.4 $7.3$6.8
$10.0 $10.3
Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11
+18% +22% +8% +26% +39%
The lower income segment continues to show the strongest year-over-yearrebound from the recession, as consumers increasingly utilize e-commerce
$50K - $99K(43% of Total)
Under $50K(24% of Total)
$100K or more(33% of Total)
e-Commerce Sales by Income Segment ($ Billions)Growth vs. YA
Source: comScore e-Commerce Measurement
$15.0
$13.5
$14.9
$18.3
$15.3
Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11
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Consumer Perceptions of the Economy
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After an improvement in Q1, consumer sentiment reverted to 2010levels as 59% called the economy poor
Perception of Economic Conditions
Q. How would you rate economic conditions today?Source: comScore Surveys
77%68% 66%
61% 61% 59% 62% 61%52%
59%
Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11
Under $50k: 70% (+10 vs Jan)$50-$99k: 58% (+7 vs Jan)$100k+: 47% (+5 vs Jan)
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Driven by a surge in concern over gas prices, consumers in every incomebracket were most concerned about rising prices this quarter
RisingPrices
Unemployment/Job Security
FinancialMarkets
Real Estate/Home Values
July10
Oct10
Jan11
Apr11
July10
Oct10
Jan11
Apr11
July10
Oct10
Jan11
Apr11
July10
Oct10
Jan11
Apr11
Total 30% 29% 42% 54%* 44% 45% 36% 27% 13% 9% 7% 7% 8% 10% 11% 7%
Household Income
$100K or more 13% 12% 31% 51% 45% 49% 32% 20% 26% 20% 12% 12% 13% 15% 22% 12%
$50K-$99,999 22% 22% 39% 52% 46% 48% 41% 30% 16% 12% 5% 8% 11% 13% 11% 7%
Under $50K 40% 39% 51% 58% 42% 42% 35% 30% 9% 5% 4% 3% 6% 7% 4% 4%
Q. Based on your current situation, which one of the following economic conditionsmost concerns you?
Source: comScore Surveys July/October 2010 & January/April 2011
Percent of Respondents Citing Their One Most Important Issue
* At least 50% of each consumer segment chose rising prices as their main economy-related concern (with over 30% choosing rising gas prices)
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$3.57
$3.90
$2.59
$1.81
$2.02
$2.46$2.64 $2.67
$2.82
$2.70
$2.77
$3.06
$3.82
45%
40%
13%
7% 5%
8%
7%
10% 12%
8% 8%
20%
36%
Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11
A recent spike in concern over gas prices is quickly approaching2008 levels, and roughly correlates to real gas price increases
Q. Based on your current situation, which one of the following economic conditionsmost concerns you? Rising Gas Prices
Source: comScore Surveys & Energy Information Administration (eia.gov)
Respondents Citing Rising Gas Prices & Average US Unleaded Price
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Gas prices have historically contributed to reduced e-commercespending growth. Will that re-occur?
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Y/Y % Change in Retail E-Commerce SpendingSource: comScore E-Commerce Measurement, Jan-07 - Mar-11
All other factors being equal, you can expect a 1%
decline in the e-commerce growth rate for every$0.15/gal increase in average gas price
Gas prices: $2.59/gallon -> $3.47/gallon
Unemployment: 9.9% -> 8.8%
Dow Jones Industrial Average: (+2345 / +24%)
Gas prices: $2.96/gallon -> $4.14/gallon
Unemployment: 4.7% -> 5.8%
Dow Jones Industrial Average: (-2011 / -15%)
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Concern that inflation will impact spending has reached the highestlevels yet, likely due to large spike in fear over gas prices
Impact of Rising Prices on Ability to Spend
$50K - $99KUnder $50K $100K or more
77%83%80%81%79%82%
90%
72%77%
72%74%75%80%
88%
57%68%64%
69%
50%59%
71%
Q. Do you expect inflation (i.e. rising prices) to affect your day-to-day spendingin the near future?
Source: comScore Surveys
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Half of consumers remain pessimistic on unemployment, and stillbelieve it will take more than 12 months to see improvement
5%5%
13%
24%
54%
NextMonth
Next 2-3Months
Next 4-6Months
Next 7-12Months
More Than12 MonthsFrom Now
Q. When do you think the unemployment rate willbegin to improve?Source: comScore Surveys January & April 2011
+4% vs. Jan 2011 (50%)
The net gain in U.S. private-sectorjobs averaged 253,000 a month
from February through April, thelargest total for any three-month
stretch since early in 2006, though
woefully short of what'sneeded to make a significantdent in the 9% jobless rate.
May 14, 2011
If the pace of job growth fromApril (244,000 jobs added)
continues each month going
forward, it will take 29 monthsbefore we have the samenumber of jobs as we had
when the recession began.
May 6, 2011
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Retailer and Product Category Overview
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Most categories show strong growth in Q1 2011 versus Q1 2010
Q1 2011 e-Commerce Sales Growth vs. YA by Retail CategorySource: comScore e-Commerce Measurement
Q1 growth rates of 15% orhigher
Q1 growth rates of 1% to 4%
Q1 growth rates of 5% to 9%
Product CategoryRelative Chg
Growth Rate Q12011 vs. Q4 2010
Q1 2011Growthvs. YA
Books & Magazines Very Strong
Computers/Peripherals/PDAs Very Strong
Video Games, Consoles & Accessories Very StrongConsumer Electronics (x PC Peripherals) Strong
Flowers, Greetings & Misc. Gifts Strong
Jewelry & Watches Strong
Apparel & Accessories Strong
Consumer Packaged Goods Strong
Event Tickets Strong
Furniture, Appliances & Equipment Moderate
Home & Garden Moderate
Office Supplies Moderate
Sport & Fitness Weak
Q1 growth rates of 10-14%
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E-commerce Buying of CPG Products Growing, but Still Represents aSmall Percent of Total Industry Sales
Purchasing of CPG products online is at a level of approximately $15 billionper year and growing at a rate of 10% versus year ago.
This represents about 1.2% of the $1.2 trillion spent annually insupermarket, drug, mass merchandiser and convenience stores.
Approximately 12% of Internet users say they have ever bought groceryproducts online. Among these, 39% have bought online in the past month.
Retailers need a reason for people to visit their websites For mass merchandisers and
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Retailers need a reason for people to visit their websites. For mass merchandisers anddrug stores its e-commerce, Rx and health information. No such driver yet forsupermarkets in U.S., but Tesco in U.K. attracts healthy number of visitors with a well-developed e-commerce business
Selected Retailer Sites - U.S. Unique Visitors* (000) in March 2011
Source: comScore Media Metrix
91,614
31,73421,780
6,616 5,073 4,726 2,561 1,802 1,344 1,004 935 159 66
Amazon-owned Diapers.com & Soap.com attracted 486K and 418Kunique visitors, respectively, in March 2011.
*UK unique visitors for Tesco
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Twelve percent growth in spending was driven by a 7% increase inthe number of buyers & a 4% increase in dollars per buyer
Metric Q1 2010 Q1 2011 % change
Dollar Sales ($ Billions) $33.98 $38.00 12%
Dollars per buyer $227.72 $237.77 4%
Buyers (Millions) 149.23 159.81 7%
Average Order Value $68.63 $65.61 -4%
Transactions (Millions) 495.18 579.22 17%
Transactions per Buyer 3.32 3.62 9%
Buyer Penetration (TotalInternet)
63% 67% 7%
Key e-Commerce Buyer and Transaction Measures
Q1 2011 vs. YASource: comScore e-Commerce Measurement
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After losing share of e-Commerce sales for several quarters, smallerretailers have battled back in Q4 and Q1
62.8%67.7% 67.7% 69.9% 68.8% 67.7%
37.2% 32.3% 32.3%30.1% 31.2% 32.3%
Q4-2009 Q1-2010 Q2-2010 Q3-2010 Q4-2010 Q1-2011
All Other Retailers
Top 25 Retailers
Top-25 Retailers vs. All Other Retailers: Share of Quarterly
U.S. e-Commerce SalesSource: comScore e-Commerce Measurement
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Multi-channel retailers have gained share in U.S. e-Commerce saleson a year-over-year and quarterly basis
Multi-channel vs. Pure-play: Share of Quarterly U.S. e-Commerce SalesSource: comScore e-Commerce Measurement
51.4%59.9% 58.5%
48.6%40.1% 41.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q4 2008 Q4 2009 Q4 2010
Multi-Channel Pure Play
Q1 Year-over-YearQ4 Year-over-Year
54.0%64.0%
56.8%
46.0%36.0%
43.2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1 2009 Q1 2010 Q1 2011
Multi-Channel Pure Play
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The percent of online transactions utilizing free shipping jumped tonearly half of all orders in Q4 2010 & Q1 2011
37% 43% 42% 44% 39% 40% 41%49% 47%
63% 57% 58% 56% 61% 60% 59%51% 53%
Q1 09 Q2 09 Q3 09 Q4 09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11
% Transactions with Free Shipping% Transactions with Paid Shipping
Percentage of e-Commerce Transactions withFree Shipping
Source: comScore e-Commerce Measurement
61% of consumers are at least somewhat
likely to cancel their entire purchase if free
shipping is not offered
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05,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Fastest Growing Mobile Content Categories by Total Smartphone Audience (000)Source: comScore MobiLens, 3 mo. avg. ending Mar-2011 vs. Mar-2010
Mar-2010 Mar-2011
+145%
+90%
+89%
+84%
+84%+83%
+80%
+78%
+78%+78%+97%
72 Million People (31% of 234 Million U.S. Mobile Subscribers, up 15% vs.Previous Qtr) Now Use a Smartphone to Access a Wide Variety of Content
When it Comes to Mobile Content Consumption, Retail Ranks as 3rd Fastest Growing Category
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Among those who specifically stated that they used their phone forshopping purposes, 40% have purchased an item online
Smartphone Usage For Shopping
Q. For which of the following have you used your smartphone?Source: comScore Survey April 2011
50%
38%
35%
33%
31%
29%
28%
26%
24%
20%
20%
22%
61%
52%
52%
48%
46%
41%
41%
40%
33%
29%
30%
2%
Finding nearby stores
Comparing prices before shopping for an item
Researching product details
Comparing prices while shopping for an item in person at a store
Searching for product reviews/recommendations from a website
Accessing deal of the day apps
Searching for product reviews/recommendations via a social networking site orapp
Purchasing an item online
Sharing product recommendations via email
Mobile barcode scanning to compare prices
Sharing product recommendations via a social networking site or app
None of the above
% of ALL smartphone owners % of smartphone shoppers
Smartphone shoppers are defined as those who stated they have
used their phones to research or purchase products online
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Group-Buying/Deal-of-the-Day Sites
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Group-Buying/Daily Deal market on a steep upward trajectory
As the Group-Buying/Daily Deal market emerges, low barriers to entry enabling
hundreds of new sites to crop up. But is there really room for everyone?
25% of deal sites havefolded or consolidated,but new deal sites still
outpacing attrition
For a copy of full Local Offer Network report, please [email protected]
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2,000
4,000
6,000
8,000
10,000
12,000
14,000
Trend in Unique Visitors (000) to Groupon.com and LivingSocial.comSource: comScore Media Metrix, Aug 2009 Apr 2011
Groupon.com
LivingSocial.com
Groupon & LivingSocial have both seen audiences grow ~3X over thepast year
+250% vs. yrago
+182% vs. yr ago
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Groupon and LivingSocial skew towards upper-income females, withLivingSocial having a slightly older age profile
-16
16
-66
-22
16
19
34
49
33
-18
18
-75
-38
12
14
55
62
62
Age & Gender Demographic ProfileIndex vs. 100
Penetration by U.S. Census Region
Age 12-17
Males
Females
Age 18-24
Age 25-34
Age 35-44
Age 45-54
Age 55-64
Age 65+
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Groupon subscribers skew toward restaurant deals, whileLivingSocial subscribers tended to purchase a variety of deals
Categories of Deals Purchased via Groupon or LivingSocial
Q. Which of the following types of deals have you purchased on Groupon/LivingSocial?Source: comScore Survey April 2011
56%
32%
31%
26%
26%
25%
21%
16%
14%
13%
13%
12%
10%
10%
5%
2%
Restaurants & eating out
Groceries
Entertainment
Clothing & accessories
Books or magazines
Health & beauty care
Services
Electronics
Digital products
Furniture or home furnishings
Sport & fitness
Outdoor & garden
Jewelry or watches
Vacation/Travel
Other
None of the above
% of Groupon subscribers
41%
39%
35%
33%
32%
28%
25%
23%
20%
18%
16%
16%
16%
16%
2%
1%
Books or magazines
Restaurants & eating out
Entertainment
Clothing & accessories
Health & beauty care
Digital products
Groceries
Services
Electronics
Furniture or home furnishings
Vacation/Travel
Jewelry or watches
Outdoor & garden
Sport & fitness
Other
None of the above
% of LivingSocial subscribers
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Email pushes are the most common way for both Groupon and
LivingSocial to draw users to their deals
How Consumers Access Deal of the Day Sites
Q. Which of the following best describes how you most often accessGroupon/LivingSocial deals?
Source: comScore Survey April 2011
60%
21%
6%
5%
0%
7%
53%
24%
7%
6%
1%
9%
An offer sent to me via email
Visiting the site on my computer to search for offers
Opening an app on my phone after receiving an offer
Opening an app on my phone to search for offers
Other
None of the above
% of Groupon subscribers % of LivingSocial subscribers
When asked to identify anymethods used to access
deals, 14% say they have
used an app afterreceiving an offer via apush notification
G di l d id h d ti i t i
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Groupons display and paid search advertising outpacing
LivingSocial
0500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
Groupon LivingSocial
Trend in Display Ad Impressions (000)Source: comScore Ad Metrix, June 2010 - March 2011
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Groupon LivingSocial
Trend in Paid Search Impressions (000)Source: comScore Marketer, June 2010 - March 2011
G h h hi h b t b th it h i il
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Groupon has much higher awareness, but both sites have similarconversion rate among subscribers
74%
45%39%
17%
25%
11%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Groupon LivingSocial
Total Internet
AwareCurrent Subscribers
Purchasers
Marketing Funnel Analysis of Groupon & LivingSocial SubscribersSource: comScore Survey April 2011
60% of Groupon subscribers have purchased in the last 3 months,compared to 55% of LivingSocial users
AwarenessGap
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$100k+ consumers are much more likely to subscribe exclusively toGroupon over LivingSocial than those in lower income groups
17%
30% 29%4%
3% 3%
7%
15%24%
72%
52%44%
Under $50k $50k - $99k $100k+
Groupon-only subscriber LivingSocial-only subscriber Both Neither
Usage of Groupon and LivingSocial
Q. Do you currently use or subscribe to the daily deals site Groupon/LivingSocial?Source: comScore Survey April 2011
Th ki $100k lik l t b ib t lti l d l f
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Those making $100k+ are more likely to subscribe to multiple deal ofthe day sites
16% 16%
1% 1%
29%
20%
2%1%
26%23%
3%
8%
One 2 or 3 4 or 5 More than 5
Under $50K
$50K - $99K
$100K or more
Daily Deal Site Usage
Q. How many deal of the day sites do you currently subscribe to?Source: comScore Survey April 2011
Overall, 47% of consumers subscribe to atleast one deal of the day website or service
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How loyal are daily deal subscribers?
0%
5%
10%
15%
20%
25%
30%
35%
40%
1 2 3 4 5 6 7 8 9 10
RepeatVisitPercentage
Number of Visits
Repeat Visitor Loyalty AnalysisSource: comScore Custom Analytics, Nov 2010 to Apr 2011
Groupon LivingSocial
18%
22%
Groupon LivingSocial
Subscriber Churn Rate*Source: comScore Survey April 2011
Repeat visitation among users is similar, but LivingSocial has a slightly higher
rate of churn among subscribers. Is daily deal fatiguea factor?
*Churn rate = No. of Past Subscribers / (No. of Current Subscribers + No. of Past Subscribers)
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The future of daily deals: can Google and Facebook gain a foothold?
175,881
154,055
10,7588,763
020,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Google Sites Facebook Groupon LivingSocial
Total Unique Visitors (000) to Google Sites,Facebook, Groupon and LivingSocialSource: comScore Media Metrix, U.S., April 2011
Google and Facebook havemassive user bases to exploit,
but will users sign on for moredaily deals or is there an inbox
saturation point?
Among flash sale sites Rue La La posted the strongest gains year
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0
100
200
300
400
500
600
700
800
900
Among flash sale sites, Rue La La posted the strongest gains yearover year, appealing to both middle- and high-income households.
Unique
Visitors(000)
+10%
Unique Visitors and Growth vs. YA for March 2011Source: comScore Media Metrix
TotalInternet
HauteLook RueLaLaGilt
GroupeIdeeli
Less than 40K 33% 43% 20% 20% 25%
$40K-$74.9K 33% 29% 33% 27% 36%
$75K-$99.9K 13% 9% 15% 16% 11%
$100K or more 21% 19% 33% 38% 29%
+28%
-21%
+131%
% Composition by HH Income for March 2011Source: comScore Media Metrix
19% of $100k+ consumers say they subscribe to at least one flash sale site*
*Source: comScore Survey April 2011
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However, overall aided awareness of flash sites remains low outside ofupper-income consumers
2%3%
16%
5%
7%
13%
4% 3%
13%
3%
5%
15%
1%
3%
8%
Under $50k $50k - $99k $100k+
Gilt Hautelook Ideeli RueLaLa OneKingsLane
Aided Awareness of Flash Sale Sites
Q. Which of the following flash sale siteshave you heard of?
Source: comScore Survey April 2011
% who have heardof each site
17% of consumers overall
are aware of at least oneflash sale site
Among those whosubscribe to at least one
flash sale site, 51% saytheyve purchased
clothing or accessories
via the site(s)
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Key Takeaways
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Key Takeaways
Year over year, e-commerce sales are up 12% through Q1 2011 and have shown six
straight quarters of positive growth E-commerce is continuing to surge in overall adoption, showing strongest ever
percentage share of total consumer retail sales (8.6%)
Consumer concern over gas prices has risen to levels not seen since 2008, andsupplanted unemployment as a top economic concern this quarter
Most consumers believe that these rising prices may impact their ability to spend in thenear future
Mobile usage continues to grow rapidly, with a third of all mobile subscribers usingsmartphones. Use of the devices to obtain price and product information in advanceof a purchase is surging
Nearly half of all online transactions in the last two quarters included free shipping,
the highest percentage ever seen. Has it become a necessary option for onlineretailers to compete?
As consumers search for value, group buying and deal-of-the-day sites arecontinuing to flourish in both traffic and usage
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QUESTIONS?
Please contact us at [email protected] if
you have any additional questions or comments.
mailto:[email protected] -
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Thank You!
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