State of Retail Q1 2012 Final (Comscore)

47
May 2012 State of the U.S. Online Retail Economy in Q1 2012 Gian Fulgoni, Chairman, comScore, Inc. Andrew Lipsman, VP Industry Analysis, comScore, Inc. Note: A copy of this presentation will be sent to all attendees within 2 business days of today’s webinar

Transcript of State of Retail Q1 2012 Final (Comscore)

Page 1: State of Retail Q1 2012 Final (Comscore)

May 2012

State of the U.S. Online Retail Economy in Q1 2012

Gian Fulgoni, Chairman, comScore, Inc.

Andrew Lipsman, VP Industry Analysis, comScore, Inc.

Note: A copy of this presentation will be sent to all attendees within 2 business days of today’s webinar

Page 2: State of Retail Q1 2012 Final (Comscore)

2 © comScore, Inc. Proprietary.

Data sourced from comScore’s global panel of 2 million Internet

users via behavioral tracking and custom surveys

E-Commerce data includes all worldwide buying on U.S.

sites

Unless explicitly stated otherwise, the term e-Commerce

refers to online retail spending, as measured by

comScore, which excludes travel, autos and auctions

Behavioral activity through March 2012 measured via the

fixed Internet

Survey conducted week of April 30, 2012 (n=1987)

Consumer Measurements:

– Site Visitation

– Online Buying

– Attitudes and Sentiment

– Demographic Segments

– Mobile and portable e-Commerce

2 million person panel

360°View of Consumer Behavior Analysis Parameters

Web Visiting & Search Behavior Online

Advertising Exposure

Advertising Effectiveness

Demographics, Lifestyles & Attitudes

Media & Video Consumption

Transactions

Online & Offline

Buying

Mobile Internet Usage & Behavior

PANEL

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3 © comScore, Inc. Proprietary.

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

2005- Q1

2005- Q2

2005- Q3

2005- Q4

2006- Q1

2006- Q2

2006- Q3

2006- Q4

2007- Q1

2007- Q2

2007- Q3

2007- Q4

2008- Q1

2008- Q2

2008- Q3

2008- Q4

2009- Q1

2009- Q2

2009- Q3

2009- Q4

2010- Q1

2010- Q2

2010- Q3

2010- Q4

2011- Q1

2011- Q2

2011- Q3

2011- Q4

2012- Q1

Validation of comScore Sales Data:

Comparison of comScore data to U.S. Department of Commerce

Quarterly U.S. e-Commerce Growth* vs. YA Source: comScore & U.S. Department of Commerce (DOC)

% G

row

th v

s. Y

A

Dept. of Commerce (DOC) comScore Estimate of DOC

Correlation: 0.93

*Note: To be consistent with DOC, comScore estimate excludes

travel and event tickets but includes auction fees and autos.

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4 © comScore, Inc. Proprietary.

State of the Economy

A Review of Key Macroeconomic Trends

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$42 $53 $67 $82 $102

$123 $130 $130 $142 $162

$44

$30 $40

$51 $61

$69

$77 $84 $80

$85

$94

$26

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q12012

$72 $93

$117 $143

Retail

Travel

+26%

+33%

+26%

+28%

+20%

+24% +24%

+13%

$171 $200

+20%

+12%

+6%

+9%

Retail e-Commerce spending is up +17% year over year, already

posting $44 billion in sales through Q1 2012

$214

0%

-5%

$209

U.S. e-Commerce Dollar Sales Growth ($ Billions) Source: comScore e-Commerce Measurement

+10%

+6%

$228

+17%

+10%

$70

+29%

+26%

+22%

+19%

+17%

+7%

-2%

+9%

+12% +14%

$256

+14%

+11%

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17%

23% 23%

19%

11%

13%

6% -3% 0% -1% -2%

3%

10%

9% 9%

11% 12% 14%

13%

14% 17%

Q12007

Q22007

Q32007

Q42007

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

Q32009

Q42009

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Both e-Commerce and retail sales showed solid growth in Q1, with online

nearly 3 times the growth rate of total retail on apples-to-apples basis

Quarterly e-Commerce Sales Growth vs. YA Source: comScore e-Commerce Measurement

Quarterly Retail & Food Services Sales Growth* vs. YA

Source: U.S. Department of Commerce (DOC)

*Note: The U.S. Department of Commerce calculation includes total

retail and food service sales, which also includes motor vehicles and

parts dealers.

4% 4% 3% 5%

4% 2%

1%

-8% -10% -9%

-7%

2%

6% 7%

5%

8%

7% 7% 7% 5%

8%

Q12007

Q22007

Q32007

Q42007

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

Q32009

Q42009

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

When excluding autos, gas and

food/beverage, Q1 2012 retail growth

was up +6% versus 2011

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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%

7.7% 7.6%

8.9%

9.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

As consumers continue to shift their spending to the Internet, the

overall e-Commerce share of spending approaches 10%

*Note: e-Commerce share is shown as a percent of DOC’s Total Retail Sales excluding Food

Service & Drinking, Food & Bev. Stores, Motor Vehicles & Parts, Gasoline Stations and Health &

Personal Care Stores.

e-Commerce Share of Corresponding Consumer Spending* Source: comScore for e-Commerce & U.S. Department of Commerce (DOC) for Retail

e-C

om

me

rce S

hare

e-Commerce share peaks in

colder seasons (Q4 & Q1)

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Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12

Overall e-Commerce dollar sales have posted double-digit gains in every

quarter since Q4 2010 and are now well ahead of pre-recession levels

Bil

lio

ns

($

)

e-Commerce Dollar Sales ($ Billions) Source: comScore e-Commerce Measurement

+13% +6% -3% 0% -1% -2% +3% +10% +9% +9% +11% +12% +14% +13% +14% +17%

% Chg vs. YA

$30.6 $30.3

$38.1

$31.0 $30.2 $29.6

$39.0

$33.9 $32.9 $32.1

$43.4

$38.0 $37.5 $36.3

$49.7

$44.3

Compared to pre-recession levels

(Q1 2008), total retail in Q1 2012 is

up 10%...

e-Commerce is up +42%

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Consumer Perceptions of the Economy

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Overall consumer sentiment improved for the second straight quarter to best

level in three years, but about half of respondents in April still consider the

economy ‘poor’

Percent of Consumers Who View The Economy as Poor

Q. How would you rate economic conditions today? Source: comScore Surveys

77% 68% 66%

61% 61% 59% 62% 61% 52%

59% 60% 62% 60% 54%

49%

Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Aug-11 Oct-11 Jan-12 Apr-12

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Concern over unemployment dropped to 26% in April, as nearly half

of consumers cited rising prices as their top economic issue

Percent of Respondents Citing Their One Most Important Issue

46%

40% 42%

50%

42% 44% 45%

36%

27%

37% 38%

31%

26%

28%

32% 32%

29%

33%

30%

29%

42%

54%

37% 37%

43% 48%

15% 13% 13%

9% 10%

13%

9% 7% 7%

12% 12%

10% 11%

8% 8% 8%

7% 9%

8%

10% 11%

7%

8% 9%

10% 11%

Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12

Unemployment /Job Security

RisingPrices

FinancialMarkets

Real Estate / HomeValues

Q. Based on your current situation, which one of the following economic conditions most concerns you? Source: comScore Surveys

Page 12: State of Retail Q1 2012 Final (Comscore)

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Retailer and Product Category Overview

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Most retail categories showed very strong (+15% or better) growth

versus year ago

Q1 2012 e-Commerce Sales Growth vs. YA by Retail Category Source: comScore e-Commerce Measurement

Q1 growth rates of 15% or

higher

Product Category

Q1 2012

Growth

vs. YA

Digital Content and Subscriptions Very Strong

Consumer Electronics (x PC Peripherals) Very Strong

Jewelry & Watches Very Strong

Event Tickets Very Strong

Books & Magazines Very Strong

Apparel & Accessories Very Strong

Computers/Peripherals/PDAs Very Strong

Sport & Fitness Very Strong

Home & Garden Very Strong

Video Games, Consoles & Accessories Very Strong

Office Supplies Strong

Consumer Packaged Goods Strong

Flowers, Greetings & Misc. Gifts Strong

Furniture, Appliances & Equipment Strong

Q1 growth rates of 10-14%

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Those in the top-20% of households, the heaviest e-Commerce buyers,

accounted for nearly 75% of all e-Commerce dollars spent in Q1

Share of e-Commerce Dollars Spent Per Household (shown by spending quintiles)

Source: comScore e-Commerce Measurement

74%

16%

7% 3% 1%

0%

20%

40%

60%

80%

100%

Top 20% Next 20% Next 20% Next 20% Bottom 20%

Page 15: State of Retail Q1 2012 Final (Comscore)

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About half of online transactions involved free shipping in Q1, the

highest percentage of free shipping seen in a non-Q4 quarter

39% 40% 41% 49% 47% 43% 40%

52% 49%

61% 60% 59% 51% 53% 57% 60%

48% 51%

Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12

% Transactions with Paid Shipping

% Transactions with Free Shipping

Percentage of e-Commerce Transactions with

Free Shipping Source: comScore e-Commerce Measurement

59% of consumers stated in a recent survey* that if they reached the end of an e-Commerce transaction and

free shipping was not offered, they would cancel their purchase at that retailer

*comScore survey – Apr 2012

Page 16: State of Retail Q1 2012 Final (Comscore)

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Led by Amazon’s +29% growth, many retail sites posted double-digit

gains in unique visitors in Q1 vs. a year ago

Avg. Monthly UVs (MM) on Select Retail Sites in Q1 2012 Source: comScore Media Metrix, U.S.

12.9

12.9

13.4

15.7

19.9

24.7

28.2

39.7

48.3

107.4

Macy's Inc.

Hewlett Packard

Sears.com

Ticketmaster

Best Buy Sites

Target Corporation

Netflix.com

Wal-Mart

Apple.com

Amazon Sites +29%

+25%

+18%

+9%

+8%

+12%

+42%

+23%

-21%

+26%

Y/Y Change

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Flash-sale sites continue to grow their audiences, with Woot.com and

Zulily.com leading the pack

Avg. Monthly UVs (000) on Select Flash Sale Sites in Q1 2012 Source: comScore Media Metrix, U.S.

Kids clothing site Totsy.com continues to skyrocket in numbers,

reaching 683,000 UVs in Q1 (up 1,051% vs. 2011)

Y/Y Change

454

482

610

683

924

1,026

1,125

1,504

2,242

2,244

DailyCandy

BeyondTheRack.com

MyHabit.com

Totsy.com

OneKingsLane.com

Ideeli.com

Gilt Groupe

HauteLook.com

Zulily.com

Woot.com +93%

+85%

+85%

+46%

+63%

+164%

+1,051%

N/A

-11%

-23%

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Groupon continues to hold the lead in monthly unique visitors among

coupon sites, and grew +19% from 2011

Avg. Monthly UVs (MM) on Select Coupon Sites in Q1 2012 Source: comScore Media Metrix, U.S.

+19%

N/A

+18%

-15%

+356%

+36%

N/A

+6%

N/A

+9%

Y/Y Change

1.4

1.4

1.4

1.7

1.8

2.7

5.5

7.0

7.2

12.5

SmartSource.com

BrandSampleNetwork.com

MyPoints Sites

SavingStar.com

DealsPL.US

CouponAlert.com

LivingSocial

Coupons, Inc.

WhaleShark Media

Groupon

* - WhaleShark Media includes RetailMeNot.com, Deals2Buy.com,

CouponShare.com and CouponsEven.com

*

Page 19: State of Retail Q1 2012 Final (Comscore)

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Validated Campaign Essentials (vCE)

Page 20: State of Retail Q1 2012 Final (Comscore)

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Arguably the Most Important Digital Advertising Initiative To Date:

Making Measurement Make Sense (3MS) Mission

Reduce costs of doing business due to

complexity of digital advertising ecosystem

‘Single Tag’ solution to reduce complexity

Improve reporting of ad exposure

Bolster confidence that ads delivered are

actually visible

Page 21: State of Retail Q1 2012 Final (Comscore)

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X

Branding advertisers on TV are accustomed to audience

guarantees and expect the same in digital

Source: comScore 2011

Cookies Are Not People

Cookie Proliferation

Accuracy of cookie-based digital plan delivery is problematic:

Cookie Deletion

Page 22: State of Retail Q1 2012 Final (Comscore)

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comScore’s measurement foundation based on validated

impressions measured at person level

in-view

correct geography

brand safety

fraud

target audience

Impressions or

Information on Media Plan Delivery

Accessible on Daily Basis

In past 5 years,

conducted 2,600

Studies for 120

Advertisers

Across 28

Countries

Page 23: State of Retail Q1 2012 Final (Comscore)

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Is In-Flight Media Plan Delivery Adjustment Working?

For Kellogg’s the early results say ABSOLUTELY

Implemented new Digital strategy and analytics in the first half of 2011.

ROI results from our first two Brand Market Mix Models have just come in.

ROI

3X

6x

Year 1 Year 2 1H 2011

ROI 2X

5X

Year 1 Year 2 1H 2011

Brand 1 ROI Brand 2 ROI

Page 24: State of Retail Q1 2012 Final (Comscore)

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comScore vCE Charter Study

18 campaigns

2 billion impressions

400k sites

Allstate

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Charter Findings

In-view ad rates across Top 500 sites

Show Substantial Variation

7%

69%

98%

MINIMUM AVERAGE MAXIMUM

Page 26: State of Retail Q1 2012 Final (Comscore)

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Large sites scored better than long-tail sites

Percentage of Ads Served In-View

77% 74% 70% 61%

US

US

Page 27: State of Retail Q1 2012 Final (Comscore)

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Digital Ad Economics:

The Good Guys Aren’t Necessarily Winning

Low correlation of In-View Rates & CPM

An equally as weak correlation was also observed between CPM

and ability to hit a primary demographic target

R²=0.0373

Page 28: State of Retail Q1 2012 Final (Comscore)

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There is good news for advertisers and publishers

Analogous to TV audience guarantees

Eliminating unseen online inventory supply

results in: More effective / efficient campaigns and less

waste for advertisers

More accurate metrics for market mix models

Better proof of digital ad effectiveness

Increased transparency/accountability

means increased confidence in digital ….

leading to more branding ad spending

moving online

Page 29: State of Retail Q1 2012 Final (Comscore)

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The Mobile Retail Landscape

Page 30: State of Retail Q1 2012 Final (Comscore)

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2011: The Rise of Mobile & Tablet Commerce

8%

9%

8%

6% 5%

3% 3%

2%

Q12012

Q42011

Q32011

Q22011

Q12011

Q42010

Q32010

Q22010

Percentage of Total e-Commerce Dollars Spent via Mobile or Tablet Device Source: comScore Mobile Measurements

Spike in percentage of

e-commerce sales via

mobile coincides with

surge in tablet ownership

Page 31: State of Retail Q1 2012 Final (Comscore)

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+1.1 +1.3 +1.3

+1.9

+3.3

+2.7

+1.3 +1.3

+1.0

+2.1 +2.3 +2.3

+2.9

+2.0

+0.7

+1.8

+2.7

+3.6

+2.9

+2.1 +2.2

+1.6

+3.8

+2.2

+3.1

+2.5

+1.4

+6.5

+3.5 +3.3

+2.1

+0.0

+1.0

+2.0

+3.0

+4.0

+5.0

+6.0

+7.0

0

20,000

40,000

60,000

80,000

100,000

120,000

New Smartphone Acquisitions (In Millions)

Total Smartphone Subscriber Base (In Thousands)

Nearly 9 million new smartphone subscribers activated in Q1, taking

the audience well over the 100 million mark

Acquisition Trend for Smartphone Subscriber Base and

Total Smartphone Subscriber Base Source: comScore MobiLens, U.S., 3 Mo. Avg. Sep-2009 to Mar-2012

Page 32: State of Retail Q1 2012 Final (Comscore)

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0

10,000

20,000

30,000

40,000

50,000

Online Retail E-Payments Credit Cards Auction Sites Classifieds Real EstateListings

BankAccounts

ShoppingGuides

Travel Service

Mar-2011 Mar-2012

Accessing online retail content continues to be a fast-growing activity on

mobile devices, with users up 69 percent versus year ago

+66%

+69% +61%

+59%

+58%

+52%

+50%

+47%

+36%

Content Categories Consumed by Mobile Phone Owners (000) & Growth vs. YA Source: comScore MobiLens, U.S., Mar-2012

Page 33: State of Retail Q1 2012 Final (Comscore)

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Mobile App access dominates Mobile Web access for most leading

pure play online retailers

41,215

27,190

13,351

12,673

6,927

5,471

4,319

3,508

2,423

Amazon

eBay

Netflix

Wal-Mart

Target

Best Buy

Redbox

Barnes & Noble

Etsy

Share of Mobile Time Spent by Retailer

App vs. Mobile Web Source: comScore Mobile Metrix, U.S., March 2012

Selected Leading Retailer Mobile Web Properties

Unique Visitors (000): Mobile Web + App Combined Source: comScore Mobile Metrix, U.S., March 2012

App Mobile Web

86%

82%

99%

18%

16%

5%

61%

95%

27%

14%

18%

1%

82%

84%

95%

39%

5%

73%

Page 34: State of Retail Q1 2012 Final (Comscore)

34 © comScore, Inc. Proprietary.

Compared to smartphones, tablet ownership is ramping up much faster

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

De

vic

e O

wn

ers

(000

s)

40 Million Consumer Tablet Owners in less than 2 years

Device Ownership – Smartphones vs. Tablets Sources: comScore MobiLens + comScore TabLens U.S., 3 Mo. Avg.

Page 35: State of Retail Q1 2012 Final (Comscore)

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Introducing TabLens: Monthly Media Tablet Tracking

Monthly tracking survey of Media Tablet

ownership and usage

6K quarterly surveys of tablet owners

Many measures parallel to MobiLens for

smartphone comparisons

Includes detailed device characteristics, user

demographics and on-device media

behaviors

Syndicated monthly reporting

Data collection ongoing since January 2012

Media Tablet: Internet connected touch

screen device with 7” + screen

Page 36: State of Retail Q1 2012 Final (Comscore)

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Tablet owners tend to skew to higher incomes: 6 in 10 make $75k+

7%

17% 17% 19%

38%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

<$25k $25k to <$50k $50k to <$75k $75k to <$100k $100k+

% S

ha

re o

f Ta

ble

t O

wn

ers

U.S. Tablet Owners by Household Income Source: comScore TabLens U.S., 3 Mo. Avg. Jan-2012 to Mar-2012

Page 37: State of Retail Q1 2012 Final (Comscore)

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1 in 5 tablet owners have purchased clothing or accessories from a

retailer, via their tablet device

20%

11%

11%

11%

9%

8%

7%

5%

5%

5%

4%

3%

3%

3%

Clothing or accessories directly from a retailer

Daily deals

Books

Tickets

Electronics

Gift certificates

Food for delivery or pickup

Groceries for delivery

Flowers

Hotel stays

Airplane tickets

Sports/Fitness

Car rentals

Auto

% of tablet owners

Product Categories Purchased via Tablet Device Sources: comScore TabLens U.S., 3 Mo. Avg. Jan-2012 to Mar-2012

Page 38: State of Retail Q1 2012 Final (Comscore)

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What’s the impact for retailers? Tablet users are more engaged than

smartphone, and more likely to shop

24%

31%

35%

41%

41%

42%

20%

18%

20%

20%

22%

34%

Made Shopping List

Checked Product Availability

Found Coupons or Deal

Researched Product Features

Compared Product Prices

Found Store Location

Smartphone Owners Tablet Owners

Shopping Activity on Tablet vs. Smartphone Sources: comScore MobiLens, U.S., 3 Mo. Avg. Jan-2012 to Mar-2012

comScore TabLens U.S., 3 Mo. Avg. Jan-2012 to Mar-2012

Page 39: State of Retail Q1 2012 Final (Comscore)

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The ‘Showrooming’ Phenomenon

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About 1 in 10 consumers had aided awareness of the term

‘showrooming’

“Showrooming” – verb. Visiting a brick-and-mortar store to see a

product but instead purchasing the product

online. Shoppers may intend from the start to

purchase the product online, or may decide to

purchase online, rather than in-person, after

viewing the item at the store.

12%

16%

8%

% who have heard of'showrooming'

All respondents

Men

Women

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35% of respondents have engaged in ‘showrooming’. Most intended to

buy at brick-and-mortar but changed their mind at the store

Consumer Usage of Showrooming

Q. Based on this definition, have you ever done this activity? (showrooming) Source: comScore Survey – April 2012

Who’s engaging in

showrooming?

35% of all respondents

50% of respondents ages 25-34,

the highest of any age group

48% of tablet owners and 43% of

smartphone owners

43% of Millenials*

* - defined as ages 18-29

…and did they plan it?

6 in 10 ‘showroomers’ say they

originally planned to purchase at the

store, but changed their mind while

there & instead bought online

32% said they went to the store always

intending to buy online

Page 42: State of Retail Q1 2012 Final (Comscore)

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72%

45%

24%

18%

17%

5%

Price was better online

Planned to buy online but wanted to see item(s)in person before ordering

Item was out of stock at store

Would rather have item(s) shipped to home thantake home with me

Was not convenient to buy in-person at the time

Other

% among those who engaged in 'showrooming'

Price was the biggest driver of ‘showrooming,’ while some wanted to

see item in person before deciding to purchase

Why Consumers Are Engaging in ‘Showrooming’

Q. Which of the following describe why you utilized showrooming? (Please select all that apply) Source: comScore Survey – April 2012

Location, Location, Location Respondents living in urban areas were

nearly twice as likely (26%) to choose

this option than those living in suburban

or rural areas (15% for both)

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Consumer Electronics and Apparel were the most popular categories

among consumers who bought via showrooming

Product Categories Most Likely to be Purchased via Showrooming

Q. Which of the following types of item have you bought online after using ‘showrooming?’

(Please select all that apply) Source: comScore Survey – April 2012

63%

43%

29%

22%

22%

16%

10%

Consumer electronics

Apparel, clothing & accessories

Books

Appliances

Toys

Jewelry / watches

Other

% among those who engaged in 'showrooming'

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Key Takeaways

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Key Takeaways

Quarterly e-Commerce sales have increased by double digits Y/Y for six

straight quarters, including a +17% gain in Q1 2012

– Online growth in Q1 2012 was triple the growth rate for total retail sales

– Channel shift to online appears to be increasing

Overall consumer perception of the economy improved again this quarter, but

49% still think economic conditions are poor

– Unemployment and high prices remain top concerns

In less than two years, tablet ownership has already risen over 40 million

– Tablet owners are more engaged and more likely to spend money online than

smartphone owners

With continued rapid growth of smartphone owners, ‘showrooming’ is proving

to be a legitimate threat to brick-and-mortar stores

– 35% of consumers have engaged in the activity, most often to find lower

prices online

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QUESTIONS?

Please contact us at [email protected] if

you have any additional questions or comments.

Page 47: State of Retail Q1 2012 Final (Comscore)

Thank You!

Note: A copy of this presentation will be sent to all attendees within 2

business days of today’s webinar.