State of the US Online Retail Economy FY2014 Q1

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  • comScore, Inc. Proprietary. State of the U.S. Online Retail Economy in Q1 2014 May 2014 Gian Fulgoni, Co-Founder & Chairman Emeritus, comScore, Inc. Andrew Lipsman, VP Marketing & Insights, comScore, Inc. Ian Essling, Sr. Research Manager, comScore, Inc.
  • comScore, Inc. Proprietary. 2 Topics for Today Review of Key Macroeconomic Trends Consumer Perceptions of the Economy Buyer Metrics & Product Category Overview Amazon Prime The Omnichannel Path to Purchase Mobile Commerce and the Multi-Platform Consumer Social Commerce Key Takeaways Q & A
  • comScore, Inc. Proprietary. 3 Data sourced from comScores global panel of 2 million Internet users 2 Million Person Panel 360View of Person Behavior CENSUS Unified Digital Measurement (UDM) Patent-Pending Methodology 1 Million Domains Participating Adopted by 90% of Top 100 U.S. Media Properties PANEL PERSON-Centric Panel with WEBSITE-Census Measurement Web Visiting & Search Behavior Online Advertising Exposure Advertising Effectiveness Demographics, Lifestyles & Attitudes Media & Video Consumption Transactions Online & Offline Buying Mobile Internet Usage & Behavior PANEL V0411Plus 5 Million TV Set Top Boxes for 3-Screen Measurement
  • comScore, Inc. Proprietary. 4 E-Commerce data includes all worldwide buying on U.S. sites (desktop buying only) Unless explicitly stated otherwise, the term e-Commerce refers to online retail spending, as measured by comScore, which excludes travel, autos and auctions Total Digital Commerce is the sum of e-Commerce (desktop) and m- Commerce (mobile) Behavioral activity shown includes data through March 2014 Custom comScore Survey week of April 21, 2014 (n=2,772) Unless otherwise noted, the terms mobile and m-Commerce refer to smartphone plus tablet Analysis Parameters & Definitions Q1 2014 Data
  • comScore, Inc. Proprietary. 5 -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 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 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 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) %Growthvs.YA Dept. of Commerce (DOC) comScore Estimate of DOC *Note: To be consistent with DOC, comScore estimate excludes travel and event tickets but includes auction fees and autos. Correlation: 0.92
  • comScore, Inc. Proprietary. comScore, Inc. Proprietary. State of the Economy A Review of Key Macroeconomic Trends
  • comScore, Inc. Proprietary. 7 At +12% growth year over year, e-Commerce continues to outpace offline retail growth, which grew at only 1% Y/Y *Note: The U.S. Department of Commerce calculation includes total retail and food service sales, which also includes motor vehicles and parts dealers. 3% 2% 2% 1% -5% -5% -6% -6% 0% 4% 5% 6% 7% 6% 4% 4% 3% 6% 2% 2% 2% 1% 4% 5% 4% 1% Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Quarterly Retail & Food Services Sales Growth vs. YA (excluding autos, gas and food/beverage) 11% 13% 6% -3% 0% -1% -2% 3% 10% 9% 9% 11% 12% 14% 13% 14% 17% 15% 15% 14% 13% 16% 13% 11% 12% Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Quarterly Desktop 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) 4% 2% 1% -8% -10% -9% -7% 2% 6% 7% 5% 8% 7% 7% 7% 5% 8% 4% 3% 3% 2% 4% 5% 4% 2% Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014
  • comScore, Inc. Proprietary. 8 Desktop e-Commerce (retail + travel) was up +10% Y/Y overall and +12% Y/Y for Retail in Q1 2014, with a total of $86 billion $42 $53 $67 $82 $102 $123 $130 $130 $142 $162 $186 $211 $56 $30 $40 $51 $61 $69 $77 $84 $80 $85 $94 $103 $111 $30 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1 2014 Retail Travel Desktop e-Commerce Dollar Sales ($ Billions) Source: comScore e-Commerce Measurement $72 $93 $117 $143 $171 $200 $214 $209 $228 $289 $256 $86 Billions($) +29% +26% +22% +19% +17% +7% -2% +9% +12% +13% +26% +33% +26% +28% +20% +24% +24% +13% +20% +12% +6% +9% 0% -5% +10% +6% +15% +9% +14% +11% +11% +13% +8% +12% +10% $322 +8%
  • comScore, Inc. Proprietary. 9 Mobile commerce, when added to desktop e-Commerce, grew 13% in Q1 and registered the largest non-Q4 quarter of total online buying $44.3 $43.2 $41.9 $56.8 $50.2 $49.8 $47.5 $63.1 $56.1 $4.5 $3.8 $4.6 $7.2 $5.9 $4.7 $5.8 $8.3 $7.3 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Desktop Mobile Desktop+Mobile Retail e-Commerce Dollar Sales ($ Billions) Source: comScore e-Commerce Measurement Billions($) $71.4 $56.1 $64.0 $45.4$47.0$48.8 +21% +17% +17% +17% +15% +16% +14% $54.5 $54.3 +12% +13% $63.4
  • comScore, Inc. Proprietary. 10 When including both mobile and desktop spending, e-Commerce accounted for 13.2% of consumers discretionary spending in Q1 2014 *Note: e-Commerce share is shown as a percent of DOCs Total Retail Sales excluding Food Service & Drinking, Food & Bev. Stores, Motor Vehicles & Parts, Gasoline Stations and Health & Personal Care Stores. Desktop & Mobile e-Commerce Share of Corresponding Consumer Spending* Source: comScore e-Commerce/m-Commerce & U.S. Department of Commerce (DOC) for Retail e-CommerceShare 7% 7% 8% 9% 8% 8% 10% 10% 9% 10% 11% 12% 11% 10% 12% 13.2% 4% 4% 4% 5% 5% 4% 5% 5% 6% 5% 5% 6% 7% 6% 6% 7% 7% 7% 7% 8% 8% 7% 7% 8% 8% 7% 7% 8% 9% 8% 8% 9% 9% 9% 9% 10% 11% 10% 9% 11% 11.7% e-Commerce Share (desktop+mobile) e-Commerce Share (desktop)
  • comScore, Inc. Proprietary. comScore, Inc. Proprietary. Consumer Perceptions of the Economy
  • comScore, Inc. Proprietary. 12 While most still believe the economy is poor or fair, negative sentiment declined 5 points in Q1 2014 are brighter days ahead? 68% 66% 61% 61% 59% 63% 62% 52% 60% 60% 61% 54% 50% 56% 49% 42% 41% 41% 41% 40% 35% 27% 30% 31% 33% 34% 32% 32% 40% 31% 31% 29% 36% 40% 36% 40% 44% 47% 48% 43% 48% 48% 5% 4% 8% 6% 7% 5% 6% 8% 9% 9% 11% 10% 10% 8% 11% 13% 12% 12% 16% 13% 17% 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 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Poor Fair Excellent/Good Consumer Perceptions of the Economy Q.How would you rate economic conditions today? Source: comScore Surveys *Note: respondents selecting I dont know / not sure accounted for an average of 1.1% of responses in each quarter, and results shown above are rebased to exclude these data
  • comScore, Inc. Proprietary. 13 Consumer concern shifted even more toward rising prices this quarter, as concern for unemployment / job security dropped to 27% Percent of Respondents Citing Their One Most Important Issue 46% 40% 42% 50% 42% 44% 45% 36% 27% 37% 38% 31% 26% 33% 34% 31% 33% 31% 33% 32% 27% 28% 32% 32% 29% 33% 30% 29% 42% 54% 37% 37% 43% 48% 44% 45% 47% 45% 46% 42% 43% 52% 15% 13%13% 9% 10% 13% 9% 7% 7% 12% 12% 10% 11% 10% 10% 10% 10% 10% 12% 14% 11% 8% 8% 8% 7% 9% 8% 10% 11% 7% 8% 9% 10% 11% 8% 8% 7% 7% 6% 8% 6% 5% 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 Jul 12 Oct 12 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Unemployment / Job Security Rising Prices Financial Markets Real Estate / Home Values Q.Based on your current situation, which one of the following economic conditions most concerns you? Source: comScore Surveys
  • comScore, Inc. Proprietary. comScore, Inc. Proprietary. Retailer and Product Category Overview
  • comScore, Inc. Proprietary. 15 Overall dollar sales increased by 12% via desktop e-Commerce in Q1 (versus Q1 2013) Metric Q1 2013 Q1 2014 % change Dollar Sales ($ Billions) $50.2 $56.0 12% Dollars per Buyer $275 $282 3% Buyers (Millions) 183 198 9% Average Order Value $71 $78 10% Transactions (Millions) 703 714 2% Transactions per Buyer 3.85 3.60 -6% Key Desktop e-Commerce Buyer and Transaction Measures Q1 2014 vs. YA Source: comScore e-Commerce Measurement
  • comScore, Inc. Proprietary. 16 Desktop computers +5% Led by apparel/accessories and CPG, nearly all e-Commerce categories showed double-digit growth versus Q1 2013 Q1 2014 Desktop e-Commerce Sales Growth vs. YA by Retail Category Source: comScore e-Commerce Measurement Absolute Dollar Rank Product Category Q1 2014 Growth vs. YA #2 Apparel & Acce