Download - State of the US Online Retail Economy FY2014 Q1

© 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


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

2 Million Person Panel

360°View 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

V0411 Plus 5 Million TV Set Top Boxes for 3-Screen Measurement


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


-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)

% G

row

th v

s. Y

A

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


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%

Q42007

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

Q32009

Q42009

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014

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%

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

Q32009

Q42009

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014

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%

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

Q32009

Q42009

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014


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 Q12014

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

Bil

lio

ns

($

)

+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%


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

Bil

lio

ns

($

)

$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


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 DOC’s 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-C

om

me

rce S

ha

re

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)


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


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

*Note: respondents selecting “I don’t 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


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

RisingPrices

FinancialMarkets

Real Estate /Home Values

Q.Based on your current situation, which one of the following economic conditions

most concerns you? Source: comScore Surveys


Retailer and Product Category Overview


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


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 & Accessories Very Strong

#3 Consumer Packaged Goods Strong

#11 Sport & Fitness Strong

#5 Digital Content & Subscriptions Strong

#10 Home & Garden Strong

#13 Flowers, Greetings & Misc. Gifts Strong

#7 Furniture, Appliances & Equipment Strong

#1 Computers/Peripherals/PDAs Strong

#14 Video Games, Consoles & Accessories Strong

#12 Jewelry & Watches Strong

#8 Event Tickets Strong

#4 Consumer Electronics (x PC Peripherals Strong

#6 Office Supplies Moderate

#9 Books & Magazines Moderate

Food and beverage

+15%

Growth rate definitions:

Very Strong: +15% or higher

Strong: +10-14%

Moderate: +5%-9%

Low: +1%-4%

Portable devices

(e.g. tablets)

+14%


43% 50% 48% 51%

44%

67% 58%

57% 50% 52% 49%

56%

33% 42%

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014

% Transactions with Paid Shipping

% Transactions with Free Shipping

Percentage of e-Commerce Transactions

with Free Shipping Source: comScore e-Commerce Measurement

49% 53%

26% 26%

17% 14%

5% 4% 3% 3%

Q1 2013 Q1 2014

In store pickup Fast shippingNo sales tax Exclusive online dealsFree shipping

Among the services/factors listed below which can be provided by online retailers, please rate them on

a scale of 1-5, where 1 is the most important factor to you, and 5 is the least important.

Most online transactions now include free shipping, which is by far the

most important online shopping factor among consumers

Percentage of Respondents Selecting Each Factor

as ‘Most Important’ for Online Shopping Source: comScore Custom Survey


Free Shipping is the new normal for the majority of top online retailers,

but Amazon falls lower on the list due to 3rd party sales

99% 99% 99% 99% 99% 94% 93% 92%

84% 83%

76% 75% 71% 70%

58% 56% 53% 53%

13% 12%

Percent of Transactions with Free Shipping in Q1 2014 Source: comScore e-Commerce Measurement


Amazon Prime & Retailer Rewards Programs


Amazon Prime members (approximately 50% of Amazon sales)

showed significantly higher dollars per transaction and per buyer

$58

$41

Dollars per Transaction

Prime Members Non-Prime Members

$158

$131

Dollars per Buyer

Amazon Prime and Non-Prime Members Average

Spend - Q1 2014 Source: comScore e-Commerce Measurement


Amazon Prime buyers skew slightly older than non-Prime buyers, with

more than half age 40 or older

4%

16%

19%

25%

17%

20%

Prime Buyers

5%

21%

25% 23%

15%

12%

Non-Prime Buyers

Prime and Non-Prime Members Age Demographics

Q1 2014 Source: comScore e-Commerce Measurement


Among current users of Amazon Prime,

most (77%) are satisfied with the program…

45%

32%

23%*

% of Amazon Prime Users

Overall Satisfaction with

Amazon Prime (%Top-2 Box, 5-pt scale)

Very

Satisfied

Somewhat

Satisfied

* - Net of: 14% Neither satisfied nor unsatisfied, 6%

somewhat unsatisfied and 3% very unsatisfied

Q. What are some of the reasons you joined Amazon Prime? Please select all that

apply and identify the top reason.

Source: comScore Custom Survey – April 2014

63%

15%

8%

5%

4%

6%

Offered free 2-day shipping

Unlimited instant streaming ofmovies and TV shows

Special pricing on 1-dayshipping

Instant access to Kindle Books

Can share membership with upto 4 people

Other (please specify)

Top Reason Respondents Joined

Amazon Prime

(% selecting each option as ‘top reason for joining

Amazon Prime’)

…and free shipping was the key factor for joining


Amazon Prime’s $20 price increase to $99/year does not seem to be

deterring prospective users from considering membership programs

18% 20%

% who would pay [Q4, $79] [Q1, $99] annually tojoin Amazon Prime (or similar program)*

Q4 2013 Q1 2014

Impact of Amazon Prime Membership Fee Increase

(Pre/Post – January/April)

Source: comScore Surveys – January 2014 / April 2014

* - Among consumers NOT currently Amazon Prime members, who were willing to

pay to join a rewards program


Consumers’ Omnichannel Path to Purchase

© comScore, Inc. Proprietary. 25 Source: comScore Survey – February 2014

Consumers were asked to rate a wide variety of shopping tools,

including “traditional” (e.g. newspapers, TV) + digital/mobile tools

“Traditional”

Shopping Tools

Digital

Shopping Tools

Mobile

Shopping Tools

• Direct mail

• Magazines

• Newspapers

• Radio

• Recommendations

from friends and

family

• Television

• Deal of the day sites

• Digital coupons

• Facebook

• Online circulars

• Online customer

reviews/ratings

• Online search engine

• Printable shopping lists

• Retailer or manufacturer

email

• Retailer website

• Twitter

• Mobile brand websites

• Mobile coupons

• Mobile location-based

services

• Mobile payments

• Mobile retailer websites

• Mobile search

• Retailer smartphone app

• Scannable QR codes

• Text alerts from a retailer

• Use of a smartphone in a

physical store

Shopping Tools Evaluated


Different tools for different purposes…and still a role for traditional

media. Mobile coupons becomes the first mobile element in top-10

Overall Rankings for Each Tool, by Statement (Ranking among tools, % Top-2 Box, 7-pt scale)

Source: comScore Survey – February 2014

“Saves Me Money” “Saves Me Time” “Helps Me With New

Ideas”

#1 Digital coupons Online search engine Online search engine

#2 Online search engine Digital Coupons Retailer website

#3 Retailer or manufacturer email Retailer website Recommendations from friends

and family

#4 Newspapers Online circular Television

#5 Recommendations from friends

and family Printable shopping lists Retailer or manufacturer email

#6 Online circular Recommendations from friends

and family Online customer reviews/ratings

#7 Retailer website Retailer or manufacturer email Magazines

#8 Deal of the day (e.g. Groupon) Online customer reviews/ratings Online circular

#9 Direct mail Direct mail Direct mail

#10 Online customer reviews/ratings Mobile coupons Digital coupons

Denotes Traditional Media


2013

2014

Saves Me Money

#17

#16

Saves Me Time

#16

#14

Helps With New Ideas

#21

#16

While mobile search has moved up in the rankings, it has yet to crack

top-10 among shopping tools

Top 2 Box Ranking for Importance of Mobile Search

(+1)

(+2)

(+5)


Mobile coupon usage up 41% in the past year, with females age 18-44

34% more likely than average to take advantage of these deals.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Number of Mobile Coupon Users Among Smartphone Subscribers (000) Source: comScore MobiLens, U.S., Age 13+, Mar-2013 (3 Mo. Avg.) – Mar-2014 (3 Mo. Avg.)

+41%

Y/Y


Mobile phones have the highest search conversion rate in comparison

to desktop computers and tablets

61%

78%

64%

Desktop MobilePhone

Tablet

% of Searches that Resulted in a Purchase

Source: comScore custom research - 15miles/Neustar Localeze Local Search Usage Study

Source: comScore 15Miles Neustar // Localeze 7th annual Local Search Study

Did you make a purchase from the local business?


Mobile driving omnichannel commerce as 3 out of 4 mobile searches

resulting in a purchase bring customers into brick-and-mortar stores

Location of Purchase Source: comScore Custom Research – 15 miles/Neustar Localeze Local Search Usage Study

70% 73% 65%

17% 16% 15%

13% 11% 20%

PC/Laptop MobilePhone

Tablet

Purchased in store

Called to make purchase

Purchase online

Source: comScore Local Search Usage Study

Did you make a purchase from the local business?

Online

Called to

make purchase

In Store


Mobile Commerce and the Multi-Platform Shopper

© comScore, Inc. Proprietary. 32 Source: comScore MobiLens/TabLens 3 month average ending December

Continued strength in adoption of smartphones and tablets has led to

a dramatic shift in media engagement on these platforms

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Nu

mb

er

of

Devic

e O

wn

ers

166 MILLION

89 MILLION

Number of U.S. Smartphone and Tablet Owners Source: comScore MobiLens and TabLens, U.S., 2000-2013

+21%

vs. YA

+40%

vs. YA

74% of the total online mobile

population now own a smartphone,

while 40% own a tablet


Mobile commerce, which reached $7.3 billion, accounted for nearly 12%

of total digital dollars in Q1

1.8% 2.4%

3.6%

5.8% 6.6%

8.8% 9.0% 9.3%

8.1%

9.8%

11.3% 10.5%

8.6%

10.8%

11.7% 11.5%

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014

m-Commerce Share of Total e-Commerce Dollars Source: comScore m-Commerce Measurement


In terms of discretionary spending, m-Commerce growth is still

outpacing e-Commerce & bricks-and-mortar

+1%

+12%

+23%

+0%

+5%

+10%

+15%

+20%

+25%

Total Discretionary Retail E-Commerce M-Commerce

Q1 2014 Y/Y Retail Spending Growth by Channel Source: Dept. of Commerce, comScore e-Commerce & m-Commerce Measurement


While categories such as computer hardware still lean heavily to

desktop, digital content and video games skew toward mobile

Q1 2014 Share of Product Category Digital Commerce

Spending by Platform for Selected Categories Source: comScore e-Commerce & m-Commerce Measurement

89%

74%

77%

89%

89%

89%

91%

92%

94%

7%

15%

19%

6%

7%

8%

3%

3%

4%

4%

11%

3%

5%

4%

3%

6%

5%

3%

60% 65% 70% 75% 80% 85% 90% 95% 100%

Total Non-travel

Digital Content

Video Games

Apparel & Accessories

Toys & Hobbies

Consumer Electronics

Home & Garden

Furniture & Appliances

Computer Hardware

Desktop Smartphone Tablet


Mobile has become the primary medium for consumers to engage with

retail brands online

0

5,000

10,000

15,000

20,000

25,000

30,000

Desktop Smartphone Tablet

Total Minutes (MM) Spent in Retail Category by Platform Source: comScore Media Metrix and Mobile Metrix, U.S., Feb-2013 – Mar 2014

47% 38%

37%

43%

15% 19%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mar-2013 Mar-2014

Desktop

Smartphone

Tablet


Several leading retailers seeing rapid growth in their number of

mobile-only visitors, highlighting the importance of mobile storefronts

0

10,000

20,000

30,000

40,000

50,000

60,000

Amazon eBay Target Wal-Mart Best Buy

Selected Top Retailers: Trend in Mobile-Only Unique Visitors (000) Source: comScore Media Metrix Multi-Platform, U.S., Mar-2013 – Mar-2014

+32%

+88%

+56%

+36%

+23%


Mobile-only traffic in the retail category skews heavily towards younger

consumers. Nearly 1 out of 3 18-24 year olds are mobile-only shoppers.

29% 19%

13% 9% 9% 6%

49% 65% 69%

63% 66%

27%

22% 16% 18%

28% 25%

68%

0%

20%

40%

60%

80%

100%

Age 18-24 Age 25-34 Age 35-44 Age 45-54 Age 55-64 Age 65+

Mobile Only Multi-Platform Desktop Only

Percent Platform Composition by Age Segment in Retail Category Source: comScore Media Metrix Multi-Platform, U.S., Age 18+, Mar-2014


0 50,000 100,000 150,000

Amazon Sites

eBay

Apple.com Sites

Wal-Mart

Target Corp.

Best Buy Sites

Sears.com

Etsy.com

The Home Depot

Macy's

PC Only PC + Mobile Mobile Only

A significant percentage of top retailers’ audiences are multi-platform &

mobile-only; but wide variation among mobile app vs. browser splits

Selected Leading Retailers: Total U.S. Digital Population

Unique Visitors (000) by Platform Source: comScore Media Metrix Multi-Platform, U.S., March 2014

164M

104M

90M

56M

44M

25M

21M

21M

20M

18M

29%

29%

<1%

76%

26%

89%

78%

64%

84%

83%

71%

71%

99%

24%

74%

11%

22%

36%

16%

17%

Browser App

% of Time Spent –

Browser vs. App Source: comScore Mobile

Metrix, U.S., March 2014

Mobile = Smartphone + Tablet

Mobile app usage for Apple.com Sites includes all Apple property

apps (e.g. iTunes, Apple Maps, etc.)

Apple Sites


Apps done right: Target hit a home run with Cartwheel rollout as

evidenced by huge gains in mobile app usage

% of Time Spent on Target Mobile –

Browser vs. App Source: comScore Mobile Metrix, U.S., Sept 2013 / March 2014

79%

26%

21%

74%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

"Sep 2013" "Mar 2014"

App

Browser


Target’s mobile usage is up 251% y/y, with Cartwheel accounting for

80% of the total increase in time spent via mobile

Total Minutes (000) Spent via Target Mobile Apps Source: comScore Mobile Metrix, U.S., March 2014

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Target.com Website Cartwheel (Mobile App) Target (Mobile App)

+251%


73%

50%

24%

18%

18%

2%

Price was better online

Planned to buy online but wanted to see item(s) inperson 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'

‘Pre-meditated showrooming’ on the rise (+8 pts vs. Q4 2013), but

price remains the primary motivator for showrooming behavior

Why Consumers Are ‘Showrooming’

Q. Which of the following describe why you utilized

showrooming? (Please select all that apply)

Source: comScore Custom Survey – April 2014


While overall, 35% of online consumers have utilized ‘showrooming,’

this behavior varies significantly across key demographics…

37% 34%

% who have showroomed

Men

Women

29%

38% 40%


Under 50k

50-100k

100k+

47% 46% 41%

36%

29% 28%


18 to 24 25 to 34 35 to 44

45 to 54 55 to 64 65 or older

35% of all

respondents

55%

41%

22%


Heavy online shopper* Medium online shopper*

Light online shopper*

* Heavy online shopper: shops online 2 or more times a week

* Medium online shopper: shops online once a week or a few times a month

* Light online shopper: shops online once a month or less

Gender Income

Age Shopper Type


Social Commerce


Social media users spend 31% more than average online, and

Pinterest users spend nearly 2x the norm

E-Commerce Buying Power Index for Selected Leading Social Platforms Source: comScore Media Metrix, U.S., March 2014

131 139

167

194

50

100

150

200

250

Social Networking Facebook Twitter Pinterest


Facebook remains an important advertising channel for retailers that

drives both brand awareness and click-through referral

Top Retail Display Advertisers on Facebook by

Display Ad Impressions (000) Source: comScore Ad Metrix, U.S., Q1 2014

3,000,441

1,729,925

903,049

747,396

731,924

554,077

520,920

439,962

418,836

390,851

Netflix, Inc.

Amazon.com

Wayfair LLC

1-800-Flowers.com

Overstock.com

Macy's, Inc.

JustFabulous

Nordstrom, Inc.

Gap, Inc.

Luxottica Group 59%

31%

51%

53%

80%

51%

18%

62%

47%

53%

41%

69%

49%

47%

20%

49%

82%

38%

53%

47%

Facebook’s Share of

Retailer Total Display Ads Source: comScore Ad Metrix, U.S.,

Q1 2014


Is Pinterest ready to take a bigger slice of the social commerce pie?

Paid ads via ‘Promoted Pins’ could prove highly effective for retailers.


Pinterest is gaining influence as a social commerce channel, but

usage continues to shift heavily toward mobile

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Desktop Mobile

Pinterest Total Unique Visitors (000) by Platform Source: comScore Media Metrix and Mobile Metrix, U.S., Jul-2012 – Mar-2014


Why else should retailers care about Pinterest? Ability to generate

very high reach among strategic demo segments like Females 18-49

12%

21% 22% 20%

37%

43%

Desktop Mobile Total Digital Population

Total Audience Females Age 18-49

Pinterest: % Reach Among Total and F18-49 Populations by Platform Source: Media Metrix Multi-Platform, U.S., Feb 2014


Other attempts at social commerce include Amazon and Twitter

partnering to easily add items to your #AmazonCart


Key Takeaways


Key Takeaways

• Q1 2014 Total Digital Commerce accelerated marginally to 13% y/y as it

continued to gain share from brick-and-mortar

• Desktop e-commerce grew 12%, while mobile commerce grew 23%

• Digital commerce grew by 1 percentage point vs. Q4 and picked up the slack from brick-and-mortar, which

softened during the quarter in part due to a cold and snowy winter

• Consumer sentiment continues to improve, but price sensitivity still a major

driver of e-Commerce behavior

• Negative economic sentiment hit an all-time low in the comScore survey, improving 5 points vs. Q4, but

economic concerns remain for 35% of the online population

• Free shipping continues to gain in importance, hitting an all-time non-Q4 high in Q1 at 58%

• Amazon Prime is popular and drives higher purchase rates, but free 2-day shipping may be less of a

motivator than many think

• Mobile & Social Commerce are becoming more significant factors in shopping

and buying behavior

• Mobile is driving 12% of total e-commerce dollars today; growing at 2x the rate of desktop

• Mobile is now the wide majority of time spent in the Retail category

• Mobile searches are influential in driving in-store purchase

• Pinterest is poised to become a very important marketing and advertising channel for retailers so it's time to

start paying attention

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