November 2012 State of the U.S. Online Retail Economy in Q3 2012 Gian Fulgoni, Chairman, comScore, Inc. Andrew Lipsman, VP Industry Analysis, comScore, Inc. Ian Essling, Research Manager, comScore, Inc. Note: A copy of this presentation will be sent to all attendees within three business days of today’s webinar
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State of the Retail Q2 2012 - Texas Cable AssociationState of the U.S. Online Retail Economy in Q3 2012 Gian Fulgoni, Chairman, comScore, Inc. Andrew Lipsman, VP Industry Analysis,
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November 2012 State of the U.S. Online Retail Economy in Q3 2012
Gian Fulgoni, Chairman, comScore, Inc. Andrew Lipsman, VP Industry Analysis, comScore, Inc. Ian Essling, Research Manager, comScore, Inc.
Note: A copy of this presentation will be sent to all attendees within three business days of today’s webinar
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 (excluding mobile and tablets unless otherwise stated)
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 September 2012
Survey conducted week of October 22, 2012 (n=1989)
Consumer Measurements: – Online Buying – Attitudes and Sentiment – Site Visitation – Demographic Segments – Mobile and Tablet e-Commerce
2 million person panel 360°View of Consumer Behavior Analysis Parameters
Review of Key Macroeconomic Trends Consumer Perceptions of the Economy Retailer and Product Category Overview The Consumers’ Path to Purchase The Digital Endcap: Retailers as Publishers Looking Back at Holiday 2011… … and a Look Forward to Holiday 2012 Key Takeaways Q & A
*Note: The U.S. Department of Commerce calculation includes total retail and food service sales, which also includes motor vehicles and parts dealers.
3% 3% 3% 3% 2% 2% 1%
-5% -5% -6% -6%
0% 4% 5% 6% 7% 6% 4% 4% 3%
6% 2% 2%
Q1 2007
Q2 2007
Q3 2007
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
Quarterly Retail & Food Services Sales Growth vs. YA (excluding autos, gas and food/beverage)
4% 4% 3% 5% 4% 2% 1%
-8% -10% -9% -7%
2% 6% 7%
5%
8%
7% 7% 7% 5%
8% 4% 3%
Q1 2007
Q2 2007
Q3 2007
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
17% 23% 23%
19%
11%
13%
6% -3% 0% -1% -2% 3%
10%
9% 9%
11% 12% 14%
13%
14% 17%
15% 15%
Q1 2007
Q2 2007
Q3 2007
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
In Q3, online sales growth continued to outpace offline, with online retail posting a 15% year-over-year growth rate, which was more than 7x greater than the apples to apples offline retail rate
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)
The channel shift appears to be accelerating, with e-Commerce representing nearly 9% of all discretionary dollars spent in Q3 2012, an increase of 1.1 points compared to 2011
*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
omm
erce
Sha
re
e-Commerce share peaks in colder seasons (Q4 & Q1)
Mobile phones and tablets are among the fastest growing e-Commerce sub categories – portable devices are growing at more than double traditional desktop computers
Q3 2012 e-Commerce Sales Growth vs. YA by Retail Category Source: comScore e-Commerce Measurement
Product Category Q3 2012 Growth vs. YA
Digital Content and Subscriptions Very Strong Consumer Electronics (x PC Peripherals) Very Strong Event Tickets Very Strong Apparel & Accessories Very Strong Video Games, Consoles & Accessories Very Strong Flowers, Greetings & Misc. Gifts Very Strong Jewelry & Watches Very Strong Computers/Peripherals/PDAs Strong Books & Magazines Strong Consumer Packaged Goods Strong Sport & Fitness Strong Office Supplies Strong Home & Garden Strong Furniture, Appliances & Equipment Strong
Mobile phones and plans +27%
Growth rate definitions: Very Strong: +15% or higher Strong: +10-14%
Consumers were asked to rate a number of shopping tools, including “traditional” tools such as newspapers and TV, as well as digital and mobile shopping 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
• 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 Source: comScore Survey – September 2012
Compared to 2010, consumers are increasingly comfortable receiving coupons online; nearly 1 in 3 respondents stated their preference for online coupons over another format
Q. Would you rather receive coupons online rather than any other format? Source: comScore Surveys - October 2010 & April 2012
Retailer websites, recommendations from friends/family and online search engines were among the top tools chosen by consumers for the metric “Helps Me with New Ideas”
42% 42% 41%
40% 39%
38% 38%
35% 35% 35%
35% 34%
28% 27%
24% 24% 24% 23%
23% 23%
23% 22% 22% 22%
21% 18%
Retailer website Recommendations from friends and family
Online search engine Television
Retailer or manufacturer email Direct mail
Online circular Online customer reviews/ratings
Digital coupons Magazines
Newspapers Deal of the day
Printable shopping lists Radio
Text alerts from a retailer Mobile coupons
Facebook Mobile search
Retailer smartphone app Mobile retailer websites
Use of a smartphone in a physical store Scannable QR codes
Mobile brand websites Mobile location-based services
Mobile payments Twitter
% of All Respondents
Percent of Consumers Who Agree Tool… (%Top-2 Box, 7-pt scale)
Overall, online search engines were considered the most valuable tool for shopping, followed by retailer websites and recommendations from family and friends
Overall Rankings for Each Tool, by Statement (Ranking among tools, % Top-2 Box, 7-pt scale)
Dollar Sales Lift Among Households Exposed to Online Advertising
% Lift: 17%
% Lift: 27%
Despite click rates of only 0.1%, comScore research has shown that display ads can successfully lift retailer sales – both online and offline
Source: “Whither the Click?” 139 comScore studies in the June 2009 Journal of Advertising Research
Exposure to display ads doesn’t just impact online sales – it lifts in-store sales as well The absolute dollar lift in offline sales is 5x higher than the lift in e-commerce sales The click is misleading as a measure of campaign effectiveness
The 2011 U.S. e-Commerce holiday season surpassed all previous years in sales and grew 15% versus 2010
* Holiday Season includes November and December **Percentage change includes seasonal adjustment to account for unequal number of weekdays and weekend days in 2010 and 2011
Holiday Season* Retail e-Commerce Sales ($ Billions) Growth vs. YA
During the 2011 holiday season, the percentage of transactions involving free shipping hit an all-time high of 52% in Q4
39% 40% 41% 49% 47% 43% 40% 52% 49% 47% 43%
61% 60% 59% 51% 53% 57% 60% 48% 51% 53% 57%
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
% Transactions with Free Shipping % Transactions with Paid Shipping
Percentage of e-Commerce Transactions with Free Shipping
Source: comScore e-Commerce Measurement
54% 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
Smartphones: Retail-related categories showed significant growth among mobile phone owners YoY, including +65% for online retail
+65%
Content Categories Consumed by Mobile Phone Owners (000) & Growth vs. YA Source: comScore MobiLens, U.S., 3 Mo. Avg. (includes browser or application access)
Showrooming: Nearly 4 in 10 consumers agreed they engaged in ‘showrooming’ – engagement remains much higher than awareness
“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%
% who have heard of 'showrooming'
32%
37%
% who have engaged in 'showrooming'
Although only 16% of consumers were aware of the term “showrooming” unaided, 37% agreed they engaged in the