ECOMMERCE BENCHMARK REPORT Q1 ECOMMERCE BENCHMARK REPORT Q1 2016

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1 ECOMMERCE BENCHMARK REPORT Q1 ECOMMERCE BENCHMARK REPORT Q1 2016

2 3 A QUICK WORD 4 DISCOVERY ECOMMERCE BENCHMARK REPORT Q1 TABLE OF CONTENTS CONVERSION BY DEVICE CONVERSION BY CHANNEL DISTRIBUTION, FEATURING CANADA POST METHODOLOGY CONTACT DEMAC

3 ECOMMERCE BENCHMARK REPORT Q1 A QUICK On a quarterly basis, Demac Media produces the ecommerce Benchmark Report containing insights we glean from aggregate data reported by our customers. Typically, the highs of the holiday season leads to a hangover in the new year, but our numbers WORD from the first quarter of 2016 show a positive outlook - and many opportunities - for online retail! In this edition of our Benchmark Report we partnered with Canada Post to bring you a special Distribution feature highlighting the steady growth of ecommerce in Canada. We also map the top growing online industry segments across the country, which includes a mix of traditional and emerging markets. We hope that retailers nationally and internationally make the most of this data and leverage the opportunities that exist in our home-country. The post-holiday months present a challenge for retailers as they look to keep shoppers engaged while implementing new strategies to encourage growth for the new year. The datapoints and trends in the Benchmark Report for Q1 of 2016 set the stage for the year, outlining how we prepare our customers for growth after the Q4 sales-spike. Commerce s slowed pace in the first quarter presents the perfect opportunity for retailers to re-engage through paid marketing campaigns and on social platforms to boost sales throughout the year! BRIANNE PRICE CONTENT MARKETING MANAGER DEMAC MEDIA 3

4 DISCOVERY DIRECT TRAFFIC GROWS IN RANK, BUT MAY BE MISLEADING RETAILERS. Direct traffic can include Dark Traffic ; referral traffic that isn t tagged with a machinereadable url structure to attribute visits from new mediums like chat, messaging apps, SMS, etc. This may overstate your true direct traffic, undervaluing your actual organic search, and social efforts. Organic search remains king in discovery, reinforcing that your SEO hygiene pays regular dividends. % OF SESSIONS BY TRAFFIC SOURCE 9% 6% 11% 15% 39% organic search direct other paid search referral social 18% 4

5 DISCOVERY TURN NEW VISITORS INTO NEW CUSTOMERS BY FOCUSING ON ENGAGEMENT DURING FIRST VISIT. Regardless of device type, new shoppers make up half of the visits to online stores. First impressions are everything in ecommerce. If your site isn t responsive you re missing out on a lucrative opportunity to turn New Visitors into Returning Customers. SESSIONS FROM NEW VISITORS, BY DEVICE TYPE 46% mobile 46% tablet 56% desktop 5

6 DISCOVERY FACEBOOK IS THE CLEAR LEADER IN SOCIAL DISCOVERY FOR RETAILERS. Social media distribution is an important and growing opportunity for retail discovery. The biggest platforms drive the most traffic with exceptional user engagement experiences that incent online shoppers to browse, follow, and connect. After chasing Pinterest for several years, Facebook is now well ahead of its peers in driving shoppers to online stores. % OF SESSIONS BY SOCIAL PLATFORM 17% 3% 2% 3% 9% 66% facebook pinterest twitter instagram sina weibo other 6

7 CONVERSION MOBILE DEVICE CONVERSION RATES ARE LAGGING CURRENT SHOPPER BEHAVIOUR. Consumers are increasingly mobile-centric, but buying experiences are rarely optimized to allow for a closed loop transaction. Retailers should invest their efforts toward a simplified experience with quick buy buttons and single-step checkout. DISTRIBUTION OF CONVERSION RATE BY DEVICE TYPE COUNT % 1-2% 3-4% 4-5% 5-6% 6-7% 7-8% mobile tablet desktop 7

8 CONVERSION MOBILE DEVICES USED FOR RESEARCH IN CONSUMER PATH TO PURCHASE. Desktop still receives more pageviews per session, but average session length between devices is evening out. Poor mobile UX encourages browsing on desktop and tablet, and in the hands of consumers mobile phones are relegated for shorter research duties... for now. AVERAGE NUMBER OF PAGEVIEWS PER SESSION mobile 4.87 AVERAGE SESSION LENGTH tablet m28s mobile 4m29s tablet 4m39s desktop desktop

9 CONVERSION REDUCE UX FRICTION TO IMPROVE REVENUE CONTRIBUTION FROM MOBILE. Smartphone and tablet usage is slowly becoming transactional, but for now desktop drives conversion. Opportunity exists for retailers to optimize the customer journey to capture more revenue across devices. Reducing purchasing friction on mobile starts with solving UX challenges. % OF SESSIONS BY DEVICE CATEGORY % OF REVENUE BY DEVICE CATEGORY 14% 12% 41% mobile tablet desktop 20% mobile tablet desktop 45% 68% 9

10 CONVERSION CONSUMERS PREFER TO USE LARGER DEVICES FOR BIGGER TRANSACTIONS. Shoppers on bigger devices show higher purchase intent, partly owed to a preference in doing research on larger devices, taking advantage of smoother payment processes. Consumers hold back from purchasing these items on mobile devices. To improve transaction volume across devices, optimize your experiences to match this expectation. AVERAGE ORDER VALUE AND AVERAGE REVENUE PER SESSION, BY DEVICE CATEGORY AVERAGE ORDER VALUE ($) $130 $125 $120 $115 $110 $105 $ $1.57 $0.92 $ $ $0.51 $1.80 $1.60 $1.40 $1.20 $1 $0.80 $0.60 $0.40 $0.20 AVERAGE REVENUE PER SESSION ($) $0 desktop tablet mobile average order value average revenue per session $0 10

11 CONVERSION APPLE CONTINUES TO DOMINATE MOBILE COMMERCE. On a global scale Apple ranks second to Samsung in handset sales, but for North American retailers mcommerce equates to Apple and its mainstay devices. % OF SHOPPERS BY MOBILE DEVICE 21% 54% iphone ipad other 25% iphone ipad other 11

12 CONVERSION SOCIAL COMMERCE SALES ARE DRIVEN THROUGH MARKETING INGENUITY. Retailers are slowly aligning their strategies with the shift towards online engagement and consumption. Platforms that allow for interactive experiences like YouTube are where social performance drives higher sales. Video production isn t cheap, but products of a higher price point warrant a bigger marketing investment to see a big return. AVERAGE ORDER VALUE BY SOCIAL PLATFORM $400 $350 $361 $300 $250 $200 $209 $197 $150 $100 $104 $98 $96 $78 $76 $64 $64 $50 $0 youtube sina weibo linkedin polyvore tumblr facebook yelp twitter pinterest reddit 12

13 CONVERSION PAID SEARCH TRUMPS DIRECT WITH THE HIGHEST ORDER VALUE. Sales taper-off during the post-holiday spending slump, making Paid Search campaigns key to driving revenue during Q1. Average order value across the board dips lower, but investments in Paid pay-off. Diversify your strategy quarter-over-quarter to maintain a balanced portfolio of acquisition channels for the entire year, accounting for seasonality. $180 AVERAGE ORDER VALUE BY ACQUISITION CHANNEL $160 $157 $140 $120 $100 $135 $107 $129 $132 $127 $118 $118 $117 $107 $103 $120 $100 $104 $96 $109 $80 $60 $40 $20 $0 paid search organic search direct other social referral display q q

14 DISTRIBUTION 15% $34.04B OVERALL ECOMMERCE GROWTH IN CANADA CANADA POST PARCEL DATA INSIGHTS 2016 CANADIAN ECOMMERCE SALES FORECAST ETAIL CANADA- THE DIRECTOR S REPORT ON THE RISE: 15% GROWTH IN CANADIAN ECOMMERCE. Globally ecommerce continues its expansion with no sign of slowing down. China, the U.S. and the U.K. are digital retail powerhouses, while the growth potential in emerging markets like India and Brazil is seemly unstoppable. While slower than the more established markets, Canadian ecommerce has been consistently growing at double digits the last couple of years and is showing signs of continued steady growth. This growth is driven by a maturing Canadian online shopper that is purchasing with far greater frequency than ever before. ecommerce sales in Canada are expected to reach C$34.04 billion in 2016 according to etail Canada. Retailers should look to tap into this impressive and continual growth potential online. Fashion, Sporting Goods, Mass Merchant were among the top growing industry segments across the country. Want to learn more about ecommerce in Canada? Visit Canada Post for more ecommerce insights and trends at canadapost.ca/demacreport THE CANADA POST LOGO IS A TRADEMARK OF CANADA POST CORPORATION. 14

15 DISTRIBUTION TOP GROWING INDUSTRY SEGMENTS BY PROVINCE 26% northern territories, yukon, nunaut sporting goods fashion mass mechant consumer electronics 21% british columbia SOURCE: Q ECOMMERCE BENCHMARK REPORT 2015 CANADA POST PARCEL DATA INSIGHTS 13% alberta 17% 23% saskatchewan 23% manitoba 37% ontario 36% quebec 27% new brunswick 18% newfoundland & labrador 30% prince edward island 29% nova scotia TAP INTO THESE TOP GROWING ONLINE INDUSTRY SEGMENTS. ecommerce in Canada is on the upward trend! The following map represents the industry segments showing impressive growth online by Province, with some greatly out-pacing the national average. Canadians are enthusiastically opening their wallets to the wider range of products that online retailers are offering, driving the promising growth we are seeing in 2016 that is projected to increase going forward. Want to learn more about ecommerce in Canada? Visit Canada Post for more ecommerce insights and trends at canadapost.ca/demacreport THE CANADA POST LOGO IS A TRADEMARK OF CANADA POST CORPORATION. 15

16 METHODOLOGY THE RETAILERS IN THIS STUDY REPRESENT A BROAD SET OF RETAIL SUB-VERTICALS. The retailers in this study reach shoppers globally! In fact, the top four countries reporting the highest average order values during Q are some of the most remote: Mongolia, Lithuania, Cambodia, Uzbekistan. DEMAC CUSTOMERS INCLUDED IN THIS REPORT, BY NAICS DEFINITIONS HOME COUNTRY OF RETAILER INCLUDED IN THIS REPORT 5% 5% 9% 7% 11% 43% clothing, accessories furniture, furnishings miscellaneous sports, hobby, book, music health, personal care electronics, appliances food, beverage building, gardening, supplies general merchandise 26% 74% canada us 16% canada canada us united states SOURCE: Q ECOMMERCE BENCHMARK REPORT US CENSUS BUREAU, NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM [ 16

17 METHODOLOGY A FEW WORDS ON OUR PROCESS FOR BUILDING THIS REPORT. ECOMMERCE BENCHMARK REPORT Q1 By publishing commerce data with higher granularity than the US Census, Demac wants to equip retailers with practical benchmarks and actionable insights to grow their business. All data is provided in aggregate to separate signal from noise and to protect the proprietary information of each participating retailer. All data was extracted from Google Analytics, and all labels are standard definitions of the Google Analytics Platform. If you would like to learn more about this report, or have any suggestions, please reach out to us. Our contact details are on the next page. NOTE: Demac publishes this data as a guide and, despite our best efforts, does not guarantee that it is free from error. 17

18 GET IN TOUCH DEMAC MEDIA IS A COMMERCE AGENCY THAT HELPS YOU BUILD, MANAGE AND SCALE YOUR RETAIL BUSINESS. ECOMMERCE BENCHMARK REPORT Q1 DEMAC RESOURCES Next Demac Benchmark Report: July 2016 Demac Blog WHAT S NEXT? Shoptalk, May 15-18, Las Vegas etail Canada, May 16-19, Toronto ecommerce Montreal, May 19, Montreal IRCE, June 7-10, Chicago Monthly ecommerce Meetup, Toronto CONTACT US

19 ECOMMERCE BENCHMARK REPORT Q1 MONTREAL 4529 Rue Clark #300 Montreal, QC H2T 2T4 TORONTO 211 Yonge Street, 6th Floor Toronto, ON M5B 1M4 MIAMI Coming Soon Toll Free:

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