ECOMMERCEBENCHMARK REPORT

Q1 2016

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TABLE OFCONTENTS

A Q U I C K W O R D

D I S C O V E R Y

C O N V E R S I O N B Y D E V I C E

C O N V E R S I O N B Y C H A N N E L

D I S T R I B U T I O N , F E A T U R I N G

C A N A D A P O S T

M E T H O D O L O G Y

C O N T A C T D E M A C

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“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 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!

A QUICKWORD

3

B R I A N N E P R I C E

C O N T E N T M A R K E T I N G M A N A G E R

D E M A C M E D I A

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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 machine-readable 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, email and social efforts. Organic search remains king in discovery, reinforcing that your SEO hygiene pays regular dividends.

% OF SESSIONS BY TRAFFIC SOURCE

39%

18%

15%

11%

9%

6%

○ organic search○ direct○ other○ paid search○ email○ referral○ social

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T

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.

46%�

tablet desktop

56%�

SESSIONS FROM NEW VISITORS, BY DEVICE TYPE

46%�

mobile

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T

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

66%

17%

3%3%

2%

9%

○ facebook○ pinterest○ twitter○ instagram○ sina weibo○ other

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T

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.

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T

DISTRIBUTION OF CONVERSION RATE BY DEVICE TYPE

○ mobile ○ tablet ○ desktop

CO

UN

T

0

5

10

15

20

25

30

35

40

45

50

0-1% 1-2% 3-4% 4-5% 5-6% 6-7% 7-8%

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

AVERAGE SESSION LENGTH

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T

6.61

6.11

4.87

4 4.5 5 5.5 6 6.5 7

desktop

tablet

mobile

0

�

�

�

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T

3m28s�

mobile

4m29s�

tablet

4m39s�

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 REVENUE BY DEVICE CATEGORY

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T

% OF SESSIONS BY DEVICE CATEGORY

○ mobile○ tablet○ desktop

41%

45%

14%

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T

68%

20%

12%

○ mobile○ tablet○ desktop

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.

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T

AVERAGE ORDER VALUE AND AVERAGE REVENUE PER SESSION, BY DEVICE CATEGORY

AV

ERA

GE

OR

DE

R V

ALU

E ($

) A

VER

AG

E REV

ENU

E PER

SESSIO

N ($

)

○ average order value ○ average revenue per session

$127.49

$114.09

$104.57

$1.57

$0.92

$0.51

$0

$0.20

$0.40

$0.60

$0.80

$1

$1.20

$1.40

$1.60

$1.80

$0

$105

$110

$115

$120

$125

$130

desktop tablet mobile

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

iphone ipad other

54%

25%

21%

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T

○ iphone ○ ipad ○ other

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.

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T

AVERAGE ORDER VALUE BY SOCIAL PLATFORM

$361

$209$197

$104 $98 $96$78 $76

$64 $64

$0

$50

$100

$150

$200

$250

$300

$350

$400

youtube sina weibo linkedin polyvore tumblr facebook yelp twitter pinterest reddit

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.

AVERAGE ORDER VALUE BY ACQUISITION CHANNEL

$135 $129 $127

$118

$107 $103 $100

$96

$107

$132

$157

$118 $117 $120

$104 $109

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

paid search organic search direct other email social referral display

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T

○ q1 2016 ○ q4 2015

14

DISTRIBUTION

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

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T2 0 1 5 C A N A D A P O S T P A R C E L D A T A I N S I G H T S

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R TE T A I L C A N A D A - T H E D I R E C T O R ’ S R E P O R T

15% $34.04BOVERALL ECOMMERCE GROWTH IN

CANADA 2014-20152016 CANADIAN

ECOMMERCE SALES FORECAST

T H E C A N A D A P O S T L O G O I S A T R A D E M A R K O F C A N A D A P O S T C O R P O R A T I O N .

15

17%

37%ontario

36%quebec

23%saskatchewan

23%manitoba

27%new brunswick

29%nova scotia

18%newfoundland & labrador

30%prince edward island

13%alberta

21%british columbia

26%northern territories, yukon, nunaut

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

TOP GROWING INDUSTRY SEGMENTS BY PROVINCE

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T2 0 1 5 C A N A D A P O S T P A R C E L D A T A I N S I G H T S

sporting goodsfashionmass mechantconsumer electronics

T H E C A N A D A P O S T L O G O I S A T R A D E M A R K O F C A N A D A P O S T C O R P O R A T I O N .

DISTRIBUTION

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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 Q1 2016 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

○ clothing, accessories○ furniture, furnishings○ miscellaneous○ sports, hobby, book, music○ health, personal care○ electronics, appliances○ food, beverage○ building, gardening, supplies○ general merchandise

43%

16%

11%

9%

7%

5%

5%

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R TU S C E N S U S B U R E A U , N O R T H A M E R I C A N I N D U S T R Y C L A S S I F I C A T I O N

S Y S T E M [ H T T P : / / W W W . C E N S U S . G O V / E O S / W W W / N A I C S / ]

S O U R C E : Q 1 2 0 1 6 E C O M M E R C E B E N C H M A R K R E P O R T

○ canada ○ united states

○ canada○ us

○ canada ○ us

74%

26%

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.

A FEW WORDS ON OUR PROCESS FOR BUILDING THIS REPORT.

METHODOLOGY

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GET IN TOUCH

• Next Demac Benchmark Report: July 2016• Demac Blog

• 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

DEMAC MEDIA IS A COMMERCE AGENCY THAT HELPS YOU BUILD, MANAGE AND SCALE YOUR RETAIL BUSINESS.

DEMAC RESOURCES

WHAT’S NEXT?

hello@demacmedia.com1-888-860-0364

CONTACT US

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MONTREAL

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Montreal, QC H2T 2T4

TORONTO

211 Yonge Street, 6th Floor

Toronto, ON M5B 1M4

MIAMI

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