ChannelAdvisor Same Store Sales (SSS) for October 2011
Note: This is a monthly feature published by ChannelAdvisor highlighting the Same Store Sales (SSS) across our wide range of over 3000 retailers and ~$3.5b in GMV. Details on the SSS including methodology and schedule can be found in this post. If you are interested in last month's (September 2011) results you can find them here.
Today we are releasing October data for Marketplaces (eBay/Amazon), Search and Comparison Shopping Engines (CSE) due to holiday timing, we will be adding search additional details later this week.
October 2011 results
As the first month in Q4, October is very important to get a potential read on the holiday season. This year is under increased scrutiny as the macro economy and indicators like consumer confidence continue to worsen. Macro economic changes aside (I worry about the headlines on Tgiving and Xmas from the deficit super-commitee as you know), October set us up for a strong Q4.
Here are the highlights from October 2011's SSS:
- Amazon - Amazon came in at 80.1% continuing their momentum from Q3 and pointing to a strong Q4. With the Kindle Fire shipping next week (November 15th), I suspect that we'll see a surge of excitement and traffic heading into Tgiving and Black Friday. As usual, Amazon's timing is impeccable.
- eBay - eBay's growth slowed slightly in October, coming in at 13.4% vs. Septembers 15%. More details on eBay later in the report.
- CSE - Comparison Shopping Engines came within a hair of positive growth and seems to have almost fully recovered from the beating they took from Panda. CSEs came in down 2% y/y, and hopefully are timing a turn to the positive just in time for the Holidays.
- Search - Search continued its strength in October, duplicating September's 20.1%.
The following chart details the SSS data for September 2010 through October 2011: (click to enlarge)
We always disclaim in the SSS data that sometimes the SSS data is influenced by software cycles at ChannelAdvisor. For Amazon in September at Shop.org's annual summit we launched our Amazon 360 major release which in beta we saw materially increase sales for customers. I mentioned last month that moved the needle on September and we believe now that the software is near 100% adoption, it will impact through it's annualization in September 2012. It's impossible for us to pull this impact out separately. Remember, though that any new customers that have come to ChannelAdvisor are exempt from SSS until they annualize and it will only impact those customers that have been with us a full year.
Review of our Amazon Estimates
In our prime coverage we also introduced several ChannelAdvisor-proprietary estimates:
- Prime - We believe that as of Amazon has 10-12m Prime customers.
- Prime 'Juice' - When an Amazon buyer joins Prime, their purchase volume goes up 3-4X
- Kindle Fire - We believe that Amazon will sell 5m units in Q4 and 20m in 2012.
When initiated, many felt these estimates were very high. Now we are at the middle fo the pack and many Wall st. analysts are saying as many as 6-7m Fire units in Q411. Most of those estimates are based on supplier checks.
A couple of Amazon news items of note:
- Over the last month Amazon has continued to add a ton of value to Prime users - including the new library system and a bunch more video content.
- Amazon has started promotions early and has a neat new area called Black Friday Deals where they aggregate all the deals they have going on (gold box, lightening deals, FB, twitter,etc.).
- Amazon has also been aggressive so far this year with holiday guides and what-not.
It all adds up to what looks like a well planned, well executed holiday plan at Amazon with the Kindle Fire as one of the key excitement drivers. Once the initial reviews come in, we'll review them and update our holiday view for Amazon over at sister-site Amazon Strategies.
One structural change at eBay that happened in Oct and continues into November is the movement of buyers into the eBay cart. As best we can tell, about half the buyers were on the cart in October and eBay is telling merchants they will be 100% by mid-November. While we're excited to see them moving on the cart, our only concern is we wish they wouldn't be making these types of structural changes in the critial Q4. They must feel very good about the cart to be making such a late change (fingers crossed).
eBay did slow slightly in October. Here are a couple of interior datapoints that maybe of interest.
- eBay Motors Parts and Accessories - In October, eBay P+A accelerated from September's 20.3% to 29.3%. Some daily deal promotions with large merchants and increased penetration/usage of the fitment system seems to be really working here. P+A was not responsible for October's slow-down.
- Format details - In October , fixed-price slowed some to 18% y/y growth, down from September's 21.7%. The real culprit to the slow down was the Auction format. While they have been declining y/y, it has been single digit (e.g. down 9% in September). Well in October, they were down over 15% y/y - a material worsening for the format. Over the last several months eBay has been tweaking BestMatch constantly and we now have the cart - our educated guess is that one or both of these changes is decreasing activity in auctions, causing the format's decline to accelerate. Anecdotally sellers are completely frustrated with the format and even finding it has lost it's 'turn anything to cash' attributes as visibility in many scenarios has gone to zero. The cart's treatment of auctions (adds them to a watch list) could be confusing buyers, we'll have to watch this in November and hopefully eBay will stop changing the BM algorithm so we can get a better read with fewer variables.
- Large Merchants- eBay continues to launch substantial large merchants, many of them now live for the holidays. There have been several added in the EFO for example.
eBay has fully launched their Q4 TV campaign. Clearly the SSS is not showing any short-term gains from the program. Seller's generally are not excited about the program, many citing the edgeiness/negativitiy in the ads as being a turn off.
Search Details and Observations