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November 07, 2012

October 2012 ChannelAdvisor Same Store Sales (SSS) and 2012 Holiday Schedule


Note: This is a monthly feature published by ChannelAdvisor highlighting the Same Store Sales (SSS) across our wide range of thousands of retailers and billions in GMV.  Details on the SSS including methodology and schedule can be found in January's post.

Today we are releasing October 2012 data for Marketplaces (eBay/Amazon), Search and Comparison Shopping Engines (CSE) along with supplemental data.  October is the third most important month of the year for retailers (behind December and November) because it is the lead-in to the critical fourth quarter.  With that in mind, let's dig in...

October 2012 SSS Results  

  • Amazon - In October, Amazon's SSS were 42% y/y, up from September's 36.6% growth rate.  October continues Amazon's greater than 2X growth-rate compared to Comscore's reported e-commerce growth rate (~13% in Q2). 
  • eBay -  eBay came in at a healthy  27.2% for October, which was up significantly from September's 21.3%. Details in the eBay section below.
  • CSE - Comparison Shopping Engines continued the 'less worse' trend as retailers ramp up their Google Shopping/Product Listing Ads spend coming in at down 10% (compared to down 12.3% in September).  Details on this decrease are in the CSE sub-section.
  • Search - Search started to bounce (Note this is AdWords only - text links, no PLA/Google Shopping)  to down 4.8% from September's down 9.6%.  Search details are below.

SSS Chart 

The following chart details the SSS data for October 2011 through October 2012: (click to enlarge)

Oct_sss_overall.jpg



CSE Trends

As mentioned, CSE SSS were down 10% for October.  There are a lot of moving parts between Google's Search and CSE offerings, and I got a lot of questions on this topic last week, so here's another attempt at describing what is happening in both the CSE and Search SSS channels due to Google Shopping and Google Product Search.

Here's what a search today for a top selling Samsung HDTV looks like: (click to enlarge)

Samsung_goog_search_11_7

The sponsored text links, AdWords, on the left (yellow) are in our search numbers.  The nice pictures with prices and more details on the right are Google Shopping and are NOT in search, they are in CSE (because that's what it is - a comparison shopping engine - feed driven and CPC). With that backdrop, here's what is happening inside our search and CSE datapoints for SSS:

  • Search - we are seeing clicks move from text links and into Google Shopping (CSE). This makes a ton of sense as you look at the example page - would you rather click on something that says: "we have samsung tvs" or one of the product images with detailed price and product details when you hover? Google Shopping is creating a headwind on search - sponsored text links are losing click share to Google Shopping over on the right.
  • CSE - Those clicks that Google Shopping is cannabilizing from Serach go into CSE.  If we just had Google Shopping being added to CSE, CSEs would be up SSS/GMV-wise a huge amount because it would be gaining significant share thanks to the clicks coming from search over to CSE.  But also inside of our CSE SSS data is the mostly end-of-lifed Google Product Search - a free program that used to look like Google Shopping, but much lower on the page and FREE! 

Therefore within the CSE bucket you have this going on inside:

Year ago:

  • Google Shopping -effectively zero (some PLA was here, but very very small)
  • Google Product Search - big GMV, but no cost to retailers

Today:

  • Google Shopping - growing rapidly, google gets paid CPC on this GMV and it's higher on the page and a better buyer experience.
  • GPS - heading towards zero, effectively went to zero on 10/17 in the US, some global will still be in here until Google turns that off - timing is TBA.

As we transition from the free-GPS to the paid-GS, we believe the CSE declines will bottom out and we'll see a reversal heading into the Holidays as retailers adopt the program and start to ramp their economics.  Search headwinds will be more permanent as the GS offering improves, is served more and consumers increasingly vote for the experience with post search query clicks.

eBay Details

eBay's October 27.2% y/y SSS % growth was a material acceleration from September.  To get a feel for what's driving the marketplaces' performance, here are the interior datapoints for the month:

  • eBay auctions - down 19.4% y/y - Auctions continued their decreases in October.  We mentioned earlier that eBay has rolled out a new change as of early October that removes auction duplicate listings along with some big search changes.  Perhaps this change accelerated the slow-down in the auction format.  
  • eBay fixed-price - up 35.4% y/y - October's fixed-price data was the highest growth rate we have seen in this component since we started splitting it out, handily beating July's previous record 33.1% growth rate.
  • eBay Motors  (parts and accessories) - Up 35.8%, a continued robust showing from this eBay vertical.  eBay continues to execute very well in this category and with a huge presence at SEMA in the last week of October, it will be interesting to see if that gives us a late Q4 bump.

Here are the YTD trends on these eBay internals.  The red line is fixed-price growth and you can see it really take off in the last month:

Oct_sss_ebay_details

eBay is benefiting from many tailwinds:

  • eBay made some behind the scenes search improvements in early October that while were negative for auctions, boosted fixed-price substantially. Our coverage was here and here.
  • eBay also released their new branding, homepage feed, progressive registration, Turbo checkout, new item page and new more graphical search.  Our coverage here.

Clearly this October boost bodes well for eBay's holiday sales - stay tuned.  During their Q3 call, they mentioned there will be another holiday ad campaign this year, so we'll be watching for that too.

Supplemental data for Search

 The following table includes the supplemental data for paid-search:

Oct_sss_search_details

Search continued to feel pressure in October as on 10/17 Google 100% turned up the query coverage for Google Shopping.  You can see clicks to paid-search ads were down 8%. CPC went up 12% reflecting a bump in conversion rate that indicates Google is doing the 'right thing' for consumers - Conversion Rates are the best indicator we have of relevance.  AOV held steady.  The decline in clicks drove the search negative SSS this month - primarily due to Google Shopping.

Supplemental data for Google Shopping

In August, we introduced a new set of data around Google Shopping.  Here is the October Google Shopping supplemental data:

Oct_sss_goog_shopping

Both the AOV and CR are up considerably indicating that the early days of the Google Shopping program are being well received by consumers and participating retailers that are focused on ROI are continuing to enjoy strong economics.

Conclusions and 2012 Holiday SSS data schedule

October was a strong month for marketplaces and search/CSE remained under pressure due to the big Google Shopping transition.  We are less than 16 days from Black Friday and you can expect some detailed holiday data from ChannelAdvisor.  

Here's our 2012 Anticipated*** Holiday Same-Store-Sales reporting schedule:

One thing that's interesting to note is we have two extra days of shopping this year as Thanksgiving lands earlier than it did in 2011.  

  • Thursday, November 8 - Our early read on the first week of November
  • Thursday, November  15 - Early read on the second week of November and MTD trends
  • Tuesday, November  20  We’ll report November MTD trends pre-Thanksgiving
  • Thursday, November  22 (Thanksgiving) - We'll share an early read on Thanksgiving trends
  • Friday, November 23 (Black Friday) - We'll have an early read on Black Friday trends
  • Saturday, November 24 (Cyber Saturday)- We'll be releasing complete Black Friday details
  • Sunday, November 25 (Cyber Sunday)- We'll be sharing Cyber Saturday results
  • Monday, November 26 (Cyber Monday)- We'll be releasing CyberS unday results and have an early read on Cyber Monday
  • Tuesday, November 27 - We'll be reporting complete Cyber Monday and Cyber Five updates
  • Thursday, December 6 - We'll release complete November SSS results with added color
  • Friday, December 7 – We’ll take a look at the first week of December and Holiday YTD
  • Friday, December 14 – We’ll check in on the second week of December and Holiday YTD
  • Friday, December 21- We’ll see how things are looking during the third week of December
  • Monday, January 7, 2013- We’ll share December 2012 SSS and Holiday Wrap Up

*** ChannelAdvisor reserves the right to change the schedule, publish early, publish later, not-publish, but we'll do our best to stick to this schedule.

Written by Scot Wingo  - CEO and co-founder, ChannelAdvisor Corporation. I am long Google and Amazon. eBay is an investor in ChannelAdvisor.

 

 

 

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