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June 10, 2013

May 2013 ChannelAdvisor Same Store Sales (SSS) for eBay, Amazon, Search and CSE

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 background, methodology, disclaimers and schedule can be found in this post.

Today we are releasing May 2013 data for Marketplaces (eBay/Amazon), Search and Comparison Shopping Engines (CSE) along with supplemental data.  In the world of e-commerce as we look at y/y trends it's important to understand any anomalies in the calendar that can distort (positively or negatively) the data.  May is the middle of the second quarter and gives us a view on how the Spring shaped up as we head into summer and Dads and Grads.  

Update from BMA, Catalyst US, Catalyst EU and IRCE

Spring in e-commerce means conference season, and I just wrapped up a very immersive month presenting to or meeting with thousands of retailers/manufacturers and hundreds of partners / fellow e-commerce vendors at four shows:

  • Catalyst US - April 29-May 1 in Vegas (1000 attendees)
  • BMA Blaze - May 29-31 in Chicago (800 attendees)
  • Catalyst EU - June 3 - June 4 in London (600 attendees)
  • Internet Retailer Conference and Exhibition (or IRCE) - June 4-7 in Chicago (10k!! attendees)

What's interesting about so much activity packed into a 5 week window is the similarities.  Regardless of retailer size, B2C or B2B, US or EU, there are six mega trends (I call them Waves of innovation) that everyone is working hard to figure out:

  1. Amazon - B2B folks are intrigued about AmazonSupply and what it means.  B2C manufacturers are increasingly selling direct.  Retailers are working through if Amazon is friend, foe or frenemy.  I've gotten more deep questions about Amazon in the last 5 weeks than in the last 5 years - how does FBA work, details on the marketplace, what's APA, how does ODR work, what's the new POP metric?  Will Amazon dominate the grocery industry?  Why's Amazon launching in India?
  2. Explosion of marketplaces - I believe that due to Amazon's success with the MP model, we are seeing an explosion of new marketplaces.  FB Gifts, Groupon Goods, Sears, Walmart, Newegg, Buy/Rakuten, etc.  Everyone is excited about the opportunities here and working to figure out how to approach.
  3. Mobile - eBay and Amazon are the clear winners at the intersection of mobile and e-commerce.  Google has several initiatives, but can they keep up without a marketplace offering?  On top of that, every retailer is working to figure out how to optimize their mobile experience across tablet and smartphone and apps.  Also everyone in the SEM world is getting their heads around Google's Enhanced Campaigns.
  4. CBT - The globalization of the World is sweeping through e-commerce.  US retailers want to sell into China, Brazil, AU, Russia, India and EU; EU retailers want to sell across EU and to the US, Brazil, China, Japan, AU and Russia.    While not easy, this is becoming more 'do-able' than ever before - and retailers that are executing on it are seeing very promising results.  eBay and Amazon have very interesting programs here that I'll be writing about in more detail as both are receiving significant interest from existing and potential marketplace participants.
  5. Social - Everyone is trying to figure this out.  We've seen Twitter and Pinterest release some interesting product features.  Instagram is key for brands that want to cater to millennials and some brands are having success with FB advertising using retargeting/FBX.  But it's still very experimental.  I like to say that e-commerce and social are flirting, but they haven't really started dating seriously, much less gotten married - but everyone feels like there is a 'there' 'there'.
  6. B2B is the new B2C - At BMA (a B2B conference) I did a fireside chat with B2B expert Charlie Peters from Emerson.  This is very interesting - the trends mentioned above we have been grappling with in the retail world are working their way back rapidly into the B2B world.  This is an industry that hasn't had much change in 150yrs and now their business customers want to buy using mobile, CBT and an Amazon-like experience.   Like consumers, they want massive selection, price competition and don't worry about boundaries on a map.  This is the exact 180 degree opposite of how this world has been for 150yrs.  Thus there is an important opportunity to lead the change and ride the wave vs. being pummeled by it.  Since most of these folks sell physical items, another interesting sub-topic is the "internet of things" - what if an industrial plant's various pieces were IP enabled and could contact the equipment manufacturer who would then call the plant to see if they wanted new parts sent out ASAP?

In conclusion, I'd say there's never been more to learn and navigate in the 12+ years I've been in the e-commerce space, but that's what makes this space so exciting.  In fact, I'd say I haven't seen as much optimism and excitement in our industry - any one of these innovations would be exciting, but the fact there are 5-6 is really creating significant opportunities inside of an already rapidly growing industry.  In fact, each of the shows I mentioned have attendance up 15-30%.

Hopefully that 30k-ft view gives you some strategic observations to think about as we jump into the May's SSS results

 

May 2013 SSS Results 

  • Amazon - In May, Amazon came in at 25.8% which is a decrease from April's 30.6%.  Note that 25.8% is still materially faster than the current 14-15% e-commerce growth rate (according to ComScore).
  • eBay -  eBay's SSS for May came in at 16% which is a slight decrease from April's 20.5% . Further in the report we provide eBay internal component details which provide details on the May results.  Note that this is still slightly faster growth than e-commerce.
  • CSE - Comparison Shopping came in at 0.3% y/y   growth for May , a decrease from April's  6.1% reflecting Google's constant 'dial turning' in Google Shopping/PLAs.   We provide details below.
  • Search - Search came in exactly flat y/y or -0.8%, a decrease from April's 2.3% - largely reflecting Google's movement of clicks between adwords and PLAs.  There are lots of moving pieces within search we will highlight in the search details section.

These datapoints show that May was a bit of a slower month than April for e-commerce.  As we dig into the Search and eBay specifics you will see some channel specific trends.   One thing I've started to notice is that e-commerce appears to be seeing more influence from weather trends that impact traditional retail.  For example, I follow Debra Weinsweig, Citi's top retail analyst, and she posts a weekly retail weather report.  The summary from that report was that May was cooler than typically across NA and that resulted in sluggish sales for sporting goods, apparel and some home and garden retailers.  FWIW, Weinswig cites a Weather Trends report that forecasts a very favorable (hotter and less precip) weather for June, so we'll see how that plays out.

We'll be watching the reports from ComScore and the US dept of commerce to see if they see similar trends.  Finally, it's important to note that monthly fluctuations are very normal and not necessary a trend (for example, see Feb of this year).

SSS Chart 

The following chart details the SSS data for May 2012 through May 2013: (click to enlarge)

June_sss_overall



eBay Details

eBay's 16% SSS result for May was just slightly ahead of  e-commerce growth.  To get a feel for what is driving the marketplaces' performance, here are the interior datapoints for the month:

  • eBay auctions - Down 18.3% y/y - This was the biggest deceleration on Auctions since December of 2012.
  • eBay fixed-price - Up 15.7% y/y - Fixed price had a decent showing in May  growing in-line with e-commerce.  I suspect weather played a role here in the April/May change.
  • eBay Motors  (parts and accessories) - P+A had another strong showing in May  up 29.5% on the heels of April's 34% strong showing.  

 Here are the TTM (trailing twelve month) trends on these eBay internals.  (click to enlarge)

June_sss_ebay_details




Supplemental data for Search

Here are the May Search internals: (click to enlarge)

June_sss_search_details


Search (traditional adwords) was down slightly in May (-0.8% y/y growth)  - a slow down from April due to the movement in queries from adwords to Google Shopping.   Looking at the internal data, we see the cannibalization from PLA/Google Shopping in the clicks metric which was down 4%. Search CR's also dipped a bit (3% y/y) to 2.69%. AOV was up 10% which helped generate a slightly down outcome even in the face of click and CR headwinds.

Note that Google is in the process of rolling out 'Enhanced Campaigns' (EC) which essentially remove the ability to pay less for mobile clicks which historically have not converted as well.  Overall this change is expected to increase mobile clicks, but as retailers move over to EC, they will likely pay more for mobile and thus less for desktop as the two networks blend together.   You can read our full coverage of the EC rollout over on sister site SearchMarketing.com - here's one post.  This goes live in July.

Supplemental data for Google Shopping

In August 2012, we introduced a new set of data around Google Shopping.  Here is the May Google Shopping supplemental data:

June_sss_gs_details

In May, we saw a continuing of the Google Shopping CR trend - an improvement of 12.3% which is impressive.  That being said, AOV was flat y/y where for the rest of the year it has been trending up.  This could be weather related as previously mentioned, or perhaps we could be seeing the start of a bit of plateauing of this program as it gets into its sixth month of full roll out.  Also, Google is rolling this out in the EU in June so we may see some of the metrics move around as the EU implementation starts and then stabilizes.

Conclusions 

By our numbers, May e-commerce decelerated modestly compared to April.  While the marketplaces outperformed e-commerce, search and CSE continued to grow more slowly than e-commerce.   Historically when we've seen weather related intra-Q blips like this we see a corresponding blip in the month after assuming the weather improves.  We'll be watching the June data closely to see if we can pull any more insights.

Also, we'll be sharing some deeper thoughts around CBT, B2B and will of course have continuing coverage of innovations coming out of eBay and Amazon.

This blog post was written by Scot Wingo, CEO, ChannelAdvisor. eBay is an investor in ChannelAdvisor.

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