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January 09, 2014

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

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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.  

Happy New Year everyone!

Today we are releasing December 2013 data for Marketplaces (eBay/Amazon), Search and Comparison Shopping Engines (CSE) along with supplemental data.  December was the last month in Q4 2013 and gives us the final view into how the holiday performed.

As we've been mentioning in our regular holiday updates and we highlighted in the monthly November update, this year was quite unusual with a late Thanksgiving causing Cyber Monday to shift to early December and shortening the holiday selling period by six days compared to 2012. 

Before diving into the December results, we wanted to provide one last overview of holiday 13:

Holiday 13 Wrap (ha!)

Heading into Holiday 2013, Forrester forecasted 15% y/y growth and comScore forecasted 17%.  Based on our SSS data, we believe the holidays came in above these forecasts.  Google Shopping/PLA along with Amazon drove a lot of that success.  Old-school search (AdWords) was surprisingly robust (see thoughts below in search details).  The biggest puzzle for the holiday was eBay.  eBay started strong (up ~30% Thanksgiving-Cyber Monday), but then in the middle of December lagged enough to come in at ~11% y/y growth overall for the holiday and November/December which is below the growth-rate of e-commerce.  In the December results below we peel the onion on all these trends from holiday 2013.

December 2013 SSS Results 

  • Amazon - Amazon's December came in at 27.9% compared to November's 12.3%, a substantial m/m increased caused by the holiday shift.
  • eBay -  eBay's December came in at 11% flat from November's 10.9%. We have eBay details further down in the report.
  • CSE - Comparison Shopping came in at 31.1% up from November's 5.0% (driven largely by Google Shopping/PLA)
  • Search - Search came in at 26.2% , an increase from November's 9.2% y/y growth.  Later in the report we have more search details.

SSS Chart 

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

  

13_dec_sss_overall_v2
 

This chart clearly illustrates that the 'great holiday shift of 13' created an unusual dip in November and a spike in December.  Talking to retailers, this created what for them was one of the most stressful holiday sales periods in recent memory because we essentially had 21 days to know how the entire year played out.


eBay Details

eBay's SSS for December was 11%.  To get a feel for what is driving the marketplaces' performance, here are the interior data points for the month:

  • eBay auctions - Down 10% y/y. 
  • eBay fixed-price - Up 10.7% y/y
  • eBay Motors  (parts and accessories) - P+A accelerated a bit in December increasing to 21.0% from November's 19.6%.  P+A is not a holiday driven category, so is less impacted by the Thanksgiving shift.  Plus it's very hard to wrap mufflers and tires ;-)

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

   13_dec_sss_ebay_details

The obvious question looking at eBay compared to the other channels is: Why was eBay flat from November to December?  (And why did holiday come in at 11%?)  If you recall when we date-aligned the holiday dates (blog post here) eBay's holiday started at 29.7% and then drifted down to 9.6%.  Unlike last year where we saw a U shape to the holiday for all channels, eBay's holiday started strong and then  slowed as we got past Cyber Monday.  In particular the 7-8 days in the middle of the month 12/8-12/15 were particularly sluggish (sub 10% y/y SSS growth) - this had the impact of erasing many of the gains eBay enjoyed in the first week of December (as well as a good showing the last week of November).

Looking back at 2012 we noticed a couple of macro differences between holiday 12 and 13 that could be contributing factors:

  • In 2012, eBay invested heavily in TV promotions that ran primarily during sporting events (football games) - there was no national US TV promotional activity that we saw.
  • In 2013, eBay did a great job lining up their promotional calendar with Thanksgiving, Black Friday, Cyber Monday, etc.
  • This year we saw early inventory stock-outs in Brick and Mortar which helped eBay in the start of the holiday, but we did not see that continue to play a role after the Cyber Five.
  • Also in 2013, eBay appeared to invest heavily in Google Shopping/PLAs (perhaps in replacement of a TV campaign?).

We're waiting to hear more from eBay on their Q4 conference call which is scheduled for January 22nd.

One highlight is the performance of eBay Motors Parts and Accessories which was up 21% (highest growth since July), which is unusually strong given the winter weather experienced in December across the US.

Supplemental data for Search

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

   13_dec_sss_search

After lagging e-commerce growth for most of  2013, Search  had a strong December. Some of that is due to Cyber Monday being in December, but also looking at the internals I direct your attention to the nice move up on Orders - driven by a material bump in conversion rate (CR). AOV was also up nicely (probably driven by improved economic backdrop primarily).

Looking at the data here combined with what we are seeing in Google Shopping, I think Google's approach of having the two offerings (PLA+AdWords) is improving the results of both programs - indicating it is definitely a better buyer experience.  Think of it from this perspective:

As consumers work through their purchase decision and can broadly be put into two buckets or modes:

  1. Research mode - "What kind of camera, toy for a my niece who is 8, tablet, HDTV, boots should I buy?"  These consumers are going to be drawn to the AdWords part of the page.  By effectively moving the transactional types of ads (economically at least) out to PLA the quality of the AdWords improves for these consumers.  Instead of "Uggs for $199!" I get "find the right boots for you" in AdWords and the Uggs are over in PLA.
  2. Buy mode - "I know I want the Playstation 4, where can I a) find it and b) get the best price/shipping/service/etc." Conversely if you are ready to buy, you don't want to slog through 30 AdWords results looking for it - you want to find it faster and know the price, availability, merchant, etc. PLA/GS is perfect for this.  Yes, I want those Uggs and $199 is the perfect price -boom.

Certainly the conversion rate moved up due to macro-economic factors and seasonal factors, but this is one of the largest conversion rate improvements for AdWords we have ever seen and we believe it speaks to some structural improvements driven by the 1-2 punch of PLA+AdWords.

Supplemental data for Google Shopping

In September 2012, we introduced a new set of data around Google Shopping.  Here is the December Google Shopping/Product Listing Ad supplemental data:

  13_dec_sss_gs_details

GS/PLA SSS were up 90% y/y, which is substantially faster than e-commerce.  A large part of this growth is the fact that last year most retailers were just experimenting with GS/PLA as was Google - now we have Google sending massive traffic to GS and retailers advertising all of the SKUs that make sense.  During the Holiday both Google and retailers really poured on the PLA spend, product and search coverage.

Google Shopping AOV increased 2.6% y/y largely driven by category mix changes. Conversion rates showed a decrease due to the fact we have more ads showing up for many, many more searches.   You can't argue with 90% y/y growth so this is quite minor compared to the broader opportunity.  In fact, we continue to believe that retailers are under-investing in this important channel.

Conclusions 

We hope you are able to use the data provided here and our holiday coverage to understand how your sales on all e-commerce channels compared with those of your peers.  The 'Thanksgiving shift' / six missing days forced retailers of all sizes to bring their "A Game" in terms of operations and logistics, and given the nature of y/y metrics, these comps  will follow us into 2014.  

Our next SSS post will be in February when we look at the January 2014 data to get a feel for how the new year is kicking off.

This blog post was written by Scot Wingo, CEO, ChannelAdvisor.

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