ECOMMERCE HOLIDAYS INDEX CANADIAN 2017 · digital revenue In Canadian eCommerce, the last 2 months of the year will make or break most retailers’ profitability. This has remained

Absolunet - 2017 Canadian Retailer Holiday Benchmark

2017CANADIAN

HOLIDAYSECOMMERCE

INDEXHow Canadian retailers’eCommerce performed

during retail’s most critical season

What’s Covered

Intro / Executive Summary

How to use the 2017 Canadian Holiday eCommerce Index

2017 Holidays/eCommerce : KPI

Traffic

Conversion Rates

Transactions

Average Order Value

Revenue

02

ABOUT

Methodology

About Absolunet

03

Overview 01

WHITE PAPER

2

eCommerce Growth

Just about every performance

metric showed growth during the holiday season which, in the case of this index, covers the beginning of Cyber-November (November 1st) all the way to post-boxing-day/New Year’s Eve (December 31st).

How Canadian retailers

performed.

The gap between Canada’s

eCommerce numbers have traditionally mirrored US eCommerce, adjusted to scale for population differences, and offset 3 years; (ex: where the US was in 2016, Canadian eCommerce would reach in 2019).

This Canada/US scale remains true, albeit many retailers are bridging the 3-year gap faster than before, as several metrics in this index will suggest.

Having said that, Canada remains a different market than the US, with different brand, geographical, demographic and logistical realities, including higher shipping costs in most cases.

As Canadian consumers become increasingly digital, the retailers who are providing more complete omnichannel experiences are being rewarded with traffic and sales across devices and from multiple sources.

Enjoy Absolunet’s first Canadian Holidays eCommerce Index.

The 2017 holiday season in Canada

saw Canadian retailers continue to

bridge the eCommerce gap with US

retail and reach a higher level of digital

maturity - as did Canadian consumers.


Executive Summary

Most retailers in the index had their biggest eCommerce holiday season ever in 2017 and have adjusted their

2018 and 2019 targets for continued growth.

- Charles Desjardins, Absolunet Partner + Executive Vice-President

“

3

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What it is

This INDEX is a complete and

unbiased representation of Canadian retailers’ eCommerce performance during the 2017 Holiday season. Multiple sectors and verticals are involved and the results are meant to provide a general impression of the state of Canadian eCommerce, from a performance metrics/KPI standpoint.

What it isn’t

This INDEX isn’t a

“be-all-end-all” statistical confirmation of eCommerce performance. Reported figures and KPI must be taken in a generalized context, as for the most part they do not separate sectors or industries, regional differences, eCommerce maturity levels, digital advertising budget and other factors that may significantly affect one type of retailer’s metrics over another (apparel vs. luxury vs. sporting goods, for example).

How to use the information

The information provided is

intended to provide reliable insight into Canadian eCommerce and to help retailers get a measurable idea of how their eCommerce KPI compare to other Canadian retailers for the given period.

Being able to benchmark

performance against a credible source of information can help identify opportunities and raise awareness of issues that need to be addressed.

For retailers newer to

eCommerce, these metrics provide targets and references; every performance metric in here should be measured, among several others.

The 2017 CANADIAN HOLIDAYS ECOMMERCE INDEX provides summarized takeaways from the aggregated and anonymized data from Absolunet’s Canadian retail clients for which useable data was available, including complete verifiable numbers from the 2017 holiday season as well as the same period in 2016, for comparison purposes (measuring progress is key to achieving eCommerce growth targets).

The collective year-over-year (YoY) data from 34 Canadian retailers was used to create this report. When necessary, outliers have been highlighted when one merchant’s results in a given metric were so strong that they swayed the average, in which case comparable results are provided in order to help readers benchmark their own results and/or projections.

How to Use This Index

4Absolunet - 2017 Canadian Retailer Holiday Benchmark

Mobile is everywhere

Traffic from mobile devices represented almost half of all eCommerce traffic during the 2017 holiday season, taking traffic share from desktop and tablet - the latter still had a surprising 17.5% of all recorded eCommerce traffic.

Holidays more important than ever

With 24.4% or roughly one

quarter of the year’s eCommerce traffic (and an even bigger share of annual revenue), November and December are absolutely key to most retailers’ digital profitability.

Traffic rose 27% YoY

Canadian consumers are readily embracing digital commerce by engaging in more digital interactions and transactions than ever. If a retailer isn’t digital, they simply aren’t a shopping option.

Much like store traffic, online traffic is an essential eCommerce KPI; simply put, no traffic, no sales. In 2017, November and December provided ¼ of the year’s eCommerce traffic.

Holiday traffic increased for virtually every site measured with mobile traffic showing the strongest growth YoY when comparing sessions/device. By comparison, eMarketer reported average Q4 traffic growth of +11.1% in the US and 17.9% in Canada.1

Methodology

Traffic was measured by counting all sessions between November 1st and December 31st 2017 as recorded by Google Analytics. Year over year evolution was measured by comparing the same data from the same merchants over the same period for 2016.

By Device Impact Growth

Absolunet - 2017 Canadian Retailer Holiday Benchmark1 - https://benchmarks-na1.emarketer.com/channel/59edf49fbfce890eb411f097/598b2886aaf61c0ed030349a

Traffic

5

Holidays Holidays

+27%

Sources of Holiday Traffic

Organic search was easily the biggest source of traffic,

followed by email, paid search and direct.

Combined, these 4 sources add up to nearly 90% of all holiday traffic in 2017 and were comparable to 2016’s traffic sources.

Highest Converting Channels?

Among the top 4 traffic sources, paid search had the highest conversion rate (CVR) at 1.81%, followed closely by organic search with 1.61% and Email with 1.5%.

Among the 2nd tier of traffic sources, referrals had a CVR over 2% and direct was 1.39%.

Key Takeaways

Canadian consumers have strong digital habits. They are

either clear about what they are shopping for: organic and paid search often signal strong intent, with searches being product-specific, whereas direct and email highlight the retail brands they trust and look to for browsing and discovery.

Traffic


Conversion Rate (CVR).

Conversion rates (CVR) for Canadian retailers grew 14.43% compared to 2016 holidays.

Desktop CVR is still king with at least 2x that of other devices, though mobile is growing more than twice as fast as the others.

+14.43%

Key Takeaways

Compared to the 2016 holiday season, CVR increased on every device with desktop still the clear device of choice for Canadian shoppers.

This overall increase may signal a certain eCommerce maturity from both Canadian consumers as well as retailers, whose platforms continue to implement easier checkout, optimized customer journeys and overall more fluid navigation.

We also recommend retailers measure revenue per session along with conversion rate.

Benchmarking should be done with retailers in the same sector, as CVR varies wildly from one sector to another.

As mobile checkout continues to improve, we expect mobile CVR to continue bridging the gap with desktop.

7

MOBILE DESKTOP TABLET

CVR BY DEVICE

Year-Over-Year Change +14.5% +19.1%+30.0%


Transactions

Make it or break it

Holidays make or break most retailers’ year;

this isn’t new. However these figures highlight that this truth is even more important when it comes to digital transactions.

According to our research, digital accounts for

more or less 10% of sales but influences up to 56% of retail purchases. This suggests that retailers with an omnichannel presence were likely “miles ahead” of their competitors this past holiday season.

How retailers manage peaks

With one third of the year’s transactions

occurring in such a short period, systemic stress not only affects server capacity (which, if it slows down navigation, negatively affects conversion rates), but also impacts a retailer’s operational ability to fulfill these orders and respond to customer inquiries - as well as the capacity to manage returns and fraud.

⅓ of the Year Infrastructure


Transactions

Total transactions increased 45.38% in 2017, as Canadians increasingly completed their holiday purchases digitally.

By Device : Desktop still rules, though its share of transactions should fall below 50% in 2018.

Mobile transactions almost doubled this holiday season, highlighting the importance of optimizing the mobile customer journey.

+45.4%

MOBILE DESKTOP TABLET

+84.7%

+30.1%

+43.7%


Holiday AOV: $122.60

Average order value was up 5.28% to reach $122.60 which

was relatively constant throughout 2017 for Canadian retailers. Outlier: one merchant’ high volume and low AOV lowered the overall average, which reached $156 when their results were removed.

Below: compared to eMarketer’s Q4 averages (data from

Salesforce), Canada’s AOV is higher than the US average, which may be attributable to US retailers’ free shipping, leading to more frequent purchases and lower AOV.

Canada’s AOV rising

AOV was up on all devices over the holidays

but even more so throughout the year, a very promising trend for Canadian retailers.

● Mobile AOV was up 4.3% YoY over

the holidays and up 13.4% in 2017. ● Desktop AOV was up 9.0% YoY over

the holidays and up 16.9% in 2017. ● Tablet AOV was up 2.3% YoY over the

holidays and up 8.6% in 2017.

Average Order Value (AOV)


Revenue

Holiday revenue from eCommerce sales increased more than 50% compared to 2016.

Share of RevenueDesktop generated 59% of eCommerce revenue, while mobile revenue doubled YoY and will continue to increase.

Per device revenue growth: Simply put, mobile is exploding, desktop has reached maturity and tablet still matters, as consumers from all demographics shift their purchasing habits to digital. MOBILE DESKTOP TABLET

+92.7%

+41.7%

+46.9%

+53.1%


Absolunet - 2017 Canadian Retailer Holiday Benchmark1 https://numbers-na1.emarketer.com/584b26021403070290f93a2d/5851918a0626310a2c186aba

2 (“...excludes travel and event tickets; *includes products or services ordered using the internet, regardless of the method of payment or fulfillment”)

Revenue

Holidays generate 32.2% of the year’s digital revenue

In Canadian eCommerce, the last 2 months of

the year will make or break most retailers’ profitability. This has remained consistent since 2016 and is expected to remain steady, though the share of digital vs. total revenue will increase.

Key takeaways:

● Plan your holiday season very early on;

your year depends on it. ● Include digital KPIs in the bigger

picture; digital influence on sales and digital revenue aren’t the same thing.

US/eMarketer’s numbers are lower

eMarketers holiday 2017 numbers1 (November

1st 2017 to December 31st 2017) suggest that US retail relies less on the holiday season, with the last 2 months of the year representing only 23.5% of the year’s revenue.

We believe their numbers do not focus

exclusively on specialty retail and include automobiles, auto-related and gasoline purchases2.

Make or Break

What Others Say

12

Methodology

In conducting the research for this report, the authors compiled data from Google Analytics to analyze the Key Performance Indicators of 34 of Absolunet’s Canadian retail clients for whom verifiable performance data was available for the complete holiday period in both 2017 and 2016.

For this INDEX, the holiday period (or period of measurement) is from November 1st 2017 to December 31st 2017 inclusively. References to 2017 “Full Year” are from January 1st 2017 to December 31st 2017. When comparing year-over-year or “YoY” the exact same dates were used from 2016, with data collection methods, retailers and algorithms being identical.

Performance data was extracted from Google Analytics and may provide slight differences with data from the eCommerce platform used by a given merchant (Magento, Sitecore, etc.), though any gaps would not be significant for the purpose of this report.

Simply put, our goal is to provide accurate and actionable information.

13

Disclaimer

Past performance may not be indicative of future results. Therefore you should not assume that the future performance of any specific eCommerce investment will be profitable or equal to corresponding past performance levels.

This report was compiled based on information and data we consider reliable. The authors assume no responsibility or liability for any errors or omissions in the content of this index. The information contained in this publication is provided on an “as is” basis with no guarantees of completeness, accuracy, usefulness or timeliness.

Absolunet reserves the right and should not be liable should it exercise its right to modify, interrupt or discontinue the availability of the content or any component of it with or without notice.

Absolunet shall not be liable for any damages whatsoever and in particular shall not be liable for any special indirect, consequential or incidental damages or damages for lost profits, loss of revenue or loss of use arising out of or related to consequential providers licensors and advisors.

No part of this material or any research may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Absolunet.

©2018 Absolunet, Absolunet Corp., Absolunet Inc. All Rights Reserved.


A North-AmericaneCommerce Agency

Absolunet helps North-American manufacturers, distributors and merchants bridge the gap between how they sell and what customers expect in the digital economy. Absolunet is an eCommerce agency and integrator with 180+ people obsessed with delivering results, creating ROI-producing (and award-winning) eCommerce experiences since 1999.

Known for its annual Top 10 eCommerce Trends report, Absolunet is a certified Magento Enterprise Solution Partner and is Magento's fastest-growing North-American partner, as well as being a Sitecore "Gold" partner and InSite Platinum partner.

About Absolunet.

Get started We help retailers use digital to move more merchandise, understand their customers and manage with better oversight.

What we do:

● Strategy + Analysis: from exploration to audit to eCommerce business plan.

● User Experience Design: customer-centric, frictionless and profitable interfaces.

● Implementation + Integration: making it all work together


Authors + Collaborators

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Charles Desjardins, Partner, Executive Vice-President

Bernard Dahl, Creative Director

John Parillo, Analyst, eCommerce Intelligence

Josée Chevalier, Artistic Director

Jean-Philippe Boudreau, Senior Director, Digital Growth

Romain Tiry, Director, Consulting Services

For general inquiries about this Holiday Index:

[email protected]

1-877-979-2276


Let’s talk.

© Absolunet, 2018, All rights reserved. Unauthorized use/reproduction strictly prohibited.

2017 Canadian Holidays

eCommerce Index

absolunet.com@absolunet/absolunet

Montreal. Kansas City. Boisbriand. Toronto.

Documents

ECOMMERCE HOLIDAYS INDEX CANADIAN 2017 · digital revenue In Canadian eCommerce, the last 2 months of the year will make or break most retailers’ profitability. This has remained