Demandware Shopping Index 2016 Q1

The Demandware Shopping Index measures digital commerce growth based on an analysis of the shopping activity of more than 400 million shoppers worldwide. This index considers shopper frequency, conversion, average order values and net change in shoppers.

High double-digit digital growth continues, as retailers continue to benefit from additional shoppers in market and increased shopper spend.

Rising & Falling

Rising & Falling

Small Screen, Big Growth

For the fourth straight quarter, phones drove more than 90% of visit growth. Mobile shoppers do far more than browse, though, as 94% of all basket growth and 66% of order growth takes place on phones.

Device Contribution on Digital Commerce Growth Metrics

Device Contribution on Digital Commerce Growth Metrics
WHAT REALLY MATTERS

Waiting for mobile growth to settle? Don’t. Phones are on pace to overtake computers as shoppers will place more orders on phones by the end of 2017. In fact, look to hear more about ‘mobile-only’ as retailers anticipate phones as the primary shopping device.

Retail at the Pace of Mobile

The pace of growth on phones is stunning. Just one year ago, phones accounted for about one-third of traffic and were neck and neck with tablets for order share. Since then, phones have been the exclusive source of visit and basket growth, and more than half of the order growth. Here’s the quarter-by-quarter view of the small screen’s contribution to growth.

Device Contribution on
Growth
Quarter-by-Quarter KPI View

smartphone bg
smartphone imagePhone Share smartphone imageTablet + Computer Share
2016 device contribution - order
2016 device contribution - order
2016 device contribution - order

The Color of Digital

Sorry orange, black is the new black as shoppers queried black in 27% of their color-included apparel searches. (Orange didn’t even crack the top 10.)

WHAT REALLY MATTERS

Shoppers are including color preference in more of their searches, an indication that searchers are more focused, even particular, on finding precisely what they want. Retailers should anticipate this need more broadly by incorporating relevance into the shopping experience, including search results and even page sort.

Device Trends

Q1 was the first full quarter where phones trumped all other devices as the leading traffic generator. While the order share growth of 46% beat the 25% growth of traffic share, for now raw growth in traffic share still beats order share. Look for that to change in Q2. And, interestingly, even shopping for the Home happens on mobile; it was the vertical with the lowest traffic on computers.

FILTER
COUNTRY
VERTICAL
45% TRAFFIC 10% TRAFFIC 45% TRAFFIC 62% ORDERS 13% ORDERS 25% ORDERS

WHAT REALLY MATTERS

Retailers that target younger shoppers are well into their mobile-first days, but mobile is clearly impacting all of digital. With the release of a less expensive iPhone, retailers can expect larger numbers of consumers to enter into the mobile shopping market, driving further increases in traffic and even conversion over the next few quarters. This indicates strong order-share growth on phones.

Time On Site

Welcome to mobile micro-moments - mobile visit duration continues to decline. French shoppers spent the least amount of time per site visit, while UK shoppers dwelled longest overall.

FILTER
COUNTRY
VERTICAL
AVERAGE TIME PER VISIT, Q1 2016 - 1% 8.6 MINS AVERAGE TIME PER PHONE VISIT, Q1 2016 - 9.0% 7.5 MINS

WHAT REALLY MATTERS

Retailers beware. The increasingly brief mobile visit means that the notion of a standard shopping journey is growing obsolete. The new expectation is two-fold – 1) Streamline the journey by requiring fewer steps both in checkout and upstream in discovery. 2) Connect the shopper across visits – whether those visits are made through one or multiple devices or channels.

Shopping Activity

FILTER
COUNTRY
VERTICAL
INCREASE IN BASKETS 20% INCREASE IN VISITS 17% INCREASE IN ORDERS 19%

For the past few years, retailer KPIs have shifted thanks to shoppers’ device preferences. This has muddled old metrics, with phones and cross-device shopping placing downward pressure on basket and conversion rate. With real buying intent and activity shifting to mobile, look for the key metrics to settle and even increase over the next few quarters.

Order Value and Discounts

FILTER
COUNTRY
VERTICAL

While free shipping came off the high of the Q4 peak shopping season, two-thirds of all orders are shipping for free, up from 63% a year ago. Both luxury apparel and health and beauty saw free shipping rates well above the average. Good news for those watching margins; discounts were flat from last year.

AVERAGE ORDER DISCOUNT 13% AVERAGE ORDER VALUE $125 FREE SHIPPING 66%

WHAT REALLY MATTERS

Free shipping continues to be a digital enabler. Smart retailers are using in-store pick-up as a means to reduce shipping costs and drive incremental purchases. As data-driven retailing emerges, look for personalized offers to help reduce the margin hit of discounting, while also encouraging shoppers to buy.

Operating System - Phones

iPhones gained share of both traffic and orders in each market analyzed, and narrowed the gap in Germany, where Android still leads by a comfortable margin.

FILTER
COUNTRY
VERTICAL
39% 39% 61%
61% 61%

WHAT REALLY MATTERS

Mobile phone manufacturers are entering a new phase of maturity, finding market niches to fill. Apple’s latest release of the lower-priced iPhone SE serves as an example of this change, as the smaller device targets a more cost-conscious buyer. Manufacturers and wireless carriers will continue to find ways to serve each part of the market and increase mobile usage, which may require retailers to prepare for the proliferation of new device sizes and types.

About the Shopping Index

This comprehensive report analyzes the activity of more than 400 million shoppers worldwide to identify trends and opportunities for retailers to elevate the shopper experience and grow revenue.
The sample set of digital commerce sites included in the report represents over 800 sites and spans 40 regions. The top five countries – United States, United Kingdom, Germany, France and Canada – represent approximately 60% of the sites.
To qualify for inclusion in the analysis set, a digital commerce site must have transacted throughout the analysis periods, in this case Q1 2016 and Q1 2015, and meet a monthly minimum visit threshold. Additional data hygiene factors are applied to ensure consistent metric calculation.
To analyze shopper-specific behavior, such as the Shopping Index value, Demandware observes the activity of anonymous registered shoppers in each period. Registered shoppers accounted for 58% of orders placed globally during the Q1 period in 2015 and 57% in 2016.
The Demandware Shopping Index is published quarterly. Data footnotes are noted inline throughout the report to provide additional clarity on analysis.
The Shopping Index is not indicative of Demandware operational performance or its reported financial metrics including GMV growth and comparable customer GMV growth.
VIEW PREVIOUS REPORT