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Demandware Caps a Record Year Driven by Strong Market Adoption of On-Demand eCommerce Technology

2008 Results Include More Than 30 New Client eCommerce Sites Launched, 67 Percent Increase in Merchandise Revenue and 82 New Product Enhancements

WOBURN, Mass. – February 17, 2009 – Demandware, the leading on-demand ecommerce solutions provider, today announced outstanding growth and performance in 2008, driven by widespread industry acceptance of on-demand technology. Throughout 2008, Demandware saw continued adoption of its enterprise-class, on-demand ecommerce platform among retail and consumer goods brands in the U.S. and Europe, including industry leaders Asda Direct (with partner eCommera), Barneys New York, Crocs, Frederick’s of Hollywood and Jones Apparel Group.

Demandware reported the following results for 2008:

• New relationships with more than 35 high-growth retail and consumer brands
• More than 30 new ecommerce sites launched on the Demandware eCommerce Platform
• 67% increase in aggregate merchandise revenue supported by its platform
• 99.97% site availability – higher than that of the top 50 Internet sites, as measured by Gomez
• 82 new product features delivered to all clients through automatic upgrades
• Industry recognition by top analysts as the leading on-demand ecommerce platform

The sea change toward on-demand solutions intensified over 2008 as more retailers appreciate the operational and economic advantages of the model, particularly in light of today’s dual market challenge of growing the online channel while improving capital efficiency. Increasingly, online retailers recognize that their resources are best spent on revenue-generating activities such as merchandising and marketing, rather than purchasing and maintaining expensive application infrastructure. Demandware provides an enterprise-class, on-demand ecommerce platform with robust merchandising functionality and complete brand control, without the capital burden of an on-premise enterprise license, enabling retailers to get multiple sites up and running quickly, without massive cash outlay.

“Demandware’s business model is very attractive in this current global economy, when large-scale capital infrastructure projects are increasingly difficult to justify. Its on-demand delivery and pricing model makes it cost-effective for companies like Crocs to continue to drive ecommerce projects forward, setting us up for long-term success,” said Chris Ladd, VP of Global eCommerce for Crocs, a Demandware client.

Client Success
2008 was a banner year for Demandware and its clients, as retailers leveraged ecommerce as a major channel for revenue growth and a critical component of their global expansion strategies.

• Demandware signed new client relationships with more than 30 leading brands, including Jones New York, Crocs, Frederick’s of Hollywood and lucy activewear.
• Demandware and its partners launched more than 30 new ecommerce sites on the Demandware Platform, including Jones New York, Nine West, Barneys New York, Roots (with PFSweb), Compact Appliance, Sam’s Wines and Spirits (with Lyons Consulting Group), Hamleys (with eCommera) and Asda Direct, a division of Wal-Mart (with eCommera).
• Demandware clients experienced 30% year over year aggregate online revenue growth during the 2008 holiday season.
• Several Demandware clients received industry accolades in 2008. Nine West and Gardener’s Supply Company were both named Internet Retailer Hot 100 Retail Websites. Wyevale Garden Centres (a joint client with eCommera) received a Silver Award in the Website category at Britain’s Best Retailer Awards 2008, within the Homeware and DIY category.

Merchandising and Service Delivery Key Performance Indicators
Demandware saw significant increases across all online sales key performance indicators in 2008, including:

• 67% increase in aggregate merchandise revenue supported by its platform
• 58% increase in aggregate order volume supported by its platform

A key benefit of the Demandware model is the assurance of the highest-levels of site availability, performance and security. Demandware service delivery milestones achieved in 2008 include:

• 99.97% site availability, significantly higher than the 99.77% average availability of the top 50 Internet sites, as reported by Gomez
• More than 51,000 site operating days, equivalent to 139 years of supporting live client sites

Continuous Product Enhancements Enable Merchandising Innovation for Clients
As an on-demand platform, automatic upgrades keep Demandware clients at the forefront of innovation by making it possible to leverage continually the latest in ecommerce best practices. In 2008, Demandware added 82 new features to its eCommerce Platform, including:

• Next Generation Promotions Engine – The most comprehensive in the industry, Demandware’s new promotions engine includes 55 promotion types and rules for promotion set-up, new easy-to-use interface, options to set restrictions for a promotion’s use with a transaction, new reporting capabilities and an API for the two-way sharing of promotions.
• Dynamic Merchandising – Merchant- and marketer-guided engine that dynamically presents to consumers any image or text-based asset, including products, content and promotions, to create more relevant and profitable shopping experiences.
• Call Center Co-Browsing – Call center agents can co-browse with shoppers, accessing in-cart orders, customer and product information and complete orders on behalf of clients.
• Cross-Channel APIs – Retailers can expose all ecommerce merchandising assets natively into other transaction environments, such as contact centers, enabling unified pricing and promotions integrity, rich product content, and incremental order capture across all retail channels.

Ranked the Leading On-Demand eCommerce Platform by Analysts
Three major analyst firms recognized Demandware as the leader in on-demand ecommerce:

• January 2009: Forrester cited Demandware as the “leading on-demand solution” in its Forrester Wave: B2C eCommerce Platforms, Q1 2009.
• November 2008: Patricia Seybold Group (PSG) recognized Demandware as “the leading on-demand ecommerce software offering,” stating that the Demandware eCommerce Platform delivers “superior search, customization and architecture.” A full download of the report can be found here.
• July 2008: Gartner recognized Demandware as a “visionary” in its Magic Quadrant for eCommerce report.

“We had a phenomenal 2008 as the challenging market conditions led more retailers to explore on-demand solutions,” said Stephan Schambach, chairman and founder of Demandware. “Our continued success speaks to the strength of our product offering and, importantly, the benefits of our on-demand model. Savvy, forward-thinking retailers understand that in this market, they need to focus on their core competencies – selling and merchandising their products – not building application infrastructure for ecommerce. At Demandware, we believe that on-demand is the future and look forward to even greater momentum in 2009.”

About Demandware, Inc.
High-growth retailers and consumer brands looking to develop or extend the reach of their B2C ecommerce business trust Demandware as their strategic partner for ongoing success. Demandware solutions, comprised of the only enterprise-class, on-demand ecommerce platform and expert services, deliver merchandising effectiveness, proven site reliability and industry best practices that exceed profitability goals. Only Demandware provides a distinct time-to-market advantage for launching multiple ecommerce sites, customizing the consumer experience from content to code, and maintaining sites at the forefront of ecommerce innovation. Demandware clients include industry leaders such as Bare Escentuals, Barneys New York, Crocs, Jones Apparel Group, House of Fraser, Playmobil and Timberland. For more information about Demandware, visit www.demandware.com, call 888-553-9216 or email info@demandware.com.