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.
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.
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.
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.
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.)
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.