Amazon, eBay Same Store Sales for January 2011

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 |  Includes: AMZN, EBAY
by: Scot Wingo

Today we are releasing December data for Marketplaces (eBay/Amazon), Search and Comparison Shopping Engines (NYSE:CSE) along with supplemental data.

January 2011 results

January came in very strong this year. Perhaps there was an overhang from the holidays or as much of the US has been buried under snow, folks have spent more time shopping online.

  • Amazon (NASDAQ:AMZN) - Amazon came in at 84.5% y/y growth for January a very strong showing. As we start 2011, many of our larger new 2010-added clients will start to be reflected in the SSS data which will move our numbers closer to the EGM numbers Amazon reports. These customers are on a significant GMV climb. If this doesn't make any sense to you, see the section below -a SSS Refresher.
  • eBay (NASDAQ:EBAY) - eBay usually enjoys a healthy Q1 'regifting' period and January 2011 was no exception. They showed good growth of 5.8% y/y, but continue to lag e-commerce growth. In 2010 we signed up 20-40 brand names to sell on eBay and as we get through 2011 these will start to have more influence on the SSS data. Again, see the SSS Refresher if this doesn't add up for you.
  • CSE - Comparison Shopping Engines continued to struggle coming in at a paltry 1.9% y/y, making them the slowest growing e-commerce channel we track.
  • Search - Search showed continued strength coming in at 22% y/y. Google's Product Listing Ads continue to drive meaningful positive results for retailers and take share from the CSE bucket.
  • Overall - Overall we see that e-commerce in January came in at 13.4%, a nice bump up from the 12% y/y growth we saw in Q4 2010 that hopefully bodes for an acceleration in 2011 ad the economy continues to improve and we see the secular movement of offline sales online.

SSS Chart

The following chart details the SSS data for 2010 through January 2011: (click to enlarge)

January_sss

Supplemental data for Search

For search, we are providing y/y SSS data for the following datapoints:

  • Clicks - volume of clicks
  • Orders - Volume of orders
  • Cost - Overall cost for combined campaigns
  • CPC - Cost per click on average
  • CPC y/y SSS delta - the difference in CPC for this month vs. the same month last year
  • CR - Conversion rate
  • CR change y/y - Year over year CR changes for this month
  • AOV - Average Order Value
  • AOV change y/y - Year over year AOV changes for this month

The details are available in this table:

January_sss_search

2011 ChannelAdvisor SSS Schedule

Here's the schedule of 2011 SSS data releases. We do our best to adhere to this schedule, but occassionally things come up that require us to move these back a day or two (rarely), so reserve the right to be late if needed ;-)

  • February 9th - January SSS
  • March 8th- February SSS
  • April 8th - March SSS
  • May 10th - April SSS
  • June 9th- May SSS
  • July 8th - June SSS
  • August 9th - July SSS
  • September 9th - August SSS
  • October 7th - September SSS
  • November 8th - October SSS
  • Holiday 2011 - SSS TBD

SSS Refresher

ChannelAdvisor Same Store Sales (SSS) are reported as a benchmark data point for ChannelAdvisor's internet retailer customers. The SSS data is not a position or forecast of any e-commerce activity, but the real transactional data captured by ChannelAdvisor across over 3000 retailers and ~$3b of Gross Merchandise Value (GMV).

The way SSS is compiled is as follows:

  • Each ChannelAdvisor customer's GMV (metaphorically a 'store' in this SSS model) is recorded on a monthly basis by channel (e.g. eBay, Amazon, Buy.com, Search, Shopping, etc.).
  • Once the customer or their channel has been with CA for a year, they are included in the SSS data.
  • If a customer stops working with ChannelAdvisor or stops selling on a channel, they are no longer included (assuming they made it past the year mark.
  • GMV is measured in native currency and compared in native currency.
  • This gives us a metric that is equivalent to that used by off-line retailers like Wal-mart, Target, etc. called same store metrics - in other words it takes out the influence that new customer additions would have to our data (which is large as we are always growing our sales team) and instead gives a clear year over year growth picture minus any customer additions or subtractions over that year.

We get a lot of questions from readers, customers and Wall St. around the year window and currency, so let me give a couple of examples to help clarify:

  1. A customer is signed in March of 2011. That customer will not start to show up in our SSS data until at LEAST March 2012, and probably later. They will show up one year after the first month they have non-zero GMV. Our customers generally take 30-60 days to launch so most likely this customer will show GMV in May 2011 and thus will be in the May 2012 SSS.
  2. A customer is signed in March of 2009, they have GMV in May of 2009. They leave ChannelAdvisor in January of 2011. In Feb of 2011, they are no longer included in SSS.
  3. A customer does 100 euro in GMV in December of 2009 on eBay. They sell 120 Euro in December of 2010. We record that as a 20% increase in eBay SSS. We do not convert those Euros (well we do, but not for SSS), to dollars in 2009 and also in 2010 - that would distort the SSS, so we keep them currency neutral or said another way we ignore the impact of currency fluctuation (ex-FX in Wall St. lingo).
  4. A customer starts with CA on search in 2008. They add eBay in 2009 and Amazon in June of 2010. The Search SSS data will begin in 2009, the eBay SSS data in 2010 and the Amazon SSS in June of 2011. This illustrates that it's not just the overall customer, but the channel activity that has to be >1yr old to be in SSS.

One other way of stating the SSS window is that the entire last year's customers are not in SSS. Sometimes this treatment can mask trends we think maybe important to retailers so we will highlight them as we see them. This treatment can also depress or inflate the SSS trends. For example, let's say that an e-commerce channel decides to give large brands top search treatment or favorable economics of some kind. In the year after they make that change 1000 new retailers swarm to that channel and it takes off like a rocket. Due to the 1yr SSS window, our data may not show the impact of that change for a while year or longer. At ChannelAdvisor, we do measure the 'all-in' number (which is essentially SSS+new customers-departed customers) which sometimes highlights some interesting data. While we don't disclose the all-in numbers for competitive reasons, we do try to look for any trends that maybe of interest and highlight them when we also release SSS.

There are many reasons this data is not a proxy for overall e-commerce activity including, but not limited to:

  • Customer variance - ChannelAdvisor's customers may not be representative of the overall customer mix of any individual channel. For example, on eBay, our customers are skewed towards the largest eBay customer set, not the average.
  • Category variance - ChannelAdvisor is over-indexed in some categories (electronics, sporting goods and auto parts) and under-indexed in others (collectibles, BMV/media, etc.) For example, on Amazon, ChannelAdvisor has very few media customers so we have no visibility into that large chunk of Amazon's business.
  • Cross Border Trade variance - While ChannelAdvisor does have a fair amount of non-domestic GMV (>25%), our mix and currency exposure is vastly different than other e-commerce players.
  • Software Impact - At the end of the day, we are a software company. Some of our features cause a short-term bump in sales that may skew results high a the beginning and then lower at the end of a one year SSS cycle.
  • Channel impact - Certain changes at e-commerce channels may cause more good or harm to our customer base, category mix, international mix and software. While the data shows these changes, because we are not a material part of every channel, over 90% of that channel's business may not have the same impact (positive or negative).
  • SSS is unique to CA - eBay, Amazon, Google and any other e-commerce business do not measure SSS. They look at overall growth when they report their financial metrics. We believe SSS is important to our customers from a benchmarking standpoint which is why we do it this way.

How to benchmark yourself?

For retailers, we recommend looking at your Y/Y performance on each of the channels and comparing it to what we are reporting here to see how you are doing compared to your peers. For example, you may feel that your 30% January 2011 vs. January 2010 growth on Amazon is very strong, but when you compare to the 84.5% share we are reporting across our customer base, you are effectively behind the average and may need to re-evaluate what looked like a great result to see why you are lagging and/or losing share in this channel.

Conversely, maybe you are growing at 10% on eBay and feel that wasn't strong enough, but you look at the CA SSS and realize you maybe being too tough on yourself because you are actually growing close to double what we are seeing out there as the average. You are effectively gaining share in this channel when compared to your peers.

Finally, maybe you are only selling on one channel and want to pick a channel that is going to super-charge some growth. Hopefully you can utilize this data as one input into that decision.

Disclosure: I am long Google and Amazon. eBay is an investor in ChannelAdvisor where I am CEO.