Report: Dollars leapfrog traffic as e-commerce growth driver

Dive Brief:

  • Shopper spending has outpaced traffic as an e-commerce growth driver, accounting for 12% growth in Demandware’s latest quarterly Shopping Index.

  • Since Demandware’s first Shopping Index in 2015, the firm has segmented digital growth into traffic and spend growth. While traffic has been the dominant driver of revenue growth, sometimes providing over 80%, the last two quarters have seen a significant shift to shopper spend, which accounted for less than half of the growth in the fourth quarter 2016, but drove a bit more than half of digital growth in the first quarter, Rick Kenney, head of consumer insights at Salesforce Commerce Cloud, told Diginomica.

  • That will make retail site experience paramount with more areas personalized, delivering relevant products more readily. “Test and learn” will need to drive conversion rate optimization practices, especially as finding net new traffic is going to get harder and more expensive, according to the report.

Dive Insight:

As the nuts and bolts of digital marketing and commerce becomes more sophisticated, retailers will be able to leverage teams like the Salesforce Commerce Cloud to drive mobile and omnichannel sales. Diginomica’s Stuart Lauchlan calls the index from Demandware, now part of Saleforce’s Commerce Cloud, “one of the more valuable trackers of developments and evolutionary trends in the digital commerce space.”

The pressure is on to take advantage of technology, with Amazon getting into all categories of retail, dominating in search and yet able to plow revenues back into innovation. Diane von Furstenberg, Ralph Lauren and Perry Ellis executives describe how the capabilities help their brands operate e-commerce directly with lower cost, and which in turn enable connections to customers whether they’re in stores or online.

“Last year, global sales of our product across both our pure play and department store customers’ websites were approximately $500 million at retail, comparable to the sales volume of our directly operated e-commerce business,” CFO Jane Neilsen told Diginomica.

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Filed Under: E-commerce
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