HOLIDAY RECAP 2017

Methodology

Adobe Experience Cloud Adobe Analytics Cloud

Most comprehensive report of its kind in industryBased on analysis of aggregated and anonymous data via:

Adobe Analytics measures 80% of online transactions at the largest 100 U.S. web retailers** Report based on analysis of 1 trillion visits to over 4,500 retail websites and 55 million SKUs Product and pricing analysis based on 6 million average daily orders during November and December

**Source Internet Retailer 2017.

HOLIDAY RECAP 2017

Key findings

1. Online holiday shopping season in 2017 tops expectations. Online shopping totaled $108.2B during the 2017 holiday season, representing 14.7% growth year-over year ($107.4B, 13.8% growth predicted)

2. The Thanksgiving weekend was one for the record books. Holiday shoppers took full advantage of deep discounts and spent over $19B dollars during the five days between Thanksgiving and Cyber Monday

3. Cyber Monday and Black Friday stay dominant and emerge as mobile mega-days. Cyber Monday was the first day with over $2.0B in mobile shopping alone

4. Big retailers won big , but small retailers competed on key days. The largest retailers saw big holiday season growth while smaller retailers had an advantage during the Thanksgiving weekend, particularly on mobile devices

5. Big markets drive holiday growth. The nation’s largest markets saw big growth, particularly on key days

HOLIDAY RECAP 2017

Online holiday shopping tops expectations

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerceSource“U.S. holiday shopping season surging towards a strong finish”. 21 December 2017. Reuters. Available at: https://www.reuters.com/article/us-usa-holidayshopping/u-s-holiday-shopping-season-surging-towards-a-strong-finish-idUSKBN1EF2DX

Online holiday shopping season (Nov-Dec) revenue in the U.S. exceeds prediction at $108.2B ($107.4B revenue, 13.8% growth predicted) by nearly $1 billion, totaling $108.2B and 14.7% growth year-over-year

Holiday season totals show faster growth• The final growth rate in 2017 (14.7%) was slightly

above last year’s (14.4%)• Revenue from mobile (smartphone and tablet) was

$35.9B (33.1% of online holiday revenue), reflecting a 28% growth rate in revenue year-over-year

• Online shopping bested predictions in part because of a strong holiday season in general. Industry and government reports cite strong consumer sentiment, low unemployment, and a strong stock market as driving strong holiday season spending

HOLIDAY RECAP 2017

Black Friday and Cyber Monday dominate the shopping season

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerce

Black Friday and Cyber Monday have steadily increased their importance during the holiday season since 2013

• Black Friday represented 21% more of the shopping season in 2017 (4.6%) than it did in 2013 (3.8%), while Cyber Monday represents 15% more of the shopping season in 2017 (6.1%) than it did in 2013 (5.3%)

HOLIDAY RECAP 2017

Thanksgiving weekend shoppers set records

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerce

Black Friday and Cyber Monday were record days, and the five-day weekend totaled $19.6B (15.2% growth year-over-year)

• By the end of the holiday weekend, the season total was $50 billion (since Nov. 1st), reaching that revenue milestone 5 days earlier than in 2016

• Black Friday and Cyber Monday remain dominant but Thanksgiving showed strong growth (18.3%) year-over year

• The gap between Black Friday and Cyber Monday didn’t close in 2017 – expect Cyber Monday to remain the major shopping day

HOLIDAY RECAP 2017

Mobile shines on Thanksgiving weekend

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerce

Consumers spent more than ever on their mobile devices during Thanksgiving weekend in 2017. Over $7.0B were spent on tablets or smartphones over the holiday weekend (35.7% of all online revenue during that time)• Cyber Monday featured the first mobile shopping

day over $2.0B (30.4% of revenue came from mobile devices)

• Thanksgiving was the most mobile-heavy day by share at 41.0% ($1.2B spent on mobile devices), suggesting that people were shopping while traveling or with family

• Weekend shoppers were also mobile-focused with 39.5% of revenue on Small Business Saturday and 37.9% on Sunday coming from tablets or smartphones and ($1.0B on mobile each day)

HOLIDAY RECAP 2017

Record-setting mobile activity during Thanksgiving weekend

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerce

52%/36%Percent of visits and revenue

coming from a mobile device.

Premium of an iOS visit over Android

Online retail sales from mobile devices for five-day weekend. +18% over last

year.

Cyber Monday: First day with more than $2b in mobile online revenue

Improvement in converting smartphone traffic.

Improvement in smartphone average order value

$7.0B $2.0B

+14.2% +1.9% +$0.58

HOLIDAY RECAP 2017

Black Friday shopping starts early, Cyber Monday finishes late

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerce. Time is local time.

On Black Friday, shoppers get an early start – shoppers shift $350M in orders to the morning (over a typical shopping day). On Cyber Monday, shoppers wait until just before deals expire and push $500M than expected into the evening hours.

Desktops are big during working hours, while tablets and smartphones peak in the evenings

HOLIDAY RECAP 2017

Large retailers dominate the season, small retailers win the weekend

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerce

Average daily growth rate over the holiday season for medium-to-large retailers is over twice that of smaller

retailers per year.

2.3x

Average daily growth rate over the five-day weekend for medium-to-large retailers is 30% less than smaller retailers

per year.

30%

Medium-to-large retailers operate at an advantage through the holiday season, but small retailers enjoy an edge during the Thanksgiving weekend

HOLIDAY RECAP 2017

Small retailers win on conversion, big retailers on cart size

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerce

…while small retailers have an advantage in converting visits to purchases, especially on mobile devices

Larger retailers have bigger shopping carts across devices….

HOLIDAY RECAP 2017

Early-year success predicts Thanksgiving weekend gains

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerce

Those retailers that grew more than 10% in the first half of the year saw revenue increases during Thanksgiving weekend 2.1 times over the average retailer. Those retailers that struggled stayed even with last year’s performance.

HOLIDAY RECAP 2017

E-mail matters, especially during Thanksgiving weekend

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerce

Search (natural and paid) led the holiday season for retailers, while e-mail sees the biggest jump during the Thanksgiving weekend• Search drove overall holiday season visits at

44.8% (natural search at 21.3% and paid search at 23.5%)

• E-mail was prominent during the holiday season at 20.0% and during the Thanksgiving weekend, e-mail and social were the only two channels to show growth (e-mail grew 3.2% in share during the Thanksgiving weekend)

HOLIDAY RECAP 2017

Big growth in big markets

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerce. Demographic trends based on correlation analysis of Census Bureau data.

More populated markets tend to have more per-household revenue during the holiday weekend. On average, doubling the size of a market increases online sales revenue by 15 to 20%. Other than population size, other factors were also associated with the fastest growing e-commerce sales:

• Fast-growing populations• High levels of international migration• Younger

Albany

Buffalo

HOLIDAY RECAP 2017

Discounts highest on Black Friday and Cyber Monday

MethodologyDiscounts reflect average price changes across product categories from October 1 prices. Discounts are calculated using a Fisher price index on matched products.

Discounts started in October for TVs, toys, and computers, but peaked for all three during the Thanksgiving weekend and remained lower than October 1 prices through the end of the year• For computers, discounts started in mid-October,

peaked on Black Friday (-15.9% lower than Oct. 1 prices on average) and were still -7.2% by Dec. 31

• In televisions, discounts started in early October, took off in early November, and peaked on Black Friday (-21.6%). TV prices were still down -12.2% by the end of the year

• For toys, discounts started in late October and peaked on Cyber Monday (down -18.9%) and remained down -11.2% by the end of the year

HOLIDAY RECAP 2017

Top products – number of days in top ten products

MethodologyThe above products are a subset of products in the Adobe Analytics sample and were tracked during the holiday season based on their predicted popularity via analysis of social media. See Adobe Digital Insights Holiday Predictions 2017 report for more.

ToysPJ Masks 52

Ride-on cars (all brands) 47Hatchimals & Colleggtibles 42

L.O.L. Surprise Dolls 36Funko Pop 14Baby Alive 12

Fingerling Monkey 10

ElectronicsAirPods 26

Amazon Fire TV 16Chromecast 14

Video Game ConsolesNintendo Switch 47

Xbox One X 42

Video GamesPokemon Sun / Moon 6Super Mario Odyssey 6

• Adobe aggregated and analyzed millions of product sales to determine top sellers each day during the holiday season

• In addition to the perennial top-selling toys and gifts, other toys and gadgets were persistent top sellers during the holiday season, including:• PJ Masks branded toys• Nintendo Switch gaming console• Ride-on toy cars (all brands)• Hatchimals and Colleggtibles toys• AirPods ear buds• Streaming devices like Amazon Fire

TV and Chromecast

HOLIDAY RECAP 2017

Growth by market

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerce. Demographic trends based on correlation analysis of Census Bureau data.

HOLIDAY RECAP 2017

Shopping carts get smaller as conversion rates improve throughout the season

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerce

Conversion rates and average order value (AOV) peak during the Thanksgiving weekend before moving in opposite directions the rest of the year• Late season visits to shopping websites are more

valuable despite decreasing order size: the increase in conversion rates offsets the decrease in AOV

• A visit the week before Christmas is 20% more valuable than the first week of the holiday shopping season• Early season revenue per visit (RPV): $4.10• Late season RPV: $4.95

HOLIDAY RECAP 2017

Mobile visits hold steady during the holiday season, but conversion rates improve

MethodologyPrediction based on Adobe analysis of aggregate and anonymous online visits and shopping trends from U.S. retailers conducting eCommerce

Smartphone share of activity held steady across the season with typical share lift on weekends• Conversion on Black Friday rivals that on Cyber

Monday• Smartphone orders average $110, up 2.0% over

2016