DemandwareShopping Index 2015 Recap & Q4 MetricsThis comprehensive report analyzes activity of over 400 million shoppers worldwide to identify trends and opportunities for retailers to elevate the shopper experience and grow revenue. The Demandware Shopping Index measures the pace of digital shopping growth, assigning a numerical value to crucial shopper metrics.

2015 Recap & Q4 Metrics

2015 Year in Review

Phones Own Growth – Even Orders

Days of the Week

Device Trends

Time on Site

Shopping Activity

Order Value and Discounts

Operating System: Phones

APPENDIX

3

4

5

6

7

8

9

10

11

12

As a leader in enterprise digital commerce with more than 1,500 global retail sites running on the Demandware Commerce Cloud and processing billions of dollars in gross merchandise value, Demandware is uniquely positioned to offer actionable insights into shopping behavior.

The Demandware Shopping Index is published quarterly. Data footnotes are noted inline throughout the report to provide additional clarity on the analysis.

The Shopping Index is not indicative of the operational performance of Demandware or its reported financial metrics including GMV growth and comparable GMV growth.

Demandware Shopping Index | © 2016 Demandware, Inc. The Shopping Index is not indicative of the operational performance of Demandware or its reported financial metrics including GMV growth and comparable GMV growth. This document contains archival information which should not be considered current and may no longer be accurate. Approved for unlimited distribution.

Contents

About the Shopping Index

3

The Demandware Shopping Index measures digital commerce growth and is based on an analysis of the shopping activity of over 400 million shoppers worldwide. This index considers shopper frequency, conversion, average order values and net change in shoppers.

Demandware Shopping Index

The Shopping Index is not indicative of the operational performance of Demandware or its reported financial metrics, including GMV growth and comparable GMV growth. The analysis reflects a comparison of digital commerce sites transacting in Q3 2015 and Q3 2014 and activity of registered users.

2015 Recap & Q4 Metrics

SHOPPER SPENDThe change in number

of shoppers visiting a site contributes

98% of brand growth

2%2015

SHOPPING INDEX

+26%DIGITAL COMMERCE

GROWTH

Attraction continues to fuel digital commerce growth. Whether retailers look to find new shoppers or re-engage with lapsed shoppers, attraction remains vital to success and healthy growth.

The product of shopper frequency, conversion and average order value change contributes 2% of brand growth.

SHOPPER ATTRACTION

98%

The analysis reflects a comparison of digital commerce sites transacting in 2015 and 2014.

2015Year in Review

It finally happened. After years of predicting the rise of mobile, 2015 was, in fact, the year of mobile shopping. Digital

commerce also made the seasonal headlines as more and more shoppers chose digital for Christmas / Holiday shopping.

Launch a month-by-month view of 2015 digital commerce shopping.

5

Once again, phones accounted for all the year-over-year gains in both traffic and basket. Phones are having a similar impact on orders, as over two-thirds of order growth is on phone. Overall, an astonishing 112% and 104% growth from phones means that traffic and baskets are receding on other devices.

Phones Own Growth –Even Orders

*Source: inmobi Insights, Global Mobile Media Consumption – Reaching Millennials The analysis reflects a comparison of digital commerce sites transacting in Q4 2015 and Q4 2014.

Device Contribution on Digital Commerce

Growth Metrics’

VISITS BASKETS

Tablet & Computer

ORDERS

100%

0%

Phone

What Really MattersMore and more, mobile is the first interaction point. In fact, some suggest* that nearly 80% of millennials experience a brand for the first time on mobile. Leading retailers will encapsulate the brand essence on phones, with best-in-class imagery, content and shopping tools.

112% 104%68%

Just as work and play separate weekdays from weekends, our device preferences are clearly defined by the days of the week. While mobile wins the weekend, computers still claim the top shopping spot on weekdays.

Days of the Week

The analysis reflects visits to digital commerce sites during Q4 2015 and is normalized to local time.

What Really MattersBoth marketers and retailers should monitor day- and week-parting to identify shopper device patterns and leverage the right vehicles. For example, when are push notifications most effective? When will email, which sees nearly two-thirds of all opens on phones, be most impactful?

Hour of the Day

0 2 4 6 8 10 12 14 16 18 20 22 24

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

Peak For Computer Traffic

Traf

fic S

hare

Weekdays

Tablet

Computer

Phone

Hour of the Day

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

Traf

fic S

hare

Weekends

Peak For Phone Traffic

0 2 4 6 8 10 12 14 16 18 20 22 24

7

The analysis reflects a comparison of digital commerce sites transacting in Q4 2015 and Q4 2014. Percentages are rounded and may not always sum to 100%.

When the tablet first came to market, we wondered ‘is this a mobile device?’ Shopper response has been a resounding ‘no.’ Clearly, the tablet is portable, but not mobile. The tablet identity crisis is apparent by reduced traffic and order share, down 19% and 10% respectively. Phones, meanwhile, continue their rise, with traffic share up 30% and order share up 50% year over year.

Device Trends

What Really Matters

While tablets are being crowded out, don’t overlook the impact this will have on computers. The larger ‘pro’ editions of tablets will compete for laptop attention and usage. Keep your UX team close for optimizing tap devices overall – certainly for phone, but also for larger screens that may transition to tap as well.

46%TRAFFIC

63%ORDERS

14%ORDERS

11%TRAFFIC

23%ORDERS

43%TRAFFIC

Shoppers continue to trim their site visits. As traffic skews towards phones, and those mobile visits fall in duration, expect this trend to continue.

Time on Site

The analysis reflects a comparison of digital commerce sites transacting in Q4 2015 and Q4 2014.

What Really MattersThe standard digital engagement is changing. Site visits are seeing downward pressure from distributed commerce and overall flattening of the funnel. The rise of personalization promises to impact duration both ways, though the net impact is unknown. Will more efficient visits that engage shoppers mean longer or shorter visits? Based on the current trends, expect this to mean quicker browsing and buying.

8.7MINUTES

11%

Average Time Per Visit Q4 2015

7.5MINUTES

19%

Average Time Per Phone Visit Q4 2015

9

The analysis reflects a comparison of digital commerce sites transacting in Q4 2015 and Q4 2014.

14%Increase in Visits

18%Increase in Baskets

18%Increase in Orders

Apparel enjoyed a strong Q4, with order growth outpacing the other verticals, despite a period of unseasonably warm weather across North America. Overall, an increase in cart rate emerged for this quarter. This bodes well for omnichannel retailers that rely on carts to bridge the gap from digital to store.

Shopping Activity

What Really MattersThe traditional linear shopping path has been forever altered by new technology, changing shoppers and omnichannel shopping. Amidst this change, baskets and basket rates have climbed. Retailers that best use the basket as a shopping tool and a marketing engagement vehicle will thrive. Those that harken to legacy metrics like abandonment rate will lose sight of a changing landscape – baskets are the currency of cross-channel engagement.

Retailers should look to frame their business performance around the shopper. In doing so, the true story of shopper activity will point to and identify opportunities to increase shopper spend and frequency.

Health and beauty and active apparel continued to see the highest level of discounts across digital commerce. Free shipping, though, is universal across verticals and countries. It is a shopper expectation, and one that ticked up slightly both sequentially and year over year.

Order Value & Discounts

The analysis reflects a comparison of digital commerce sites transacting in Q4 2015 and Q4 2014. Discount rate is calculated as the discount on merchandise purchased and does not include items previously marked down.

What Really MattersWhile the reality of delivering both free shipping and discounts may seem like a foregone conclusion, leading brands are breaking the mold by offering customized and exclusive product. These offerings provide an opportunity to more intimately connect with shoppers and increase item value.

AVERAGE ORDER VALUE

$12272%FREE SHIPPING

16%AVERAGE ORDER

DISCOUNT

11

The analysis reflects a comparison of digital commerce sites transacting in Q4 2015 and Q4 2014. Percentages are not exhaustive of all operating systems and do not sum to 100%. Android is a trademark of Google Inc. iOS is a trademark of Apple Inc.

iPhones gained share of both traffic and orders in each market analyzed, gaining 5 percentage points in just the last year, and up 3 points over the previous quarter. For shopping, iPhones reign.

Operating System: Phones

62%ORDER SHARE

61%TRAFFIC SHARE

38%ORDER SHARE

39%TRAFFIC SHARE

What Really MattersWhile the numbers point to an iPhone preference, the share on Android devices is still far too large to ignore. Regardless of device, developing a best-in-class experience on phones is job #1 for every retailer.

APPENDIX

Device TrendsTraffic and Order Share by Device, Q4 2015 v. Q4 2014

Traffic Share 2015 Q4 2014 Q4 YoY

Country Computer Tablet Mobile Computer Tablet MobileComputer

- YoYTablet -

YoYMobile -

YoY

GLOBAL 46% 11% 43% 53% 13% 34% -14% -19% 30%

USA 46% 8% 46% 52% 11% 37% -11% -24% 23%

UK 38% 20% 42% 46% 23% 31% -18% -11% 36%

GERMANY 51% 12% 38% 62% 13% 25% -19% -8% 51%

FRANCE 52% 10% 39% 62% 11% 27% -17% -9% 43%

CANADA 47% 14% 40% 56% 16% 29% -16% -11% 38%

Vertical Computer Tablet Mobile Computer Tablet MobileComputer

- YoYTablet -

YoYMobile -

YoY

ACTIVE APPAREL 48% 8% 44% 57% 10% 33% -15% -19% 32%

GENERAL APPAREL 46% 10% 43% 56% 13% 32% -17% -19% 37%

LUXURY APPAREL 46% 10% 44% 51% 14% 36% -10% -24% 23%

HEALTH & BEAUTY 46% 8% 46% 51% 10% 39% -9% -21% 17%

HOME 43% 13% 44% 51% 16% 32% -16% -19% 36%

APPENDIX

Device TrendsTraffic and Order Share by Device, Q4 2015 v. Q4 2014

Order Share 2015 Q4 2014 Q4 YoY

Country Computer Tablet Mobile Computer Tablet MobileComputer

- YoYTablet -

YoYMobile -

YoY

GLOBAL 63% 14% 23% 69% 15% 16% -9% -10% 50%

USA 67% 10% 22% 73% 12% 14% -8% -15% 54%

UK 47% 22% 31% 54% 24% 23% -13% -6% 37%

GERMANY 69% 13% 19% 76% 13% 11% -10% -1% 68%

FRANCE 73% 10% 16% 78% 11% 11% -6% -8% 50%

CANADA 64% 15% 20% 73% 16% 11% -12% -6% 86%

Vertical Computer Tablet Mobile Computer Tablet MobileComputer

- YoYTablet -

YoYMobile -

YoY

ACTIVE APPAREL 66% 10% 23% 72% 12% 16% -8% -15% 47%

GENERAL APPAREL 65% 13% 23% 72% 14% 14% -10% -12% 66%

LUXURY APPAREL 64% 14% 23% 69% 17% 15% -8% -19% 58%

HEALTH & BEAUTY 69% 11% 21% 74% 13% 14% -7% -17% 52%

HOME 56% 16% 28% 62% 17% 20% -10% -6% 36%

APPENDIX

Time on Site, by DeviceVisit Duration in Minutes, Q4 2015 v. Q4 2014

Computer Tablet Mobile

Country 2015 Q4 2014 Q4 YoY 2015 Q4 2014 Q4 YoY 2015 Q4 2014 Q4 YoY

GLOBAL 9.5 9.8 -3% 9.9 10.7 -7% 7.5 9.4 -20%

USA 9.4 9.9 -5% 9.6 10.2 -6% 7.6 9.2 -17%

UK 10.5 10.9 -4% 11.2 12.3 -9% 7.9 9.9 -20%

GERMANY 9.2 9.2 0% 9.3 9.8 -5% 7.1 9.5 -25%

FRANCE 7.9 8.0 -1% 8.2 9.7 -15% 6.4 9.0 -29%

CANADA 9.7 9.3 4% 9.0 9.4 -4% 7.7 8.7 -11%

Vertical 2015 Q4 2014 Q4 YoY 2015 Q4 2014 Q4 YoY 2015 Q4 2014 Q4 YoY

ACTIVE APPAREL 10.6 10.7 -1% 9.5 10.8 -12% 7.6 9.7 -22%

GENERAL APPAREL 9.6 9.9 -3% 9.8 10.7 -8% 7.8 10.0 -22%

LUXURY APPAREL 9.5 9.2 3% 9.8 10.2 -4% 7.3 8.7 -16%

HEALTH & BEAUTY 7.9 8.2 -4% 8.7 9.6 -9% 6.3 7.5 -16%

HOME 9.3 9.8 -5% 9.9 10.4 -5% 8.0 9.6 -17%

APPENDIX

Shopping Activity, Q4 2015 v. Q4 2014

Country ∆ Visits ∆ Baskets ∆ Orders

GLOBAL 14% 18% 18%

USA 16% 20% 17%

UK 5% 1% 14%

GERMANY 6% 9% 9%

FRANCE 20% 24% 31%

CANADA 23% 56% 34%

Vertical ∆ Visits ∆ Baskets ∆ Orders

ACTIVE APPAREL 36% 29% 25%

GENERAL APPAREL 18% 27% 24%

LUXURY APPAREL 11% 12% 21%

HEALTH & BEAUTY 10% 25% 19%

HOME 8% -4% 5%

Order Value and Discounts, Q4 2015

Country AOV - LocalDiscount

Rate-MerchFree Shipping Order Share

GLOBAL $122 16% 72%

USA $115 20% 73%

UK £68 6% 70%

GERMANY €150 8% 73%

FRANCE €88 10% 66%

CANADA $134 (CAD) 24% 68%

Vertical AOV - USDDiscount

Rate-MerchFree Shipping Order Share

ACTIVE APPAREL $118 20% 74%

GENERAL APPAREL $124 18% 74%

LUXURY APPAREL $336 13% 85%

HEALTH & BEAUTY $82 19% 84%

HOME $84 14% 59%

APPENDIX

Operating System: PhoneTraffic and Order Share by Operating System, Q4 2015 v. Q4 2014

Traffic Share 2015 Q4 2014 Q4 YoY

Country Android iOS Android iOS Android iOS

GLOBAL 39% 61% 44% 56% -11% 9%

USA 35% 64% 40% 59% -12% 8%

UK 37% 63% 43% 57% -14% 11%

GERMANY 55% 45% 62% 37% -11% 19%

FRANCE 50% 50% 53% 46% -6% 7%

CANADA 35% 65% 36% 64% -3% 2%

Vertical Android iOS Android iOS Android iOS

ACTIVE APPAREL 43% 57% 49% 51% -12% 12%

GENERAL APPAREL 38% 62% 43% 57% -10% 8%

LUXURY APPAREL 25% 75% 28% 72% -11% 4%

HEALTH & BEAUTY 37% 63% 46% 54% -19% 16%

HOME 41% 58% 47% 53% -11% 10%

APPENDIX

Operating System: PhoneTraffic and Order Share by Operating System, Q4 2015 v. Q4 2014

Order Share 2015 Q4 2014 Q4 YoY

Country Android iOS Android iOS Android iOS

GLOBAL 38% 62% 43% 57% -13% 9%

USA 34% 66% 39% 61% -14% 9%

UK 37% 63% 42% 58% -12% 9%

GERMANY 61% 39% 69% 31% -11% 24%

FRANCE 50% 50% 56% 44% -11% 14%

CANADA 33% 67% 35% 65% -6% 3%

Vertical Android iOS Android iOS Android iOS

ACTIVE APPAREL 37% 63% 43% 56% -16% 12%

GENERAL APPAREL 38% 62% 44% 56% -13% 10%

LUXURY APPAREL 17% 83% 22% 78% -20% 5%

HEALTH & BEAUTY 30% 70% 36% 64% -17% 9%

HOME 45% 55% 50% 50% -10% 10%

Get in TouchDemandware PR781.425.1328blog.demandware.com

PR@demandware.com

Demandware, the category defining leader of enterprise cloud commerce solutions, empowers the world’s leading retailers to continuously innovate in our complex, consumer-driven world. Demandware’s open cloud platform provides unique benefits including seamless innovation, the LINK ecosystem of integrated best-of-breed partners and community insight to optimize customer experiences. These advantages enable Demandware customers to lead their markets and grow faster.

About Demandware:

Demandware, Inc.5 Wall Street Burlington, MA 01803

+1 (888) 553 9216 info@demandware.com

demandware.com

© 2016 Demandware, Inc. This document contains archival information which should not be considered current and may no longer be accurate. Approved for unlimited distribution.