A P R I L 1 8, 2 0 1 3

US Retail Ecommerce OutlookWhats Driving Growth?

Sponsored by:

Jeffrey Grau Principal Analyst2013 eMarketer Inc.

Roadmap of our journey

Product category forecast

Online sales forecast

Leading retailers

Shoppers & buyers forecast

2013 eMarketer Inc.

The outlook is bright for US retail ecommerce salesOnline sales will grow more than 4 times the rate of 3.4% the NRF forecasts for total retail sales in 2013Retail Ecommerce Sales Defined Products/services ordered online or price and terms of sale negotiated online, even if payment or fulfillment occurs in-store Included: o digital downloads (e.g., music from iTunes and movies from Netflix) o Gross merchandise value (GMV) of items sold on online marketplaces like Amazon and eBay o Sales from US retail websites to foreign customers Excluded: o Travel and event tickets sold online2013 eMarketer Inc.

What forces are influencing ecommerce growth?

Convenience, price and selection The EconomyAfter a burst of economic gains in January and February, job growth slowed to a trickle in March, raising concerns about the strength of the economic recovery in 2013

Consumers find information, compare prices and access virtually limitless product selection at anytime, from anywhere

Waves of innovationMobile, globalization, omnichannel capabilities, online marketplaces, personalization, expedited fulfillment, new business models

Twitter #eMwebinar2013 eMarketer Inc.

Mobile spending has begun to have an impact on ecommerce

Tablet Share of Mcommerce Sales

2013

2017

62.5% 71.5%

2013 eMarketer Inc.

US ecommerce is also starting to get a boost from international sales2013 Asia Ecommerce FactsAsia-Pacific will surpass North America as the worlds biggest B2C ecommerce market B2C ecommerce sales in AsiaPacific will grow more than 30% vs. 12.2% in North America China, India and Indonesia are driving the fast ecommerce growth in Asia-Pacific China, the primary driver of AsiaPacific growth, will surpass Japan as the regions largest B2C ecommerce marketNote: B2C includes travel, digital downloads and event tickets sales Source: eMarketer, February 20132013 eMarketer Inc.

Comparative estimates of ecommerce sales growth range from 10% to 14%

2013 eMarketer Inc.

Historically, research firms have been bearish in forecasting online sales

2013 eMarketer Inc.

Ecommerce is gradually accounting for more of total retail salesEcommerce is growing 2-3 times faster than total retail sales and the result is rising online sales penetration rates

Twitter #eMwebinar2013 eMarketer Inc.

But thinking about channels as distinct entities ignores how consumers shopAt some point that breakdown becomes immeasurable and irrelevant.Source: eMarketer interview, March 2013

Eric Best CEO Mercent

This notion of channel is almost melting away. Whats important is how different channels influence each other and how to attribute customer engagement across them.Source: eMarketer interview, March 2013

Sean Cook CEO ShopVisible2013 eMarketer Inc.

Roadmap of our journey

Product category forecast

Online sales forecast

Leading retailers

Shoppers & buyers forecast

2013 eMarketer Inc.

The two largest product categories will account for 42.9% of total online sales in 2013

2013 eMarketer Inc.

A mix of larger and smaller online product categories will post the highest CAGRs from 2012-2017

2013 eMarketer Inc.

Several categories exceed the online penetration rate of 6% for total retail ecommerce sales

2013 eMarketer Inc.

Categories to watch: Apparel and accessoriesMarket PositionLow Size (billion) Growth Penetration Medium High $54.2 17.2% 14%

Source: eMarketer, Booz & Company

Growth Enablers Body scanning technology

Runway videos 360 degree product views Home try-on programs

2013 eMarketer Inc.

Categories to watch: CPG (groceries and personal care)Market PositionLow Medium High 15.2% Size (billion) $18.3 Growth Penetration 1-4%Source: eMarketer, Booz & Company

Growth Enablers Automatic replenishment programs Broader product selection Faster and lower-cost delivery Twitter #eMwebinar2013 eMarketer Inc.

Categories to watch: Autos and parts

Market PositionLow Medium High Size (billion) $25.5 Growth 9.2% Penetration