Adobe Digital Index went out on a limb to predict and report on both the total size and growth of the online retail market. Only Adobe is in a position to supply this information and only Adobe attempted to do so.
That’s hard to do. There are many ways to run the numbers, but not all of them are very accurate. Let me explain what made Adobe’s Cyber Monday prediction so accurate and why it’s different than other numbers you might have seen.
Let’s start with year-over-year growth. It’s easy to say how much one slice of the market grew. All you have to do is measure a handful of retailers. If you choose the right set you can show huge year-over-year growth without really impacting the size of the market. Small retailers who grow at a 30% rate for one year are still small. Without market size there is no context. Adobe’s data is robust enough that it can be sliced by geo, retail category, retail type, and annual revenue. None of these segments as a whole saw 30% growth both this year and last. With more than 200 million visits analyzed from Cyber Monday alone we know that a significant share of the market was represented.
On the other hand, using panel samples to estimate market size is likely to underestimate the contribution of smaller retailers. The top 18 retailers on the IR 500 list represent half of the list’s total revenue. That means the other half of the market is very fragmented and broken up between 482 retailers. Panel sampling methods are likely to underestimate that long tail of retailers. They also do not effectively measure the impact of mobile devices. With 1 in 5 online purchases transacted using a mobile device this holiday season (1 in 4 on Black Friday), mobile is not insignificant anymore.
For the sake of argument let’s start by speculating that half of all online retailers use Adobe analytics. If that were true and you believe other reports about market size ($1.5 billion on Cyber Monday) then Adobe customers would have transacted about $750 million yesterday. I can tell you that significantly more than that was transacted by Adobe customers. Either the market is larger than reported or Adobe represents more than 50% of the market or both.
Only Adobe is in a position to measure both the total size and growth of the online retail market. This is because our analysis includes leading retailers who leverage Adobe Marketing Cloud technology and who represent the majority of the top 20 online retailers as ranked on the Internet Retailer Top 500 list in terms of revenue. Moreover, we’ve been collecting data from the top retailers for many years and it is our access to this historical data as well as the breadth of our retail customer base that powers our predictions and enables us to achieve such accuracy. These retailers, both large and small, use Adobe’s products to measure precisely how consumers interact with their websites (desktop, mobile web, and mobile app).
You can keep tabs on holiday activity as-it-happens via our interactive online shopping prediction website here and read more about our holiday shopping data insights in the following blog posts.