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.

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