Verto Index: E-Commerce

Just in time for Black Friday, this month’s Verto Index looks at the top e-commerce brands among U.S. adults (ages 18 and above) and shows a ranking of the most popular sites and apps, from Amazon to JC Penney.

Verto Analytics data shows that when it comes to e-commerce, digital native brands continue to dominate. The three biggest e-commerce brands (based on number of monthly users) haven’t changed much from last year’s rankings: Amazon, Walmart, and eBay still the occupy the top positions. But while Amazon has enjoyed a small bump in user growth and overall reach, both Walmart and eBay are seeing fewer monthly users. eBay took an especially heavy hit, losing more than 20% of its monthly users compared to its numbers from a year ago. But, as usual, the most interesting insights can be found further down the chart, as we look at new entrants to see who’s winning the battle for user engagement.

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Coupon-Cutting Never Gets Old

Coupon-clipping hasn’t disappeared – it’s merely entered the digital age. One of the most popular genres on the this month’s index is rebate/deals sites and apps: according to Verto Analytics data, 15 of the top 60 commerce sites (or 3 of the top 15) are coupon or flash sale sites. And surprisingly, the top brand here is Groupon, who just announced it was acquiring one-time rival LivingSocial (partly owned by Amazon).

While the company has become a poster-child for the post-IPO bust, watching its share price plummet precipitously from a 28-dollar high to closer to four dollars today, it still has 27% market reach, far exceeding that of its closest rivals, Coupons.com and Ebates. And despite falling revenues and repeated rounds of layoffs and divestments, Groupon still reported nearly 68 million monthly users during October 2016 – an increase from last year’s reported 61.5 million monthly users.

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So, who is actually still using Groupon? Verto Analytics data shows that Groupon’s largest audience comes from the 55 and older crowd, which comprises a third of all Groupon users. Groupon is also particularly popular among women, who form 60% of Groupon’s user base. And it’s especially strong in Pennsylvania, where it has an incredible 52% reach among adult users (reaching more than 4.8 million users total). By comparison, Groupon only has a 22% reach in California, and a 28% reach in Illinois, where its headquarters are located.

But Groupon’s market lead may not be safe for long. As the company struggles to develop a sustainable business model beyond flash deals, it faces declining user interest (its stickiness rating remains at 12%, similar to last year) and competition from more traditional rebate companies like Coupons.com and Ebates, which have lower monthly user numbers and reach, but higher stickiness than Groupon (Verto’s stickiness rating compares daily users to monthly users to quantify the most engaged users).

Will the Grocery Store Dominate E-Commerce in 2017?

The online grocery business has proven to be especially contentious, as Amazon and Walmart compete for customers in major markets across the U.S. The space is already a crowded one, as brick-and-mortar stores and startups like Instacart also fight for traction in local markets.

Amazon is the clear leader in e-commerce overall, and recently announced plans to backwards-engineer its supply chain and open 2,000 physical grocery stores around the nation – partly to compete with brick-and-mortar rivals like Walmart and Target. Based on Verto Analytics data, 52% of Amazon customers also use Walmart’s e-commerce tools, and 29% of Amazon customers also use Target. Converting these customers into Amazon loyalists could mean a huge gain in user numbers and reach for Amazon.

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But there may be a new competitor on the horizon: Kroger. This surprise entrant into the online grocery space makes its debut in our e-commerce rankings at number 23. Kroger is the largest supermarket chain in the U.S. based on revenue, but has remained largely under the radar when it comes to e-commerce. But that may change soon: Kroger has just a tenth of Amazon’s reach, but a 10% stickiness rating, which positions it above Target and just behind Kmart. And more than half of Kroger’s users are mobile-only, partially due to the early initial success of its ClickList app, which has been gaining traction among the mom set: two thirds of its users are women, and 19% of them live in Ohio, where Kroger’s corporate headquarters are also based. While Verto Analytics data shows that only nine percent of Amazon users also use Kroger’s online shopping tools, an incredible 89% of Kroger customers also use Amazon. Kroger has already made some bold moves towards converting some of Amazon’s customers, and 2017 could be the year that brick-and-mortar establishments finally surpass their digital rivals.

Stickiness: E-Commerce Brands to Watch

Which brands are worth watching in 2017? Verto Analytics’ stickiness rating (which compares daily users to monthly users to quantify the most engaged users) is an excellent guidepost. It’s true that some of the stickiest e-commerce brands don’t necessarily have the largest user base, but their users show a consistent pattern of engagement with the brand over time – the indicators of a long-term, loyal user (and consequently, one that can also be monetized). And that’s why they’re also the properties that we’ll be watching in the coming year. In addition to Kroger, here’s our shortlist of other e-commerce brands to watch:

  • Starbucks and McDonald’s: both of these restaurant companies are already household names with global reach, and they’re also two of the stickiest brick-and-mortar brands on our e-commerce index, ranking alongside Walmart. Starbucks (16% stickiness) has already implemented mobile ordering and mobile payments through its app, and McDonald’s (15% stickiness) is still catching up to its competitors, with plans to launch its own ordering and payments app in 2017. Both already very high ratio of mobile-only users; these two brands could become e-commerce and mobile payments leaders as they continue to roll out their apps and services to larger audiences around the world.
  • Shopkick: Although this rebate/coupon app ranks just 20th on our index, its stickiness (28%) comes in only second to Amazon (31%). Our index already indicates the popularity of coupon and rebate sites. Shopkick’s model of location-based rebates combined with gamification elements to incentivize frequent use have helped it develop a small but highly engaged user base. On average, its users access the app 19 times a month (compared to 30 times a month for Amazon). If Shopkick can scale up its user base while maintaining this level of engagement, it could overtake two of its biggest rivals in the space, Ebates and Coupons.com, and leverage its location-based technology to expand beyond the rebates/coupons category.

The Future of E-Commerce

Can a new challenger finally displace Amazon’s grip on e-commerce? It seems unlikely, but traditional brick-and-mortar stores are making their way up the charts, slowly catching up to their digital competitors. As we noted in our 2017 predictions post, regional e-commerce players will continue to rise. What remains to be seen is if this disruption originates from a local player from a long-established brick-and-mortar brand like Kroger, or a new digital upstart like Wish.

Interested in our insights on the future of e-commerce? Download a PDF of the Index. And for the latest updates, follow us on Twitter and LinkedIn.