May 14, 2010, 6:10 PM

Department stores lead Q1 growth in e-commerce sales, Demandware reports

Department stores led year-over-year growth in first quarter e-commerce sales, with a rise of 76.1%, e-commerce technology provider Demandware says in a performance index based on its U.S. and European clients.

Paul

Managing Editor

Department stores led year-over-year growth in first quarter e-commerce sales, with a rise of 76.1%, e-commerce technology provider Demandware Inc. says in a performance index based on its U.S. and European clients.

The index, which is based on retail e-commerce sales at 126 web sites that operate on Demandware’s software-as-a-service e-commerce platform, also notes that Q1 year-over-year growth at European sites far outpaced their U.S. counterparts, 66.9% to 18.3%.

Demandware says its European clients’ e-commerce sites have been growing three to four times as fast on a year-to-year basis for the past several quarters, reflecting the ongoing growth potential in Europe, where online shopping caught on more slowly in the U.S.

The company says aggregated Q1 growth for the 126 sites was 39.5%, with 97% of that growth driven by a higher conversion rate that produced more orders despite a slight decline in traffic to the sites. Demandware attributed the remaining 3% of the growth to higher average order values.

The company notes that a number of its clients are growing by launching new e-commerce sites to serve additional countries, focus on particular brands or product categories, and to target specific consumer groups.

In addition to department stores, the index broke out Q1 growth rates by the following retail verticals:

  • Apparel 40.5%
  • Health & Beauty 14.7%
  • Home & Garden 12.5%
  • Toys & Games 9.7%
  • Media & Entertainment 9.0%

Demandware also noted in its index report:

  • Luxury brands are recovering relatively slowly from the economic downturn, as consumer have shifted toward lower-priced goods;
  • Many clients are exploring the use of personalization tools to offer merchandise more likely to appeal to particular segments of customers;
  • Several retailers are either launching or planning mobile commerce sites, though most have not yet seen a significant amount of sales through the mobile channel.

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