2016eComm Holiday Outlook:Anticipating Accelerating eComm Growth of 17%w/Mobile &AMZN Driving Upside

We expect a healthy 2016 holiday season, with a better retail sales backdrop thisyear—we expect 3.3-4.0% Y/Y growth in 2016 from 2.1-3.2% in 2015—driven by astronger labor & wage market, elevated consumer confidence, higher growth indisposable personal income, & two more shopping days between Thanksgiving andChristmas (30 days vs. 28 last year). We believe eCommerce holiday sales willmodestly accelerate to 17% Y/Y, up from ~16% Y/Y in 2015, driven by mobile(we estimate 55% Y/Y mComm growth, ~22.5% of eComm sales), a growingAmazon presence, & eComm representing a higher percentage of traditionalretailer sales. We estimate ~14.3% eComm penetration of adj. retail sales this holidayseason, up from ~12.5% in 2015, as eComm continues to take share from brick &mortar retail. In this note we include our Proprietary Pricing Survey (100 itemsacross 12 categories) where we find AMZN remains the overall pricing leader,but the price delta vs. competitors has narrowed some w/WMT just 2% aboveAMZN & TGT 6% above on an overall basis (see Figure 14).