A Metric's Carol: Last-Minute KPIs for Retailers
By Amberly Dressler, Managing Editor
Every retailer has choices to make when it comes to how they approach the holiday season - from where they choose to spend their money to what they choose to spend their time on.
While nobody wants to be a Scrooge, analytics data can help retailers decide where to be generous or stingy - as there are indicators buried within ghosts of holidays past and present that can predict the successes or failures of the future.
Even with national holidays like Fourth of July and company-specific events like anniversary sales, chances are that an e-commerce site's largest promotional efforts come at year-end. With Black Friday fast approaching (and expected to once again be the busiest shopping day of the year), it's imperative retailers look at what happened Nov. 28, 2014 to inform what will happen Nov. 27, 2015.
They can turn to their current Web analytics system (see a list of the most popular at wsm.co/coolanalytics) to reflect on that single day (by setting a custom date range) and even compare it to past Black Fridays.
Retailers should pay special attention to campaigns (e.g. Facebook ads, email newsletters, paid search, etc.) that boosted key performance indicators (KPIs) like conversions, revenue and length of sessions, while flagging any that had negative implications, like above-average bounce rates. These campaigns' successes and failures should set the precedence for this year's efforts - even if some last-minute modification is required.
For example, if an email campaign on Black Friday 2014 performed poorly (few sessions derived, no conversions, etc.), a retailer will want to review that particular message within their email service provider (ESP) to discover the reason. Perhaps it was sent too early or too late in the day? Was it missing a call-to-action? There are important questions to ask if campaigns underperformed on such a critical day (see sidebar).
Holiday Campaign Checklist
Discover items to check off before you launch important end-of-year campaigns at wsm.co/xlist15.
Some of these KPIs, however, may be irrelevant a year later. For instance, a retailer could have suffered a high bounce rate (access industry benchmarks at wsm.co/mozbench) from a campaign directing mobile users to a landing page that was not optimized for their device. This year, however, that same campaign (or a similar one) could be lucrative if that retailer is now mobile-ready and capable of serving users regardless of the device being used. While there are many questions that arise from even the most basic analysis, these are the type of queries that need immediate answers (and should inform campaign changes) in the coming weeks.
Retailers often focus too much on the amount of traffic their site has (or the "magic" number of visitors that will solve all their problems) instead of the quality of traffic it is currently receiving. By comparing referrals based on the revenue they are bringing in, retailers will have a current understanding of where their last-minute efforts should be directed. For example, if a specific publisher (e.g. a blogger) is just outside of an e-commerce site's top referral sources (e.g. top 10 or 20) but generates revenue, a retailer may want to send that site owner an email or a tweet thanking them for their support and perhaps offering their readers an exclusive end-of-year promotion. Since the publisher has already shown interest in that retailer's site, he or she may need just a little push to promote it more often this holiday season.
Yet to Come
Without tending to past and present data, retailers won't like what is yet to come - especially if they aren't looking at new versus old business at year's end. This holiday season, retailers are going to put on their best show - free or discounted shipping, beautiful creative and more - which can bring in a lot of new shoppers. If sellers don't cater to returning customers, however, they are doomed to fail. Not only are returning customers more likely to react positively to a retailer's marketing efforts, but Zeke Hamdani, director of Web services for Celerant Technology, says returning customers can also provide the most profitable transactions. In fact, an Adobe Digital Index Report indicated those who have purchased from a company twice before are nine times more likely to convert than a first-time shopper, while a RJMetrics E-Commerce Benchmark report indicates the more times shoppers buy the more likely they are to increase their average order value (AOV).
Make it a Happy Holiday
It's critical that retailers think more about the past, current and future experiences they are offering by reviewing their analytics and making last-minute changes so it's not just a happy holiday season, but also a lucrative one - setting even higher benchmarks for 2016.