Practical Ecommerce

How to Measure 2014 Holiday Ecommerce Marketing

U.S. online retail sales generally grew throughout 2014. And many Internet merchants have enjoyed increased holiday sales so far. Nonetheless, smart businesses always look for ways to improve, and knowing if your holiday marketing worked or is working is a good place to start searching for new or better opportunities.

At the time of writing, the 2014 Christmas shopping season had not completely finished, but there is still a lot of good data showing growth. For example, comScore, the trend tracking firm, reported that 2014 holiday ecommerce sales grew about 23 percent on Thanksgiving Day, 26 percent on Black Friday, 17 percent on Cyber Monday, and 15 percent on Green Monday — relative to the same days last year.

On December 10, comScore estimated that about $35.4 billion had been spent on ecommerce purchases in the United States for the holiday shopping season to date. That is something like a 15-percent increase from the same 2013 period.

As online sellers review their businesses’ success, it will be important to understand what helped them increase sales relative to the this overall trend.

As online sellers review their businesses’ success, it will be important to understand what helped them increase sales relative to the this overall trend.

Which Departments Contributed?

Perhaps the first question to ask when analyzing holiday ecommerce success is, “Which departments contributed to the sales?”

For a mid-sized ecommerce business, there is likely to be a marketing department, a purchasing department, and an operations department. At some small ecommerce businesses, one or two folks might do all of the jobs. Nonetheless, it is important to ask how each of these sections of the business performed. In the context of a discussion of how effective marketing was, first understand how other parts of the business might have also impacted performance.

For example, how many new products did the business add since last year? Did a larger product selection with increased inbound organic site traffic give shoppers more choices for adding to a purchase? Was the company able to make a better free shipping offer because of improvements in the shipping process? If so, how did that change impact sales?

The aim here is to estimate how much your sales might have grown if you did no marketing at all. Or put another way, in the absence of marketing, what would total sales have been? Once this baseline is established, it is possible to measure how much marketing added to the top and bottom line.

Measure Tactics; Think in Attribution Chains

Next, start to look at individual marketing tactics and attribute sales or other kinds of conversions.

As an example, one retailer’s recent Woobox campaign offered customers a chance to enter to win one of ten $100 gift certificates to use on the company’s website or in other channels. Everyone who entered the contest also received a coupon code. The campaign garnered 5,615 entries, 18,004 page views, and about $1,800 in sales from the coupon codes.

Was the Woobox tactic successful? Maybe. It cost at least $600 — which is the $1,000 face value of the ten, $100 gift certificates, minus the retailer’s average margin — and generated only about $1,800 in sales. So if one stopped measuring at this point, it might not be the most successful of holiday tactics.

Fortunately, that is not where the campaign ended. Of the 5,615 entries, about a third were new to the merchant’s email list, and were sent subsequent holiday offers. Some of these new shoppers made purchases, totaling about $5,000. Marketers will certainly want to attribute some of those sales to the email message that led most directly to the transaction. But the online contest deserves some of the credit (attribution) too, since it was what added the customer to the email list that later lead to a sale.

This idea of marketing tactics working together in sequence to make a sale is something referred to as an attribution chain.

When it comes to deciding if your holiday ecommerce marketing worked, one should look at not just the last action a customer took, but give attribution to all of the tactics that contributed to it.

Use Key Performance Indicators

Once a marketer has defined several attribution chains and looked at how various tactics impacted sales directly, it can also be helpful to review the company’s overall performance relative to key performance indicators.

In 2013, Contributing Editor Dale Traxler suggested 21 KPIs that will help online sellers track and monitor business success. Here are those 21 KPIs.

  1. Unique visitors.
  2. Total visits.
  3. Page views.
  4. New visitors.
  5. New customers.
  6. Total orders per day, week, month.
  7. Time on site per visit.
  8. Page views per visit.
  9. Checkout abandonment.
  10. Cart abandonment.
  11. Return rate.
  12. Gross margin.
  13. Customer service open cases.
  14. Pay-per-click cost per acquisition.
  15. Pay-per-click total conversions.
  16. Average order value.
  17. Facebook “talking about this” and new likes.
  18. Twitter retweets and new followers.
  19. Amazon ratings, response and order turnaround time, and open cases.
  20. Email open, click, and conversion rates.
  21. Referral sources: percent from search, direct, email, pay-per-click, other.
Armando Roggio

Armando Roggio

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