{{ searchResult.published_at | date:'d MMMM yyyy' }}

Loading ...
Loading ...

Enter a search term such as “mobile analytics” or browse our content using the filters above.

No_results

That’s not only a poor Scrabble score but we also couldn’t find any results matching “”.
Check your spelling or try broadening your search.

Logo_distressed

Sorry about this, there is a problem with our search at the moment.
Please try again later.

Many retailers have published their Christmas results recently and on first glance it shows that many retailers did extremely well over the period online, compared to Christmas 2009.

It's only when you look at these figures relative to overall trading figures for each business that the true picture comes to light and all is, perhaps, not as it seems.

Many retailers have published their Christmas results over the last two weeks, and the table below summarises some of the key publically released figures. Overall it shows how well online did over the Christmas trading period compared to Christmas 2009.

Retailers

Christmas Online Trading Figures

Argos

+38.0%

Debenhams

+88.5%

House of Fraser

+120.0%

John Lewis

+42.0%

M&S

+25.0%

Mothercare

+10.2%

Next

+8.7%

Shop Direct

+23.4%

SuperGroup

+243.3%

Tesco

+18.0%

Thorntons

+7.6%

Waitrose

+45.0%

This table has to make you wonder. Why did some online stores grow at such a pace whereas others grew far more slowly?

Like all numbers you have to check the validity of what is being recorded; do they really indicate a great business result?

Growth direct and total business table

Retailers

Overall Christmas Trading Figures

Christmas Online Trading Figures

Argos

-4.9%

38.0%

Debenhams

0.3%

88.5%

House of Fraser

8.5%

120.0%

John Lewis

4.0%

42.0%

M&S

2.8%

25.0%

Mothercare

-5.8%

10.2%

Next

-3.1%

8.7%

Shop Direct

5.0%

23.4%

SuperGroup

93.6%

243.3%

Tesco

4.3%

18.0%

Thorntons

3.9%

7.6%

Waitrose

5.4%

45.0%

It looks like some of the fantastic online growth figures are not real growth but actually reflect the shift in the way consumers like to shop, and because of that we see a decline in retail sales and growth in online.

Sales that are due to channel migration or changes in shopper behaviour (e.g Click and collect, mobile sales) which result in more sales being attributed to the direct/online business are not real growth.

This shift from one channel to another does not grow overall business sales, even though you will read many 'mobile sales up 660%' headlines'.

Yes, all merchants have to keep up with the consumer and the way they like to shop, but be aware that launching a mobile friendly site or developing a Facebook store is more likely to be a means of holding on to existing customers rather than a direct route to acquiring new customers.

So why did some online/direct businesses really grow?

Growth Drivers

The macro reasons these businesses grew are easy to define as there are only two:

1. More new customers purchased for the first time during the Christmas period.

2. Existing customers ordered more frequently or increased the value of their transactions.

These are the only two possible reasons that their business increased year on year. The best retailers already know which was the reason for their success as these are measures they track continually.

If you are not tracking your sales-split this way then it should be something you add to your KPI dashboard right now.

The question then becomes "what were the main contributory factors to the real growth?"

Growth Enablers

These are the tactical changes which can be made to the business to enable the Growth Drivers, and they include a whole myriad of tactics including;

  • Online store improvements.
  • Merchandising tactics.
  • Pricing policy.
  • Promotions.
  • Product range.
  • Enhanced product availability.
  • Reduced returns rate.
  • More shipping options.
  • Smarter PPC campaigns.

...and the list goes on and on!

It is really important that the right analysis is done now to show what really drove growth, and that can only be done by taking a single view of customer behaviour and analysing the results overall.

Many businesses make the mistake of looking at each area independently of the other changes and then coming up with 'stilted' views of the results. We see this when you get each team responsible for a Growth Enabler measuring their own work and claiming great success, but failing to attribute it to any other Enabler.

A good Analytics team will be able to tell the leadership why the business grew last Christmas, and the results should be free from single activity bias.

Matthew Tod

Published 20 January, 2011 by Matthew Tod

Matthew Tod is CEO at Logan Tod & Co and a contributor to Econsultancy. 

4 more posts from this author

Comments (7)

Comment
No-profile-pic
Save or Cancel
Avatar-blank-50x50

Steve Gurney

Hi Matthew

You raise a lot of good valid points, however, you seem to not factor one measurable metric, which is the retailer's share of their online market versus offline.

Some of the increased growth online compared to offline can be the result of the retailer being significantly better in online retailing than their competitors, thus capturing a greater share of online spend in their market.

It could also be geographical factors. Take Waitrose and John Lewis as an example. Many in the UK do not have a local store, so online (plus Ocado for Waitrose) gives them a greater national access.

All of these factors and more will generate greater growth online.

Thanks

Steve

over 5 years ago

Avatar-blank-50x50

TrafficColeman

Black Seo Guy "Signing Off

over 5 years ago

Joe Friedlein

Joe Friedlein, Director at Browser Media

Another factor which I think that cannot be ignored when looking at online trading performance this year is the weather.

Looking across our clients' pre Christmas trading data, there was a definite surge in online activity as the first wave of snow hit. Logic would suggest that this was a rise in online transactions that would perhaps have otherwise occurred on the high street (therefore possibly not real growth as such as online benefited at the expense of the high street).

Perhaps more interesting was a marked drop in online transaction during the second hammering of snow, when the media started to suggest that Christmas delivery was no longer assured.

While not quite as obvious, we also saw an increase in traffic to the 'contact us' pages or store locator (where there was one) when the online conversion rates started to drop. Again, this would suggest that people were using the web to find out what they wanted to buy but wanted to physically purchase the goods in-store to make sure that they got it in time for Christmas.

I haven't seen any daily sales data from any of the big online retailers but would love to see this data compared against the weather on the day. Joe

over 5 years ago

Tony Barker

Tony Barker, Director & Founder at eEnablement - Online Interim Management & ConsultancySmall Business

... and also an understandihng of the relative position each retailer's online channel was at the start of 2010 ie the likes of Next, M&S, Tesco have  been developing and building their online and e-commerce over 5-10 years; whereas the likes of House of Fraser have only really invested in e-commerce in recent years. ie it is easier to show a high % growth from a lower base!

over 5 years ago

Avatar-blank-50x50

Steve Farquhar

Good post Matthew. Certainly agree with the last few paragraphs...the challenge is whether all the data we need is available to analyse...

As everyone said growth in a particular channel doesn't just happen for a single reason..consumer appetite, innovation, competition, weather all influence consumer decisions....it's a complex combination of factors that is impossible to untangle. In most cases the consumer making the decision on how to purchase couldn't even untangle the real reason for their own decision.

Taking account of as many influential factors as best we can and considering them sensibly in the development of our multi channel strategies is all we can do to improve business performance. If that strategy goes some way to meeting some business KPIs then that's positive (we might get a bonus!).

One of the growth influents that tends to be ignored in muti channel strategy is simply the removal of wastage, barriers and negative experiences. Generally speaking this means not throwing money away and making it easy for a person to do what they want to do, even if they are only researching, so that they come back to buy. This is true for both existing customers and prospects.

If what a person is looking for is prompted offline they should find it easily online. It should feel seamless and part of the same 'conversation' with the brand. Equally the purchase process should be straightforward and delivery information reliable. Negative perceptions in both online and offline act as an inhibitor to growth as competitors who are more considerate to the customer experience will derive advantage.

All measures (strategic trends, web analytics etc) are useful for backdrop context and understanding but we sometimes we can get caught up in translating their meaning. Ultimately it comes down to focussing on delivering a quality propositiion cost effectively to the people you want to reach and ensuring they are happy with it. As the deliverables evolve it's important to ensure any changes are well received by the users and have a positive impact on the business. This is very often overlooked! Amazon were doing very well until the snow arrived!

Cheers

Steve

over 5 years ago

Avatar-blank-50x50

Matthew Tod

Thanks to all for the responses, and I think we all agree that channel shift is often reported as growth and there are many factors influencing real growth including snow, and that newcomers should really top the table as they did come to the party late! I agree to with Steve that removing 'friction' from the online purchasing process is important, after doing that for the last 8 years I have to say that! BUT in many cases now we find that friction is not the biggest constraint to growth, other issues are the real bottlenecks. Issues such as the consumer proposition, organisational structure, lack of a coherent growth plan, merchandising skills and poor insight into what is driving rising numbers to name but a few. Knowing what enables growth within an organisation and knowing what the constraints to growth really are is, in my view, the key to delivering sound results. Social, mobile and apps are all interesting tactics that might play a role in driving growth but unless you really understand the growth drivers of the business they may well be distractions. Thanks again Matthew

over 5 years ago

Avatar-blank-50x50

kilim

I know

over 5 years ago

Comment
No-profile-pic
Save or Cancel
Daily_pulse_signup_wide

Enjoying this article?

Get more just like this, delivered to your inbox.

Keep up to date with the latest analysis, inspiration and learning from the Econsultancy blog with our free Daily Pulse newsletter. Each weekday, you ll receive a hand-picked digest of the latest and greatest articles, as well as snippets of new market data, best practice guides and trends research.