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.