Posted on 24 December 2008 by Loch Rose
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ShopLocal hosts the online circulars for many top retailers, and can track the behavior of the shoppers who visit those circulars to plan their shopping expeditions. In particular, we can track the shoppers as they:
- Interact with the circulars, in particular by clicking on individual offers, thus showing interest in those particular offers. We measure this behavior in the form of a clickthrough rate
- Visit multiple circulars, i.e. the circulars for different retailers. We measure this behavior as the % of visitors that cross-shop.
We have reported on both the clickthrough rate measure and the cross-shopping measure in previous posts. Both show pronounced patterns by day of week. When both are converted to an index, and plotted on the same chart, we can see that they represent a perfect purchase funnel:
(Chart is based on 5 weeks of data during the holiday period of 2008, excluding the week of Thanksgiving.)
Online circulars typically go live on a Sunday and run for 1 week, so this chart follows the behavior of shoppers as they interact with the circulars during that week.
- On Sunday, shoppers come to check out the new retailer offers (traffic peaks). However, they come to browse and compare more than to buy: they view the most listings, but are least likely to click on them for additional information, while 1/6 of all shoppers visit the circulars of two or more retailers, nearly twice as many as on any other day.
- For the rest of the week, shoppers gradually become more focused: traffic is down, but clickthrough rates increase and cross-shopping decreases, as they zero in on their purchases.
- The trend peaks on Friday, when shoppers finalize plans for their Saturday shopping expeditions: traffic is the second highest of the week, yet clickthrough rates are the highest, and cross-shopping is the lowest. These are highly committed shoppers.
Some conclusions:
- Sunday is a very important day because it starts customers down the purchase funnel, even if many of them don’t actually purchase that day.
- Friday is also an extremely important day, because that is the day on which many customers are making the transition from shopper to buyer.
- One key reason that the online circular is a successful merchandising tool for retailers is that it remains equally accessible to customers throughout their purchase cycle, unlike the print circular which is most visible and accessible when it arrives in the Sunday paper.
Posted on 23 December 2008 by Loch Rose
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Consumers cross-shop, i.e. visit the online circulars of multiple retailers, to a significantly greater extent during the holidays. The chart below shows that the weekly cross-shopping pattern for the last two years has been very similar, peaking during the week of Black Friday both times, with 2008 peaking just a little lower:
Evidently, shoppers responded to the economic news by cross-shopping a little less, probably because their shopping lists were shorter. Still, the pattern is remarkably similar. The next chart is a rolling 7-day average of daily cross-shopping starting November 2007:
The November peaks are offset because Black Friday fell later in 2008. Also worth noting:
- 2008 is distinctly though not dramatically lower than 2007
- Daily cross-shopping is not much lower than weekly cross-shopping: most consumers who cross-shop do so when they first visit the online circulars
A plot of the daily data shows that there is a strong day-of-week pattern in cross-shopping:
A plot by day of week shows that cross-shopping peaks on Sunday, when most circulars launch, and falls off rapidly to a low on Friday:
Most shoppers are making their cross-retailer comparisons early on, and return later to confirm their choice rather than to reevaluate.
Despite historically high levels of retailer promotions, consumers remained if anything more loyal to their primary retailers in 2008 than in 2007. This gives retailers a good chance to capture a large portion of the holiday spending by consumers who are influenced by deals to come to the store, and should increase the overall effectiveness of the retailers’ promotions.
Posted on 26 November 2008 by Loch Rose
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Black Friday deals are legendary, but this year retailers are spending even more time and money to make sure that everybody knows about them in advance. Not content with waiting for the traditional Thanksgiving Day perusal of their circular offers, the retailers are pushing the offers out online as much as 5 days in advance.
ShopLocal hosts the online versions of the circulars for many top retailers, and so we can quantify just how much the retailers are doing this. It turns out that on Wednesday and Thursday of this week, 25% of the offers that retailers display in their online circulars will be previews of the Black Friday deals. That’s about double the percentage in 2006 and 2007, and reflects both the increasing importance to retailers of Black Friday as an event, and the importance of their online circulars as a way to reach shoppers and bring them into the store.
Not surprisingly, the highest percentage of posted but not yet active offers – i.e. deals that the shopper can read about but still can’t redeem – is during those two days before Black Friday.
Of course, this is all part of the whole Black Friday phenomenon. Retailers consider it risky to tell the shopper about a great deal, while simultaneously telling them that they have to wait to get it, because shoppers who decide that they want it right away are likely to go elsewhere. In fact, retailers normally want shoppers to be motivated to take immediate action: drive to the store and buy it, before the store runs out or the deal expires! But shoppers are prepared to wait for great deals on Black Friday, so Black Friday previews work.
Retailers are due to bring an unprecedented number of deals to shoppers on Black Friday this year, and they have previewed them for shoppers to an unprecedented degree. If the shoppers don’t respond, it won’t be because the retailers stinted in their efforts, but because of the increasing slowdown in the economy. As of now, Black Friday is shaping up to be the high point of the holiday selling season.
Posted on 25 November 2008 by Loch Rose
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We saw consumers start to increase the extent to which they shop across multiple retailers in October, as they recovered a little from the shocks to the economy in September and the holidays neared. Since then they have tracked their year-ago patterns closely, and are ready for their usual increase during the week of Thanksgiving and Black Friday, as they seek out the best deals at different retailers:
We might have guessed that cross-shopping would increase, given increased attention to bargains in the softening economy, but at the same time shoppers are simply less motivated and fewer in number: if the shopper isn’t buying, no need to cross-shop. Still, if this pattern holds up, with cross-shopping at similar levels to 2007, retailers may not be as afflicted as they fear by cherry-picking shoppers who grab the best deals on Black Friday and move on.
Posted on 11 November 2008 by Loch Rose
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Last month we saw that consumers were actually less willing to shop across retailers to find the best deals in September, despite the economic storm clouds that should presumably have them searching for the best possible deal. But other data we’ve reported since then suggest that consumers had good reasons for cross-shopping less, the most important being a surge in offers from retailers. After all, if a consumer’s favorite retailer is inundating them with offers, no need to look elsewhere.
In October, though, retailers cut back significantly on the number of offers they extended, and found a good balance with the reduced level of consumer demand. How will the consumer respond? Not surprisingly, with fewer offers per retailer, consumers had an incentive to look further afield, with 15.5% cross-shopping the retailer circulars that ShopLocal hosts in October. That compares to 13.2% in September, and is the highest level in 2008 since January’s post-holiday sales.
Consumer cross-shopping is a complex behavior, influenced by the number and quality of offers made by the retailers, by the economy, and of course by holiday seasonality. We can predict that cross-shopping will increase significantly and probably peak in November, due to holiday shopping, but there’s no telling how high it will go. We will find out at the end of the month.
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