Ah, the holidays. While the word ‘holiday’ means a leisurely day off to many people, for your business, it might be one of the busiest times of the year. For retailers with a large American customer base, the holiday season usually spans the months between Thanksgiving and New Years.
Rushes can be experienced at any point during the year, however. For example: If your business sells shorts or pool supplies, you might experience a rush during the summer. In this article, we’ll explore analyses that will help you compare your high seasons across different years.
When analyzing holiday season performance, consider analyzing (or building) these metrics:
Number of new customers, Number of orders, Revenue
To help you understand how the pattern of this year’s growth compares with previous years, consider analyzing these measures. The number of new customers, number of new orders, and revenue will show you how your business is performing on a day-by-day basis for the time frame (holiday season) you specify. You can also analyze these measures using a cumulative perspective to see how the metric changes over time.
Average order value
This measure displays the overall average order value during your holiday seasons.
Today’s example: Daily holiday season revenue
Now that we know what metrics to analyze, let’s look at some sample revenue data during the holiday season months of November and December for both 2014 and 2015.
In this example, there are two large spikes in revenue for 2014 and 2015: these increases coincide with Black Friday and Cyber Monday. Notice how the spikes aren’t on the same day for 2014 and 2015. This is because Black Friday fell on November 27 for 2014 and November 28 for 2015. Similarly, Cyber Monday was November 30 for 2014 and December 1 for 2015.
Furthermore, there’s a spike in revenue for 2015 on December 19th that does not appear in 2014. It’s possible that a sale was offered on this particular Saturday that wasn’t available the previous year.
Apart from the few dates mentioned above, the revenue for these two years track together.
What questions should I consider?
To help you understand the seasonal trends for your business, here are some questions you should keep in mind when exploring your own data:
- Are the trends from year to year expected?
- Do the trends reflect your expectations for variations across seasons?
- Are there differences from year to year? Can these differences be explained?
- Were promotions offered during a specific year?
- Were prices increased during a specific year?
- Was advertising spend increased for a specific year?
What else should I analyze?
One option is to analyze your customers’ buying behavior during the holiday season. Do customers acquired during the holiday season spend more or purchase more frequently than customers acquired outside of the holiday season?
Another option is to analyze your ROI by campaign during the holiday seasons. Is your ROI higher for particular campaigns that run during the holiday season? Should you be increasing spend for campaigns with high ROI during these seasons?
Furthermore, you could analyze the number of discounted orders versus full price orders. Are most customers waiting for a sale to purchase orders during your holiday season or are they purchasing full price items?