How does your perform on Cyber Week stack up? We've compiled the stats from pre-Thanksgiving through Cyber Monday 2019.
This episode is also available on YouTube.
Shopify merchants broke records with $2.9+ billion in worldwide sales over Black Friday/Cyber Monday weekend.
In this episode, we unpack the biggest shopping week of the year.
You'll hear:
Paul Reda: I said push, pull. Push it, pull it. Push it, pull it. You know what the name of that song is?
Kurt Elster: Push It, Pull It?
Paul Reda: Nope, it’s called Do The Push and Pull.
Kurt Elster: Oh, okay.
Paul Reda: It’s actually Do The Push and Pull Part One.
Kurt Elster: You know what I appreciate about that? It’s a call to action.
Paul Reda: Yes. Rufus Thomas has a lot of songs about calls to action. Do The Funky Chicken, Walk The Dog, Do The Push and Pull. They’re always multi-part. It’s always part one, part two.
Kurt Elster: And who doesn’t appreciate clear direction in life?
Paul Reda: Exactly. Yeah.
Kurt Elster: Especially on the dance floor.
Paul Reda: On the dance floor. Yeah. Hey, so how was Disney World for the 40th time this year? Did you see something new, they build a new thing? They build Walt’s Hall of Communists, that were like trying to destroy Walt Disney in his paranoid fantasies?
Kurt Elster: There was a Walt-oriented or Disney-oriented museum that we walked through to get to some meet and greet, because my two year old’s really into character meets. But it made no mention of Walt’s love of union busting.
Paul Reda: Hashtag facts.
Kurt Elster: Oh, boy. Did you make any purchases over Cyber Week?
Paul Reda: I think, technically, yeah. Cyber Week purchase, I bought Borderlands 3, which is a computer game.
Kurt Elster: And this was on sale?
Paul Reda: It was on sale, obviously. Not paying full price. What are you, crazy? I built a new computer using the proceeds from the holiday email guide that we sold people, so thanks everyone, for buying that. I got a new computer. It was awesome.
Kurt Elster: All right, so on Black Friday, I went to technically a mall, a shopping center. I was at Disney Springs in Orlando, which is Disney’s monstrously huge outdoor mall, and managed to buy literally nothing.
Paul Reda: All right.
Kurt Elster: Because the Disney Store on Black Friday was packed. But as far as I could tell, nothing was actually on sale. Everything was full price.
Paul Reda: That’s smart.
Kurt Elster: Yeah.
Paul Reda: You’re shopping anyway. We talked about this couple episodes ago, where it’s just like, just say you have a sale, and then don’t mark anything off.
Kurt Elster: They didn’t even do that. There was no mention of a sale at all. Just there were Christmas decorations, and that was that. Some of the stores around it… The only interesting thing I saw was a store that literally had, they had a sign outside that said, “Spin to win,” and it looked exactly like the Privy Spin to Win popup. It was the same color scheme and layout, at least, and I’m staring at this thing, I’m taking a picture of it. “We’ll post this.” And then I look up, sure enough, they built the wheel. They had the wheel in the dead center of the store, and there was a guy spinning it.
I don’t know what I was thinking. I didn’t get a video or photo of that.
Paul Reda: So, what they really should have done is, if you were trying to mimic it, at the front door, instead of when you step on the panel, to make the electric doors slide open, instead the doors shouldn’t open, a panel should just slide over that says, “Spin to win,” and blocks you from getting inside the store.
Kurt Elster: Yeah, well that’s your exit intent popup.
Paul Reda: No, it’s an entrance popup.
Kurt Elster: Okay.
Paul Reda: you’ve seen Spin to Win.
Kurt Elster: Yeah. The exit intent popup is a security guard tackles you on your way out unless you make a purchase. “Hey! Take this coupon!”
Paul Reda: I wonder what’s in this store. Oh, Spin to Win! Cracks you right in the head.
Kurt Elster: So, neither of us managed to make a purchase during Cyber Week.
Paul Reda: I bought-
Kurt Elster: You bought a computer game.
Paul Reda: Yeah, pretty much.
Kurt Elster: And I went on vacation.
Paul Reda: Yeah.
Kurt Elster: All right, but in today’s episode, we want to do a Black Friday Cyber Monday postmortem, so we’ve pulled some data sources, and let’s see what we’ve got here. So, we’ve got some quick overview stats from Shopify themselves, about how merchants, the one million Shopify merchants did on the platform. I talked to the guys at Bold, Jay Myers, and he gave me some stats on how things went for them.
And those are quick, and then I hit up master Facebook marketer, Kurt Bullock, our marketing manager, and got some stats on Facebook ads, so if you’re looking to compare, you’re looking for some frame of reference, he’s got some observations for us. And then lastly, and most importantly, we’ve got stats in general that Paul pulled from our top stores, and averaged them, and we can’t name names, of course, but we’re gonna talk about things in general, and in average, and roughly how these stores are comparing to last year.
So, hopefully this will give you a frame of reference, because it’s tough. People don’t necessarily always share their numbers online, and it can be tough to know where you stand. It’s a little… feel like a lot of times you’re working in the dark. It’s a little strange.
So, all right, the quick overview is Shopify merchants break records with $2.9 billion in worldwide sales over Black Friday Cyber Monday weekend. All right, here’s an interesting stat: Consumers spend an average of $83 per order, and of all countries, Canadian consumers spent the most, at $96. Mobile remains the preferred shopping channel for online commerce, with 69% of sales made on phones or tablets, while 31% occurred on desktop.
Apparel and accessories saw the most orders during the weekend, with consumers purchasing makeup, mobile phone accessories, and coats and jackets the most. So, people going into Black Friday are buying their winter gear right then? Makes sense. Those are the stats that Shopify shared with us.
When I told Jay Myers, he said, “Hey, I could tell you it was absolutely massive for us. Hits to our servers were up close to 70%. So, basically anytime an app does something on a store’s page, we see a hit, and orders through Bold Cashier were up over 600%, and they experienced no downtime.” And they’ve got a case study coming out with a merchant of note, and I agreed I wouldn’t share who it was, but they… Look out for that case study. They reported beating previous year’s Black Friday sales in the first 15 minutes after midnight, and another in particular had 10,000 people on their site in 10 minutes before midnight, with their carts loaded and ready to check out. That’s kind of cool.
All right, some other general stats here.
Paul Reda: Also, Bold opened… I just liked Bold did this. They announced they opened their first international office.
Kurt Elster: Oh, where? Is it in Cambodia? Paris? London?
Paul Reda: No, no, no.
Kurt Elster: Tokyo?
Paul Reda: Nope.
Kurt Elster: Where?
Paul Reda: Texas.
Kurt Elster: Oh.
Paul Reda: I just like that they’re international office is in Texas.
Kurt Elster: It’s funny to think of it-
Paul Reda: Because they’re in Canada.
Kurt Elster: Yeah, but for us, it’s funny to think about, “Oh, Austin, Texas. International.” I’ve got some other stats from… that Get Elastic shared, and truthfully, I don’t know what the heck Get Elastic does, but they shared-
Paul Reda: It’s numbers on a sheet, so it must be true.
Kurt Elster: Yeah. Well, they cite all their sources. Yeah, I see CNBC in here, Salesforce. All right. Okay. I’m just gonna accept that these are true. What in here stands out to you, Mr. Reda?
Paul Reda: The thing that immediately caught my eye was on Cyber Monday, the day that we have access to the internet after the weekend, you know, at home you have maybe a 14.4 baud modem, if you have dial-up at home at all, but then Cyber Monday, you get to the office, where your office has a T1 line, and then you can finally shop online, once you’re away from your house. Because you know, that’s what Cyber Monday is.
Kurt Elster: Tell us what you really think.
Paul Reda: Is that mobile traffic share was 54%, but mobile revenue share was only 33%.
Kurt Elster: And what does that mean to you?
Paul Reda: That means that people on their phones don’t buy as much as on desktop. We talk about this all the time.
Kurt Elster: Yeah, we see that. What’s the typical difference in conversion rate, based on the numbers you saw?
Paul Reda: Well, they have a stat in here that it’s maybe like 7% on desktop in these stats, and then it’s like 3% on smartphones. It’s like half. With then tablet in between those two.
Kurt Elster: What’s funny is it looks like these thing… These sales, they grew. Online purchases, Back Friday purchases, all this stuff grew in the U.S., but globally it grew more. So, even countries where they’re not celebrating Thanksgiving are still engaging in these sales.
Paul Reda: Well, because these websites are… The websites are international. I mean, they’re the whole world, so I mean, they’re having a sale. If they’re having a sale for U.S. Black Friday, it’s a sale for everyone.
Kurt Elster: And this, I saw, I love this stat. I think one of the biggest missed opportunities for Shopify merchants is not sending more emails, especially during Cyber Week, and December, and the holidays. They said here, “68% of consumers say they pay more attention to retail email during the holidays.”
So, if you’ve got a great offer, you are doing yourself a disservice, you’re doing the customer a disservice, by not bringing it to their attention.
Paul Reda: Yeah, because they’re thinking it, they’re primed to think about shopping. They’ve been told by society to be ready to shop, so you should take advantage of them being ready to shop.
Kurt Elster: This one claims 45% of Thanksgiving orders came through mobile, up 24%, so a recurring theme across all of the stats we got is really, the week started on Thanksgiving.
Paul Reda: Yeah, I mean Thanksgiving night, you’re home from wherever you were, or everyone’s gone by like 8:00 or 9:00.
Kurt Elster: Yeah, Thanksgiving dinner starts early.
Paul Reda: Unless you actually party. I mean, I’m boring, but you know, you’re not going to bed that time, you need something to do.
Kurt Elster: So, you start… It’s you’re in that food coma at home, just trying to be introverted, away from all the people, and that’s when you start doing your shopping.
Paul Reda: Just lazing around. Yeah.
Kurt Elster: So, the brands… We assume you have finite discretionary income to blow on stuff, so the brands that started early got those sales started and out, and those emails out on Thursday, are the ones that really made the most of this.
Paul Reda: And we’ll see this later in the stats I talk about. When we pulled the stats from our clients for this, I did November 4th to December 4th, December 4th being the day I started pulling the stats, and that’s why I stopped, but you know, it clearly started earlier in the month. I saw, I think one of our clients, their biggest day was actually the 22nd, which was the Friday before Black Friday. I don’t know… I didn’t actually jump in there and see how they made the 22nd their biggest day, but it was.
Kurt Elster: Yeah, I think… Well, this year, because it’s a Thanksgiving came much later, it’s a shorter shopping season, we saw pretty much everybody, like all the big box retailers, their sales started the weekend prior to Thanksgiving.
Paul Reda: Yeah. They started… Oh, yeah. I was seeing stuff… I was seeing the shopping, it felt like in all the sales I was seeing, started the end of that week, like on the 22nd. And then all of Thanksgiving week was sale time.
Kurt Elster: So, my two takeaways right now are you should have done better than last year.
Paul Reda: Oh, yeah. If you didn’t do better than last year, you really screwed up bad.
Kurt Elster: Because people are now, more and more people are shopping online, and it is their expectation, and you would expect to see 10 to 20% better than last year, based on these stats. And the sooner you started, the better, so next year you would want to make sure you’re starting earlier. Like Thanksgiving is now the new normal to start, and ideally you may have started sooner than that.
Paul Reda: I mean, I’ll say on all the stores that I looked at, both that we’ll be citing today, and ones I was looking at earlier, the worst one did 15% better. That was the worst one, whereas the average ones did 40 to 50 to 60% better than they did last year.
Kurt Elster: And again, on the topic of email, and recently we talked about SMS, they’ve got, in this Get Elastic infographic, they’ve got some stats here on Black Friday, specifically. They say Black Friday sent 17% more email than on Thanksgiving, 20% more email over the previous year, 22% more SMS offers.
Paul Reda: I’m shocked that that’s that small.
Kurt Elster: Versus Thanksgiving day, but wait, 148% SMS increase over Black Friday 2018, so SMS explodes this year.
Paul Reda: It explodes on Black Friday, but they’re not sending, exploding them over Thanksgiving.
Kurt Elster: Yeah, they didn’t send it out on Thanksgiving.
Paul Reda: They’re not sending them on Thanksgiving day, which I guess makes sense, like you know, people are… They got stuff to do.
Kurt Elster: As far as offers go, they’ve got a couple stats in here, and we’ll talk about this later. 78% of merchants offered free shipping, and 28% was the average Black Friday discount for the majority of… Majority of deals remaining flat year over year. The offers were really about the same as last year, so you want to be… To be competitive, 30% seems to be the magic number to get people’s attention.
Paul Reda: Just make a third. Make it 33.
Kurt Elster: I like that. All right, a third. Interesting thing on this Cyber Monday, they having timing in here. One third of revenue came from late night shoppers, between 10:00 PM and 2:00 AM.
Paul Reda: Doorbusters. Internet doorbusters.
Kurt Elster: Internet doorbusters? Now, what’s not clear, is that Monday night or Sunday night?
Paul Reda: I think that’s Sunday-
Kurt Elster: Like, does my Cyber Monday start-
Paul Reda: I’m calling that Sunday night.
Kurt Elster: So, what it… I think the smart move then is next year Sunday, 7:00 PM, that’s when you send out the email saying, “Cyber Monday sale starts now!”
Paul Reda: Oh, yeah. Good idea.
Kurt Elster: And then you can send the reminder the next morning.
Paul Reda: Yeah. Yeah.
Kurt Elster: I like that idea. Okay. I want to go over Kurt Bullock’s Facebook stuff, what he found.
Paul Reda: All right. Maybe I was wrong on that date thing, because according to KB, Cyber Monday peaked after 9:00 PM, so maybe that 10:00 to 2:00 stat is for on Cyber Monday, 10:00 PM.
Kurt Elster: Yeah, he said Cyber Monday started slow, merchants were anxious about it, but then in the evening, it really takes off, and yeah, 9:00 PM. So yeah, he defines it as hey, after dinner and kids are in bed. He said that similar to what we saw in that infographic, if you started your sale before Thanksgiving, you probably saw strong numbers. They were basically bonus days, because acquisition costs were lower, resulting in higher return on ad spend. Interesting. I had not considered that. That you’ve got, since people were buying earlier, but not everybody was advertising earlier, you were… The sooner you start, the better your return on ad spend is.
Paul Reda: I have a digression.
Kurt Elster: Sure.
Paul Reda: If the majority of traffic is on phones, but the majority… Not the majority of buying, but disproportional buyers are on desktop, wouldn’t it be better to buy Facebook ads that only targeted desktop users, which would be cheaper, because you’re getting less people? Those would be cheaper, right?
Kurt Elster: I don’t know if they’d be cheaper.
Paul Reda: But they would convert better.
Kurt Elster: In theory. The issue you get into is people pre-shop.
Paul Reda: I know. That’s what we discovered is that mobile traffic is top of funnel traffic, so maybe retargeting ads should only be… Retargeting ads, which are cheaper than regular ads.
Kurt Elster: If you want to get really deep in the weeds experimenting on targeting by device, you would do… I think based on that data, you would target cold traffic to iPhones, because we also know conversion rate is higher on Apple devices, and average order value’s higher on Apple devices. So, I want my cold traffic to iOS devices, and then I want my retargeting traffic-
Paul Reda: The desktops.
Kurt Elster: … to desktop devices.
Paul Reda: I love it.
Kurt Elster: I mean, that’s not a difficult thing to test, so if you have like a funnel that works, and you have ads that work, duplicate them and change the targeting. Yeah. You could absolutely test this idea.
He did say over the weekend, so Saturday, Sunday, but before Cyber Monday, after Black Friday, many accounts saw performance drop significantly, and he lowered ad spends in accounts, and shifted most of that budget to Cyber Monday. So again, you’re making fun of people like, “Oh, they don’t shop at home, and they wait till they go back to work on Cyber Monday.” That’s 100% what they do. It’s just not clear why.
Paul Reda: That’s just the internet, though. I mean, people… We see it on literally every single store we have, the revenue-
Kurt Elster: Traffic drops the weekend.
Paul Reda: Traffic and revenue drops over the weekend, because people have-
Kurt Elster: Or just think about like-
Paul Reda: People have things to do. They’re on the weekend. They get to go. They’re not chained to a computer at their desk.
Kurt Elster: Whereas if they’re at work, there could… Best case scenario, they spend 50% of the time working. The other 50% of the time screwing around, and a great thing to do is cruise the web for deals, and I think that’s the magic of Cyber Monday.
Paul Reda: I hate Cyber Monday.
Kurt Elster: I just accept it now. Even the phrase Cyber Monday.
Paul Reda: It’s Cyber.
Kurt Elster: It’s so Cyber.
Paul Reda: I just think about more when Cyber Monday was about getting together with your family, and building an H.R. Giger inspired man-machine hybrid. That’s what Cyber Monday always means to me. Now, it’s just been too commercialized.
Kurt Elster: Just going full RoboCop?
Paul Reda: Yeah, you know, just like watching Johnny Mnemonic, and giving someone a robot arm.
Kurt Elster: Okay. You know what? I’m in. I think I want you to sit down and write the mythos of Cyber Monday.
Paul Reda: And now, it’s juts the brands have taken it over.
Kurt Elster: And which we have a candlelight processional and discuss the sacrifice RoboCop made for us on Cyber Monday.
So, some of Mr. Bullock’s Facebook ads takeaways. He said, “Big return on ad spend was not as easy to come by this year compared to last year for many advertisers. To give you some ranges, accounts spending 100 grand or more that weekend landed in the 2 to 3x ROAS range, and accounts spending less than 100K may have landed in the 3 to 5x ROAS range.”
Paul Reda: Which is a big hit, because I mean normally, outside of this time period we’re talking about, we usually see like 10x.
Kurt Elster: In the past. It’s getting harder and harder.
Paul Reda: Yeah.
Kurt Elster: But yes, that’s… Compared to last year, it’s lower. 100%, it’s lower. Because Facebook ads are just getting more and more competitive. So, he said buyer intent was high, so customers were buying, and revenue was strong, and the thing everyone has seen, and I’ve seen screenshots of a few people who’ve posted their sales online, is conversion rates go through the roof, but acquisition cost is higher. So, it’s back to that idea we discussed before, you have… You’re really taking sales that were deferred from October and early November, and then making them at a loss and a higher acquisition cost.
Paul Reda: Yeah.
Kurt Elster: All at once over in this case, a five-day period. That’s rough. It is a rough proposition. He said, “The accounts that did the best,” and here’s the last takeaways, “focused on creating a compelling offer, solid ad creative, and varied their offer creative over the course of the promotion.” So, the Cyber Monday ads were different than Black Friday ads. Well, that makes… I mean, that’s true of any day of the week, I think.
He said offering big discounts generated lots of sales, so that like 30% off, maybe 50% off if you could do it, but he said, “Hey, there’s other ways to do it.” So, he gave a few examples that did well without relying completely on discounts, which also means you get to retain more profit, given those higher acquisition costs. Number one, new product launched on Black Friday, so this is absolutely one of my takeaways this year. The brands that did an exclusive product, or launched a product on Black Friday, did really well with that.
Paul Reda: Doorbusters. That’s exactly what they are, isn’t it? I mean, that TV, that cheap TV-
Kurt Elster: When you buy a TV on Black Friday, they are often a model specific to-
Paul Reda: Exactly. Specific to Black Friday.
Kurt Elster: Yes. Yeah, so the internet version of doorbuster deals has been just like super limited edition things, like I get… You know, you get this, we only sell this pin, free gift with purchase, on Black Friday. So, you have to figure out something to buy if you want the free gift with it. So, that was a good one, or just like we’ve got this limited edition product, that’s only gonna be… that we’re launching today, on Cyber Week.
So, he said Cyber-Week-only products, or limited-run products that aren’t normally available, bundles and BOGO, and then spend over X and get Y free. So there, absolutely things you could do that don’t just involve giving away all of your profit margin. Anything in there stand out? What’s your chief takeaway there?
Paul Reda: I don’t know. I’m just thinking of ways, if Facebook ad acquisition costs are going up, I’m just trying to think of ways, like I said before, where you can find the… you can sort of Moneyball your way through undervalued paths, in order to achieve the return on ad spend we were seeing even just earlier this year. So, this idea of maximizing desktop ads, because the desktop, a desktop user is like 40% more likely to buy than a mobile user, so it’s like, “Okay, let’s hammer those desktop users.” Or it’s like an iPhone user will spend 25% more than an Android user. Okay, let’s hammer those iPhone users.
Kurt Elster: I think my takeaway for getting the ROAS back is to avoid just pure discounting, and I like-
Paul Reda: Yeah, I like free gift with purchase, like a cheap, free gift, that costs you nothing, but is kind of cool, like Hoonigan’s doing pins, like those, that worked out really great for them.
Kurt Elster: Yeah. I like the limited edition idea product, product launches, or free gift with purchase, or free gift with purchase and it’s a limited exclusive, like the Hoonigan lapel pins.
Paul Reda: Yeah.
Kurt Elster: Okay, so you pulled our own data.
Paul Reda: Yes.
Kurt Elster: Here we know, this isn’t an infographic, this isn’t something… This isn’t hearsay. This is you went through a selection of our top performing clients’ brands’ stores, and obviously we’re not gonna name names, and you pulled a bunch of stats for them for Black Friday this year, compared it to last year, got percentage changes, so we’ve got a pretty good idea of how people performed this year, and versus last year. What did you notice? What did you see?
Paul Reda: Well, the main thing was everyone did a lot better. Like I said before, the worst was 14% over what they did last year. And I did this, I pulled these stats because we needed to record this, so the stats only span from November 4th to December 4th, but even when I pulled them on December 4th, the… We’re still on the back side of the mountain, like the mountain hasn’t gone back to ground level yet.
We’re still-
Kurt Elster: So, you think if you had, if you wait another week-
Paul Reda: They’re hearing-
Kurt Elster: Get the rest of the holidays-
Paul Reda: They’re hearing-
Kurt Elster: It’s gonna be even better.
Paul Reda: They’re hearing this on Tuesday. If we recorded this Tuesday at 4:00 in the morning, and I could get the stats from Friday, Saturday, Sunday, Monday, I think then we would have gotten the full amount. I think now we maybe only got like 90% of the mountain. We don’t have the full bump. And obviously last year, because Thanksgiving was earlier, the last year stats have the full bump. But even still, the numbers were all better across the board.
Kurt Elster: Yeah, these revenue numbers. All right, the average revenue increase for 2019, over 2018, 46%.
Paul Reda: Yeah.
Kurt Elster: And there’s one store in here that did 97%.
Paul Reda: And they’re not a small store.
Kurt Elster: No. No, it’s not like it’s a small sample size.
Paul Reda: They doubled their revenue in terms of millions of dollars.
Kurt Elster: Yeah, they literally… Yeah, the store I’m looking at literally jumped from half a million to a million.
Paul Reda: And the thing is, and they had the… They really had the best stats across the board, so here… When I made this spreadsheet, I did traffic, conversion rate, revenue, average order value, and then returning customer rate, and trying to see how… So, everyone got a revenue increase, and I kind of wanted to pull out how each store achieved that. Did they achieve that with a bunch of more traffic and a bunch of new users? Did they achieve that by bumping up their average order value? Did they achieve that by blowing out their conversation rate, probably via discounting?
And everyone kind of had a different way of doing it, but yeah, this one that doubled their revenue, they killed all of those metrics across the board, so they managed to hit everything. Traffic up 17%, conversion rate up 40%, average order value up 18%, return customer rate up 32%, and also, their return customer rate is already ridiculous. Extremely high. 64% return customers.
Kurt Elster: Whoa.
Paul Reda: So, they have a loyal fan base that they just pulled money from for the whole month.
Kurt Elster: So yeah, what I’m seeing across here, I’m seeing the people that really succeeded, it was based on having loyal customers who were just waiting to pull the trigger.
Paul Reda: Everyone did it across the board, like this one did it via average order value. I don’t know how to refer to these. I just keep saying this one, but it’s… We can’t say who it is.
Kurt Elster: Can say home goods, lifestyle, apparel. The one that fluctuates the most, really, is return customer rate.
Paul Reda: Yeah, I mean, now there was… We had one store that had return customer rate actually went down. They pulled in a bunch of new people. Some of them had very little return customer rate changes. I mean, I think that one might not be indicative so much.
Kurt Elster: And with the exception of a single store, all of them had a significant increase in traffic over the previous year.
Paul Reda: Yeah.
Kurt Elster: So they all, the commonalities in these stores, and in the infographics we’re seeing, is more people shopped online, so we’ve got an increase in traffic, an increase in conversion rate, and increase in average order value. The only thing that bounces around is return customer rate.
Paul Reda: Yeah, so throw that one out.
Kurt Elster: Okay. In terms of offers… Well, let’s give some broad ranges here.
Paul Reda: Wait, I just gotta talk about this one.
Kurt Elster: Sure.
Paul Reda: We got this one who’s involved in the… who’s an apparel company. Their traffic did not change at all.
Kurt Elster: Just one. Out of all the others, traffic goes up pretty significantly across the board. There’s just one where their traffic stayed flat, which is interesting.
Paul Reda: Literally unchanged traffic, but revenue up 46%, and they goosed average order value, and they had a huge return customer rate. So again, it was like they had… They got their current fan base to buy more. And to me, the fact that they hit that revenue target without increasing their traffic at all is like, “Oh, man. These guys are untapped. There’s even more out there if they could get the traffic up.”
Kurt Elster: So, I think the takeaway here is if you pull up your stats for Cyber Week, and your return customer rate is very high, so say it’s… It peaks during this time, then that’s an indicator that really, you could dramatically extend customer lifetime value more than you have already.
Paul Reda: Yeah. You have a lot of returning customers, it’s much easier to get those returning customers to spend more.
Kurt Elster: The thing that blew me away is the big jumps in average order value, so yeah, you’re offering a discount. Yeah, you’re eating into your profit margin, but people are spending way more to take advantage of the discount.
Paul Reda: Yep.
Kurt Elster: I thought that was very interesting.
Paul Reda: Well, you know, it’s the… where it’s just like, “Well, I had to buy it. It was on sale.”
Kurt Elster: Right.
Paul Reda: It’s like, “No, you didn’t. You didn’t have to buy.” It’s like, “Well, I gotta strike now while I can get it for cheaper.”
Kurt Elster: And the psychological thing that’s going on here is loss aversion. Even though I’m spending money, I’m viewing it as, “Well, if I don’t buy, I’ve lost the savings.”
Paul Reda: Yeah, I’ve lost the opportunity to get it at a discount.
Kurt Elster: You know, unless you were already planning on buying that thing, of course it isn’t… It’s a logical fallacy.
Paul Reda: And that’s the power of wish list apps.
Kurt Elster: Oh!
Paul Reda: Is that you know… You could really… If you have the wish list app, and you get told, “Well, now it’s on sale,” you’re gonna clear that wish list out. And that kicks up the average order value, because you’re buying like four things at once.
Kurt Elster: I think that’s a Klaviyo flow you could do, where it… If a product goes on sale that they viewed, it sends it out. I may be full of it.
Paul Reda: I would hope so.
Kurt Elster: But I like that idea.
Paul Reda: That would print money.
Kurt Elster: All right, so here’s the idea that you want to implement. You have a browse abandonment list, or-
Paul Reda: You send them a Facebook ad only on desktop that the thing that they want is on sale, and then they buy it.
Kurt Elster: I wonder if you could do that. The limitation would be… Stop making that face. The limitation there I think would be custom audience size. But all right, so person browses product and doesn’t buy. Browse abandonment. The price of the product drops, you send an automatic email out saying, “Hey, this product’s on sale.” You don’t even have to be like, “Oh, this product you viewed’s on sale.” Maybe you want to, add some personalization to it, but just you know that by virtue of them viewing it, they were interested, and now the price has dropped, so why not notify them?
Paul Reda: Yeah.
Kurt Elster: I like that idea.
Paul Reda: Duh!
Kurt Elster: That’s very powerful. I don’t think we have that going in any store.
Paul Reda: I was gonna say, I thought you were gonna come at me with some cool new idea you had. I’m just like, “Yeah, duh. Why wouldn’t you do that?”
Kurt Elster: I don’t think we’re… I gotta write it down and do it.
Paul Reda: Oh, man. Don’t tell our clients we haven’t been doing that.
Kurt Elster: Let’s see. What the heck? Oh! I wanted to talk about offers. What were the… The offers that performed well, we talked about a little bit, but it’s still no gods but shipping in ecommerce. The stores that offered just said either, “Hey, free shipping on all orders,” so let’s say normally you have like a minimum of 125 bucks, and then you say, “All right, you get free domestic shipping.” Great!
Or there were a couple folks that said free international shipping. All right, you definitely have to have your fulfillment on lockdown to make that one work, but if you could do it, man, people go wild for that stuff. Any free shipping offer works really well. If you’re already offering free shipping, free upgraded shipping, so that’s a great way to add value, get people to make a purchase without actually discounting the product itself, and potentially devaluing the brand.
Paul Reda: Cutting into your margins, yeah.
Kurt Elster: Well, I mean you still… You’re eating the cost of the shipping, but that’s probably less than if you had discounted the product itself, and then you still gotta offer free shipping on orders over whatever.
Paul Reda: Yeah, and the shipping cost isn’t 20% of the purchase price or whatever.
Kurt Elster: Yeah. Free shipping offers work really well. Exclusive products, free gifts with purchase, limited edition products, that worked really well for people. 30% off seems to be the common, like, “All right, that’s the number for people to pay attention to.” If you sent out a Black Friday email that’s like, “10% off!” That’s not even getting opened.
Paul Reda: Yeah, it’s like, “Get out of here.”
Kurt Elster: Yeah. That’s getting deleted, so I think it needs to be more than 25%. I think 30% is the magic number, where you get their attention, because like you said, it’s like about a third off. That’s a good offer.
Paul Reda: 25%, I’ll think about it.
Kurt Elster: Just go to 30. I like 30. And you could also use these stats to figure out, okay, what could my customer lifetime value be? So, if you see this big peak in return customer rate, okay, that tells you for next year, for 2020, you should be working on ways to extend customer lifetime value. So, follow-up emails, post-purchase sequences, that sort of thing, really advanced retargeting on past customers, and next year, 100%, you want to start sooner than you think you should, and you want to send more emails than you think you should. And if you haven’t experimented with SMS, it’s just leaving money on the table.
Those were my takeaways from this year.
Paul Reda: My takeaway is everyone made more money, so if you didn’t make more money, you did bad.
Kurt Elster: Oh. I’m sorry if that happened to you, but yeah, if you’re looking for a benchmark, if you did 10 to 20% better than last year, that would put you about with everybody else.
Paul Reda: All of our client… The average was 40.
Kurt Elster: Okay, yeah, because they work with us.
Paul Reda: Oh, good point.
Kurt Elster: Yeah.
Paul Reda: Yeah. If you’re working with scrubs, they probably got you 15%, but if you work with us, you get 40.
Kurt Elster: Anything else? I don’t have anything on the outro. The only thing I wanted to add is every week I send out this newsletter, and nobody replies to it, and I always find that funny. I think there’s the idea like, “Well, I don’t want to bother him,” or, “He’s not gonna answer it,” or, “It’s a virtual assistant.” It’s my actual email. If you reply to one of my newsletters, I get that email, and I will probably respond to it.
Paul Reda: I remember many rants earlier this year on the podcast about how idiots were replying to your newsletter, and were asking you to take part in their business or something.
Kurt Elster: No, no, no. Not idiots.
Paul Reda: And you were very mad about that.
Kurt Elster: Crazy people. No, I get a lot of LinkedIn cold outreach. The worst offender is LinkedIn.
Paul Reda: LinkedIn’s a nightmare.
Kurt Elster: LinkedIn is a cesspool. The cold outreach emails on LinkedIn are painful. It’s like pickup artist stuff. It’s like whatever the business version of pickup artistry is.
Paul Reda: So, what Kurt’s saying is he’s lonely. Please tell him that you like him.
Kurt Elster: Okay!
Paul Reda: Or like ask him questions or something.
Kurt Elster: You know what? Yeah, I just… I want to feel useful.
Paul Reda: Don’t contact me.
Kurt Elster: Paul@ethercycle.com.
Paul Reda: No. Don’t. Pease don’t email me. I don’t want that.
Kurt Elster: Should we tweet at you?
Paul Reda: No. I like…
Kurt Elster: How should we get ahold of you?
Paul Reda: I live in a cave.
Kurt Elster: Could we share your phone number? Text Paul?
Paul Reda: I leave the cave to come to work, and then I go back in my cave.
Kurt Elster: All right. Well, let us know if you need help decorating your cave. There’s some home goods deals during Cyber Week.
Paul Reda: I’m on the market for a new cave. I’ve been looking around for one.
Kurt Elster: Okay.
Paul Reda: And it’s pricier than I thought it would be.
Kurt Elster: That’s usually how cave shopping goes. All right, we’ll end it there. Thank you, and I hope your Black Friday went well, your turkey was deep fried, your sales were phenomenal, and we will talk to you in two weeks.