Many happy returns: Christmas customers more loyal than other times of year

30/10/2019

Holiday customers that return the following holiday season are more than twice as likely to convert compared to other customers – highlighting the importance of using technology that can analyse and segment valuable audiences at scale, according to new research.

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The study, from personalisation ad tech firm Monetate, analysed 8.52 million customers across 2017 and 2018 holiday seasons and identified that customers who came back, or were “retained” the next holiday season were a significantly more valuable segment that is often overlooked because of their relatively smaller size.

While the average conversion rate for all returning customers is about 2%, retained customers from the previous holiday season converted at 4.2%.

The research also finds that:

• Consumers coming from Bing and Yahoo have consistently higher conversion rates, with retained Bing customers converting at 8%, four times the typical returning customer
• Social is also on the rise, with consumers converting after be redirected from Facebook and Instagram showing much higher conversion rate growth one year later, and this group is growing in size year over year for most retailers

While the average conversion rate for all returning customers is about 2%, retained customers from the previous holiday season converted at 4.2%. The research illustrates the value of identifying valuable audiences even if they are smaller. With automated personalisation, retailers can effectively grow more of these customers into their best customers. This strategy is valuable not only for past customers, but for planning 2019 holiday marketing that will deliver in 2020.

“As retailers get ready for 2019 holidays, this research shows how important it is to use technology that can analyse and segment valuable audiences at scale. With insights like this, marketers can be planning for the long term customer relationship,” said Lisa Kalscheur, Chief Marketing Officer, at Monetate. “We found that retained holiday customers are significantly more valuable during the next holiday season, which should be informing personalisation efforts that go well beyond the next few months.”

The report also looked at the relative conversion rates of retained holiday customers across several major referring sites including Google, Bing, Facebook and Instagram, as well as visitors who navigated directly to the site. People coming from Bing and Yahoo have consistently higher conversion rates. Retained Bing customers convert at 8%, four times the typical returning customer. This small but loyal group would benefit from personalised approach that treats them differently than typical shoppers.

Monetate also found that people who converted after coming from Facebook and Instagram showed much higher conversion rate growth one year later, and this group is growing in size year over year for most retailers. What’s more, customers who came to a brand’s website first via Facebook and were engaged enough to come back the following holiday season are nearly 70% more likely to purchase than the first year. This finding is bolstered by previous Monetate research which found the value of sequential personalised page views increases performance of referral channels like Facebook.

“Historically, marketers have had to design their holiday marketing campaigns to appeal to the widest audience possible, which has left out key high-value groups such as the growing Instagram shopper audience,” said Kalscheur. “With the right approach, marketers can find these groups and create personalisation campaigns that appeal to them specifically, creating opportunities for more growth.”

The research is available for download here


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