Thumbnail image for 2015-28-January-FreeTree.jpg

By now, big retailers have dumped the last of their holiday decorations and e-marketers have already started making plans to boost revenue the next time around.

This makes it the most wonderful time if the year to look at the data to find out what worked and what didn't in e-commerce for the 2014 holiday season. Conveniently, two predictive marketing vendors, Custora and Kenshoo, just released complementary studies that are chock full or data points.

Taken together, they confirmed the generalities that other studies have reported: e-commerce is growing rapidly, mobile is grabbing a bigger share the pie and desktop is still dominant. However, they also threw in some granular details about such things as ROI on paid search, revenue in social channels and the growing role of product listing ads (PLA) in the increasingly competitive e-commerce marketplace.

Detailed Data

2015-28-January-Kenshoo-rev device.jpg

Both reports are available online -- you'll find Kenshoo's here, and Custora's here. But we'll share you a few highlights, starting with devices.

The desktop still accounts for most the revenue, though spending and ROI in  mobile is rising.

"During the festive season, mobile phone ad spend increased by 77 percent year-over-year (YoY), driving a 120 percent YoY increase in revenue," reported Kenshoo, citing data gathered from customers that accounted for 60 billion impressions and clicks during the final two months of 2014.

"While impressions, clicks, spend and revenue increased dramatically for mobile devices YoY, desktop computers still drive the highest conversion rate -- 6.9 percent," the report stated.

Custora noted that one of four purchases came from a phone or tablet during November and December, up from 18.6 percent a year earlier.

Search is (Still) King

Search -- organic or paid -- remains the greatest source of revenue. Custora, which based its study on data from 100 million anonymized shoppers at 100 online retailers, said 38.5 percent of transactions began that way. It attributed 17.5 percent from paid search and 21 percent from organic. Email came in with 17.7 percent, affiliates at 10.9 percent and social with a modest 1.9 percent. Last year, social accounted for 2.3 percent.

"Similar to the trends last holiday season and throughout 2014, social media -- including Facebook, Twitter, Instagram and Pinterest -- is still not driving a substantial share of e-commerce transactions," Custora reported.

2015-28-January-Kenshoo paid search clicks.jpg

However, Kenshoo noted retailers took advantage of a higher inventory on social channels, eliminating "wasteful" impressions and generating growth in both clicks (up 35 percent) and revenue (up 42 percent). The cost per click (CPC) fell 6 percent to 35 cents, with a return on ad spend of $2.58.

Timing Matters

In the holiday season, as in life, it appears that timing is everything. And here the two studies appeared to conflict, with Kenshoo finding data to suggest Thanksgiving is now among the most important days of the shopping season while Custora found just the opposite.

"Despite strong year-over-year revenue growth (+17.7 percent of Thanksgiving 2013), Thanksgiving did not even make it to the top 20 biggest shopping days this holiday season," noted Custora.

2015-28-January-paid search ctr cnv dates.jpg

Kenshoo's charts showed a huge spike in clicks on Thanksgiving. "Although retailers did not increase spend greatly on Thanksgiving, the revenue generated almost equaled that generated on Black Friday, making this day a great opportunity for retailers to target customers," it said.

Doubling Down

Spending on PLAs more than doubled during the season, according to Kenshoo, resulting in a doubling of revenue on Black Friday and nearly as much on Cyber Monday.

"The format is only going to continue to grow -- the consistent return retailers are seeing with PLAs combined with the search engines continued expansion of product ad capabilities will lead to further engagement and innovation," Kenshoo said.

Kenshoo added a few "imperatives" for marketers as take-aways:

  1. Consumers are relaying on multiple devices as they interact with brands, and that should not be viewed as a threat but rather as an opportunity to engage with shoppers more often. "To meet KPI goals, marketers need to be sure to provide consisten, relevant messaging across all channels and create a seamless, mobile-optimized experience for consumers, even through the post-click," it said.
  2. Interest in products throughout the shopping season is "very high," presenting a strong opportunity to benefit from PLAs. "But utilizing this ad format is the first step," it warned. "The real challenge is enhancing your product feed and optimizing these ads to promote your best-performing products to drive sales, revenue and conversions."
  3. While social media is on the rise, "there are a shrinking number of slots to get in front of audiences organically," it said. "The good news: social ad formats are becoming more engaging and audiences are responding."

 Title image by Tom Murphy.