Holiday Benchmark Metrics that Matter: Average Order Value

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This holiday season, vanity metrics (looking at you, open rate!) are the low hanging fruit. But beware – they’re poisonous! If you’re a marketer who is focused on increasing revenue (trick statement), then you need to be focused on Average Order Value.

When we created our Holiday Data Report for email marketers, we focused on revenue because there’s almost 800bn on the line this holiday season. We already covered click-to-open holiday trends and how they provide insight that click rates simply cannot match. Now we’re moving on to look at how Average Order Value (AOV) trended during the 2013 holiday season and our predictions for 2014.

Why AOV Matters In a Big Way

The simple truth is: nothing speaks louder than cold hard cash…and lots of it. Average Order Value – sometimes referred to as Average Response Value – directly maps your email program back to business and revenue goals. Increasing AOV is a fundamental revenue driver and helps you determine the health of your overall marketing strategy (and even pricing strategy) by giving you the metrics needed to measure of long-term value of individual customers and cohorts.

2013 AOV Benchmarks

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What’s of no surprise to us is that during last year’s holiday season, AOV spikes started during the week of Black Friday and held strong through Cyber Monday. This is when mass volumes of customers purchase holiday gifts in larger quantities than during normal online shopping sessions, so despite the fact that brands are heavily discounting during this weekend, AOV still remains the highest during the entire November-December sweep.

What’s fascinating is to see how “Christmas Creep” – the impact of a shorter than normal holiday season – drove AOV to rise before Thanksgiving. AOV dropping during the weeks before and during Christmas could be for two reasons: 1) shoppers are buying one-off gifts at this point in the season and 2) guaranteed free shipping offers may expire by this point, ultimately driving consumers to shop in-store.

2014 AOV Predictions

  1. In 2014 we expect to see the further rise of Cyber Sunday. To get ahead of the competition and to make the most of yet another short holiday season (just 27 days, folks!), brands will release discounts and promotions even earlier on Cyber Sunday (and maybe even Cyber Saturday).

  2. Free shipping offers will be extended this year. To compete with Amazon and other juggernauts, many brands will explore extending free shipping offers up until just days before Christmas.

Stay tuned for the last post in this 3-part series on RPM and DOWNLOAD THE FULL HOLIDAY DATA REPORT NOW!

— Marielle Hanke, Senior Manager of Analytics and Optimization