2014 Holiday Data Alert ‑ Cyber Monday’s AOV Is King Despite Lower Conversion Rates
Cyber Monday lived up to the hype this year by becoming online shopping’s biggest day in history, according to early data, and setting a record of more than $2 billion in single-day online sales. This success alone wasn’t a huge surprise to us at Sailthru as Cyber Monday revenue volume has seen solid, predictable growth year-over-year. What did surprise us, however, were the mechanics behind the sales as Cyber Monday experienced the highest Average Order Value during Cyber Weekend even though conversion rates were at a holiday weekend low.
Average Order Value On the Rise
Fitting with Cyber Monday’s record sales, the shopping day delivered the weekend’s highest AOV to date across all devices–with tablet AOV making a massive surge.
Consumers converted on desktops, tablets and smartphones to take advantage of promotions with big basket sizes on Cyber Monday, worth a significant 6% higher than Black Friday on average.
Even With High AOV & Record Sales, Conversion Rates Cooled
Despite winning the AOV game, Cyber Monday fell short in the realm of conversion rates, on average 13% lower than Black Friday.
This signals specific trends on Cyber Monday (covered in our previous Holiday Data Alert), most notably the role urgency plays on Cyber Monday. We postulate that when Monday hits, consumers know this is likely the last big sale of the holiday weekend and buy incremental items that really hike up their basket size. This is further supported by additional data we analyzed seeing a large, continual purchase spike starting at 6pm on Cyber Monday well into 11pm, and then tapering off them the end of the night.
Trends + Good Old Fashioned Marketing
The uptick in AOV can not be chocked up to consumer psychology alone. Based on our analysis, the types of Cyber Monday promotions also drove consumers en masse to online retailers and to buy at larger basket sizes. We saw many of the most effective discounting and urgency-driving tactics being used by retailers this year to keep AOV high, including:
Time-bound discounts: This tactic known for driving urgency is Cyber Monday’s namesake. Most retailers issued 24-hour discounts and in many cases increased discount values in evening hours to ensure that consumers purchased at higher than normal volumes.
Discount floors: “Spend $200, Save 20%” offers were extended in addition to traditional discounts (typically at a lower % off) by ecommerce retailers on Cyber Monday, ensuring that consumers were driven to spend in order to save. This tactic resulted in incremental increases in AOV.
Shipping minimums: Similar to discount floors, this tactic helped protect AOV by requiring customers to meet a minimum order value in order to qualify for free or expedited shipping.
BOGO promotions: When applied to high value items and giving consumer a lower value item free with purchase, these promotions drove consumers to purchase multiple items in exchange for free merchandise.
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This post was written by and based on data analysis from Marielle Hanke (Sr. Manager of Analytics) and Steve Wood (Optimization Analyst).