The Seven Secrets Of Online Shoppers
Cyber Monday has passed, but the holiday shopping season is far from over. U.S. consumers are expected to spend $1 trillion this holiday season, with at least $43B of that spent online. Most retailers think they understand their customers -- spending millions to mine data to create customized Web, mobile, and in-store campaigns -- but recent research shows some surprising and unexpected consumer behaviors this holiday season.
1. Age and gender matter less than you think
Although many retailers craft campaigns by designating age and gender targets, research shows these are not the
most significant factors in driving conversion. There are few notable differences between conversion rates across ages, and women are only 9% more likely than men to convert for retail campaigns. So
while the long-held “truth” that women do the majority of holiday shopping may still hold in-store, it’s not the case online. Far more important factors in the conversion process are
number of children, interest, and recency and frequency of ad exposure.
2. High earners aren’t necessarily big spenders
Consumers with a household income between $75K and $100k per year are the most likely to convert on online retail campaigns, while consumers in more affluent households are significantly less likely to do so. In fact, households making under $20k a year are more than twice as likely to convert than households making between $20K and $50k, and three times as likely to convert as households making $50k and $75k.
3. Gamers make a lot of online purchases
Retailers would do well to tailor advertising campaigns to gamers if they want to boost sales this holiday season. Gamers in general are 5.5 times more likely to convert on retail campaigns than the average, and casual gamers are 17.8 times more likely to do so. Sports fans of either gender are not very big shoppers. In general, they are 20% less likely to convert than average shoppers, with American football fans being 80% less likely to convert, and fantasy sports fans 95% less likely to do so.
4. Two-kid households are the conversion sweet spot
When it comes to kids in a household influencing conversion, two is the magic number. Households with children were slightly more likely to convert overall, but consumers with two kids were 2.2 times more likely to convert on retail campaigns than average shoppers, whereas families with one child were 1.3 times more likely, and households with three kids were 1.1 times more likely. Precisely tailoring campaigns to two-kid households could make a big impact in holiday sales this year.
5. Forget Cyber Monday – Wednesdays and Thursdays are conversion days
The best time to reach consumers to drive conversions for retail campaigns is between 6 a.m. and 6 p.m. on Wednesday or
Thursday. Consumers are 1.5 times more likely to convert during these windows than any other time of the week, although Friday is also a better-than-average conversion day. Remember to expose
consumers to your retail campaigns on Wednesday or Thursday, because shoppers are most likely to convert within 24 hours of ad exposure. Conversion rates decline steadily from there, dropping off
steeply for consumers who saw an ad longer than four days ago.
6. Frequency seals the deal – but beware of ad overload
In order for your ads to make an impact, consumers need to see your campaigns several times -- but they won’t appreciate being bombarded. Consumers are most likely to convert on retail
campaigns when exposed to between 5 and 16 ads, and only begin to show above-average conversion rates after exposure to two or more ads. On the flip side, conversion rates dropped sharply at the 17+
exposure level, indicating that advertisers should be looking to hit a “sweet spot” of between 5 and 16 ad exposures for a campaign over a month-long time frame.
7. The "Where" matters
Some geographic areas convert at a much higher rate than other metros. In particular, shoppers in Chicago, Baltimore, Philadelphia, and Tampa have significantly higher conversion rates than average. Similarly, some demographic areas -- particularly those in the Southwest (Austin, Phoenix, Houston, Dallas, and San Antonio) -- have lower conversion rates overall. While you wouldn't want to avoid lower-conversion-rate areas altogether, you may need a slightly different messaging, offers, or approach when advertising to consumers in low-conversion metros.
Deploying artificial intelligence and big data can help uncover unpredictable campaign response trends. Using new ad technology platforms to make automated media purchasing and optimization decisions can help retailers find the right shoppers most likely to convert.