BFCM

Editor’s Note: Repeat is merging with Stamped. Stamped CEO Mike Berardo is again authoring this newsletter.

We’re in that time of year where brands are wrapping up their Holiday planning. They’ve got forecasts signed off, offers locked in, and the creative is rolling.

Having been in those conversations, I can tell you: most projections are made in a tops down fashion, as opposed to bottoms up. And while those sorts of projections can be accurate at the top line, they can miss nuances that change your bottom line performance.

One of the cool aspects of our merger with Repeat is that they’ve been students of retention, looking at data in ways that overlap with us—but are still distinct. And the idea of building a bottoms up model for Holiday planning is one of those. 

Here’s an example: Last year, the Repeat team looked at BFCM order volume and average order value by customer type over the week prior to Holiday’s official kickoff, finding that customer acquisition and average order value were—roughly speaking—negatively correlated.

For planning purposes, this is hugely valuable data. 

With it, you can plan for volume growth, but not contribution dollar growth, from new customers, mild contribution dollar growth from most of your returning customers (those who aren’t that loyal) and significant contribution dollar growth from the small, but highly loyal segment of your customer base. 

That’s interesting—and instructive from a planning perspective—but not very tactical in terms of retention. One place to maybe get tactical, though, is exploring how you can incentivize those more loyal customers to shop during Holiday. 

As Repeat’s co-founder, Sarah, previously noted: 

Your most loyal customers don’t need a reason to buy and do so when they want or need your product, including the weeks leading up to a major sale event. So, more of them are likely to sit on the sidelines. The more away you get from that level of loyalty, the more a good deal will pull your customers in.

And this shows up in the data in another way:

When comparing last week’s numbers to the last several, new customer AOV was flat. Returning customer AOV, though, was richer at every returning customer segment, meaning deeper discounts gave brands’ best customers a reason to stock up.

Knowing that they’re driving an outsized lift in contributions dollars, one of the main goals of Holiday should probably be getting more of your most loyal customers to stock up. After all, they spend significantly more.

One place to consider tactics: Loyalty. 

In our recent BFCM report, we found that BFCM orders placed with loyalty rewards had the same discount percentages as orders placed with loyalty rewards outside of BFCM. Pretty incredible, when you see that non-loyalty orders had 35% deeper discounts during BFCM.

For your most loyal customers, then, the offer may not be the most persuasive lever to getting them off the sidelines. And that can be a valuable hypothesis to test in terms of moving the needle on those most loyal customers.

What you might want to test is whether offers like points multipliers and accelerated earnings can pull more orders forward, since doing so with your most loyal customers will deliver the best AOV gains for your Holiday season. 

A slightly higher hit on margin in a future purchase could be a worthwhile tradeoff for more raw contribution dollars now.