The Impact of Peak Trading Across The Affiliate Channel
By Matt Swan - Head of Business Intelligence at Affiliate Window
Christmas has already faded into the past, so now’s the time to look back at the peak period and see just what happened in online retail.
This article looks at some of the key peak trading trends across the affiliate channel that we saw during that period
The impact of ‘Black Fiveday’
Black Friday broke records, with £1.23 bn spend online alone on the day itself. But ahead of the key trading period of Cyber Weekend, much was made of advertisers starting their offers early. This led to the term ‘Black Fiveday’ being coined, stating that while Black Friday would be the largest trading day, by launching offers earlier there would be increased trading earlier in the week preceding the big event.
Over that period, Affiliate Window reported £59 m in revenue generated for its advertisers. But what impact did this have on trading across the Christmas period?
The charts below consider the share of revenue generated for advertisers across November and December for both 2015 and 2016. Data in the first graph is shifted by two days in order to compare Black Friday and Cyber Monday like-for-like.
While the lines almost match exactly, it’s clear that the earlier start had an impact. It’s not a dramatic increase, but there is a definite growth in the share of revenue in the build up to Black Friday.
This also had an impact on the revenues and activities in December, especially from Christmas Eve onwards. The chart below shows like-for-like dates to see what the yearly comparison was.
The effect of advertisers starting earlier in 2016 is evident. There has been a shift towards more trade occurring in the run up to Cyber Weekend, shifting trade from the Christmas period. It is evident that consumers were purchasing earlier in 2016 than they were the previous year.
You can read more of Affiliate Window’s findings from Cyber weekend in this recent whitepaper.
Christmas trading peaks
Turning attention specifically to the Christmas period, the chart below considers the sales trends across the day for Christmas Eve through to Boxing Day.
Traditionally sales peak on Boxing Day and 2016 was no different. However, there was also a notable peak on Christmas Eve. Much like with the build up to Black Friday, advertisers were launching their offers even earlier to take advantage of consumers who were eager and waiting to participate in the Christmas sales to pick up a bargain.
There was a clear peak in late afternoon/early evening with some big name advertisers launching their sales.
There was also a notable peak in another sector on Christmas Eve. Two of the top three advertisers across the network were actually in the fast food sector. Consumers were certainly building up an appetite to hit the sales.
Across this wider period the notable sectors were department stores, electrical retailers and fashion brands. Consumers were keen to secure discounts for big ticket items as well as freshen up their wardrobes for the new year.
Depreciation of the pound sees more interest from overseas
Another notable theme of Black Friday was the increasing demand from overseas customers for UK advertisers. This was again evident in the Christmas numbers. With heavy discounting and cheaper delivery costs, it is becoming increasingly more economical for overseas consumers to purchase from the UK. This has been further compounded with the depreciation of the pound in the second half of 2016.
Over the period from Christmas Eve through to Boxing Day, sales were generated across 165 additional countries.
While the overwhelming majority (92%) came from the UK, breaking the additional 9% down by country there were some interesting trends. 13% of this came from the United States while 10% was from China. Ireland (6%), France (4%) and Australia (4%) made up the remainder of the top five.
An increase in activity from China has been an emerging trend and one that is expected to continue throughout 2017. There is a strong desire for health and beauty products from UK advertisers.
With more advertisers building strong ecommerce infrastructures creating the ability to deliver internationally at cheaper prices, the growing global focus of UK brands is likely to gather pace over the coming years.
The role of mobile in peak season trading
Increasingly consumers are using multiple devices within their path to conversion. This was a trend that we witnessed across the Christmas period, with mobile devices playing a key role as an influencing device.
On Boxing Day, where more than one device was involved in a customer journey, 88% of these started on a mobile device, with 42% on a smartphone. However, when looking at the device type where the conversion took place, this figure drops to 57% with desktop being the primary device for driving conversions.
The share of smartphone conversions halved, clearly demonstrating the role of smartphones in the early, exploratory phase of the consumer path to purchase.
Where only a single device was used, mobile accounted for 56% of all transactions, with smartphones converting 31%.
The rise in multi-device customer journeys is making it increasingly important for advertisers to be able to track the full journey to truly understand the role that each device plays in the conversion and the publishers involved in each stage.
With advertisers preparing for peak and launching their Cyber Weekend offers even earlier, there has been an impact on the Christmas trading period as peak is pulled ever closer to mid-November.
While once the post-Christmas sales would be the big peak in the online retail calendar, this is now comfortably eclipsed by Black Friday. Advertisers launching their offers earlier have seen the distribution of sales throughout November and December gravitate even further towards Cyber Weekend.
The depreciating pound has seen an increase in sales from overseas, with a clear trend being the demand for health and beauty products from China. British brands are continuing to build upon their impressive international credentials and overseas consumers’ demand for their products continue unabated. The perfect storm of pricing, delivery and diversity of goods has paid significant dividends for many British retailers, a trend we expect to continue in 2017 and beyond.