E-commerce trends: Higher volume/lower AOV
About a week ago, I offered some thoughts on how the way in which e-commerce companies are navigating the COVID-19 crisis is highly dependent on the vertical. (Read last week’s post here)
My thoughts last week were focused on how two brands I manage — Industry West and Favor — are both offering Black Friday-esque sales, but seeing starkly different results when compared to their Cyber Week metrics.
I was then asked to compare the numbers of Industry West — a high-end furniture brand — to the same period last year.
So let’s take a look at April 1-15 YOY…
As a refresher, Industry West was founded about 10 years ago, though it’s very much still in startup mode. We are privately-held and do not have the bloated employee count typical of many venture-based tech/e-commerce brands of the past five years. For our first nine years, we were e-commerce only, and in spring 2019 opened our first brick-and-mortar location in SoHo at 14 Crosby Street.
We sell both consumer-side and to the trade, working with both external and internal procurement teams that have helped furnish everyone from Marriott and Yankee Stadium to Facebook, Google, BurgerFi and SeatGeek.
Over the past three weeks Industry West — along with most e-commerce brands out there — has offered its best sale of the year (25% off sitewide).
With that here are the results we’re looking at April MTD YOY:
(these are strictly e-commerce numbers and don’t account for what’s fielded by our sales reps)
- Revenue up 10%;
- Transactions up 82%;
- AOV down 40%;
- CPA down 55%; and
- Conversion rate up 71%.
When sharing these numbers with colleagues, the feedback often is positive. But being the negative sorter that I am, I often reply with: Yes, but how long can we run a Black Friday sale?
I guess that’s the issue many of us in e-commerce are dealing with right now.
Additionally, if we’re seeing increased revenue, volume and conversion rate with an amazing improvement in CPA, are we choosing to incrementally up our spend? No.
While the cash coming in is critical right now, and may even be lemonade in the lemon of life in terms of being exposed to a broader residential market, residential sales alone don’t breed profitability. (Go back to last week’s post where I unpack that a bit more.)
So those are the most recent metrics.
As I’ve been pretty transparent lately, what other questions do you have or metrics would you like to see?
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