For retailers, holiday sales are too important to leave to guesswork. Last year’s data holds the key to a more profitable season this year.
So don’t wait. The dog days of summer are the right time to analyze last year’s Q4 results. Sales trends, campaign performance, and operational missteps all provide valuable insights that inform decisions.
Here are seven reminders to help plan effectively.
Summer is the right time to analyze last year’s Q4 results.
Learn What Sold
Last year’s sales data reveals behavioral patterns: how shoppers responded to promotions, product launches, and site changes.
Review daily and weekly sales reports from October through December. Segment shoppers by device, location, and purchase date.
Look for sales spikes related to your marketing campaigns, categories, and products. Look also for missed opportunities, such as short-term sales slumps.
Use those learnings to schedule promotional periods and plan inventory. Replicate or even double down on what worked.
Know Top Channels
Next, analyze last year’s website traffic.
Perhaps most sales happened on mobile, but that is relatively less impressive if 90% of all site traffic was also mobile. The point being that not all ecommerce web traffic converts equally.
Learn which high-volume sources did not convert well, to improve this year.
Conversely, figure out which traffic sources had the best conversion rate. For example, if email marketing converted the best, start growing the list this summer.
Measure ROAS
Many B2C ecommerce businesses spend most of their annual advertising budget during the Christmas season. Knowing the top-converting channels leads to identifying the most profitable advertising campaigns.
Return on advertising spend is the ratio of dollars invested in a specific ad to the revenue or profit it generated. A campaign costing $100 and generating $400 in profit had an ROAS of 4:1 or 4x.
Perhaps you acquired one-time gift buyers via TikTok for $3 each, but spent $4 to acquire shoppers from YouTube, with a higher lifetime value.
Prioritize high-ROAS campaigns early in Q4. Scale back ineffective placements and, when suitable, negotiate performance-based advertising now.
Find Profitable Products
The mix of holiday products impacts profits. Slow-moving items tie up capital and often generate returns and support issues.
SKUs that sold in small quantities but had excellent conversion rates and low returns could likely benefit from more promotion.
Focus on proven sellers when ordering holiday inventory. Phase out low-margin or high-friction products. Some print-on-demand shops, for example, might decide to carry inventory for top sellers rather than wait for week-long production schedules.
Review Shipping Performance
Shipping errors and delays cost money, create churn, and destroy trust, especially during the gift-giving season. Customers hold the seller responsible even if it used a third-party fulfillment service.
Review warehouse performance logs, carrier tracking data, third-party shipping dashboards, and “where is my order?” requests. Identify:
- Order-to-ship times across peak dates,
- Product picking accuracy,
- Delayed shipments,
- Damaged shipments.
Some order management tools report shipping performance metrics. Regardless, last year’s fulfillment should inform shipping cut-off dates, staffing levels, carrier selection, and more.
Consider Customer Service
Customer service requests often reveal friction points in your store’s purchase flows and operations. Resolving these glitches once and for all could materially improve holiday profits.
Look at the volume of support requests by theme and date. Identify complaints associated with specific marketing campaigns, offers, or products.
Were shoppers confused about sizes? Did the “buy three items and get free shipping” offer cause consternation? Did the cryptic promo code create problems?
Identify items or offers that triggered support tickets and remove them from gift guides or sitewide promos.
Check for Refunds, Returns
Most holiday gift recipients return or exchange an unwanted item. Maybe the product did not fit well. It might have been a duplicate. Or perhaps the recipient just didn’t like it.
Check returns and refunds by product, channel, and date. Differentiate, when possible, between likely gift items and personal-use purchases.
Analyze whether returns resulted from a practice of your business.
