Valentine’s Day 2017 Recap
Valentine’s Day 2017 unfolded in much the same way as Holiday 2016. In a word, late. Even though companies began promoting for Valentine’s Day as early as January 10th, most of that growth happened in the week leading up to Valentine’s Day, once again suggesting that, more and more, we are becoming late shoppers and last minute buyers. Reporting for the calendar dates of January 15th – February 14th, the average specialty food company grew 2% over the same period of time last year.
Our Specialty Food Index (SFI) is comprised of companies selling protein, fruits and nuts, snacks, confections, pantry goods, gift baskets and other food items direct-to-consumer. For the purposes of our Valentine’s report, we omitted companies that do not promote for Valentine’s Day either by direct mail or e-mail campaigns.
Here is a closer look at 2017 vs 2016 averages of relevant companies in the index:
- Revenue grew 2%.
- Visits fell 4%.
- Revenue per Visitor grew 5%. Average rev/visit was $4.17.
- Conversion Rate (CR) grew 3%. Average CR was 4.4%.
- Average Order Value (AOV) grew 2%. Average AOV was $95.
- Best performer grew 26% in revenue. Lowest performer fell 15%.
- 27% of the index grew more than 10%.
- 41% grew between 1% and 10%.
- 32% were flat or down.
There was a wide range of performance data to review. As always, we try to garner the common themes in those that outperformed. Often times it’s the lack of those initiatives that hamper growth in the weaker performers. This holiday was no exception.
These late-buying trends suggest that urgency is simply gone for the majority of buyers. With so many of us conditioned for Amazon Prime, and with Prime Now growing in market share, even a loyal customer with the intention to buy will wait until the last minute. If the company doesn’t prepare for this and keep shipping options open until the last possible minute, revenues can easily be lost. We see this trend continuing and strengthening for the unforeseeable future.
The best performers allowed for procrastination and offered customers the option to ship as late as Monday, February 13th for Valentine’s Day arrival. This not only gave them the extra days of seasonal revenue, but also created additional promotion opportunities. The most important gift-giving edge that specialty food companies have over Amazon is variety and full selection. This edge is lost if the customer is frozen out by early cut-off dates. The need to protect and enhance those competitive advantages to Amazon is becoming imperative for companies who want to sustain healthy growth. This is also captured in end-user experience, excellent customer service and quality. All of which solidify trust and loyalty in a customer.
Another absolute throughout our best performers was a strong Holiday 2016 season. This is the most critical element of our business. Specialty food companies really do have one shot at impacting their entire year by increasing its recent, best-responding buyer list. A strong holiday is far more crucial than what it simply produces in sales. It ensures that next year’s off-season events and holidays are well positioned. We saw this in spades in our Valentine’s Day results.
Planning and attaining a robust holiday looks different for every business, but all successful marketing plans will include a mix of test offers, new merchandise, promotions, careful pricing, attractive shipping rates, and new methods of customer acquisition. All of these elements should be rolled out in a timely and organized way to lower risk and balance proven marketing investments with newer, more speculative plays. We are all working within the confines of a budget and appropriate spend allocation is everything.
As was the case in holiday 2016, our best performers are also benefiting from ongoing conversion rate optimization (CRO) efforts. Optimizing a site is continuous. In terms of seasonal relevancy, CRO can mean color changes, appropriate merchandise on the homepage and promotional banners. Sites that are the best converting remain fresh with new content, seasonal changes and interesting photography. This doesn’t have to come at a great cost, just having a different featured product each month, or changing out the images on your homepage can inspire a deeper look.
Making sure the buying process is seamless and unencumbered is also important. Often times we are too close to our own websites to notice the glaring issues. Do some user testing, look at where you are losing shoppers. Find the conversion killers and address them. A half a point increase in your conversion rate can be significant, even if your traffic remains static. Companies that grew this year over last year all invested in their websites in 2016.
Creative seasonal messaging was also a winning play. Change the messaging on your confirmation page and include a special promotion for the buyer. Use your transaction e-mails to promote. An order confirmation e-mail is a great opportunity to get a second order as is a shipping / order tracking e-mail. The best buyers are the most recent buyers and e-mails that relate to an order have a far better chance of being opened and read than an unsolicited e-mail. Use those opportunities whenever possible and start early.
With Valentine’s Day in the rear-view mirror, ask yourself if you are prepared for Easter. Though no holiday will come close to end-of-year boom, Spring events offer a good opportunity to test your marketing efforts. Let us know if we can help.
ARE YOU GOING TO THE SPECIALTY FOOD ASSOCIATION BUSINESS SUMMIT?
The event will be held April 2 – 4th in Chicago and will cover all the latest and greatest in specialty food eCommerce. 5th Food Group will be presenting, along with an incredible line up of speakers and participants. Visit Specialtyfood.com/sfbs for more information.
Want to meet us there? Contact Jennifer Emanuelson at jennifer@5thfoodgroup.com