Last Minute Holiday Shoppers May Have a Lower Lifetime Value Than Those From Black Friday and Cyber Monday

Dec, 24 2014

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In a recent study of 5 million customers over multiple shopping seasons, we've found some very interesting data that show a lower average lifetime value for customers acquired near the end of a holiday shopping season. These last-minute holiday shoppers not only have a lower lifetime value, but tend to have a lower retention rate than customers acquired during Black Friday and Cyber Monday. Last-minute holiday shoppers are defined as those shoppers who make purchases between December 4 and December 23. These shoppers also tend to spend, on average, much less than Black Friday and Cyber Monday shoppers.

Key findings from the analysis by AgilOne include:

  • The average lifetime value of a last minute Christmas shopper is $122 as compared to $142 for customers acquired during the rest of the year, $137 for those acquired on Black Friday and $128 for those on Cyber Monday
  • The retention rate of last minute holiday shoppers is 22 percent lower as compared to customers acquired during the rest of the year and 13 percent lower than customers acquired on Black Friday
  • The lifetime value of last minute holiday shoppers is 14 percent lower as compared to customers acquired during the rest of the year and 11 percent lower than customers acquired on Black Friday

This doesn't mean that your last minute holiday shoppers aren't worth your time. On the contrary, this means that you have a cluster of customers who you have the potential for higher life time values. Brands encounter huge amounts of last minutes shoppers but don't invest enough resources or effort in to improving their retention rates. Retailers should focus on creating marketing campaigns that further incentivize last minute shoppers to keep coming back for more. Using discounts, personalized offers and even custom product recommendations can help increase the life time value of your last minute shoppers.

"Retailers have worked hard to acquire millions of new shoppers over the holiday season, but our analysis shows that they need to do much more to encourage long-term brand loyalty among these new buyers," said AgilOne CEO Omer Artun, Ph.D. "By following up with highly targeted, relevant messages throughout the year, brands can achieve much greater return on their holiday investment."