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Toy Sales Have Largest Dropoff from Website Errors

With Cyber Week in full swing retailers websites are getting hammered. This is the moment they prepare for all year and while we are enjoying our holiday, they are sitting in war rooms praying that their site can handle the traffic. If we've learned anything from the glitchy, hacky Disney+ launch, it is that even the biggest companies struggle to get the digital experience right.

Last year retailers spent a quarter of their entire year's marketing budget in 5 days amounting to over $6 billion in marketing expenses. With that expense added to the manpower, planning, inventory management and personnel involved, it is easy to see why retailers would be so nervous.

If you've done any shopping in the last few days you have probably run into slow sites, errors and products that were out of stock when you tried to complete your order. At Quantum Metric, we wanted to know what happens to online shopping when shoppers encounter an error. To be honest, we were expecting to find that frenzied, bargain hunting Cyber Week shoppers would be even less patient than normal but to our surprise that is not what we found.

We looked at the percentage of shoppers who had completed their purchase but not yet clicked "buy." We looked at the percentage of shoppers that actually resulted in retailer revenue and broke them down by those who encountered an error versus those that did not.

A Typical Retailer Day

On a typical day, 70-80% of shoppers will complete their purchase fully once they are have filled up their cart and added all their purchase information. If they encounter an error, general merchandise retailers will lose about 6 percent of their orders. Luxury merchandise retailers will lose 10.5 percent but toy retailers will lose a whopping 50.1 percent of their orders. 

Error Impact - Typical Day

 

During Cyber Week

We were expecting to see the impact of errors on Cyber Week be even worse but as you can see from the chart below the impact is about the same for general and luxury merchandise. Toy retailers experience the worst drop off still but instead of losing over 50 percent of their orders, they only lose about 29 percent. What's going on?

 

Error Impact - Cyber Week

Perhaps online holiday shoppers are not as frantic as we might imagine. For toy retailers, it turns out that big price promotions and thought of disappointed kids drives parents to push through the difficult experience.

To put the revenue loss into perspective, however, if this holiday season alone turns out to reach the estimate of $143 billion in online shopping, an average 20% drop in orders for retailers would be worth $28.6 billion in potential revenue. That's enough to more than pay for all of the marketing expenses for the season nearly 5 times. Ouch.

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