After a very busy Christmas season, I expected a big drop in traffic starting December 26th. I was surprised to discover, however, that some of the products I was marketing not only maintained their traffic levels but in some cases even saw increases in clicks. The bad news, however, was that conversion rates for these products decreased, resulting in less profit per click for my company.
My first thought was that the increase in clicks was coming from people looking for post-Christmas bargain sales. This theory might work to suggest increased clicks, but it wouldn’t really account for the decrease in conversion rate. While its true that we didn’t offer a specific post-holiday sale, we also didn’t create ad text around this concept either, so I don’t think an inordinate number of people would be clicking through on our ads looking for bargains.
But then my co-worker Hilary had an interesting theory: what if people get gifts on Christmas, then wake up the next morning and search for the gift they got to find out the price of the gift? This might be an act of vanity (to see how much someone spent on you) or to determine the value of a return or exchange.
Either way, this sort of behavior is nothing but bad news for retailers buying paid search ads. Ads that had a high degree of commercial intent prior to Christmas could rapidly become the target of searchers with at best curiosity about their gift and at worst a desire to return the items they received.
So what’s an eTailer to do? Well, I think you’ve got two choices. Option #1 is to reduce bids and reduce the cost of these new window shoppers and the reduced conversion rates. Option #2 is to create post-holiday offers that increase conversion rate among actual bargain shoppers, again to offset the horde of non-buyers. One or both of these tactics might be the ticket to post-holiday success.