INside Performance Marketing
Impending VAT Change Trumps Christmas Sales

Impending VAT Change Trumps Christmas Sales

On the Affiliate Window platform there was a dramatic shift in sales patterns between the immediate sale period around Christmas and the New Year bank holiday. Whilst transactions were significantly down on January 3rd from their pre and immediate post-Christmas highs, the average order value that day was £122.

Put in context, compared to the Christmas period as a whole the typical sale value was 63% higher on January 3rd and double that recorded on 6th December, widely recognised as the peak pre-Christmas trading day online. This meant that whilst sales were down 43% on their cyber Monday high, overall sales revenue was 6% higher on 3rd January. Conversion rates were also better than Cyber Monday and above average for the whole of the Christmas period.

Delving deeper into the data we can see that electrical, home appliances, computing and furniture all over indexed on January 3rd with sales ramping up more than all other sectors. With typical order values well in excess of the network average this helps shed some light on how the complexion of transactions changed towards the end of Christmas week.

The combination of higher than average conversion rate and order value resulted in January 3rd outperforming any other day over the Christmas period on the network with final figures of £6.3m in sales for Affiliate Window’s advertisers on that day alone.

Diversifying Sale Dates

2010 also saw key retailers further diversify the start dates of their post-Christmas sales resulting in transactions being much more evenly spread over the tail end of December. As a result there are no obvious stark patterns in performance over the month of December other than sales tailing off as last delivery dates approached and passed and the annual first Monday of the month peak.

Christmas / Vat Sales graph

Pre-Christmas trading highs outstripped post-Christmas performance in terms of total sales but as average order crept up so the difference in sales revenue was much less marked (see the widening gap between sales revenue and transactions in the graph). Interestingly there was far less fluctuation in the average commission paid to affiliates although general patterns suggest this was marginally higher as the sales kicked in.

So overall a much more complex picture than last year underlining how online is maturing and retailers are choosing to follow their own path in optimising their peak season revenue. Throw in the hike in VAT and this year’s Christmas and New Year statistics will probably stand as an anomaly in years to come as we trace back ecommerce trends.

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Kevin Edwards

Kevin Edwards

Kevin Edwards has over nine years experience working for affiliate networks.

Since joining Affiliate Window in 2006, Kevin has had a significant impact on the business, facilitating and deepening relationships with partners and strengthening the core management team.

He heads up the Strategy team as Strategy Director with responsibility for producing research, implementing best practice and providing analysis for key clients.

He’s also former Chair for IAB's Affiliate Marketing Council.

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