Study finds 1% of users generate 40% of sales

Study finds 1% of users generate 40% of sales

By Travolution
By Travolution
As little as 1% of a retail website’s users generate as much as 40% of its revenues, according to new research.

The study, based on analysis of 950 million page views from more than 123 million website visits, found that while 1.06% of total visitors generate four tenths of a site’s income, there are a further 20% of site visitors who will never make a purchase.

Customer experience management platform Qubit, which conducted the research, broke down website users into different user types.

Sofa Surfers

17% of website users visit sites regularly, but never purchase. Their regular viewing times of 9am-11am and 1pm-5pm suggest that they might be stay-at-home parents or non-working individuals with plenty of time on their hands to surf their day away. They are twice as likely as your average site visitor to be surfing on an Apple device using the Safari browser and to be using a tablet. Geographically, these users tend to come from urban areas, although Londoners do not seem to be as prone as others to this behaviour.

Big Spenders

This core of loyal website fans make up just 0.03% of total users but create 30% of revenue. Intensely loyal to their chosen retailer, they visit their preferred sites 300 times more often than the average user. They are 20% more likely than the average to be using a tablet, but are 10 times less likely to be visiting via a mobile. These users shop between 1pm-3pm during the day, but will also spend up to 20 times longer than the average user surfing between midnight and 4am. These users are 23% less likely than average to come from central London but are over-represented in the city’s suburbs, in particular in Ealing, where more than twice the average number reside.

Basket Cases

A strange retail breed, the basket case comes to a site and fills their shopping basket but never completes their purchase. They only represent 2.46% of users, but generate no revenue for the retailer. They tend to use Google’s Chrome browser, which has a younger user base that is happy to shop around, perhaps explaining their bizarre on-site behaviour. These users come from the Midlands and northwest, particularly from Birmingham, being 50% more likely than average to come from that area. They are also largely nocturnal, with their web usage focused around 7pm-3am.

Speedy Shoppers

Making up 1.03% of users, the focused few generate 10% of total revenues, making them the second most valuable segment. These users visit a site and make a purchase with no messing around and seemingly little consideration. While Mancunians rarely display this behaviour, people from northeast London seem to be keen on this sort of focused shopping. They are 18% more likely to be using a mobile and tend to surf via Internet Explorer or Chrome.

The research findings were developed using analysis from Qubit’s ‘big data’ retail analytics and personalisation platform. This collects and analyses information about behavioural trends among website users and then lets retailers serve up personalised websites based on that insight.

Qubit chief executive Graham Cooke said: “By breaking down online shoppers into these different personas its easy to see where retailers should be focusing their efforts.

“Sofa surfers and basket cases show all the traits of ‘real’ shoppers and if you’re not analysing your audience properly you’ll never know that they’re giving you nothing back.

“By understanding what people are doing on your site, and whether or not they’re going to turn into paying customers, you can make more informed decisions about where to invest your marketing budget.

“Conversely, it’s vital that you encourage and embrace your big spenders and the speedy shoppers because these tiny segments are driving a massive percentage of your revenue.”

The data was released to mark the launch of the latest version of the company’s customer experience management platform.

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Cruising Excursions out to cause waves with international expansion

By Travolution
By Travolution

Two-and-a-half years after introducing its disruptive start-up model in the world of cruise, UK-based is poised to expand its international reach.The firm, which will turn over £6 million this year, has created new websites for the Germany, French and Dutch markets and expects to make a splash after seeing considerable growth in the UK.

Having agreed deals with the UK’s big two, Thomas Cook and Tui Travel, the firm has seen sales increase 400% this year, double what it had projected.

It turned a profit last year according to accounts filed last September and is now out of its start-up phase and a fully sustainable business, founder and managing director Simon Purchase told Travolution.

He was in London this week to meet with the technology firm Correl8 which built the existing website and has created its second version including its international sites in just eight weeks.

Purchase admitted at first it was a hard slog convincing agents to feature his product, but the signing of the big two was a turning point.

“We have had a very successful couple of years. It’s gone round in a circle to the point where people are asking us whether they can take product.

“With Thomas Cook and Tui Travel now offering excursions to their passengers, customer are now asking their agents if they can do their excursions.”

Purchase said agents have also been forced to seek out additional revenue opportunities since cruise lines cut commission to agents – the UK’s leading operators by as much as 10%.

With 10,000 tours in 700 ports worldwide, Cruising Excursions believes it is well ahead of any potential rivals in a sector tipped as the next battle ground for disruptive technology.

Behind the business, however, is more than just fancy technology it has contracted its own tours and organises its own transfers to give it control over the product.

The firm’s entry into the sector has seen local tour guides and operators previously frozen out by the major lines able to grab a slice of a growing and lucrative market.

At the same time a market that was sewn up by the operators has been broken open, offering customers significant savings on their on-shore activities.

Cruising Excursions now claims to have 8% of the UK cruise market of 1.7 million annual cruisers. It had originally targeted hitting 2% after two years.

Purchase said trade distribution has played a key part in the firm’s growth, rising from just 10% at the outset to 50% today.

European expansion isn’t Cruising Excursions first foray overseas; it already has a health business to consumer operation in the US and has just signed with Harvey World Travel in Australia.

But Purchase said he expects its latest expansion will cause further ripples among operators who are seeing good growth in cruise in Europe particularly in Germany, the second-biggest market.

“When I started this business I never thought there was this much money in excursions. The dramatic growth from direct and agents has been incredible in comparison to what we budgeted for.

“I’m obviously very pleased with the company’s success and am driving the business forward in the future to inhibit potential competitors.

“This sector has been a closed shop for 20 years. The cruise lines have never put their prices down they have always put them up. What do they expect?”

Cruise Excursions plans to launch an app that will allow customer to book their cruises while they are away, up to a day in advance.

It has also developed an API although this is not being used widely to date, most agents approaching shore excursions as an after sale add-on rather than inserting them into the booking flow.

The firm also hopes to add pre- and post-cruise trips, something failed rival Shorex set out offering but was unable to make work.

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