'Tis the season for holiday gift giving, and it's also the time for many of us to review the year that is coming close to an end in just a few short weeks.
Hopefully you're knee deep in holiday orders, and packages!
But, if this isn't a busy time for your online retail store, it's a great time to set aside time to review what happened in the past 12 months, and make your plans for 2015 to get off to a roaring start.
January is often a down time for most retailers, so if you lack the time to do this review in the next few weeks... first week of January will do just fine.
How to Do the Review
Set aside at least half a day (ideally, a full day) to do the review.
If we're in our offices, or home office there is a tendency to get distracted so do the review in a new space.
Go to the library, a quieter coffee shop, co-working space, or even book a hotel room for yourself (and add on a spa day!).
What to Review
Financials - This is the core health of your business. Your profit and loss statements (that your Accountants prepare, or some may have available through Quickbooks or other financial software, or even (shudder) Excel.
Questions to ask: How much did you do in gross revenue this year? (vs. last year), How much did you net in profit this year? (vs. last year) What was your margin (in dollars and percentage)? Was this up/down versus last year? What's your days of inventory as you close the year? (Up or down versus last year).
If you set specific financial goals for this year (yay!), you'll want to compare versus how you tracked versus those goals as well.
Review your marketing/promotional spend. If you have a marketing budget that you're actively tracking on a monthly or quarterly basis, then this will be an easy part of the financial review. If not, hopefully you can download your receipts/expenses categorized as Advertising and Promotional spend from your accounting software. If you set a marketing spend goal, compare your actual spend versus forecasted, both as a total gross dollar amount of spend, and as a percentage of revenue.
Analytics - Hopefully you have Google Analytics, Omniture or similar software installed on your eCommerce site. If you're not reviewing this monthly (good practice), or weekly (best practice), now is a good time to pull the data.
Google Analytics (GA) offers the ability to export reports into PDF or CSV files (How to do so here). This is ideal if you want to layer your analytics on top of sales and profitability data which may not be whole in format in GA if for example you do wholesale sales or trunk show show revenue that would not show up there.
There is a ton of data in GA, and it's easy to get lost in there. The top metrics I focus on (at a year over year level) are: Unique Visitors, Repeat Visitors, Bounce Rate, Conversion, Traffic Sources, Social, Content and Landing & Exit Pages.
If you're putting out a regular email newsletter, login and get a report for your annual summary of performance on email. Key metrics to review are: % opens, bounced emails, unsubscribe rate, and click through. Also, pay attention to your top performing emails, and print those out for review later.
Assortment - Your eCommerce backend content management system will likely hold this data. In this exercise you want to understand what products (including colours/sizes/styles) sold through the fastest and turned the quickest. Doing this is important to understand what you need to create (or buy if you're a distributor). You'll also want to highlight the duds of your product assortment, and make note to potentially phase those products out.
Another great source of feedback on your assortment is your customer review software. Although it's a daunting exercise, an app like Yotpo that tracks reviews can give you a product by product rating. Take time to READ the feedback and integrate it into your buying (and designing process) for next year.
Customer Analysis - Your eCommerce system or CRM (customer relationship management system) has this information stored. In this part of the review, you'll want to determine who your top 20% of customers (or less) that drive 80% of your revenue (although a myth, this is often true!). Consider opportunities to dig deeper on them -- where do they live? How did they find your site? Repeat purchase of the same item? Different items? How old are they? What interests do they have in common? What magazines/websites/FB pages do they follow?
Leverage the internet as much as possible, or even reach out to them directly with a personal survey (and offer a small reward for completing... like a gift card!) to get more insight. These are your BEST customers, and you want more just like them.
Content + Marketing efforts - Your GA reports will feed into this section of analysis but so will your top social media channels. First, you'll want to identify your top social referrers (What social media platform drives the most traffic and sales? Traffic and Profit?). Second, you'll want to identify your worst social referrers (What social media platform is driving high traffic, and low conversion? What social media platform (that you spend time on) is driving no traffic?)
Next, you'll want to dig into the individual platforms analytics for deeper details. This is why I'm suggesting you only pick a few channels, as this can be a time consuming exercise. Major platforms such as Facebook, Pinterest, Instagram (via Iconosquare), Twitter and others have robust analytics tools if your account is active as a business.
Have a look at what posts received the highest reach, engagement, and comments. Mark down your best three pieces of content, and your three worst performing. Write down similarities between the top performing pieces of content, and differences versus the poor performing content. Notate the best times to post, and top performing hashtags.
Accomplishments + Key Learnings - This is where we CELEBRATE all of the good (& highlight where we learned from the not-so-good).
Take out a piece of paper, and write down your top 10 accomplishments for the year. What did you do really well? What are some things you did this year in your business that you are proud of? They don't have to be major (though they could be), or they could be smaller (i.e. learned how to use Photoshop).
Now, flip the paper over and list your top 10 things/experiences/lessons you learned this year. For example, quality over quantity in social media, or interview web developers prior to hiring. Whatever it is. Anything in your business that seemed to suck at the time, that now you've learned from as to how to do things differently. Keep this piece of paper. You'll need it for your 2015 review + deserve to celebrate your accomplishments + your learnings as this year comes to a close.
If you've made it to the bottom of this post, you're doing great!
Although it sounds arduous, I promise that doing a thorough 2014 year in review of your online retail business will prove immensely valuable.
Both for your 2015 planning (which I will tackle in a future post), but also for optimizing your marketing efforts and time.
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