September 3, 2020
By Crystal Astrachan
Sr. Analytics and media manager
Advertisers often ask how to make the most of Amazon deal events like Prime Day and Black Friday/Cyber Monday. To help answer that question, we studied purchases made by new-to-brand (NTB) coffee pod and capsule customers during tentpole events. Our analysis answers two questions:
Prime Day and Black Friday/Cyber Monday are key for attracting a high volume of NTB customers. Using display advertising and discounts together can help advertisers to reach up to 57% more NTB customers than discounts alone. Tentpole events attract customers who continue to purchase from brands after the events. The new cohorts of customers collectively spend up to 1.9x more than average during their first year.
Who: Cohorts of NTB coffee customers that purchased for the first time during Prime Day and Black Friday/Cyber Monday were compared to cohorts of NTB customers throughout the rest of the year. ‘Coffee’ in this post refers to single-serve coffee ASINs, including coffee pods and capsules. ‘Cohort’ refers to the collective group of coffee customers.
When: We evaluated four cohorts of customers in this study: customers who entered during two Prime Day events (2017 and 2018) and two Black Friday/Cyber Monday events (2016 and 2017). We compared these four cohorts to cohorts of NTB customers that made their first purchase throughout the rest of the year to form two comparative years of a baseline, which represents an average day outside of Prime Day and Black Friday/Cyber Monday. Overall, we used sales data from 11/2016 – 10/2019.
What: We calculated the number of NTB customers at each time period, and tallied NTB customers’ purchases for the 12 months after initial purchase. These calculations provided the average first-year spend of NTB customers.
More NTB coffee customers purchase for the first time during tentpole events than average days.
The volume of NTB customers isn't just because the events attract more customers overall. A greater percentage of customers are NTB during tentpole events. On an average day, 32% of customers that purchase from the coffee brands studied are NTB, compared to 40% on Prime Day and 76% on Black Friday/Cyber Monday.
Discounts alone resulted in 2.1x and 1.5x more NTB customers for Prime Day and Black Friday/Cyber Monday, respectively, compared to an average day. Brands that offered a discount and used display advertising saw 57% and 13% more NTB customers than brands that offered a discount alone on Prime Day and Black Friday/Cyber Monday, respectively.
Advertisers often ask if customers that purchase for the first time during Prime Day and Black Friday/Cyber Monday will remain loyal to their brands after the tentpole ends or if the events attract one-time shoppers. There are two ways to answer this question.
First, how much does the average customer spend over their first year? An average NTB customer that starts purchasing from a coffee brand on Prime Day and Black Friday/Cyber Monday spends 90% and 80% of an average NTB customer that starts purchasing on another day. While each individual customer goes on to spend slightly less, the high total volume of customers during Prime Day and Black Friday/Cyber Monday more than makes up for the lower average customer annual spend.
Second, how does the entire cohort of NTB customers collectively spend over their first year? We know that tentpole events are volume drivers. In key insight 1, we saw that the tentpole events drive a high total volume of customers when compared to an average day. So it’s important to focus not only on the behavior of an average NTB customer, but also on the group of NTB customers as a whole - the entire cohort.
As illustrated below, the cohort of customers that started purchasing from the coffee brands during Prime Day and Black Friday/Cyber Monday collectively spent 1.9x and 1.2x more, respectively, when compared to groups of customers that purchased for the first time during an average day.
In summary, our study revealed the following insights:
Make use of our insights with these next steps: