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USING R TO UNDERSTAND REVENUE BENEFIT FOR YOUR ONLINE BUSINESS
Catie Gamble – Data Scientist
Marks and Spencer .com
ONLINE RETAIL BASICS
HOMEPAGE
CATEGORY PAGE
PRODUCT PAGES
BASKET
CHECK
OUT
PURCHASE
VISIT
START
ONLINE RETAIL BASICS
HOMEPAGE
CATEGORY PAGE
PRODUCT PAGES
BASKET
CHECK
OUT
PURCHASE
VISIT
START
VISIT TO
PURCHASE
RETURN
TO
PURCHASE
Other call
to actions
ONLINE RETAIL BASICS
PURCHASE
VISIT
START
AVAILABILITY
PRICINGDELIVERY
OPTIONS
HOMEPAGE
CATEGORY PAGE
PRODUCT PAGES
BASKET
CHECK
OUT
MARKETING
SITE SPEED
FUNCTIONALITY
PROMOTIONS
SALES
SEASONALITY
VISIT TO
PURCHASE
PROBLEMS FACEDNew feature added to site during promotional period
We know the new feature drove higher conversion or customer engagement
But by how much?
Potential new initiative or strategy will bring additional revenue
But is set to degrade performance/delivery/etc…
How much additional revenue will be offset?
Scenario test several options for the same initiative
Which option is the most profitable/engages the customer the most?
and…Feature/Initiative cannot be measured by AB test
EXAMPLE IN R – THE PROBLEMNew feature added to site during promotional period
We know the new feature drove higher conversion or customer engagement
But by how much?
Potential new initiative or strategy will bring additional revenue
But is set to degrade performance/delivery/etc…
How much additional revenue will be offset?
Scenario test several options for the same initiative
Which option is the most profitable/engages the customer the most?
and…Feature/Initiative cannot be measured by AB test
ONLINE RETAIL BASICS
PURCHASE
VISIT
START
MARKETING
SITE SPEED
FUNCTIONALITYAVAILABILITY
PRICINGPROMOTIONS
SALES
DELIVERY
OPTIONS
HOMEPAGE
CATEGORY PAGE
PRODUCT PAGES
BASKET
CHECK
OUT
SEASONALITY
EXAMPLE IN R – THE PROBLEM
PURCHASE
AVAILABILITY
PRICINGDELIVERY
OPTIONS
HOMEPAGE
CATEGORY PAGE
PRODUCT PAGES
BASKET
CHECK
OUT
New feature
added to
Product pages
How does this
impact customers
going to next
stage of journey?
MARKETING
SITE SPEED
FUNCTIONALITY
PROMOTIONS
SALES
SEASONALITY
EXAMPLE IN R – THE PROBLEM
PURCHASE
AVAILABILITY
PRICINGDELIVERY
OPTIONS
HOMEPAGE
CATEGORY PAGE
PRODUCT PAGES
BASKET
CHECK
OUT
New feature
added to
Product pages
How does this
impact customers
going to next
stage of journey?
MARKETING
SITE SPEED
FUNCTIONALITY
PROMOTIONS
SALES
SEASONALITY
EXAMPLE IN R – REGRESSION
MARKETING
PERFORMANCE
FUNCTIONALITY
AVAILABILITY
PRICING
PROMOTIONS
SALES
Impact of
New feature
added to
Product pages
Product Page to
Add to Basket
Conversion Rate
%
= + +IMPACT OFIntercept
EXAMPLE IN R – REGRESSION – STEPS
1 2
34
Format data + exploratory
analysis
Build model.
Model diagnostics
Financial uplift
Consider interaction
variables
Impact on
ATB Rate VisitsConversion
RateAOV
Potential Revenue Impact
x x x
=𝐌𝐒𝐄 =
1
𝑛
𝑖=1
𝑛
(𝑦𝑖 − 𝑦𝑖)2
date device ATB cr
…
…
WHAT TO MODEL?
HOMEPAGE
CATEGORY PAGE
PRODUCT PAGES
BASKET
CHECK
OUT
PURCHASE
VISIT
START
Propensity Modelling
Marketing/Visit Forecasting
Funnel KPI modelling
Exit rate
predictions
Add to basket
Checkout to purchase
Marketing
Customer
segmentation
Control groups
