Elist Electronics Sales Analysis

Elist is an e-commerce platform, founded in 2018, that sells popular electronic products and accessories worldwide.

This project aimed to provide insights that can help teams across the company understand Elist’s performance, improve operational efficiency, and drive better decision-making.

Key business questions

• What were the overall sales trends from 2019 to 2022?
• What were the company's yearly and monthly growth rates?
• How has the new loyalty program performed? Should we keep using it?
• What was the company's refund rate and average order value (AOV)?

Executive summary

TL;DR: Post-pandemic sales are stabilizing, but seasonal dips and shifting consumer behavior highlight the need for diversification and strategic engagement. Strengthening loyalty programs, optimizing high-value product experiences, and mitigating seasonal downturns with targeted promotions will drive sustained growth and customer retention.

Deep-dive analysis

Sales Surge in 2020, Followed by Decline in 2021-2022: A Shift Toward Pre-Pandemic Trends

• From 2019 to 2022, over 108K orders were placed, generating over $28.1M in total sales. 
• 2020 saw the highest revenue at $10M, a 163% surge from 2019, with an average order value (AOV) of $300. March 2020 experienced the sharpest monthly spike (~50%) in sales and orders, driven by the shift to online shopping and remote work.
• In 2021, sales growth rate slowed by 10%, and AOV dropped to $255. The decline steepened in 2022, with sales falling 46%, signaling a return to pre-pandemic consumer behavior.

Recommendations:

• Diversify product offerings and explore new categories to mitigate reliance on pandemic-drive trends and adapt to changing consumer behavior.

Sales Slump in February & October: Plan for Off-Season Dips

• While sales peak during the holidays, October and February consistently see sharp declines. The steepest decline was October 2022 (-55%).

Recommendation:

• Combat seasonal dips with targeted promotions and engagement strategies in October and February, such as early holiday deals, limited-time offers, and customer re-engagement campaigns, to counteract seasonal dips.
• Collaborate with the Marketing team to investigate the sharp decline in sales in October 2022 and identify the underlying causes.

Loyalty Program Drives Growth, But High-Value Transactions Remain with Non-Loyalty Members

• Non-loyalty customers generated $17M in sales, surpassing loyalty members, who generated $10M over four years.
• Since 2021, the loyalty program has driven growth in annual revenue, order volume, and average order value (AOV). However, AOV for loyalty members remains only slightly higher than or equal to non-loyalty members.

Further breakdown of the loyalty vs non-loyalty cohort by percentile shows that: 

• High-value customers are often non-loyalty members. Across all four years, the top 25% of non-loyalty customers consistently spent more per order than loyalty members. This suggests that occasional or bulk buyers drive larger transactions without being part of the loyalty program.
• Loyalty members spend more frequently but at lower order values. The bottom 25% of loyalty members consistently outspent non-loyalty members in that percentile, indicating that the program attracts repeat buyers rather than bulk or high-ticket purchasers.
• Loyalty member spending is stable, while non-loyalty AOV fluctuates. The median AOV for loyalty members has remained relatively consistent ($168) over the years, while non-loyalty AOV fluctuates more, with significantly higher spending at the 75th percentile.

Recommendation: 

• Convert high-spending non-loyalty customers into loyalty members with tailored incentives that maintain their spending habits.
• Optimize the loyalty program with tiered benefits, exclusive bulk discounts, or premium membership perks to encourage higher-value transactions.

Mid-Range to High-Value Products Drive Sales but Experience Higher Refund Rates

• Apple products account for 49% of all orders, generating $14M in sales, with Apple Airpods headphones leading in volume (48K+ orders).
• In 2020, the refund rate was 9.21%, dropping to 3.61% in 2021. The overall 5% refund rate remains well below the 8-10% industry benchmark (1,2), highlighting strong product performance across most categories.
• ThinkPad (12%) and Macbook Air laptops (11%) have the highest refund rate across all store orders, despite accounting for only 2.70% and 3.67% of orders, respectively.
• Apple AirPods (2K+ refunds) and 27-inch 4K gaming monitor (1K+ refunds) have the highest refund counts, making them key focus areas for return reduction. 
• Mid-range to higher-value products may see more refunds due to customer expectation, product performance, or usability concerns rather than impulse buying. This trend suggests that expensive electronics are more return-prone due to price sensitivity, feature complexity, or differing expectations.

Recommendation: 

• Conduct customer surveys and analyze return data to identify key issues with high-refund products (ThinkPad laptop, Macbook Air laptop, Apple AirPods, 27in 4K gaming monitor), such as quality, fit, functionality, or misleading expectations. 
• Enhance post-purchase support by offering troubleshooting assistance, extended warranties, or repair/replacement options to reduce unnecessary returns and improve customer satisfaction.

About the data

• The ERD is available here.
• Refund dates apply only to products purchased between 2019 and 2022.
• Supplemental SQL queries used for analysis can be found here.