Product Price Sensitivity · 2020. 4. 8. · FR - Toys & games: examples of Conversion Rate changes over time slope slope Source: Microsoft Internal Data, France, March 1st-30th Q&A

Product Price SensitivityHypothesis preliminary testing on FR sample

March 2020

Hypothesis

As Covid-19 now also has economic impacts,

lot of people have lower revenue resources.

Consequently, we might expect a higher sensitivity in prices.

Methodology

Market: France

Period: March 1st - 30th

Data: Microsoft Internal, from shopping campaigns only

Sample: data of 50+ accounts whose shopping product feed classification matches the MSA Shopping Taxonomy

either for Product Type 1 and/or for Category 1 Level

Depending on the category we observe, we define a price range threshold in order to have a minimum volume of

clicks each day for each price range

In France the lockdown started on March 17th . But major Government announcements have been made on March

12th and 14th that led behaviour changes to start

Product Price RangesThe below are only random examples just to show how ranges were built.

Store names, even if not related to the sample used, have been hidden.

Range 40-60€

labeled as « 40 »

Range 40-60€

labeled as « 40 » Range 40-60€

labeled as « 40 »

Range 20-40€

labeled as « 20 »

Range 80-100€

labeled as « 80 »

Range 120-140€

labeled as « 120 »

Important

Even if the impression and click are made on a low-price product, the final conversion(s) can happen on a different

product with a different price. And the web user can have several products in their shopping cart

Nevertheless, we consider in this analysis that the product price on which the web use click/convert gives a good

information on the price sensitivity

But in no case the price ranges should be considered as exactly the value of the purchase for ROAS or ROI calculation

Electronics

FR - Electronics: the products with lowest price range

have the biggest amount of clicks and their volume grows over time

Electronics: clicks

0 20

40 60

80 100

120 140

160 180

200 220

240 260

280 300

320 340

360 380

400 420

440 460

480

0€

and 40€

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

FR - Electronics: examples of CTR changes over time

CTR

slope

Electronics: CTR over time and trendline for range:

0-20€

0

Linear

(0)

CTR

slope

Electronics: CTR over time and trendline for range: 280-300€

280

Linear

(280)

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

FR - Electronics: a clear shift of CTR away from higher priced products.

The higher the prices ranges, the stronger the CTR decline over time.

rate of change

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

rate of change

0

20

40

60

80

100

120

140

160

180

200

220

240

260

280

300

320

340

360

380

400

420

440

460

480

CTR rate of change over time

low-price :

Positive trend

High prices

Negative trend

FR - Electronics: examples of Conversion Rate changes over time

conversion rate

slope

conversion rate

slope

Electronics : Conversion Rate over time and trendline for range :

0-20€

0

Linear (0)

Electronics : Conversion Rate over time and trendline for range :

280-300€

280

Linear

(280)

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

0

20

40

60

80

100

120

140

160

180

200

220

240

260

280

300

320

340

360

380

400

420

440

460

480

Conversions rate: change over time trend

FR - Electronics: a clear shift of Conversions away from higher priced products.

Conversion Rate goes up for low-prices and down for high ones overall.

Over time people buy less expensive products.

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

change

trend

low-price :

Positive trend

High prices

Negative trend

Conclusion:As there is a clear trend over time

of conversion rate going up for

low-prices and down for high

prices, we can reasonably

conclude that beyond the volume

and categories aspects, a real

consumer behavior appears of

sensitivity on prices

FR - Electronics: when looking at Printers as a specific product example, the price

sensitivity is confirmed

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

40 60 80 100 120 140 160 180

CTR rate of change over time

40 60 80 100 120 140 160 180

Conversions rate: change over time trend

0

50

100

150

200

250

300

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29-M

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31-M

ar

Printers (Imprimantes): clicks40

60

80

100

120

140

160

180

Apparel & accessories (Vêtements & accessoires)

FR - Apparel & Accessories: the products with lowest price range

have the biggest amount of clicks and their volume grows over time.01-M

ar

02-M

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28-M

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29-M

ar

30-M

ar

Apparel & accessories: clicks

0

20

40

60

80

100

120

140

160

180

between 0€

and 60€ over time

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

FR - Apparel & Accessories: examples of CTR changes over time

CTR

slope

CTR

slope

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

Apparel & accessories: CTR over time and trendline for range: 20-40€

20

Linear (20)

Apparel & accessories: CTR over time and trendline for range: 180-200€

180

Linear

(180)

0 20 40 60 80 100 120 140 160 180

CTR rate of change over time

FR - Apparel & Accessories: overall for this sample, the higher the prices

ranges, the stronger the CTR decline over time

rate of change

Source: Microsoft Internal Data, France, March 1st-30th

Q&A : why observing products ranges < a certain value ? Cf the “threshold” explanation in methodology slide.

rate of change

low-price :

Positive/Slightly

Negative trend

High prices

Negative trend

FR - Apparel & Accessories: examples of Conversion Rate changes over time

slope

slope

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

Apparel & Accessories : Conversion Rate's Trendline Slopes over time

for range 0-20€

0

Linear (0)

01-M

ar

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ar

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27-M

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28-M

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29-M

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30-M

ar

Apparel & Accessories : Conversion Rate's Trendline Slopes over time for

range 80-100€

80

Linear (80)

0 20 40 60 80

Conversions Rate : change over time trend

FR- Apparel & Accessories: a stronger trend down in Conversions for

higher priced products. Over time people buy less expensive products.

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

change

trend

low-price :

Slightly Negative trend

High prices

Negative trend

Conclusion:As there is a clear trend over

time of conversion rate going

up for low-prices and down

for high prices, we can

reasonably conclude that

beyond the volume and

categories aspects, a real

consumer behavior appears

of sensitivity on prices

Toys and games

(Jeux et jouets)

FR - Toys & Games: the products with lowest price range have the

biggest amount of clicks and their volume grow over time

Toys & Games: clicks

0

20

40

60

80

Source: Microsoft Internal Data, France, March 1st-30th

Q&A : why observing products ranges < a certain value ? Cf the “threshold” explanation in methodology slide.

between 0€

and 40€ over time

FR - Toys & Games: examples of CTR changes over time

CTR

slope

CTR

slope

Source: Microsoft Internal Data, France, March 1st-30th

Q&A : why observing products ranges < a certain value ? Cf the “threshold” explanation in methodology slide.

Toys & games goods: CTR over time and trendline for range: 20-40€

20

Linear

(20)

Toys & games goods: CTR over time and trendline for range:

80-100€

80

Linear

(80)

0 20 40 60 80

CTR rate of change over time

FR - Toys & Games: overall for this sample, the higher the price ranges,

the stronger the CTR decline over time

rate of change

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

rate of change

low-price :

Slightly

Negative trend

High prices

Negative trend

FR - Toys & games: examples of Conversion Rate changes over time

slope

slope

Source: Microsoft Internal Data, France, March 1st-30th

Q&A : why observing products ranges < a certain value ? Cf the “threshold” explanation in methodology slide.

Toys & games: conversion rate trendline slopes over time for price

ranges: 20-40€

20

Linear

(20)

Toys & games: conversion rate’s trendline slopes over time for price

ranges 40-60€

40

Linear

(40)

0 20 40 60 80

Conversions Rate : change over time trend

FR - Toys & games: a stronger trend down in Conversions for higher priced

products. Over time people buy less expensive products.

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

change

trend

low-price :

Slightly Negative trend

High prices : stronger

negative trend

Conclusion:As there is a clear trend over

time of conversion rate going

up for low-prices and down

for high prices, we can

reasonably conclude that

beyond the volume and

categories aspects, a real

consumer behavior appears

of sensitivity on prices

Furniture

(Meubles)

FR - Furniture (Meubles): the products price range between 140€ and

200€ have a bigger amount of clicks, compared with ranges between

200€ and 260€

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

We choose here to focus on the 140-160 to 240-260 € product price ranges to observe a certain level of prices.

between 140€

and 200€ over time

0

20

40

60

80

100

120

140

160

180

200

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Furniture (Meubles): clicks

140

160

180

200

220

240

FR - Furniture (Meubles): examples of CTR changes over time

CTR

slope

CTR

slope

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

We choose here to focus on the 140-160 to 240-260 € product price ranges to observe a certain level of prices.

Furniture (Meubles): CTR over time and trendline for range:

220-240€

220

Linear

(220)

Furniture (Meubles): CTR over time and trendline for range:

140-160€

140

Linear

(140)

140 160 180 200 220 240

CTR rate of change over time

FR - Furniture (Meubles): overall for this sample, the higher the price

ranges, the stronger the CTR decline over time

rate of change

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

We choose here to focus on the 140-160 to 240-260 € product price ranges to observe a certain level of prices.

rate of change

low-price :

Positive/Slightly

Negative trend

High prices

Negative trend

FR - Furniture (Meubles): examples of conversion rate changes over time

slope

slope

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

We choose here to focus on the 140-160 to 240-260 € product price ranges to observe a certain level of prices.

Furniture (Meubles): Conversion Rate over time and trendline for range:

140-160€

140

Linear (140)

Furniture (Meubles): Conversion Rate over time and trendline for range:

240-260€

240

Linear (240)

140 160 180 200 220 240

Conversions Rate : change over time trend

FR - Furniture (Meubles): a stronger trend down in Conversions for higher-

priced products. Over time people buy less expensive products.

Source: Microsoft Internal Data, France, March 1st-30th

Note : we observe products ranges < a certain value -> cf the “threshold” explanation in methodology slide.

We choose here to focus on the 140-160 to 240-260 € product price ranges to observe a certain level of prices.

change

trend

low-price :

Slightly Negative trend

High prices

Negative trend

Conclusion:As there is a clear trend over

time of conversion rate going

up for low-prices and down

for high prices, we can

reasonably conclude that

beyond the volume and

categories aspects, a real

consumer behavior appears

of sensitivity on prices

Hypothesis test conclusion

HYPOTHESIS: As Covid-19 now also has economical impacts,

lot of people have lower revenue resources.

Consequently, we might expect a higher sensitivity in prices.

CONCLUSION: The hypothesis is confirmed after analysing the

France samples.