Is Cartwheel Having An Impact on Target In-Store Sales?

Make sure to read my follow up: Target should shut down Cartwheel.
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Target Cartwheel has driven approximately $4.2m $4.7m in in-store sales in the first 8 weeks of the program. This post explains how I calculated that number.

A second post will cover why I think Target needs to revisit its Cartwheel strategy and potentially shut down the program. If you’re not familiar with Cartwheel, read Target’s official introduction.

Program Basics
To use Target Cartwheel, consumers go to cartwheel.target.com and login through Facebook. Consumers then get to choose a limited number of product offers. For example, the most popular offer on Cartwheel is 5% off fresh berries. On the product page, you’ll see the 5% off listed in the upper left hand section. You’ll also see ‘global redemptions’ for the offer at the top of the page. The current # of redemptions (as of this morning) is 15,177. To redeem the offer, a consumer would go into her local target (the offers are only redeemable in-store), grab the product, and show the cashier a Cartwheel barcode. The cashier scans the barcode and the consumer saves 5% on fresh berries.

Global Savings & Total Sales
If you go to cartwheel.target.com (homepage), there’s a number representing Global Savings. As of this post, the number is about $355K.

So what is Global Savings? As a formula, Global Savings = Redemptions * % Off * Total Price. Basically, it’s the total amount of savings through Cartwheel.

While Global Savings itself is an interesting figure and a metric we can all track, there are a lot of metrics I’m more interested in and top of my list is Total Sales driven by Cartwheel. Has Cartwheel driven $1M in in-store sales for Target? $3M? $10M? Basically, is Cartwheel having any impact on in-store sales?

Unfortunately, exact figures are impossible for me to figure out because pricing varies by store, some Cartwheel offers cover multiple products at different price points, and various other quirks of Cartwheel,  but I feel I can get an accurate enough picture to make an analysis worthwhile.

Basic Math

Redemptions and % Off  are listed for each product on each product page. If I divide the Global Savings by (Redemptions * % Off), I can figure out the Total Sales (total price of all products redeemed).

But I can’t simply do # of Redemptions * % Off because I need to take into account the weight of each Redemption. Therefore, I need to figure out the weighted average % off for each product offer. To do this, on June 22, I checked each product offer and recorded the # of Redemptions and the % Off.  I multiplied these numbers together to create the weight of each offer. I then added up all the weights and divided this total by the number of redemptions to get the weighted average % off. In this case, I got 7.51%.

To get the Total Sales (total price), I then divide global savings by the 7.51%. As of June 22, Global Savings = $234.927, so Total Sales = $3,128,568.

Raw Data (If you’d like a copy, just email me your request)
-“Global Savings” (sheet 1) is a record of Global Savings by day. You’ll see that I missed some days, so there are a couple irregular increases. To account for this, I created a couple metrics that will be important to monitor to understand the growth of the program: Dollars/Hour, $ Growth/Day, and % Growth/Day. On June 22, you’ll notice that the Global Savings amount grew by 150%. I talked to Target about this and was told that the numbers just get updated periodically. In other words, the growth from $88K on June 21 to $234K on June 22 is not a glitch, it’s just an update. I have many issues with this update, especially because I didn’t see a corresponding increase in the number of Redemptions from June 21 to June 22, but Target isn’t going to divulge exactly what happened to me. For our purposes, as long as there isn’t another ‘update’ and there’s a consistent growth rate going forward, I think my calculations for metrics like Total Sales are a good measure of the program.
-“Redemptions – Ranked” (sheet 2) is a record of all the Redemptions and % Off for the 648 products that were live as of the morning of June 22. Know that there were products that ‘expired’ prior to June 22. Once a product expires, the product page is taken down, so there’s no way to see Redemptions and % Off, but I wasn’t able to find more than a handful of expired products on the site during my analysis. At most, I think there were 20 expired products, which would have accounted for about 3% of all offers. “Redemptions – Ranked” has my weighted average % Off calculation. Column C is % off for each product and Column D is Redemptions for each product. Column G is the weight for each product offer. Finally, Cell G651 is the weighted average % off (total weight / total redemptions).
-“Calculations” (sheet 3) shows the main figures and Total Sales. As of June 22, Global savings = $234,927. Weighted average % off  = 7.51. Therefore, Total Sales = $3,128,568. Said another way, as of June 22, Target had aproximately $3.1M in sales through Cartwheel. Updating this figure as of this morning, Total Sales = $4,720, 798. Note that I’m assuming weighted average % off remained constant.