Impulse purchases and misorders driven by highly compelling advertising, resulting in increased returns
First written in FY2024-Q2. 2 of 3 entries say "Materialised", first in FY2024-Q2. Latest entry: FY2024.
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- FY2024MaterialisedAnnual report
「Due to these factors, recurring and other revenue for the fiscal year was ¥921.799 million below the earnings forecast. Regarding advertising creative, we are reanalysing the results with reference to reviews by external consultants and further optimising the messaging to avoid prompting impulse purchases and erroneous orders.」
Returns and cancellations exceeded expectations as impulse purchases and erroneous orders increased in response to highly persuasive advertising, causing recurring and other revenue to fall ¥921.799 million below the earnings forecast. We are proceeding with the optimisation of the advertising messaging based on reviews by external consultants. - FY2024-Q3MitigatedAnnual report
「Due to these factors, recurring and other revenue for the 3rd quarter cumulative period was ¥384.472 million below the earnings forecast. Regarding advertising creative, we are reanalysing the results with reference to reviews by external consultants and further optimising the messaging to avoid prompting impulse purchases and erroneous orders.」
While the risk of returns and cancellations exceeding expectations due to impulse purchases and erroneous orders in response to highly persuasive advertising continued, we began addressing it through reviews by external consultants and reanalysis and optimisation of the advertising messaging. - FY2024-Q2MaterialisedAnnual report
「In addition, during the second quarter accounting period, returns after products had been shipped were higher than expected. This resulted from the establishment, through the creative division's skills development achieved in the previous fiscal year, of a structure capable of producing more persuasive advertising. At the same time, the increased appeal of the advertising led to more impulse purchases and erroneous orders by new customers, resulting in more returns and cancellations than initially expected. Due to these 3 factors, recurring revenue for the second quarter accounting period was 0.8% (¥19.096 million) below the earnings forecast.」
While skills development in the creative division made the advertising more persuasive, impulse purchases and erroneous orders increased, causing returns and cancellations to exceed expectations. Recurring revenue was 0.8%, or ¥19.096 million, below the forecast, and inventory valuation losses and product disposal losses related to expired products and other factors were also recorded.