Thursday 16th October | #52 | Join Free
Hello, and welcome to Thursday’s Beyond the Basket. Are you actually tracking your P&L, or just watching sales and hoping for profit at the end? As margins tighten and shoppers get more cost-conscious, knowing the right metrics matters more than ever. Today we’re diving into how to measure what really moves the needle, plus news on IKEA’s year-on-year sales dip and Debenhams’ continued marketplace push into the US. Let’s get into it. 👇 - Mike Callachan (btw founder)
In today’s beyond the basket:
📊 Measure What Matters: The Metrics That Protect Your Margin
🛍️ Debenhams partners with Amazon to expand in the US
🗣️ Walmart embeds ChatGPT for end-to-end shopping
👗 John Lewis launches supplier platform to grow premium range
🪑 IKEA sales dip again as price cuts bite
+plus three longer reads and one podcast to help you stay ahead of the game.
FEATURE
📊 Measure What Matters: The Metrics That Protect Your Margin
Ever looked at your sales dashboard feeling like you're crushing it, only to check your bank balance and wonder where all the money went?
You're not alone. Most eCommerce brands are brilliant at tracking revenue but terrible at tracking return on spend, and that's exactly where the money leaks out. The good news? A few smart metrics can plug those leaks fast.
Here's what actually moves the needle on profit.
Watch MER, not just ROAS
ROAS is a flatterer. It'll tell you what you want to hear while your margins quietly evaporate.
MER (Marketing Efficiency Ratio) tells the complete story: total revenue ÷ total ad spend. Track it weekly. Set a floor that still clears your contribution margin (CM), and when you dip below it, stop scaling.
To make it easier to calculate MER use our MER calculator hereCalculate your contribution margin
"Gross margin" can be too vague to run a real business on. You need layers:
CM1 = Net sales/revenue – COGS
CM2 = CM1 – fulfilment + fees
CM3 = CM2 – marketing
Run your business on CM2 and CM3, if they’re in the negative you’ll need to make adjustments. Tracking these can give you real profit visibility. Every other metric is just revenue theatre.
Use our CM calculator here to make calculating CM easier.Measure Real Ad Impact
Here's the uncomfortable question: are your ads actually driving sales, or just getting credit for purchases that would've happened anyway? That’s what a lift test measures. Platforms like Meta and Google let you split your audience into two groups, one that sees your ads and one that doesn’t. The difference in conversions between them is your incremental lift, the sales that truly came from your ads.
Run lift tests quarterly or when scaling new campaigns. If you find your lift is low, it means you’re paying for sales you’d have got for free. Cut spend, tweak targeting, and redeploy budget where it moves the needle.
Measure returns as a cost, not a nuisance
Every return hits your margin twice: once for postage, once for write-off or restocking. Track return reasons by SKU. Experiment with fit guides, better photography, or even locker returns to cut the rate. Small improvements here add up fast.
The Bottom Line
Every profitable month I’ve had started with a spreadsheet, not a campaign.
If you don’t measure accurately, you’ll miss the small errors, discounts stacking, fulfilment fees creeping up, that quietly drain profit. Set up a simple dashboard with MER, CM2/CM3, and return rate. Check it every week, before you tweak another ad set or brainstorm your next promo.
If it’s not on your dashboard, you’re probably not improving it. And in Q4, that’s the line between looking busy and actually making money.
QUICK TIP
Ask a post purchase question
After checkout, ask one simple question, “What nearly stopped you from buying today?” It reveals real friction fast, giving you direct fixes that analytics can’t.
ECOMMERCE
🛍️ Debenhams partners with Amazon to expand in the US LINK
TL;DR: Debenhams Group is teaming up with Amazon Fashion to bring its Nasty Gal label to over 250 million US customers, launching 170+ products with Prime delivery ahead of the holidays.
Why it Matters: This follows recent partnerships with Macy’s, Bloomingdale’s, and Nordstrom, signalling a full-scale US push for Debenhams’ portfolio of British fashion brands. Rather than building its own US presence, the group is piggybacking on established marketplaces, trading margin for reach and data.
Your Move: If you’re eyeing overseas growth, consider a marketplace-first approach. Use these platforms to test product fit, build audience awareness, and gather real demand data before committing to physical or standalone DTC expansion.
ECOMMERCE
🗣️ Walmart embeds ChatGPT for end-to-end shopping LINK
TL;DR: Walmart has become the first major retailer to integrate ChatGPT directly into its eCommerce experience, letting customers browse, get recommendations, and checkout entirely through conversational AI.
Why it Matters: This marks the start of “intent-based commerce”, where discovery, decision, and checkout happen in a single chat. It flips the old SEO and PDP model on its head, putting algorithmic visibility (how well AI understands your products) ahead of ad spend or brand storytelling.
What to Consider: Treat product data like the new storefront. Ensure descriptions, attributes, and tags are structured and contextual so generative engines can surface your products accurately. If ChatGPT becomes a shopping gateway, clarity beats creativity.
ECOMMERCE | RETAIL
👗 John Lewis launches supplier platform to grow premium range LINK
TL;DR: John Lewis has introduced a new Mirakl-powered supplier platform that lets premium brands list and ship products directly to customers, without John Lewis holding stock.
Why it Matters: This marks a shift toward a marketplace-style model, giving John Lewis more assortment agility and a faster path to premium brand expansion. It’s also a smart cashflow move, less inventory risk, more data on what high-end shoppers actually want.
What to Consider: If you’re wholesaling or running a multi-brand store, look at how “ship-direct” partnerships can extend your range without bloating inventory. Speed and flexibility in assortment are becoming key differentiators, even for legacy retailers.
RETAIL
🪑 IKEA sales dip again as price cuts bite LINK
TL;DR: IKEA’s global sales fell 1% for the second year running, as the brand pushed through average price cuts of 10% to win over cost-conscious shoppers.
Why it Matters: IKEA’s betting on volume over margin, a move few retailers can afford right now. Visits and units sold are both up, showing shoppers are still spending, just more carefully. It’s a reminder that value perception, not discounting alone, drives loyalty in a squeezed economy.
Your Move: If you’re cutting prices, do it with intent, simplify your offer, highlight core value, and make sure margin recovery is baked into your plan. Cheap isn’t a strategy unless it builds market share or lifetime value.
📚 The Reading List
Curated deep dives, longer reads and analysis shaping the future of eCommerce and digital marketing.
Inside the world of beauty packaging
Glossy (35 min listen) Listen Here ›
How beauty brands are turning packaging into part of the experience, and why design now drives loyalty as much as product.
Should we be worried about AI market concentration?
City A.M. (6 min read) Read Here ›
A sharp look at whether AI power is consolidating too fast, and what it could mean for smaller players competing in digital markets.
The psychology of music in marketing
HubSpot Blog (8 min read) Read Here ›
Why sound shapes emotion and behaviour, and how the right playlist or audio cue can nudge shoppers to spend more.
5 ways to integrate AI into your existing business systems
Inc. (5 min read) Read Here ›
Practical steps for adding AI to daily operations, from automating admin to improving decision-making without massive rebuilds.
Enjoyed this one? Forward it to someone who sells online.
Was this forwarded to you? Join 500+ ecommerce operators reading Beyond the Basket every day.
Sign up here for free