SOURCE: AHAlife Holdings Limited

AHAlife Holdings Limited

December 13, 2016 16:30 ET

Thanksgiving demonstrates AHL's positive contribution strategy is on track

NEW YORK, NY and SYDNEY, AUSTRALIA--(Marketwired - December 13, 2016) - AHAlife Holdings Limited (ASX: AHL) ("AHA" or the "Company"), a digital marketplace for premium lifestyle products, is pleased to announce a new company record for the highest sales achieved in one day and a positive variable contribution1 from sales over the Thanksgiving weekend.

Positive Contribution Strategy

Sales over Thanksgiving weekend reached a total of US310,000, including a record day of US$118,000 on Cyber Monday. Despite total sales being 10% down on the prior year, the contribution from those sales improved from a loss in FY16 to a positive variable contribution1 in FY17 as a combined result of AHA's customer acquisition strategy and operational improvements which have reduced operating costs.

After several years of building the AHA brand and registered users, the focus for AHA is on acquiring and converting profitable customers. This means selecting specific marketing channels that target customers who repeat most frequently and therefore generate a higher life time customer value. It also means reducing costly investment in paid marketing channels to focus on those segments that generate a positive ROI on the customer's first transaction.

AHA has also recently implemented operational improvements that include reduced marketing offers and promotions, reduced shipping costs, the introduction of a minimum order value threshold for free shipping and the increased automation of roles and processes -- enabling the company to protect cash reserves as it strives towards break even.

 
Key data for the holiday period:
     
 
 
 Thanksgiving
2016
 Thanksgiving
2015
     
 Average Order Value US$205 US$196
 Product Margin 50% 47%
 Offers & Discounts 16% 20%
      
 Gross Margin 43% 37%
      
 Shipping Charges 6.1% 10.0%
 Paid Search Advertising US$17k U$83k
 Revenue Return on SEM2 Spend $4.50 revenue $1.78 revenue
   per $1 spent per $1 spent

Technology Performance

During Thanksgiving the AHA site received 15,000 visits per day on average with approximately 380 orders placed per day without interruption or stress placed on the platform, via desktop or the App.

In trading in the first quarter to date, AHA has generated revenue of US$1.3M versus US$1.6M for the corresponding period in FY15 which reflects the reduction in paid advertising on unprofitable customers. Through continued operational improvements, AHA has reduced operating cash outflow to its lowest levels since listing.

About AHA
AHAlife Holdings Limited (ASX: AHL) is a digital marketplace for consumers of luxury items and designer products. The Company's 50,000 customers purchase items directly from a community of 4,000+ handpicked designers and artisans in 45 countries. AHA's business model is a drop-ship approach, allowing wholesalers to ship directly to customers leaving no inventory risk for the Company. For more information, please contact AHA Investor Relations on the details below.

1 Variable Contribution is defined as: Booked Sales minus; Product Cost, Offers & Discounts, Shipping Charges, Credit Card Fees and Direct Search Advertising. Variable Contribution does not take into account fixed overheads.

2 "SEM" is an abbreviation of Search Engine Marketing which refers to paid keyword advertising on search engines such as Google, Bing and Yahoo. It also includes other Cost-Per-Click advertising such as Facebook and Pinterest.

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Image Available: http://www.marketwire.com/library/MwGo/2016/12/12/11G124934/Images/BookedSalesbyQuarter1-d07b2b77dd138ed48bbc490f14668d98.jpg
Image Available: http://www.marketwire.com/library/MwGo/2016/12/12/11G124934/Images/ByThanksgiving1-4d4eeb0542cca161b43449f0441d35d5.jpg
Image Available: http://www.marketwire.com/library/MwGo/2016/12/12/11G124934/Images/Variable1-2dbaa9b28cb9bd0bb9439414736a7179.jpg
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