Louise Singlehurst: And can I just ask, if we exclude bronze and silver, are you seeing the retention rates increasing above? I know the 90%, but we don’t have a reference point in terms of historical levels. Is there anything that you can share with us just numerically on those retention rates?
Stephanie Phair: Yes. So look, retention rates, given all of the macro factors, given the volatility, we would love to see them higher. They’re broadly flat, mostly brought down by the lower tiers, as you might expect. Again, we acquired a huge number of those customers, but we’re seeing some encouraging facts. So more items per basket from those lower tiers. That’s a very good indicator of future loyalty and future repurchase. So even with those lower tiers, it’s not that we’re not focusing on them. We are driving that. But, of course, we’re seeing better ROI from our efforts on the higher tiers.
Operator: We have time for one more question. The final question will be from Stephen Ju from Credit Suisse. Please unmute your audio and ask your question.
Stephen Ju: Okay. Thank you so much. So sorry to belabor the point on the demand generation costs here, but it does sound like the CAC in North America and maybe the US has ratcheted higher, and very rarely does the cost of media ever come down. So should we be thinking about a slower pace of customer growth overall? And also, should we be thinking that the prevailing environment in the US will spread to what may be currently your lower cost regions as your competitors also look for those customers as well? Thanks.
Elliot Jordan: Hi, Stephen, yeah, it’s worth focusing on this. What we’re seeing, obviously, is the media inflation is very high in the US, because of the competitive environment. We are, though, been able to bring our customer acquisition spend, so the dollar per unit of customer acquired or per acquired customer is down 18% year-on-year. So we’ve been able to drive efficiencies despite that media inflation by effectively expanding our mix of channels. We’re using a lot more social media and influencer and other channels to move away from paid search or search engine marketing spend. And that’s helping us to alleviate some of this increased inflation and bring down the actual absolute per order CAC. And, obviously, that’s brought down overall demand generation spend in terms of overall dollars as well.
So far, that’s not impacted on new customer acquisition. We had over 500,000 new customers in the quarter. Again, we’re 9% up year-on-year in terms of active consumers despite the fact that Russia has impacted us by about 100,000 customers in this quarter in terms of negative impact. So, overall, we feel like we had the right balance in Q3, and the team is doing a great job, not to chase those last marginal customers that ultimately aren’t going to deliver the lifetime value that we want to achieve from the customer cohorts that we’re acquiring. I think importantly, we are seeing that drive, particularly given the gross margins are up and the take rate is up, we’re seeing the stronger level of three-month LTV for the customers that we’re bringing in quarter-on-quarter.
So that’s very good, and as I say, the CAC down for Q3. So I would expect to see an improvement again on three-month LTV versus the first half. Whilst we’re adding these customers, and as Stephanie touched on, driving retention as good as we have, I think there’s significant upside in retention. If you look at our numbers, and we will go through a bit more in terms of cohort information on December 1st at the Capital Markets Day, significant upside there in terms of frequency of shop and being able to retain customers as we move forward. So I think we’ve got it right. It’s one of the highlights for me out of Q3. The bit about the US, clearly, it’s very promotional going into Q4. Will it spread elsewhere? Look, I think there’s maybe a slight chance that we see some highly competitive environment across Europe.
