– Implemented changes to improve stock availability, simplify the customer journey, increase margin when coupon codes are used, and increase conversion rate
– Got rid of product bundles and introduced automatic discounts for customers who add more than 1 unit to their cart
– Saw an increase in margins and first-time buyer conversion rate, with the potential for even higher conversion rates with the addition of email campaignsImplement automatic discounts for customers who add more than 1 unit to their cart to increase conversion rate and encourage more items to be added to the cart.So we just pushed a test live yesterday, and it’s a doozy. It took 8 hours of analysis for only 15 SKUs, looking back on unit economics and plotting a revised discount strategy that would solve a few things. We had four main goals:
1. Improve stock availability
2. Simplify the customer journey
3. Increase margin when a coupon code was used
4. Increase conversion rate
Improve Stock Availability – So we sell out of products pretty quickly sometimes. As such, bundles where a product or size was involved were being shown as unavailable. No substitutions were available, and it was costing us potential sales and a nightmare to handle from an ops perspective. We were able to get rid of packs altogether.
Simplify the Customer Journey – We wanted the customer to be able to mix and match different products and unlock savings in line with what our packs provided. We did this by moving to automatic discounts with overlapping rules. Now, when a customer adds more than 1 unit to their cart, they see an automatic discount applied. We can offset this discount in the near future by just raising prices. In some cases, these changes increased our margins from before.
Increase Margin when Coupon Code used – This was a big one for us. We didn’t exclude bundles from our welcome coupon because it was unique. Now, with the structure that we have, signing up for our newsletter still gets you the best discount but only sacrifices 5% more on the margin side. In fact, with some of our products, we’re actually making that up instantly with the new discount format.
Increase Conversion Rate – With all these customer-centric changes that also happen to benefit the brand from a margin and ops perspective, we have the hypothesis that seeing products in your cart that have a reduced price automatically when you purchase more than 1 item should increase the conversion rate and items added to the cart. It’s an instant reason to take advantage of the deal and complete your transaction. Our current conversion rate is 7.85% for the last 30 days. Our goal is a 10% conversion rate with a stretch goal of 12%. At the time of writing this, we have a 10.29% first-time buyer conversion rate, and the blended rate is higher.
A note on this, we do not do email campaigns for this brand, so these numbers are without email campaigns, only flows. If we added a few campaigns a blended adjusted conversion rate north of 15% is possible.If this pans out the way we expect, this would mark another incredible shift in how I approach ecommerce. We still have things we haven’t optimized yet and I still haven’t built my acquisition mouse trap yet. I used to think a 20% conversion rate was impossible, now I’m not so sure that is it. I’ll update everyone in a few weeks.#data #strategy #ecommercehttps://www.linkedin.com/in/jivanco