Marketing | Digital Commerce 360

BarkBox conversion rate jumps 30% after marketing email testing

Gretchen Salois — Tue, 06 Jun 2023 16:45:44 +0000

Subscription retailer Bark is testing ways to keep its subscribers long term, while also encouraging them to add more items to their subscription box orders, says Ed Walloga, vice president, lifecycle marketing and ecommerce.

“We needed to have a lot more targeted conversations with each consumer throughout their lifetime with Bark. And we needed to do that efficiently,” he says.

Bark started its business in 2012 selling a monthly subscription BarkBox containing two dog toys and two dog treats in each shipment. The dog toy and dog food subscription retailer expanded its product offerings through the years, including offering dental products in 2020.

Ed Walloga, vice president, lifecycle marketing and ecommerce, Bark

To figure out how best to market to consumers to increase upselling and cross selling, Bark turned to Simon Data, a software tool that allowed the retailer to run comparison tests and see how marketing campaigns perform.

Retaining and building up the lifetime value of its customers is important to the subscription retailer.

Data shows 5.6% of retailers in Digital Commerce 360’s Top 1000 retailers used a subscription model in 2022. That’s down from 6.5% in 2021. That percentage differs depending on the category. 36.1% of Top 1000 food and beverage retailers had a subscription model in 2022. That is up from 27.8% a year earlier. 28% of health and beauty retailers had subscriptions in 2022, and 10.1% of specialty retailers like Bark.

During its fiscal fourth quarter 2022, Bark’s average order value increased $2. Upselling and cross selling accounted for the boost, Walloga says.

“And a huge amount of that was the increase in improving [conversion for] dental Bark Bright,” he says. Bark Bright are products like toothpaste and dental chew treats for dog teeth care.

Bark tests marketing emails for Durable Dental Chew products

In January 2023, Bark tested two marketing email campaigns for its Durable Dental Chew product launch, which is part of Bark Bright.

Bark sent the emails to its regular BarkBox subscribers. These subscribers received plush toys with treats as part of their core subscription.

The other type of subscribers are Super Chewers. These subscribers receive more durable toys in addition to treats as part of their core subscription.

The A/B split tests involved “several hundred thousand in each pool, and the A/B test was an even 50/50 split for each pool,” according to the company.

A/B testing, also known as split testing, allows Bark to test a percentage of its subscribers with two email campaigns to see which results in more opens or clicks. Bark can test different images or language and compare which ones consumers responded to more favorably.

The results showed that BarkBox subscribers were more responsive to the standalone announcement. Conversion rate was 16% higher for those BarkBox subscribers.

Meanwhile, Super Chewer subscribers were more responsive to marketing that highlighted the product collection. Conversion rate for these consumers was 30% higher.

“This was a surprising result, but this is why we test these things,” Walloga says.

Bark believes that because Super Chewer is a more specialized product, consumers liked a side-by-side comparison of original and durable products.

Bark subscribers opt in for SMS texts

There are 2 million BarkBox subscribers receiving a box every month, Walloga says. BarkBox sends subscribers products they can add onto each box. That program includes sending push notifications via SMS, he says.

“We’ve got a very aggressive push notification,” Walloga says.

SMS is an opportunity to “have worthwhile conversations with active and engaged customers,” he says. “That’s where you can apply SMS, and it doesn’t feel like a promotional campaign [to the consumer],” he says.

Bark used Simon Data to launch SMS in July 2022. It currently has 175,000 subscribers opted in to receive text messages. The opted-in base is growing by an average of 35% each quarter, according to Bark.

When customers respond to Bark SMS texts, a Bark employee responds, Walloga says.

“Our customer care team can pick up the [SMS] conversation and respond directly,” he says.

SMS subscribers receive a mix of product availability announcements. These include alerts about exclusive treats, toppers and toys they can add to their subscription box before it ships. SMS recipients also receive order status updates like shipment confirmations and account updates. They also receive marketing messages for “seasonal moments” like Cinco de Mayo or celebrating Star Wars on May 4th.

One of the most successful SMS texts reminds subscribers they have 24 hours left to add to the next box, he says.

Also, Bark is working on using its app to engage with consumers.

“We want to test pushing notifications directly to the Bark app,” Walloga says. According to Walloga, “a vast majority of our users are engaging on a mobile phone or the Bark app,” he says.

Bark adjusts email marketing strategy to retain subscribers

Bark subscribers typically commit to six- or 12-month subscription periods, Walloga says. The retailer reviews data to identify which customers are most at risk of leaving, he says.

“We’ve developed [email] outreach to those customers to remind them of the value that they saw as a Bark user,” he says.

This includes noting purchase history and favorites, he says. In addition to a personalized message, the retailer also sometimes includes incentives. This has allowed Bark to keep subscription renewal rates strong, Walloga says.

Email is still at the core of Bark’s digital marketing tools, Walloga says.

“Email is one of the fastest ways to test and iterate, and it gives you a little more real estate to have a conversation with a consumer,” he says. “But by no stretch is it the only channel we use.”

Personalized communications increases loyalty, Walloga says. Some of the tests Bark tried focused on loyalty, reminding customers of the value Bark brings them.

“If you have a very targeted, personalized conversation with the consumer or subscriber, they will respond,” he says.

Bark is No. 174 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

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Online flower retailer records highest-ever revenue day

Abbas Haleem — Mon, 22 May 2023 19:16:56 +0000

More people have reason to send a gift on Mother’s Day than on Valentine’s Day, said Katie Hudson, content director at online flower retailer UrbanStems.

And whereas UrbanStems typically sells five times more than a usual week in the week leading up to Valentine’s Day, it sells 10 times more than a usual week leading up to Mother’s Day, she said. Moreover, conversion for UrbanStems Mother’s Day sales increased nearly 50% compared with the retailer’s average conversion, she said, without revealing specific figures.

The UrbanStems homepage, captured Friday, May 12, shows a Mother’s Day promotion of up to 30% off for double bouquets.

UrbanStems Mother’s Day sales

The retailer had its best revenue day ever on May 11, the Thursday leading up to Mother’s Day, Hudson said, without revealing a dollar amount. That coincided with its highest site traffic on the same day. Hudson said the retailer has yet to determine if this was its best Mother’s Day period to date, “but most likely. We are still figuring this out due to refunds and redeliveries.”

UrbanStems site traffic in the week leading up to Mother’s Day increased more than 400% compared with non-holiday weeks. Its average order value also increased more than $10 during the sales period.

“Typically we’ll see a spike,” Hudson said. At least for Mother’s Day, people are more likely to do gift sets, which are more expensive with us, or to do add-ons.”

That led Hudson and her team to do A/B tests to determine whether offering add-ons at checkout boosted AOV. She said the retailer did not see a difference in having add-ons appear during checkout, so going into Mother’s Day, it removed the add-on upsell opportunity to improve site speed.

“What we found was that when the add-ons were being shown in checkout, it would cause the site to load a little slower because it was having to call to see what add-ons were in inventory,” Hudson said. “So we removed that, and even then, some people were choosing add-ons before they got to checkout.”

A/B testing

The overall boost in site traffic made Hudson realize she could squeeze in some last-minute testing to optimize landing pages.

“So many people were coming to the site that we could get a result we knew we were 100% confident in — in half the time we normally would,” Hudson said.

On May 11, just three days before Mother’s Day, UrbanStems tested versions of its landing pages from social media with and without customer reviews. But when the retailer removed reviews, it saw conversions decrease 25%, Hudson said.

From there, Hudson said, UrbanStems better understood how much its customers care about reviews.

“They want to see how the actual product arrives,” she said.

Optimizing social media and digital marketing with APIs

UrbanStems also runs design feature experiments using web design vendor Zmags’ Fastr Frontend interface, which connects to the platform via an application programming interface (API).

About 10% of sales during the period came from Zmags custom pages for podcasters and influencers UrbanStems worked with. Those pages averaged an 8% conversion rate, Hudson said.

Hudson said UrbanStems also tested its paid landing page made using Zmags against the Mother’s Day product landing page, which runs on the retailer’s Shopify-powered ecommerce site.

“With that, we saw a 200% lift in conversion when we drove people to the Zmags experience versus just our normal PLP when they’re coming through paid social. We’re constantly testing,” Hudson said. “The conversion rate numbers that week of Mother’s Day in general were insane and not the norm, but we were able to keep testing and getting it better and better.”

The UrbanStems Mother’s Day product landing page on May 12 shows how soon shoppers can receive bouquets.

The UrbanStems Mother’s Day product landing page on May 12 shows discounts, overnight shipping options and an out-of-stock bouquet.

Countdown timers

UrbanStems also used Zmags to include countdown timers across its site, including on product landing pages, even before Mother’s Day. The retailer worked with Zmags to automate the timers to count down to 2 p.m. Eastern Standard Time in cities where it offers same-day delivery, then automatically update each day to count down again. UrbanStems offers same-day delivery in Washington, D.C., New York City and Los Angeles.

Hudson said UrbanStems had never used the countdown timer on its homepage before Mother’s Day, so it ran an A/B test in which 25% of the site traffic had a timer on the page.

“We just wanted to make sure because our homepage was already converting so well,” Hudson said. “We didn’t want to mess with it too much.”

It increased conversion 2%, which Hudson said “wasn’t huge, but it was enough to say it was a clear winner.” Then, the timer went to 100% of UrbanStems’ audience.

UrbanStems also uses Zmags for its landing pages for site visitors coming from social media platforms. Some of those pages touted 11% conversion rates the week of Mother’s Day. Hudson said even though that’s when purchase intent is highest among UrbanStems shoppers, she and her team had not seen an 11% conversion rate for such a page.

Post-Mother’s Day

Hudson said UrbanStems did not run any paid social ads the week after Mother’s Day. Instead, the retailer is using the post-holiday time to reflect on what it has learned.

“We need to have customer reviews,” Hudson said.

Furthermore, UrbanStems must develop a landing page that prioritizes customer reviews higher on the page.

“Taking some of the testing we did and iterating on it after Mother’s Day is going to be really important,” Hudson said.

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SodaStream uses AI to increase conversions through email, SMS and social media

Gretchen Salois — Thu, 11 May 2023 14:46:42 +0000

SodaStream International Ltd. (a subsidiary of PepsiCo) sells its sparkling water machines and refill canisters in 46 markets across the world.

“We needed a global overview of our entire [pool] of consumers and their interaction with the brand,” says Yoed Negri, global director of digital transformation, SodaStream.

Yoed Negri, global director of digital transformation, SodaStream International

Negri says SodaStream understands that its customers interact with the brand through more than one channel: email, SMS text and social media posts. But they weren’t sure how those interactions lead to an increase in conversion, he says.

“We understood that the current marketing infrastructure we had was not enough,” Negri says.

SodaStream’s marketing software provider, Optimove, offers artificial intelligence software. In 2022, SodaStream began using the capability in six markets, which represents about 10% of countries where SodaStream sells its products, Negri says. SodaStream products are sold in store at retail chains like Walmart Inc., Target Inc., and others, as well as online. The retailer sells directly to consumers in 20 markets online.

Test campaigns show how likely consumers are to convert

One way SodaStream engages with SodaStream drinkers is by sending recipes to customers they know like Pepsi-flavorings, diet flavorings and other options based on past orders. The retailer wanted to see how its customers responded to the recipes when received via email, SMS text or through social media posts, Negri says.

The beverage retailer declined to disclose the specific flavors presented, but Negri says the results showed that ads appealed differently to consumers depending on the channel. For example, for email campaigns, SodaStream saw a 3%-5% increase in conversion and 15% increase in average order value.

SMS text conversion rates were 10%-15% higher compared with email depending on the market, Negri says.

For social media posts, Negri says it’s important to note engagement and conversions.

“We see 7%-10% increases in engagement for personalized content and 5%-7% increase in conversions,” he says.

SodaStream conducted the tests over a period of four to eight weeks in late 2022, Negri says. Optimove’s AI software learns how consumers are responding to ads within six to eight weeks, Negri says.

Using AI to anticipate conversion

When deciding which campaigns to propose to which customers, Optimove’s software uses the data it collected to determine the best campaign for each, says Pini Yakuel, CEO of Optimove.

A retailer might decide to send a marketing campaign or a promotion, such as a birthday promotion, via email, SMS or a combination of both methods. Optimove’s AI determines the best combination for each customer base, Yakuel says.

Digital marketers also use Optimove’s analytics for the following:

The likelihood to convert.
The likelihood of becoming a top spender.
The risk of churn (the measure of how many customers stop using a product).
Likelihood of reactivating (also known as re-engagement, where retailers reach out to people who have previously expressed interest or engaged but have since disengaged with communications).

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Executives from Shein, ThredUp, and PacSun weigh in on a potential TikTok ban

Mary Meisenzahl — Wed, 05 Apr 2023 16:07:35 +0000

U.S. lawmakers are scrutinizing TikTok again as it becomes more important than ever for ecommerce retailers.

The U.S. is mulling a ban of the short-form video app because of alleged national security risks. Concerned regulators worry TikTok’s parent company, ByteDance, shares private user data with the Chinese government. A TikTok ban has been proposed before. In 2020, the Trump administration publicly mulled banning the Chinese app and banned it on many government devices.

TikTok transformed into an ecommerce powerhouse

Since 2020, TikTok has become more popular among U.S. users. The app reached 150 million monthly active users in March 2023, up from 100 million in 2020. In that period, TikTok became a shopping platform for many users, prompting retailers to spend big on advertisements. TikTok was charging up to $2 million per day for ads taking over its homepage in 2021, Bloomberg reported. In 2022, TikTok rolled out a shopping feature in the U.S. and debuted plans for U.S. fulfillment centers, signaling plans to further cement its role in ecommerce.

A TikTok presence is particularly important for retailers looking for young consumers. In 2022, 83% of U.S. teens used TikTok at least monthly. 16- to 25-year-olds spend three times as much time on TikTok as on the next most popular social media website, according to September 2022 data from Measure Protocol.

TikTok is ThredUp’s smallest social platform

Secondhand apparel marketplace ThredUp has an active TikTok account of nearly 31,000 followers. It regularly posts memes, videos describing the harms of fast fashion, and collaborations with influencers like Nava Rose, who has nearly 6 million followers. Over Valentine’s Day, ThredUp used Rose’s videos to direct viewers to the “Dump fast fashion” shop of items Rose curated. ThredUp uses AI to surface similar items to the ones Rose selected.

For Noelle Sandler, chief marketing officer at ThredUp, TikTok is just one avenue to reach customers.

“We have a nice collection of platforms and content that we’re sharing across,” including Instagram Reels and YouTube, she told Digital Commerce 360. Though ThredUp’s TikTok audience is engaged, she said, it’s the smallest of the retailer’s social networks. A TikTok ban would be a blow, but not a huge one.

“I’m hopeful that TikTok gets to stay,” she said.

But if it doesn’t, she said, she believes influencer content will continue to perform well on other platforms.

Shein benefitted from organic TikTok videos

Fast fashion retailer Shein is one of the brands most closely associated with TikTok, but global head of strategy and corporate affairs Peter Pernot-Day brushed off concerns about a possible ban.

Shein ranks No. 12 in Digital Commerce 360’s database of the top online retailers in Asia.

With the help of TikTok and the thousands of user-generated “Shein haul” videos, the brand became the most-visited apparel retailer website in the world, according to SimilarWeb. Though TikTok deserves at least partial credit for making Shein a household name in the U.S., the company doesn’t view TikTok as more essential than any other advertising method.

“It wasn’t so much influencer strategy as it was organic,” he said, as users who weren’t paid influencers posted their Shein purchases online in hopes of gaining followings.

“We‘re a consumer of advertising platforms. We’re active on Snap, Meta, Google ads,” TikTok is just one more place to buy ads, Pernot-Day said. He compared it to Shein’s new billboards in the Paris subway, as another way to reach customers where they are. If TikTok is banned, though, Shein might lose some of that organic awareness cultivated online.

A TikTok ban would be disappointing for Pacsun

Clothing brand PacSun is active on TikTok, with 2 million followers. The retailer prides itself on being on the cutting edge of ecommerce technology, from working with virtual influencer Miquela to creating a shoppable Metaverse store in Roblox. PacSun was also one of a handful of retailers to test out in-app checkout in TikTok in the U.S., co-CEO Michael Relich said.

PacSun ranks No. 252 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers.

Like Shein, PacSun initially saw TikTok as a venue for organic content made by users who just wanted to show off their purchases. By 2020, PacSun was promoting user-generated content with hashtag challenges.

“Wherever the customer is, we want to be there,” Relich said, stressing the importance of remaining relevant with Gen Z and Gen Alpha customers. For PacSun, that includes TikTok, and he would be “disappointed” in a ban.

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Three key Shoptalk takeaways: artificial intelligence, video, and secondhand shopping are trends to watch

Mary Meisenzahl — Fri, 31 Mar 2023 20:15:14 +0000

Shoptalk just hosted its 2023 convention with more than 10,000 attendees from hundreds of companies. Ecommerce was on the minds of executives and consultants during the four days of presentations. Speakers from companies in Digital Commerce 360’s Top 1000 database of the largest North American ecommerce retailers addressed the future of AI, convenience, sustainability, omnichannel shopping and more.

These were some of the most interesting trends to watch from Shoptalk.

AI is everywhere

Artificial intelligence was the single most popular topic among presenters and panelists. Executives and speakers faced dozens of questions about how AI might change retail.

Noelle Sadler, CMO, ThredUp

Executive vice president and chief digital and information officer at Lowe’s Seemantini Godbole pointed to the home improvement retailer’s app as an example of AI’s potential applications. The app can be used to measure square footage of a room and see how appliances will fit. It’s not “nice to have; it’s essential,” Godbole said. Lowe’s Cos. Inc. ranks No. 11 in the Top 1000.

Other retailers spoke about using artificial intelligence to make better recommendations to customers. For example, ThredUp chief marketing officer Noelle Sadler described how the resale company uses AI to suggest similar products to customers. Shein global head of strategy and corporate affairs Peter Pernot-Day told Digital Commerce 360 that the apparel retailer also uses AI to make recommendations to consumers. The company then uses information on customer preferences to create new collections for customers in just a few days.

Video and livestreaming have potential

Shopping through livestream video is still relatively unpopular in the U.S. market, but several retailers and marketplaces at Shoptalk described how that could change.

Ecommerce marketplace Verishop found that customers react strongly to videos. The marketplace uses automation to turn livestreams from creators into smaller evergreen clips that can live on product pages. Products with video reviews saw conversion rates improve more than 40%, co-founder and CEO Imran Khan said.

Fragrance company Nest takes a different approach. Live videos are a way to sell products like fragrances that consumers traditionally want to see in person, chief digital officer Andrea Moore said. Nest uses videos to establish its credibility in the fragrance world, answer consumer questions, host product premiers, and showcase exclusive offers, Moore said.

The secondhand market is growing

ThredUp’s Shoptalk presentation

Secondhand sales were also discussed throughout the conference by a number of retailers. ThredUp president Anthony Marino began a panel discussion of resale companies by saying that used clothing has gone from having “stigma to status.” ThredUp now works with 20 companies to manage their resale markets, including J. Crew (No. 87), Gap (No. 19), and Abercrombie and Fitch (No. 57). The clothing resale market is growing 16 times faster than the broader retail market, per ThredUp’s data. The company said more than half of consumers purchased secondhand clothing in the past year.

Reham Fagiri, co-founder and CEO of furniture resale marketplace AptDeco, told a similar story about used furniture. The furniture resale market is growing about three times as fast as total retail, Fagiri said.

Both ThredUp and AptDeco attributed the growth to customer expectations of convenience and sustainability. To work directly with retailers, ThredUp and AptDeco both emphasized that they can bring new consumers to brands that might not buy them at the original price points. AptDeco partnered with Williams-Sonoma Inc. (No. 22) to list returned or slightly damaged furniture, and in turn gives the retailer data about how to price used items.

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AI powers Asian Beauty Essentials

Abbas Haleem — Wed, 15 Mar 2023 14:57:39 +0000

To drive conversion, skin care brand Asian Beauty Essentials uses artificial intelligence to write copy for shoppable blog posts in both English and Spanish, says founder and CEO Lauren Petrullo.

It produces six blogs a week, some of which drive more than 9,000 visits per month, she says.

To achieve this, she uses a technology trio:

Ahrefs, an SEO tool for growing search traffic
Surfer SEO, which helps the retailer grade and rank content
Jasper, an AI content generator to write the posts

Asian Beauty Essentials made its blogs shoppable in October 2022, she says. Petrullo first identifies the blogs that are generating the most traffic, then adds shoppable components to them to see if that will drive conversion. That includes both links back to the ecommerce portion of AsianBeautyEssentials.com as well as products shoppers can add to their cart directly from a blog page.

For example, an Asian Beauty Essentials blog called “The Easiest 5 Step Korean Skin Care Routine for Rookies” suggests products that each have an “Add to Cart Now” button. Clicking on the product images or titles takes shoppers to each product listing page.

Asian Beauty Essentials adds products to its blogs so shoppers can put them in their carts without leaving the page.

Once a blog post on Asian Beauty Essentials starts to convert orders, Petrullo measures how many shoppers add products from that post to their carts and how many shoppers complete the purchase as opposed to abandoning the cart. She also checks the average order value from the blog post to determine if she should create similar blog posts or take a different approach.

After making the brand’s blog posts shoppable, its average order value grew to more than $100. That compares with about $34 prior to making blogs shoppable.

Petrullo says she made the decision to add Spanish-language blog posts in June 2022 after going through her customer list and evaluating where orders were coming from and what customers’ last names were.

“My current focus is making sure the content is authentically correct and therefore a really good user experience,” Petrullo says. “I trust that the conversions will come later, and so far, those hypotheses have been winning out.”

Expanding artificial intelligence to email

Asian Beauty Essentials uses Klaviyo as its email marketing provider.

Klaviyo determines the average order value for different customer segments. Among the biggest insights Klaviyo provides, she says, is how many times a customer has purchased after clicking on an email and what products she purchased together.

But she says she especially values the AI components Klaviyo offers. The vendor sends emails at the times a consumer is most likely to open it and engage on a link. Brands can also send emails based on when customers are likely to finish products that need replenishing. She also used Klaviyo’s “Back in Stock” feature, which adds a “notify me when available” button on the website to products that are out of stock. This helps her determine how much product to reorder.

Klaviyo can also automatically exclude customers from email lists if they have already bought items the email is promoting.

She says all the AI technology was a “huge, huge investment,” and it seems to have paid off.

This is part of Digital Commerce 360’s March 2023 Strategy Insights edition. Our members have access to all the articles in this month’s issue, Data-Driven Retail.

This article is part of a larger piece, “Retailers use data to improve web conversion and improve the customer experience.”

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How are digital marketers using AI to boost conversion?

Gretchen Salois — Wed, 08 Mar 2023 13:30:53 +0000

Artificial intelligence has helped decrease digital marketing costs at online pet supplements retailer Finn Wellness LLC. “Over the last six months, our [digital marketing] approach has been test, test, test,” says Randall Stainton, director of growth. Facebook and Instagram ads help Finn reach new customers. But with limited options, he says. With Facebook, Finn could […]

The post How are digital marketers using AI to boost conversion? appeared first on Digital Commerce 360.

Online flower retailer UrbanStems increases conversion 12% during Valentine’s Day season

Abbas Haleem — Tue, 07 Mar 2023 20:49:16 +0000

Online flower retailer UrbanStems typically sells about five times its typical volume in the week leading up to Valentine’s Day, said Katie Hudson, content director.

“The week of Valentine’s Day, the intent to purchase is so high that we’ve seen — and we’ve tested this a few times — we’ve seen people convert better on our normal shopping experience for that week because they don’t even need to know our story,” Hudson said.

The retailer’s conversion rate increased 12% year over year for Valentine’s Day 2023. A large part of the retailer’s sales come through its customized landing pages, Hudson said, declining to provide dollar figures.

The retailer had its highest sales number on Feb. 12, Hudson said, though she declined to provide a dollar amount.

“We all knew people were going to wait until the last minute, and they did,” Hudson said.

Using a ‘Fastr Frontend’

UrbanStems is always monitoring its conversion rate, and it continually tests design features to improve conversion, Hudson says.

The “normal shopping experience” on UrbanStems.com uses Salesforce’s ecommerce platform and is limited to Salesforce templates. UrbanStems also runs design feature experiments using web design vendor Zmags’ Fastr Frontend interface, which connects to the platform via an application programming interface (API).

The vendor allows Hudson to add new pages or custom-designed sections of pages to UrbanStems.com that aren’t limited to its ecommerce platform’s template, rather than submitting a ticket to the retailer’s web developers each time she wants or needs to make a change.

“It’s for a creative audience to be able to do things on those key parts of the site where your brand vision is paramount,” said Ryan Breen, chief technology officer at Zmags. “You really want to do something not restricted by templates.”

Breen said its typical to see a drop-off after a shopper goes to a landing page that a company put “all their effort into” creating.

“I know the moment. I’ve fallen off,” Breen said. “Hand-designed, cool site, to template hell. It’s usually right around the category page.”

There are often differences in opinion among the merchandisers, marketers and development agencies producing custom pages, Breen said.

“Everything becomes a ticket to another team to another team to another team, and you aren’t doing that in a day,” Breen said.

Changes UrbanStems makes to improve conversion

Some of the changes UrbanStems made include adding a countdown timer, updating promo codes in real time, creating shoppable tiles on the retailer’s blog, and using an inventory badge that indicates how many units of a product are available. Each change helped UrbanStems improve its conversion, Hudson said.

When UrbanStems tested a Zmags landing page versus its normal shopping product listing page, the Zmags landing page always had a higher conversion rate compared with the normal shopping page, Hudson says.

In the case of Valentine’s Day, the Zmags product landing page (PLP) UrbanStems created on its site resulted in a 35% increase in conversion compared with its templated PLP, Hudson said. UrbanStems tested the page from Jan. 24 to 29.

“We weren’t even expecting to run the test so short, but the numbers were so significant,” Hudson said.

The Zmags pages have tested and performed so well for UrbanStems that the retailer now tests one Zmags frontend page versus another to see how well different creative leads shoppers to convert.

UrbanStems top-selling Valentine’s Day products

“Unsurprisingly, red roses were our top seller,” Hudson said.

And the retailer saw the biggest conversion lift on SKUs in the $70 to $100 range, she said. Furthermore, people are more likely to include add-ons such as vases to their Valentine’s Day purchases, she said.

UrbanStems also orders in lower volume SKUs that have a higher price point to experiment with what shoppers are comfortable purchasing. The flower retailer offered a SKU for Valentine’s Day that was over $200 and sold out.

“Granted, we ordered at a significantly less amount, but I’m always honestly surprised to see what people are gravitating toward,” Hudson said. “I think sometimes it could be that when you see a higher price point, it feels like a more luxurious gift, which it certainly is. The over $200 price we offered had a mixture of fresh florals and orchids in it, which we’ve never done before, a bouquet with mixed orchids. It came with a vase as well. The fact that that sold out was a little surprising to me because it was something different that we’ve never sold before.”

UrbanStems also offered peonies during the Valentine’s Day season.

“Peonies overall was a huge win for us,” she said. “We actually sold out of peonies a week before Valentine’s Day.”

All those SKUs led to UrbanStems’ average order value (AOV) increasing 12% year over year around the February holiday.

Making marketing adjustments by channel

Hudson said even though UrbanStems knows the intent to purchase is “really high” leading up to Valentine’s Day, the retailer also wanted to make sure it showcased products at price points it knew shoppers were looking for based on sales data at the end of January and in early February.

It also wants to make sure it’s sorting products that are on sale or have a high buy-to-detail rate. Buy-to-detail rate is an analytic that shows the percentage of people who bought an item on a website after viewing that product’s page.

UrbanStems only used Zmags in its landing pages for shoppers coming to the site from paid social media marketing. The retailer didn’t experience any dips in conversion leading up to the holiday, Hudson said. Additionally, UrbanStems increased conversion on paid social 83% year over year.

Moreover, it spent less on paid social this year compared with 2022. Paid social transactions increased 27% year over year, she said. Those transactions come from Meta, TikTok and Pinterest. UrbanStems targeted the male audience on Meta platforms and found it responded to promo codes and the countdown timer Hudson implemented.

Those performance increases were “pretty wild for us and really exciting,” Hudson said. The next big challenge, she added, is taking those wins and applying them to its next big sales period: Mother’s Day.

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Wayfair and Overstock are using different strategies to survive declining sales

Mary Meisenzahl — Wed, 01 Mar 2023 21:58:17 +0000

Wayfair Inc. and Overstock.com Inc. both saw sales decline in 2022. The competing ecommerce furniture chains reported slowing sales and fewer active customers, and they’re adopting different strategies to turn things around.

Wayfair is No. 7 in the 2022 Digital Commerce 360 Top 1000, Overstock is No. 33.

Overstock and Wayfair sales are down

Wayfair and Overstock reported a decline in sales in 2022 across the quarter and year.

Wayfair’s total net revenue for the quarter ended Dec. 31 decreased 4.6% year over year to $151 million. The company also reported a net loss of $351 million, significantly higher than the net loss of $202 million in the fourth quarter of 2021.

Net revenue at Wayfair was also down for the 2022 fiscal year, dropping 10.9% over 2021. The net loss over the year was $1.3 billion.

Overstock’s earnings report was even more grim. Net revenue decreased 34% in the fourth quarter ended Dec. 31 to $405 million, though the net loss was a comparatively small $16 million.

Net revenue for the full year was $1.9 million, a 30% decrease year over year. Overstock reported a net loss of $35 million for 2022, with about half of that loss in the fourth quarter.

Active customers declined

Executives at both furniture retailers said they had fewer active customers making purchases. Wayfair reported 22.1 million active customers in the fourth quarter of 2022, a 19% year-over-year decrease.

Overstock is a relatively smaller operation, with 5.2 million active shoppers in Q4, a 36% decline year over year.

This trend is in line with consumer data Digital Commerce 360 collected in an April 2022 survey of 1,113 online shoppers. Three-quarters of respondents said they planned to buy less than half of home goods online, compared to 59% answering that way in 2021.

Consumers planned to pare down their online home shopping. 42% said they would spend the same amount on home goods as they had the previous year. Another 41% said they would spend less. Respondents also said they would spend less on outdoor furnishings, new furniture and home office setups than in 2021, with appliance repairs the only section seeing a slight increase.

Overstock aims at increasing sales to younger customers

Even as overall sales decreased, mobile orders were a bright spot for Overstock. Overstock’s app adoption is growing “rapidly,” CEO Jonathan Johnson told Digital Commerce 360 in a phone interview. It’s now the company’s fastest growing sales channel, making up 52% of fourth quarter sales. The company expects to see at least the same level of app growth in 2023.

Overstock’s typical customer skews “older and more affluent,” Johnson said. App users show higher loyalty, have higher conversion rates and are also younger than the average customer overall, he said, though he declined to share specifics.

Overstock’s other strategy for reaching younger buyers involves influencers, Johnson said, and Overstock is spending more than ever before on marketing. The website partnered with influencers and brand ambassadors with far reach on social media, including HGTV star Tarek El Moussa.

Wayfair focuses on cutting costs

As Overstock concentrates on drawing in new customers, Wayfair has cut costs as a strategy to get back in the black.

The furniture retailer has taken several measures to cut unnecessary costs, CEO Niraj Shah told investors in a Feb. 23 call. Wayfair laid off 1,750 employees in January, totaling about 10% of its total workforce including 1,200 corporate employees. These cuts were on top of earlier layoffs of 900 corporate workers in August to “reduce redundancies and remove excess management layers,” Shah said at the time.

The company has also had a hiring freeze in place since spring 2022, and has been reducing advertising budgets that had grown beyond the small tests that they were originally intended for, Shah said.

Both companies are hoping 2023 will turn things around for the online furniture industry. 2022 was a “year we will not forget nor repeat,” Overstock’s Johnson told investors.

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Retailer uses machine learning to entice shoppers to click and buy

Gretchen Salois — Mon, 27 Feb 2023 17:32:49 +0000

“If you’re going to send an email to somebody, you want to send emails to people that are likely to click — and purchase,” says Jeff Ekblad, vice president of marketing at music instrument and equipment retailer Sweetwater.

Ekblad uses artificial intelligence customer engagement vendor Blueshift’s “create predictive model,” which Sweetwater uses to plan promotional strategy around its products. The model uses machine learning to predict whether a consumer will click on a marketing email.

Marketers need to collect data so it can be used for personal recommendations and predict future shopping behaviors, says Michael Renz, global retail technology leader at consulting firm Ernst & Young.

“That helps create a personalized shopping experience,” Renz says. Without automating certain tasks, retailers stand to lose to retailers that are investing now, he says.

“I can see who’s ready to engage via email and I can then target the people who didn’t open the email,” Sweetwater’s Ekblad says.

Sweetwater created a predictive audience called “likely to click,” within Blueshift, for consumers that were likely to click on a link within the email to Sweetwater.com, Ekblad says.

“We used this predictive audience to supplement our normal engaged audiences,” he says.

It worked. Sweetwater increased clicks from emails by 25% month over month in September 2022 compared with August 2022, he says.

Sweetwater is No. 72 in the Top 1000, Digital Commerce 360’s database ranking the largest North American online retailers by web sales.

Classify tags result in increased clicks, online sales

Classify tags on products like “guitar vintage,” has more context than “guitar,” Ekblad says. Sweetwater has built about 150 customer classify tags and attached these to its inSync blog articles and videos. The classify tags dive deeper into customer interests than categories alone, he says.

Sweetwater’s customer data platform (CDP) funneled these classify tags into Blueshift. This helped further match content to consumers, resulting in a 13% increase in clicks and a 40% increase month over month in purchases. A CDP is marketing software that collects first-party customer data to build a single view of each customer.

Sweetwater is currently merging 150 classify tags from its internal CDP to Blueshift. It will also create a ranking system of which classify tags are most popular.

It can launch automated email campaigns based on classify tags. These email campaigns can segment its email list based on shoppers who made purchases with those classify tags and email them other products in that category.

Personalized product recommendations

Throughout 2022, Sweetwater continued to build personalized product recommendations in email marketing campaigns.

As a result, email click-through rates for the retailer’s weekly deals and promotions emails increased 10% month over month. Online purchases attributed to emails increased 16% month over month, Ekblad says.

After success with its weekly emails, Sweetwater expanded product recommendations into additional promotional and category-focused email marketing campaigns that were category-focused.

The software makes recommendations based on factors such as personal viewing history, and items related but not limited to:

Viewed products
Category interests
Customer classify tags
Promotional offers
Product financing eligibility
Inventory availability

Why do shoppers abandon their carts?

Sweetwater also wanted to appeal to shoppers who abandoned their carts. A/B testing — also known as split testing — allows Sweetwater to test a percentage of its shoppers with two email campaigns to see which results in more opens or clicks. The retailer may test different images or language and compare which consumers responded to more.

In July 2022, Sweetwater ran its first A/B test, which compared article and video Blueshift recommendations in its weekly content newsletter inSync, resulting in a 31.5% increase in click-through rate for the number of consumers who opened the email compared with the other email. Order rate increased 39%, he says. Order rate is the total orders relative to the number of consumers who opened the message. Sweetwater conducted the A/B tests over the course of several weeks, Ekblad says. Previously, Sweetwater hand-selected what content to include in emails, he says. Blueshift’s AI-generated recommendations are more effective, he says.

Other tested changes include removing text promoting an active deal when there wasn’t one. “It was cluttering the email which decreasing the visual impact of items that had actual deals available,” Ekblad says. Another changed the call to action button during checkout from “checkout now” vs. “go to cart.”

The retailer plans to roll out messages based on customer preferences, he says. Sweetwater plans to test email campaigns with articles and video content related to items in their shopping cart items. The software will test how promotional headlines, color and design elements, messaging and other emails elements appeal to shoppers.

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