Testing a hypothesis – even one that seems totally counterintuitive – often pays dividends in marketing campaigns. Luckily, testing hypotheses is the bread and butter of our marketing strategy. Which is how we discovered this rich little morsel of AOV marketing knowledge that may very well transform our M.O. for structuring product listings – while boosting profit margins, of course.
But…we’re not giving it away right off the bat (don’t worry, we will!). Instead, won’t you join us on this bite-sized journey of assumption > challenging that assumption > testing > ending up surprised and delighted? We find that the more we practice this thought process, the more excellent material we find to test. Which, of course, produces exciting little ecommerce-platform gems like these. So, let’s recap!
1. Recognizing The Assumption
These days, ecommerce businesses do a great job of communicating a free shipping threshold because they’re understood to drive up the key metric of AOV (average order value).
Conversely, we assume that openly advertising below-the-free-shipping-threshold info (i.e. “$7.99 shipping fee, or free shipping over $50”) will decrease AOV as online shoppers will go for the less expensive products, feeling less pressure to meet that minimum purchase quota.
2. Challenging The Assumption
Customers often get zero info about shipping costs beneath that “free shipping” threshold until they’re at checkout. But…could hiding standard delivery fees behind that free shipping incentive create a negative customer experience that ultimately affects buying behavior? Maybe. Here are a couple buying-journey reactions we considered:
1) They feel uneasy because the shipping cost is a less-than-fun *surprise*
2) They bail because it can feel unsettling or like they’re being tricked
3. Forming a Hypothesis
With these possibilities in mind, the hypothesis around how to increase AOV became:
If we share below-threshold shipping info, we’ll increase trust & clarity in the customer base, resulting in more transactions for products that don’t inherently meet the price threshold for free shipping.
If your first thought was “Won’t that decrease AOV?!”, it was ours too. But we like to test rather than assume when it comes to purchase behavior – because what if we’re wrong?
3. Testing
To find out, all we needed to do was a simple PDP test. We added “Standard Shipping is $” under the ATC button.
4. Results!
Finally, the cool part. We were very surprised by what we learned:
- ATC (add to shopping cart) rate improved a good amount, at ~8.5%
- Conversion rate also showed a nice improvement at ~9.4%
(Do we still need more data for serious statistical significance? For sure. But would we have even considered exploring this route if we just trusted our assumptions about the customer journey? Nope!)But wait: impact on AOV was one of our big questions. So did it decrease as assumed? Not at all. In fact, those who we showed shipping info to had a HIGHER AOV, at~9.6%.
5. Insights
So what does this say about customer behavior around a minimum order incentive? Our educated guess is that people don’t want to “lose” money to shipping, which feels more real once you know the cost (in late-stage checkout). Instead, they’d rather spend more to “save,” and then justify a few more bucks in additional items from that sense of a slight discount. With transparency, it seems, came larger purchases.
Ultimately, customer clarity takes the W, because it:
- Gives individual customers the info to determine how they can get the most perceived value out of the purchase
- Removes that sense of surprise/deceit from the shopping experience that comes with a late-checkout added charge
- Appears to boost sales revenue!
Unexpected and exciting way to increase AOV that we’d never encounter if we didn’t test!
Want more tried & tested insights for ecommerce sites that we encounter in the wild?