Omniture Articles
Surprises & Tips On Increasing Average Order Value (AOV): PETCO.com Gains 20% Lift
PETCO.com recently improved their gross margin by 20% by running a series of site-wide tests using Offermatica. These test discovered the optimal promotion, copy, and images to drive sales.
"The biggest thing we learned is that your natural instinct isn't always right," says Heather Blank, Director of e-Commerce Marketing and Business Development for PETCO.com. "What we all thought would be the best discount wasn't necessarily the case."
Blank was sure that the biggest discount level at the lowest dollar threshold would result in the highest lift in total sales and margin—but in reality, a different combination worked best. PETCO had to determine what pieces of the promotion made a difference and then dig into those pieces to dramatically improve results. It wasn't until all the various elements were combined—the winning offer, winning headline, colors, and images—that Blank achieved maximum results.
Here's how it worked:
First, the team tested percentage-off versus free shipping on orders over a certain dollar amount. They also tested different creative treatments. Surprisingly, while the creative treatments (different photos, colors, and copy) had some clear winners, the offers themselves were less effective in increasing lift.
"The downer was, neither one of the offers moved the average order amount by much," Blank says.
So she went deeper into the test. Because the percentage-off—while only slightly better than free shipping—was still the winner, Blank took that offer and tested:
* percentage off amount: 10%, 15%, and 20%
* minimum dollar thresholds: $40, $60, and $90
* headlines: Buy Now Save X%, X% Off Click Here!, and Save X% Today!
The headline X% Off Click Here! had a significant impact. "I wouldn't have thought the headline would be a major driver of lift," says Blank. "I would have thought the offer would be more important than the headline."
Thrilled with the increase in average order value, revenue and margin, Blank offers three tips to other online retailers considering testing:
1. Testing can be simple
"It's not a lot of work on your end to get the test up and running," she says. "Don't be afraid of the investment of time. It's quick and easy."
2. Keep an open mind
"Even if you think it's not worth testing, try it. We had some really big surprises."
3. Partner with your creative team
Creative teams tend to be proud of the look and feel of the site they created and don't like to be told what to do. By partnering with them on different creative treatments, you can run a small test, then go back to the team armed with solid data.
"It's better to say, 'You need to make this red because the lift is 15% higher,' than just saying, 'I think you should make this red.' It's less about wanting them to change what they're doing and more about results."