Case Study: Chinaberry Uses Personalized Product Recommendations to Boost Revenues
PROBLEM: Chinaberry, a cross-channel retailer of children's books, craft kits, toys and games, wanted to increase its online conversion rates.
SOLUTION: Partnered with a provider of personalized product recommendations (PPRs) for online retailers.
RESULTS: Overall site conversion for the Isabella brand website jumped from 4.7 percent in November 2008 without PPRs to 6.8 percent in November 2009 with PPRs. Personalized email alerts have drawn higher open rates and more than doubled conversion rates compared to the company's unpersonalized monthly email, with average order size for the PPR alerts roughly $5 more.
PPRs topped a laundry list of functionalities that Spring Valley, Calif.-based retailer Chinaberry wanted to incorporate into its e-commerce site and email communications. After all, PPRs create more relevant interactions with consumers, a must for today's marketers. So in October 2009, in conjunction with MyBuys — a provider of PPRs for online retailers — Chinaberry rolled out PPRs on its inspirational gifts, books and music brand Isabella's website. (As of press time, PPRs on the Chinaberry brand website were still a few weeks away.)
Visitors to the Isabella website are presented with PPRs while browsing product pages, at the checkout page, in purchase confirmation emails and in weekly email alerts generated by behavioral triggers (e.g., abandoning products in a shopping cart). The recommendations are based on customer profiles developed from browsing and buying histories. The more times consumers visit the Isabella website, the more refined the profiles become and the more relevant the PPRs.
As privacy issues continue to be a thorn in the side of many online retailers, PPRs would seem to be cause for concern, right? Not so according to a recent survey MyBuys conducted with e-commerce consulting firm the e-tailing group. Seventy-six percent of shoppers want retailers to know them, remember them and make recommendations. And they expect retailers to do so, the survey revealed. Chinaberry is no exception.
"The proof in the pudding there is the fact that conversion rates improved, and that there's a very low unsubscribe rate," says Stephen Fuller-Rowell, director of e-commerce at Chinaberry. "Customers see this as an aid to shopping rather than a distraction. It's so unobtrusive, and the results seem to indicate that customers don't appear to be at all inconvenienced by it."
These results include increased conversion rates for Isabella's website, plus increased open and conversion rates and a higher average order value for the auto-generated email alerts.
With new customer acquisition costs continuing to rise, Chinaberry has focused its efforts on retaining the customers it already has. PPRs are a key factor in the success of this strategy.
By analyzing what customers have looked at and purchased in the past — both products and price points — Chinaberry better understands its customers, leading to stronger relationships with them.
"Chinaberry's spent a lot of time, money and energy to try to acquire customers," says Shaun Schooley, vice president of client success at MyBuys. "It's really important for [Chinaberry] to not only hold on to these customers, but also create that depth of sale and ongoing relationship."
PPRs, in fact, have helped Chinaberry convert many single- purchase customers to multipurchase ones, Schooley says. And Chinaberry plans to remarket "to these customers with the proper follow-ups."