These experiments were made for walking and that’s just what they’ll do…

Author

Tim Axon

Published

9 July 2024

Charles Clinkard is not just talking the talk, it’s walking the walk.

Embracing a data-driven approach to optimisation has yielded significant results for the brand. By focusing on specific objectives and employing iterative testing, the company has successfully enhanced its online performance, demonstrating the transformative impact of an experimentation culture.

Objective 1: Enhancing Stock Visibility

One of the primary objectives was to effectively communicate stock levels to their customers. Unlike fast-fashion retailers, they do not maintain a vast inventory for each shoe size, making it crucial to convey this information to encourage timely purchases.

Through extensive iterative testing across various site components – from product listing pages (PLP) to product detail pages (PDP) and the cart – Charles Clinkard was able to identify the most effective messaging strategy.

The critical insight gleaned was that highlighting low stock levels directly on the PDP significantly motivated customers to complete their purchases.

When customers believe that a product is running out of stock, they are more likely to make a purchase to avoid missing out. This response is driven by the fear of loss, which is often a stronger motivator than the prospect of gain.

Research by Cialdini in his book “Influence: The Psychology of Persuasion” highlights the power of scarcity in driving decision-making. Cialdini explains that when an item is perceived as scarce, its perceived value increases, prompting quicker purchasing decisions to secure the product before it becomes unavailable.

Objective 1: Enhancing Stock Visibility

This is supported by behavioural economics which finds that simplifying the decision-making processes leads to greater satisfaction with the chosen option. Cues like “only a few left in stock” trigger immediate purchasing actions as it short cuts the traditional decision making journey going from need-to-purchase, cutting out evaluation of alternatives. For involved purchases such as shoes often people suffer from choice criteria paralysis where they are overwhelmed by the amount of options open to them; scarcity bypasses this.

Furthermore, low stock alerts can also act as a form of social proof. When customers see that a product is nearly out of stock, they infer that it must be popular among other shoppers. This bandwagon effect is also found to enhance overall satisfaction with the decision.

By indicating that only a few items remain, retailers can tap into the psychological trigger of loss aversion. A recent study by HubSpot found that the use of scarcity tactics can increase conversions by up to 10%. Our results fit with this research. The experiment resulted in purchasing users increased by 8.97%, and revenue saw a 9.96% uplift.

Objective 2: Increasing Customer Acquisition through Rewards

The second focus area was boosting customer acquisition by promoting Charles Clinkard’s reward programme. The challenge was to find the optimal placement and messaging to maximise the effectiveness of this scheme.

Through a series of A/B tests, it was ascertained that displaying reward points messages on checkout pages significantly impacted key performance metrics.

This strategic placement led to a 3.2% increase in transactions, a 4.4% rise in revenue per session (RPS) on mobile, and a 2.8% boost in average order value (AOV) on desktop. These findings highlight the dual benefits of iterative testing: identifying the right area for message placement and refining the content to resonate with the target audience.

The reason for this is that loyalty programmes and reward points increase the perceived value of a purchase by offering future benefits. It justifies the current purchase by providing an added sense of value, making customers more likely to complete the transaction.

Objective 2: Increasing Customer Acquisition through Rewards

Immediate rewards, even if they are not immediately redeemable, significantly impact consumer satisfaction and purchase intention. Seeing reward points accumulate in real-time at the checkout page provides an instant gratification, reinforcing the decision to buy.

This is reinforced by the commitment and consistency principle, which suggests that once customers start the checkout process and see the rewards they will earn, they are more likely to follow through with the purchase to remain consistent with their initial decision. According to Cialdini this principle is especially effective when the rewards are prominently displayed, reinforcing the customer’s commitment to the transaction.

Additionally, research and the results of this experiment show that customers tend to spend more when they are close to reaching a reward threshold. By showing the potential rewards at checkout, customers may be inclined to add more items to their cart to maximise their points, thus increasing the AOV.

The Value of Iterative Testing

The above examples are testament to the power of iterative testing and data-driven decision-making. The process of optimisation is inherently gradual, requiring patience and precision to fine-tune strategies and achieve measurable improvements. A/B testing, in particular, plays a crucial role in this journey, enabling businesses to experiment with different variables and identify the most effective approaches.

The results also illustrate the long-term value of continuous improvement. Working collaboratively it is possible to consistently identify new areas for optimisation leading to a tangible competitive advantage, something that was previously unobtainable in-house.