Increase eCommerce store AOV and ARPU

Key Takeaway

Customers will default towards the cheapest product variant if you let them, but by highlighting
the value of
more expensive product variants, you can begin to use their price conscious behavior to your advantage.

The only caveat is that you’ll also raise price perception – so there’s a fine balance between trying to
raise
the AOV, and potentially hurting your CVR. Fortunately, when you do find the correct
balance, you’ll be
able
to safely increase revenue without more traffic.

How to redistribute sales towards more expensive product variants, increasing AOV and ARPU — without
negatively impacting conversion rate

+27%

AOV

+23.1%

ARPU

+20%

Share of subscription

Summary

Opportunity:

Have you noticed that the smallest and cheapest variant of your product accounts for the majority of
transactions? If so, then it could be a sign that your users are overly price conscious, and tackling this
behavior can
allow you to redistribute sales towards more expensive variants, drastically increasing ARPU
and
AOV.

Risks:

The risk with pushing customers towards more expensive variants is that it will raise the overall price
perception of your brand. Customers will see the more expensive variants first, feel that it is reflective
of your entire store’s price, gauge that it is too high, and immediately churn from the PDP without
clicking
for cheaper options, leading to a potential decline in CVR.

Solution:

A strategic UI redesign with visual hierarchy would highlight the true value of more expensive variants,
and a double-tap-to-checkout feature would provide a faster and smoother checkout experience. The first
change was to increase AOV and subscription take-rate by making more expensive options more
valuable,
while
the second would aim to
reduce checkout friction and offset the potential CVR decline risks so that the
conversion rate stays stable
.

Result:

AOV increased by 27%. CVR decline was statistically insignificant (-3.25%). The
percentage of purchases
for
the cheapest variant was significantly reduced. The percentage of more expensive variants increased by
50%,
and 200%, respectively.

Client Background

The client, SomniFix, is a single product online store that sells ‘Anti Mouth Breathing Strips’. These
are
pieces of disposable tape that can be placed over the mouth each night so as to eliminate mouth breathing
and promote healthier nasal-breathing while sleeping.

Product comes in three sizes and the two largest sizes have a 10% Subscribe &
Auto-Replenishment offer:

1 Pack — 28 Day Supply
3 Pack — 3 Month Supply
12 Pack — 1 Year Supply

Insights

Our research revealed several analytical and data insights that we used as a foundation for our hypothesis.

The smallest pack option was the default pre-selected, making it the fastest and
most frictionless
purchase option.

Because of this, the smallest (1) Pack option accounted for a significant proportion of purchases.
Price differences between each pack were presented sub-optimally.

Total prices were displayed, but the value breakdown was unclear, so customers were more likely to
default to the smallest product offering, even if it was less cost-effective.
It was possible for a user to make a purchase without ever being aware of the
Subscribe &
Auto-Replenishment feature.

This is because the (1) Pack had pre-selection, but Subscribe & Auto-Replenishment does not apply to
the
(1) Pack offer, so to get the subscribe block to appear you would have to manually select a larger
variant.

The structure of the type of purchases, in the context of Revenue

One-time Order
Subscription First Order
Subscription Recurring Order

The structure of the type of purchases, in the context of Transactions

One-time Order
Subscription First Order
Subscription Recurring Order

Hypothesis

Based on insights into user behavior and perceptions, if we change the UI in accordance with the following
three points, we’ll be able to push customers to the 3 pack option, allowing us to
achieve a
higher
AOV while maintaining CVR.

We’ll increase the rate at which the (3) pack option is selected by pushing it as
the default-selected
option, and offering a detailed breakdown of price per pack, price per week, and total price.

This will create a clear visual hierarchy where the discounts, price, and benefits of the (3)
pack
option
are emphasized, allowing users to immediately see the value of larger pack options, increasing their
purchase share.

The negative consequence of this decision is that we expect SomniFix’s price perception to increase.
From
this, we’re likely to see a higher churn from the Product Display Page (PDP) where users will
immediately
see a higher price, and instead of clicking around for cheaper options, immediately eject.

However, we’re confident that overall the increase in AOV will compensate for the potential decline in
CVR, and as a result, we’ll still be able to positively impact the ARPU.
We’ll increase the rate at which users select Subscribe & Save by funneling users directly to the cheapest subscribe & save option.

This would be the (3) pack option, and users who subscribe have a 2.56 higher CLTV than one-time
purchases.
We’ll offset any potential decline in conversion rate by introducing a
double-tap-to-checkout feature
for
mobile ordering.

This will create a faster, more frictionless checkout experience, creating a CVR increase that will
offset any potential decline. (This was to mimic how a user generally interacts with their smartphone –
by
double tapping anything they’re interested in.)

Product Detail Page (PDP)

Before

After

Slide-in pricing block

Before

After

Product Detail Page (PDP)

Before

After

Slide-in pricing block

Before

After

Result

ARPU increased by 23.1%
AOV increased by 27%
Subscribe & Save take-rate increased by 20%, jumping from 10.2% to 12.4%.
There was a non statistically significant drop in the conversion rate (-3.25%). This is because
the
double-tap checkout feature we introduced for mobile orders brought in 16% more
transactions,
offsetting the possible conversion rate drop.

Product Performance — Mobile

Additionally to the main result:

Share of (3) pack purchases increased from 30.9% to 46.5%.
Share of (12) pack purchases jumped from 2.4% to 7.2%.
The share of (1) pack purchases (Mobile) decreased from an average of 66% to 46%.

3 Pack	Control	Alternative
Unique Purchases	30.92%	46.53%
Quantity	27.85%	47.57%
Revenue	41.49%	49.48%

12 Pack	Control	Alternative
Unique Purchases	2.42%	7.43%
Quantity	2.11%	7.28%
Revenue	12.66%	29.98%

1 Pack	Control	Alternative
Unique Purchases	66.67%	46.04%
Quantity	70.04%	45.15%
Revenue	45.84%	20.54%

Experiment details

Experiment type: A/B Test

Traffic Split: 50:50

Key Metric: ARPU

Targeting Condition: Pricing Block & Checkout speed

Experiment type:

Traffic Split:

Key Metric:

Targeting Condition:

A/B Test

50:50

ARPU

Pricing Block & Checkout speed

Increase eCommerce store AOV and ARPU by redistributing sales toward more expensive products

Increase e-commerce sales by focusing customers on higher-priced options

Key Takeaway