For this high-end skincare brand, one of its most popular selling products was the sample kit. It was a crucial part of its product portfolio because it lowered the barrier to entry into the brand and was the first thing that most customers every purchased before trying anything else. The issue was that physically, the product was over 1.4 lbs which means it was billed as 2 lbs making shipping costs a burden to the business and offering free shipping to the customer cost prohibitive. This product was supposed to break down all the barriers to entry! Instead, it developed barriers of its own and it was hurting sales not just for it, but for reorders that usually resulted from it resulting in painful chain reaction. If this product didn't sell, it was like turning off the water supply at the faucet.
This was a classic domino-effect. Because the product was so heavy, we were unable to offer free shipping. Because we couldn't offer free shipping, it was severely impacting our sales of this product, which as mentioned above was the main draw for new customers into the brand. If we could optimize this product, we were certain that we could increase sales by 50% which was crucial because typically consumers that purchased the product in question turned into return customers that spent hundreds of dollars.
We started out by establishing what we knew we knew: we knew that it was a great product that people loved. We knew that people that who purchased it were 90% more likely to reorder than people that didn't. We knew that it was the cheapest product on the store by 50% (this is important because no other product is below a $50 price-point). So what could possibly be not to like about this product? We had the social proof, the value and the quality.
Once we established what we knew, the answer was clear: shipping cost. From a P/L standpoint, we couldn't offer free shipping for this product. It had a shipping weight of 2 lbs and added over 30% to the final cart value. Unfortunately, there's only one way to get cheaper shipping costs: reduce weight, which you can only do by removing pieces.
Luckily, it was a 10-piece kit and we realized that by removing two pieces we could get the total weight under 1 lbs, which would then allow us to offer free shipping for this product. To determine which two products we were going to axe, we analyzed consumer data to figure out which SKUs people liked the most and which SKUs they could probably live without. Based on followup order data, we realized that three SKUs out of the kit were only reordered 5% of the time or less.
In other words, we could remove two of these SKUs and nobody would really miss them. To help our decision making process, we picked the most expensive two so that we could simultaneously increase our profit margin on the sample kit as well as reduce weight.
Once we reduced the weight of the product to below <1 lbs, we were able to offer free shipping on this best-seller. The results were dramatic with a 115% increase in orders the week after the change and a sustained increase of 98% in order monthly volume. This win was compounded by the fact that not only were we bringing in more first-time orders, but now we were also increasing the size of the consumer segment that we knew were 90% more likely to re-order products than anyone else.
