February 9, 2021
The very first online purchase. It’s often a mystery to upstart DTC (direct to consumer) brands why so many shoppers show love, but don’t click that buy button. A very expensive mystery.
That initial conversion is the flashbulb moment for 7,000 other ever-expanding marketing metrics with confusing acronyms… CAC, ROAS, LTV. While a returning customer base is what turns interesting products into profitable, high LTV ones; the key signpost for a to-be-successful product is profitability on first purchase.
Winning digital-first brands find a way to do just that, increase 1st purchase profits, by improving the conversion rate of on-the-fence online shoppers. Of course, there are countless variables that affect why a consumer does or does not buy. Brand recognition, creative alignment, price, promotions, community, etc.
But the common thread among these winners is a clear-cut buying path. A simplified shopping experience that helps the consumer reduce questions and make a decision. In essence, to solve the first purchase mystery, you simply need to give your shoppers a map. Here are some of my favorites…
Haus // Art of Sport
Let’s start with Haus, the highly acclaimed alcohol-to-your-door biz. Haus is a great example of what we call the “Join the Club” method. The true value of the Join the Club method is the long-term value of repeat purchases. But Haus also does a fantastic job of using their club to entice first time shoppers. The membership page both simplifies the product experience (2 bottles monthly, choose your flavors), and offers incentive to pull the trigger (10% off, free shipping, perks).
Men’s personal care brand, Art of Sport, also uses a psuedo “Join the Club” method, with a slightly different twist. AOS gives less focus to the community-building aspect of their membership. But instead uses their guided welcome experience to reduce consumer options and provide a customized kit. At the end of the day, the kit provides a similar hook to Haus. A simplified first-purchase experience through the customized kit, and a discount (15% off, free shipping) for joining the club.
Well loved for their technical workout wear, Outdoor Voices set a new standard for what it meant to build a community in DTC fashion. But much like everyone in the tricky fashion world, the number of SKUs has grown considerably over time. That increase in SKUs can lead to uncertainty for new shoppers, “I love the OV ethos, but what products are their best? Where do I start?”
I love the way OV keeps their “OV Kits” front and center, as a primary option in their top navigation bar. This allows shoppers to quickly build a “go-to outfit for #DoingThings.” The experience is simple and perfectly aligns with the brand promise. Apparel brands should consider taking a similar route. Feature “go-to” product(s)/bundles to help customers feel confident in their first purchase.
Yeah, I’m an old dad. My little guy loves Cerebelly fruit and veggie purees (Well, he loves Sweet Potato Mango. He will throw Broccoli Pear back in your face.) While my wife loved the first order experience. Cerebelly certainly didn’t invent the personalized quiz (Stitch Fix and Winc come to mind). But they did utilize the concept perfectly. We won’t name names, but there are a lot of examples of TERRIBLE personalized quizzes out there in Ecommerce land… so be careful.
Cerebelly does a fantastic job of offering personalized recommendations based on the age of your child. While giving the new parents solid logic and reasoning along the way. The quiz isn’t just gathering information, it’s also slowly selling the product by convincing parents that “we know our sh*t” (Sorry, Cal). Once you finish the quiz, upsell plan options + a sizable first purchase discount help seal the deal. Good baby food is expensive.
Cadence is a fairly new product, small refillable containers for travel. The size and use case of the product creates some unique challenges for the team. Particularly, how do we sell these in bundles while still allowing personalization.
I think they’ve done a nice job with their “build your 6” experience. I assume there is some level of research that goes into the number 6, whether it be customer research or an effective way to drive up first purchase AOV (average order value). Either way, it gives clear direction for first time buyers, eliminating the question of “how many should I buy?” while still offering flexibility. The U/X design here is also very well done.
There aren’t many categories more high-margin than fragrances. Scents-to-your-door brand–Snif–has used that flexibility to their advantage. Building their entire shopping experience around “Try now, pay later.”
The key here is lowering the bar for entry. Snif sends out a 3-fragrance kit for $0 up-front. Customers then have 7 days to return unwanted scents, before being charged for kept product. Once they get the kit, customers are bought in. I imagine that somewhere near 100% of orders keep AT LEAST 1 of the 3 fragrances. While the amount of customers that keep all 3 might be higher than you think. All in all, it’s a unique model set to target younger consumers in a very competitive industry.
There’s no “right way” to build your first-purchase experience. Membership Clubs, Go-to Products, Quizzes, Starter Packs, Trials, Discounts …. different things work based on category and price point. But I know this, despite what the Cheesecake Factory will tell you, optionality is usually bad. If you’re trying to solve your own “first purchase mystery,” find a way to give your shoppers a map. Some maps even lead to buried treasure.
Founder, Strategy & Digital at P48
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