Digging Into Customer Data on Socks Site Turns 5x ROI
Tapping consumer insights raises AOV 19.6%
A Rosetta.ai case study with AHUA
Ahua is a multi-brand Korean fashion and accessories retailer whose main product used to be novelty socks.
A lot has changed since then, but the company slogan remains the same, “Ahua, are you ok?”
Ahua is definitely OK! Mr. Ahua himself is Owner/CTO and has made some slick ecommerce moves to grow his novelty socks website into a much bigger venture.
The problem: tight margins and difficult-to-manage customer data
Tight margins are situation normal for many online apparel merchants. Pressure to discount, rising returns, and all kinds of unforeseen costs can cut into profit and slow down growth.
But Mr. Ahua was well-aware that increasing average order value is one way out of the tight margin trap. He also knew increasing AOV is all about making better connections with current customers and cross selling to them, a strategy used by some of the biggest players in ecommerce.
The key to this solution was right under his nose, in his customer data. But putting his data into an actionable business plan was challenging. Mr. Ahua concedes, “we had a lot of difficulty exporting our website data and analyzing it by ourselves.”
It’s not an uncommon problem. Marketers all over the world have tons of data on hand, but find it difficult to manage.
Eventually, in 2019, the time came when the shrinking profit margins on novelty Korean socks were leaving too little room for discounts. Mr. Ahua needed to find new solution to increase profit and grow business.
He had read about personalized marketing on an ecommerce FB group and thought it might be a good fit for his problem.
He searched around and found a local SaaS company specializing in personalized marketing for apparel websites. He reached out to them to ask about adding a recommendation engine to his website.
The solution: automated data analysis and fashion-optimized recommendations
The Rosetta.ai personalized marketing solution was just what Mr. Ahua needed. It collects customer/product data and machine learning figures out which other products individual shoppers want to see.
With recommendation engines installed on his landing page, category page and product details page, shoppers visiting Ahua Apparel may come for custom socks, but may add a navy blue sports suit (see below) to the cart as well because it was recommended based on that customer’s preferences.
Why it works
The customer data insights from the Rosetta.ai recommendation engine simplified data analysis and Mr. Ahua was soon able to see what was selling and what was not on the level of product attributes.
By analyzing customer preferences, I can easily find the most-clicked products, the shared attributes of the things added to the cart most often, the items with the most purchases and a lot more. That helps me learn more about customers and our products. Source: Mr. Ahua, 2020.
The personalized preference profile for the landing page recommendation engine, “Recommended just for you.”
To Mr. Ahua, customer insights are the most valuable thing, he even added “it’s not all about the money.” Now he views growing his business via cross selling much more favorably than through discounts alone.
While still in the 14-day trial period, Mr. Ahua noticed that average order value had jumped from 70 to 100 NT dollars per customer so he signed up for a full year subscription to the service.
Just 3 months later (by August of 2020) personalized marketing provided by Rosetta.ai was driving 20% of total purchases and 20% of total revenue per month.
By the end the year, AOV was 19.6% higher than before having the recommendation engine. The extra revenue translated into a 5x return on investment!
Besides the profit increases, and Mr. Ahua also grew his business. Now his product line includes a wide range of Korean apparel and accessories that goes far beyond novelty socks.
Rosetta.ai offers fashion-optimized, image-based AI personalization for 1:1 onsite shopping experiences, authentic email marketing campaigns and preference analysis insights.
On average, our clients double their order value and triple their conversion rate because shoppers on their websites are more engaged by the industry-leading accuracy of our personalized recommendations.
Rosetta.ai has been featured in Forbes Top 25 ML startups and Analytics Insights Top 10 companies.
Sign up for a free 14-day trial today and start growing your business on day one.