Challenge
The online furniture store has a broad customer base with diverse needs and price preferences - from shoppers who always choose products from the standard range, to enthusiasts of a particular interior design, to those looking for premium collections. Uniform pricing meant a loss of revenue. On the one hand, customers looking for bargains may have left for the competition. On the other hand, users who value convenience and quality may have been willing to pay more, but the company did not seize the opportunity. There was a lack of flexibility in adjusting prices to individual customer profiles.
Action
- Detailed customer segmentation
The company divided customers into groups based on products viewed, time spent on the site and demographics. RFM reports were able to determine which customers spend the most money and are willing to buy premium collections, and for whom promotions and lowest prices are most important. Customers were divided into segments such as:
- New customers: typically more price-sensitive and looking for incentives for their first purchase.
- VIP: who value loyalty program benefits and exclusive offers. Willing to pay more for a product that matches their preferences.
- Cart-abandoning customers: often requiring an additional price incentive.
- Customers looking for unusual, unique products: Willing to pay extra for something that the competition doesn't have, that is unique, modern.
- Customers with high purchase frequency: loyal customers who deserve a discount for their brand loyalty.
For new customers, it was tested to offer a small discount on the first purchase or free delivery once the basket value threshold was exceeded.
VIPs were shown promotions mainly for premium, high-end products. Other categories were at standard price.
Personalized discount coupons of variable value were used for customers abandoning the shopping cart, depending on the value of the abandoned cart and the customer's sensitivity.
For customers buying unique products, promotions were displayed for items in the “Only with us” category.
For loyal customers, exclusive promotions, earlier access to new products or special prices on products from their purchase history were used, without lowering prices for everyone.
- Automation and personalization
The e-commerce platform was integrated with Marketing Automation. This way, all customer and purchase data was updated in real time. - Automatically display personalized prices and promotions
Different pricing strategies were tested for each segment. Set up campaign mailings with dynamically changing content depending on the segment targeted. - Creation of a loyalty program with additional discounts and promotions
A loyalty program was set up for the most engaged customers with rewards, such as additional discounts that reduce the price of the order, which can be collected after collecting a certain number of points.
Results
- Revenues increased by 16%.
- Due to personalized price offers, more customers decided to complete the purchase, so a 12% increase in the conversion rate was observed.
- Effective price offers encouraged customers to return. Cart abandonment rates were reduced by 18%.
- A dynamic pricing program, combined with a loyalty program, made customers feel valued and return more often. Customer satisfaction increased by 15%.
