Skinnydip London sees 8x ROI for using Category Merchandising, covers annual cost in just one month

About Skinnydip

Skinnydip London was born shortly after the launch of Apple iPhone, with the quick realization that there were virtually no fun phone case designs on the market. Since the launch of their first phone case in 2011, the brand has grown from a small accessory company to a vanguard of contemporary trends. With 90% of the traffic coming from mobile, the brand now operates a complete online store selling affordable products that easily spur impulse purchases, 16 standalone stores across the UK, clothing collaborations with universal brands like Barbie, Disney and The Simpsons, and a distribution network of over 200 concession stores.

A Nosto client since 2019, Skinnydip London serves up the most fun and quirky accessories, clothing and lifestyle products for all to love and enjoy year round.

Challenge: Growing Demand, Shrinking Resources and Manual Processes

As it did for most brands, the global pandemic brought on a number of challenges for Skinnydip that have gradually impacted their ambitious growth goals. Some of these challenges were amplified even further by the recent shifts in demand. 

Loss of multiple sales channels and increase in digital competition

In addition to generating sales through their online store, Skinnydip sells their products in over 200 concessions in the UK. With the pandemic abruptly halting brick-and-mortar shopping, their sales growth on these channels disappeared entirely. Like most brands who faced a similar loss, the brand has shifted their focus to the online experience as their sole channel for traffic and sales. 

The shift to online experiences has been both an opportunity and a threat for the brand: while they’ve seen an increase in new traffic to the site during the pandemic, competition for digital real estate is steeper than ever. Skinnydip is one of many brands who’ve completely pivoted to online-only experiences, now competing against a sea of digitally native brands with strong footholds in the online sphere.

 

Balancing growing customer demand with manual merchandising and minimal resources 

While Skinnydip did see an increase in new site traffic, working with a small team has made it that much harder to keep up with growing customer demand (especially during peak season). 

To add to their lack of resources, their manual merchandising strategy has put an even greater strain on their ability to foster product discovery, convert new site traffic and nurture new shoppers into loyal customers. 

The brand showcases dozens of categories on their site – and with a manual merchandising process in place across categories new and restocked products would be automatically placed at the bottom of their assigned collection. This meant that customers searching a specific category (like “handbags”) would have less of a chance of discovering new products within that category. 

Additionally, if a new product was launched, Skinnydip had no visibility into how those products fit into other categories. This meant that products with great sales potential would often end up in the wrong places and not visible to the customer, causing the brand to miss out on the crucial initial sales window.

Our previous merchandising was done through intuition and what “looked good”. There are tons of products in our collections that work really well as add-ons, but someone manually merchandising might rank them much lower on the category page.

Meghan Lewis, Head Of Ecommerce, Skinnydip London

Skinnydip needed a solution to eliminate an extremely laborious process at a time when resources were limited and traffic was on the rise. They also needed a way to eliminate gut feeling and guesswork that often led to human error; instead, adopting a merchandising strategy that uses data to drive their decisions.

Category Merchandising was profitable in less than a month. It’s definitely a significant revenue and growth driver for us. That’s not the case for every tool. 

Meghan Lewis, Head Of Ecommerce, Skinnydip London

Solution: Eliminating Manual Processes with Category Merchandising and A/B Testing & Optimization

To start tackling this challenge, we worked with Skinnydip to implement Category Merchandising on their site and analyze the impact of automated merchandising on sale and non-sale categories. They then used A/B Testing & Optimization to test this impact against their manual page setup. The tests were conducted over a 20-day time period.

We weren’t actively looking for a merchandising solution. From looking at what was on the market, we previously hadn’t been able to find something within our budget. At the same time, as we grow, the time & costs associated with manual merchandising will only increase and result in larger issues for the website.

Meghan Lewis, Head Of Ecommerce, Skinnydip London

  • Testing Category Merchandising for the “Sale” Category

Skinnydip wanted to clear new product inventory that did not sell well as a result of their manual merchandising process. To do so, they set up an A/B test that would analyze the impact of promoting trending products  that resonate with discount oriented shoppers and generate decent revenue per view. This variation was tested against Skinnydip’s default page setup, where new items and best-selling products in the Sale category are manually mixed together and “new” products are based on the brand’s assumption of which products would perform well.

This test produced significant results for Skinnydip. By prioritizing products with high views those generating above average revenue per view, Skinnydip was able to zoom in on the most potential product range in the sale category to rapidly rotate the most popular discounted inventory. This increased Sales category page conversion rate by 41% and click-through rate (CTR) by 59%.

  • Testing Category Merchandising for selected Non-sale Categories (Beauty, Clothing, Phone Cases and Accessories)

Skinnydip also wanted to test the impact of showcasing popular products within their Beauty, Clothing and Phone Case and Accessories Category pages that generate a good return in the form of tangible revenue per view. 

In this test, new, non-discounted products were prioritized on the respective Category page to maximize AOV and revenue while discounted items were demoted. This variation was tested against Skinnydip’s default page setup, where new and best-selling products are manually mixed together and “new” products are based on the brand’s assumption of which products would perform well.  

The results of this test showed a substantial increase in conversion rate and click-through rate (CTR) across Skinnydip’s non-sale categories.

Beauty: 36% higher conversion rate, 23% increase in CTR

Clothing: 12% higher conversion rate, 26% increase in CTR

Phone Cases and Accessories: 35% higher conversion rate, 38% increase in CTR

This is only the beginning of Skinnydip’s journey with Category Merchandising. With a major focus on transforming their customers’ experiences in 2021, they’re eager to dive deeper into implementing Lifecycle segmentation site-wide. To offer the ideal shopping experience, the Skinnydip team wants to create completely unique journeys for first time visitors vs prospects – not just on Category pages. Through the use of Category Merchandising, Content Personalization and Product Recommendations, they’ll have the freedom to consistently adjust messaging for each individual shopper across the entire site experience.

The results and impact on our CVR and revenue have been great – but the most important thing is how much time it saves. Category merchandising helps to take things off the neverending todo-list so we can focus on meeting our growth objectives.

Meghan Lewis, Head Of Ecommerce, Skinnydip London

Result: Substantial Increases in Conversion Rate, CTR, and ROI

With Category Merchandising implemented across all categories, Skinnydip is now able to automatically implement different approaches which saves them time and effort while generating more revenue. In addition, they’re now able to test the value of these approaches and make more educated assumptions that have a positive impact on their bottom line.

Since going live with Category Merchandising, Skinnydip has achieved:

  • A 15.61% increase in conversion rate storewide
  • 16.10% increase in average visit value (AVV) storewide
  • An ROI of 8x

Category Merchandising in “Sale” Category Page generated:

  • 41% higher conversion rate and 59% increase in CTR 

Category Merchandising on Non-sale Category Pages generated:

  • 36% higher conversion rate and 23% higher CTR in Beauty category Category page
  • 35% higher conversion rate and 38% increase in CTR in Phone Cases and Accessories category
  • 12% higher conversion rate and 26% increase in CTR in Clothing category

16.10%

higher AVV site-wide

15.61%

higher conversion rate site-wide

8x

ROI

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