VKTRY Gear boosted conversion by over 30% and grew their profits by testing a price decrease.
Context & Background
VKTRY Gear makes personalized, carbon fiber insoles for athletes. These premium insoles are built to enhance performance and protect from injury, and are uniquely situated in the market! When they found Intelligems, VKTRY was in the midst of huge demand growth, with the exciting benefit of a in a decrease in supplier costs. They came to Intelligems with the desire to ensure they were priced for success.
As a premium product with few direct competitors, VKTRY Gear's hero product (their gold insoles) were priced at $169 per pair. However, as consumer demand for their product skyrocketed, VKTRY considered a price decrease that would (hopefully) allow them to capitalize on the demand growth as much as possible. They found that they now had some margin flexibility as supplier costs decreased as they grew. However, they wanted to be smart about the price decrease to ensure that it would ultimately help them boost their top-line revenue and profits.
The brand decided to use Intelligems to help them answer a few questions:
1Would a price decrease actually result in an increase to conversion rate that would continue to help them grow meaningfully?
What level of price decrease would result in the "sweet spot" where growth in orders outweighed a loss in average order value (AOV)?
They set up a split test, testing their current price ($169) vs. a few different price points ($149/$159/$179). Using Intelligems, VKTRY was able to split traffic to their site in real time, directing 25% of site visitors to each group. During the test, Intelligems update prices both on the front end (updating product prices across the site) and on the back end (showing the correct product prices in the cart/at checkout). In addition, the brand used Intelligems traffic filtering tools to exclude all traffic from Google Shopping, in order to minimize friction for those visitors.
The test showed that decreasing prices had the intended effect, resulting in higher order volume and higher profits on orders containing the gold insoles!
The $149 group (the lowest price) saw the highest conversion rate, with a CVR boost of 32% over the control price.
Despite the decrease in AOV, the conversion rate impact had a more than commensurate effect, and resulted in the highest profit/site visitor (+13.5%).
The test showed that decreasing prices on their hero product could boost order volume and profits! Both price decrease groups resulted in an increase, but the lowest price point brought the highest conversion rate, revenue/visitor, and profit per visitor.