Retailer adopts AI-powered automated online merchandising and A/B testing through Nosto to power online sales success.

Skinnydip London, which sells mobile phone accessories, clothing and lifestyle products online, as well as through its network of UK shops and retail concessions, is using automated merchandising and A/B testing technology to deliver a 16% increase in average visit value – with the sales conversion rate on its ecommerce store now up 15%. The improved performance has been achieved since the company pivoted its entire operation online during the pandemic.

Skinnydip is using an ecommerce merchandising solution available through Nosto’s AI-powered Commerce Experience Platform to automatically optimise the way it displays and ranks products on category pages based on real-time customer behaviour and onsite performance data. The company, for which 90% of ecommerce traffic comes through mobile, is also using A/B testing tools through Nosto to identify the best performing merchandising strategies on dozens of category pages for its beauty, clothing, phone cases and accessories products.

With the pandemic abruptly halting brick-and-mortar shopping in 2020, Skinnydip, like many brands, shifted focus to its ecommerce store as the sole channel for traffic and sales. This was both an opportunity and a challenge: while online traffic has increased, so has online competition.

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Nosto automated Category Merchandising

Skinnydip needed a merchandising strategy to foster product discovery, convert new site traffic and nurture new shoppers into loyal customers. With Nosto it has been able to replace a labour and time-intensive manual strategy based on gut feeling and guesswork, with automated merchandising that uses data and machine learning algorithms to drive decisions.

“Our previous merchandising was done through intuition and what ‘looked good’. For example, 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,” said Meghan Lewis, Head of Ecommerce, Skinnydip London.

With Nosto Category Merchandising, an infinite number of products can be automatically arranged in a specific order on the most vital areas of a category page, based on product attributes (such as brand, colour, whether a product is new or is being offered at a discount) and performance metrics such as click-through rate, conversion rate and impressions.

Different personalisation and merchandising rules can be assigned to different customer segments, with the ability to select multiple attributes and performance goals together, giving different weights to each to fine-tune the order in which products are displayed.

Underpinning its Category Merchandising solution, the Nosto platform uses machine learning to analyse shoppers’ online behaviour and give retailers the ability to automatically segment audiences and personalise the online experience based on almost any combination of factors -such as category affinity, brand affinity, gender, lifecycle stage, and more.

“Category Merchandising was profitable in less than a month. It’s definitely a significant revenue and growth driver for us,” said Lews. “It also helps to take things off the never-ending to do-list so we can focus on meeting our growth objectives.”

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Nosto A/B Testing

To identify the best performing merchandising strategies on its category pages, Skinnydip has been using the A/B testing module available on the Nosto platform, which is designed for easy set up and deployment of A/B/n, split, and multivariate testing of different online experiences. This helps merchants discover actionable insights into which products and brands consumers are most likely to purchase via test results.

In one test, new, non-discounted products were prioritised on category pages for beauty, clothing, phone cases and accessories to maximise average order value and revenue – while discounted items were demoted. This was tested against Skinnydip’s default page setup, where new and best-selling products are manually mixed together, and “new” products are displayed based on the brand’s assumption of which products would perform well.

The result was a substantial increase in conversion rate and click-through rate (CTR) across Skinnydip’s non-sale categories using the new merchandising strategy.

• 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

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