We ran an A/B Test with different free shipping thresholds—$25 (control), $35 (variant 1), and $50 (variant 2)— and introduced revenue per visitor (RPV) as a new KPI to the organization.
Conversion optimization is not about improving conversion rates, as this test clearly identified.
The test showed a 15% increase in RPV when the shipping threshold was at $50 compared to $25. The fear was that increasing shipping threshold would deter customers from purchasing (lower conversion rate); however, in reality and post-surveys conducted customers wanted the option to qualify for free shipping regardless of the threshold (psychological).
This improvement created the following benefits to the brand:
- Improvement of AOV by 20% as customers were adding to their purchase (units per transaction increased by 33%).
- Revenue improvement of >$1 million from shipping and additional products added to cart within 1st calendar year and continuing to see more revenue YOY.
- Shift the narrative of shipping many orders at worse margins to shipping larger orders at better margins with a big focus on profitability.