Context
One of the largest online fitness stores in the US is systematically improving its customer stickiness, repeat purchase behavior, and basket size.
Regulatory and healthcare challenges aside, customer stickiness is an ever-important strategic topic of discussion. Stickiness is also an indirect view of the effectiveness, utility, and organization of an e-commerce site. It measures how the brand resonates with its users. This online retailer specializes in sports supplements and muscle supplements. They also provide subscription-based benefits and discounts.
Challenge:
The client realized that a very low percentage of customers (around 25%) places multiple orders. This being a measure of stickiness, the client asked us to analyse and identify customer cohorts that impact and increase profit.
The plan of action included the following analysis:
Cohort Analysis
Market Basket Analysis
Exhibit 1
1. Understanding the interpurchase time.
It gives idea about the products which are in high demand and help manage inventory.
2.Identifying brand loyal customers.
Loyal customers are identified and rewarded with discounts and offers regularly for longer retention.
3.Market basket analysis to identify frequently bought combinations.
It helps company to upsell related products.
Exhibit 2
The Product Subscription, a low-value plan, allows customers who are price sensitive to receive discounted products based on the benchmark order value.
Churn analysis was done to understand the behavior and predict customers who tend to end their subscriptions. Data regarding KPIs such as Cart abandonment rate, bounce rate from PDP, etc was acquired through various channels and were incorporated to the model for analysis.
Insights
Analyzing the order basket helped us understand the fitness journey of the customer and cater to their needs by sending recommendations for the next purchase that would be beneficial for them.
Reminders and discounts just before the replenishment of a product will push customers back to the website.
The results
The company has seen a significant increase in the number of products that have been repurchased. Customers are highly satisfied thanks to the targeted rewarding (offers and discounts), it has also helped in customer retention (reducing the number of customers churning to 3%). The workout duration showed a positive climb by 5%.
The nutrition business has achieved an increase in sales and revenue after the model incorporation.
