How Billy Reid Improved Conversion Rates, Customer LTV, and Contribution Margin with TryNow

About

Billy Reid is an iconic American fashion brand known for classic, modern styles with a distinct Southern influence. Offering premium men's and women's apparel crafted from high-quality fabrics, Billy Reid celebrates timeless design through a contemporary lens.

Challenge

Billy Reid aimed to grow conversion rates, customer LTV, and contribution margins.

Address price sensitivity

Billy Reid’s commitment to quality, at a premium price point, presented some obstacles for their online business. The wide array of styles and the challenge of finding the perfect size remotely made some shoppers hesitant to purchase sight unseen, leading to stagnant conversion rates.

Cross-sell products to improve Customer Lifetime Value

While the brand had a loyal following, they aimed to deepen relationships with existing customers by getting more of their products into shoppers' homes. This would not only build trust and loyalty with more customers but also increase customer lifetime value.

Combat rising return rates with Try Before You Buy

At the same time, managing return rates was an ongoing battle impacting profitability. The costs of processing and restocking returns made it crucial for Billy Reid to drive higher contribution margins to offset those expenses.

Solution

Convert hesitant shoppers, build customer loyalty, and increase profit margin with TryNow.

In order to increase online conversion rates, customer lifetime value, and contribution margin, Billy Reid implemented TryNow. Their Try Before You Buy program enabled customers to experience the incredible quality and fit of items at home, only paying for what they keep.

To provide the best shopping experience, Billy Reid rolled out their TryNow program on all items (except Final Sale), and added TryNow entry points on product pages and in the navigation menu. This encouraged customers to try more items, and it allowed them to discover and opt into the program organically. As the value became clear, they added entry points, like cart-abandonment emails and other marketing initiatives, to drive more incremental profit with Try Before You Buy.

“The overall time investment with TryNow has been low. We initially plugged it into the site, created a couple of entry points, and that was all we needed to build out the program in a low-lift way.” - Jeff Gaudette, Head of eCommerce, Billy Reid

Billy Reid set up their Try Before You Buy Program to encourage higher-value orders:

• Shoppers check out with Try Before You Buy.
• Shoppers can try up to 6 items for 7 days at home.
• Shoppers can easily keep what they love, return what they don’t, and only pay for what they keep.

Results

TryNow enabled Billy Reid to achieve a high conversion rate, boost net LTV, and realize a remarkable ROI after return costs.

Since launching TryNow, Billy Reid has seen incredible results across key performance metrics, generating a 5.89% conversion rate, boosting Net LTV by 79.53%, and realizing a 36x ROI after return costs.

79.53% Higher Net Lifetime Value for TryNow customers compared to Buy Now customers.

Billy Reid’s Try Before You Buy program facilitated deeper customer loyalty and trust in the brand. Customers who used TryNow for Billy Reid generated a 79.53% higher net lifetime value compared to traditional Buy Now customers, driving an incremental $339.29 in net sales per customer in a 6-month cohort. This incremental revenue easily offsets the incremental return and shipping costs of $20.35 per customer. 

Shoppers are ordering and keeping more items, in addition to coming back more frequently. The repeat purchase rate among TryNow users was 28.1% higher, as customers experienced more of Billy Reid’s exceptional products, fostering trust, loyalty, and an appreciation for the brand’s craftsmanship. With TryNow, Billy Reid acquires more customers and more valuable customers.

“We've been seeing almost a 30% increase in repurchase rate with TryNow customers versus customers that just buy now. It's a huge increase and it's been creating much more loyal and valuable customers to us... It is a lot easier and cheaper for us to keep customers as opposed to finding new ones.” - Jeff Gaudette, Head of eCommerce, Billy Reid

5.89% TryNow Page Conversion Rate converts ~3x better than baselines.

Try Before You Buy also alleviated hesitation, evidenced by Billy Reid's 5.89% TryNow conversion rate. Offering a trial period allowed customers to experience the product before committing, removing the upfront cost barrier and boosting conversions. Compared to the Buy Now Best Sellers Page conversion rate, the TryNow Collection Page saw a 2.78x higher conversion rate.

"Right after implementation, we saw a TryNow conversion rate on our TryNow page of 6%. Compared to other programs we've implemented, nothing's had a significant lift in conversion rate like TryNow has… and compared to other strategies we've launched, we've never seen a lift of 79.53% in Net LTV like we have with TryNow. Most of the time it's very minor like a 5-10% lift. Nothing close to a 79.53% improvement in Customer LTV that we've ever seen." - Jeff Gaudette, Head of eCommerce, Billy Reid

Enhancing the shopper experience has directly contributed to the meaningful increase in conversion rates observed. Billy Reid has seen overwhelmingly positive feedback from customers, highlighting TryNow as a standout customer experience driver:

“I’m new to this brand, I wasn’t sure how they would fit. Given the premium brand, comfort and fit is important to me. I love the clothes.” - Robert S.

“I loved the whole experience. There are no brick and mortar stores near me so being able to try on both styles and sizes without having to pre purchase and then return is invaluable. Perfection.” - Kenneth M.

“I love the service. I absolutely LOVE ❤️ your clothing. I'm going to keep the blazer....it literally fits me like it was made for me!” -Samuel A. 

36x Return on Investment after accounting for incremental return costs.

Billy Reid’s TryNow program saw a 36x return on investment after accounting for incremental return, shipping and warehouse costs. The TryNow ROI calculation determines the profitability of using the TryNow service by taking the net revenue generated from TryNow orders, subtracting the fees paid to TryNow as well as any additional costs like return shipping and restocking, and then dividing by the TryNow fees paid to show the true, fully burdened ROI.

In addition, by offering shorter trials that cycled inventory faster, TryNow improved Billy Reid's inventory efficiency. Although initial product distribution increased with the 7-day TryNow trial, since shoppers were prompted to make the decision to return or keep within the 7-day window, returned merchandise was restocked much more quickly compared to their standard 30-day return window.

“With TryNow we've seen a very significant ROI it is around 36x after all costs have been factored in - that's processing fees extra the increase in return labels and then also TryNow’s rates. So the program easily pays for itself.” - Jeff Gaudette, Head of eCommerce, Billy Reid

By improving customer acquisition and retention while simultaneously increasing average order values and margins, TryNow provided Billy Reid a powerful engine to supercharge their online business.

“I don't really know why other brands haven't adopted TryNow. It's had an overwhelmingly positive result with our customers. We're continuing to grow the program and hopefully we can find new ways to get customers to use it, given the overall lift that we've been seeing.” - Jeff Gaudette, Head of eCommerce, Billy Reid