Culture

How a VTEX intern doubled the revenue of a major retailer

Lucila Thompson
Lucila Thompson May 19, 2021
How a VTEX intern doubled the revenue of a major retailer

As a member of VTEX, we have some commitments: one is guaranteeing our customers’ success, and another is always to seek knowledge regarding digital commerce.

In a meeting with our Founder and Co-CEO, Mariano Gomide, he challenged me ーan intern at that timeー, alongside CX Analyst Arthur Mello, to pick up a client, diagnose their operation and implement solutions that would directly enhance their customers’ experience, therefore impacting their revenue.

We decided to pick a retailer that sells appliances. Their current Customer Success Manager proposed analyzing their ecommerce. Since a low percentage of their total revenue came from their B2C digital commerce operation, it would be a true opportunity for the retailer. 

So, if you’re wondering how an intern with no background in retail doubled a major retailer’s revenue, bear with me.

Diagnosis

When you have a disease, the first thing you do as a patient is to call your doctor and tell them your symptoms. Then, they’ll give you the correct diagnosis and the perfect treatment to make you feel better as soon as possible. The goal of telling your doctor about the symptoms is to collect evidence about how you’ve been feeling. 

When we’re talking about an ecommerce operation, it happens the same way. You can analyze many signs to formulate an accurate hypothesis and reach the heart of the matter. There’s no right or wrong way to do this, although you have to trust your gut and follow empirical evidence. It goes from observing your niche price strategy to a more in-depth analysis of competitors’ and market data.

We began our investigation using two available data analysis tools: Google Analytics and Google Search Console. They work almost like a symptom dashboard. If properly set, you can track and measure every user interaction related to the ecommerce operation, such as the number of page views, conversion rate, ROI, and many other metrics that could improve your decision-making process. 

Using those tools, we found some interesting symptoms in the ecommerce store: two regions in Brazil (South and Midwest) presented conversion rates lower than 0,5% and an average order value of about ⅓ the price of any product sold. For example, Santa Catarina’s State in Brazil, in a whole month, presented a 0,09% conversion rate. The odd fact about this was that the organic traffic remained at a healthy baseline. 

Intrigued by the first findings and continuing the analysis, we saw that the product page had a significant number of dropouts by observing the sales funnel within Google Analytics. This was most likely the root of the low conversion rate.

In parallel, we were trying to understand how to increase the SEO performance. We looked for how users behave when searching for an air conditioner (the main product sold in their ecommerce). To do this, we used Google Trends, a tool in which you can add some keywords and see charts and information based on searches regarding the word you’ve inserted. 

It showed us something quite surprising. We discovered that the South and Midwest Regions in Brazil were the two zones that demanded this product the most. Coincidentally, or not, these regions were the ones in which the store presented a massive number of dropouts, the lowest conversion rates, and the smallest revenue share. 

The lack of product availability in those Zip Code ranges and longer delivery time, when compared to competitors, was driving users out of their page. In the end, the root of the problem was not content nor SEO techniques. It was on the management side of the operation.

After diagnosing the symptoms, proceed to the right treatment

After collecting some strong evidence about your symptoms, you will contact your doctor, and they’ll guide you through the correct treatment specifically for your case. Going back to the ecommerce analysis, this is the time to present the solutions that could solve the problem. It is essential to be careful in this step. You can’t deliver generic solutions the same way you can’t treat all diseases with the same treatment. We’ve had to target the simplest solutions that fit in the client’s context and operation.

“We’ve had to target the simplest solutions that fit in the client’s context and operation.”

We prepared a presentation carrying the client throughout our diagnosis and suggesting some ideas for solving the symptoms listed. They were as simple as correcting the freight tables for the regions we’ve shown that presented a huge demand.

Checking-in the treatment results 

After presenting and guiding the client to the solution, it is essential to check if it brings positive results. To do this, we’ve made a comparison of the clients’ fiscal months before and after the adjustments. 

After implementing the solutions for the freight tables, the client managed to fulfill the demand in the South and Midwest region of Brazil. Those regions that presented almost zero conversion rate due to the shipping unavailability were becoming the most demanding regions for that ecommerce.

It is also important to mention that those regions were affected by external factors that pushed them to be the most demanding regions for that product. So, this adjustment would also make the client surf the wave for this seasonal event that significantly increased the demand. 

Monthly overall results reflected an increase of nearly 98% in total revenue only considering the B2C ecommerce website (without marketplaces). Besides, the number of transactions increased by 40%, and the average order value by 27.60%.

Thank-you note

This project was undoubtedly a turning point in my career. I’d like to thank some of the people who had an active role in it.

  • Mariano Gomide and Rodrigo Dellacqua, thank you for supporting our analysis and giving us a little push to get out of our comfort zones and learn more about digital commerce.
  • Arthur Mello, thank you for being the co-worker who gave traction to this project and made it all happen.

In VTEX we are all Digital Commerce Specialists.

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