July 8, 2024

UnderOutfit - How we increased annual revenue by $984,000 for one of Shopify’s fastest-growing brands

We’ve been working with UnderOutfit’s CEO & Co-founder Felix Leshno and their Head of Operations Nando Dornelas to uplift their checkout. 

So far? The results are blowing everyone away.

  • +$984K increase in annualized revenues
  • -14% reduction in first time shopper abandonment
  • Increase of 3 basis points in overall checkout conversion

About UnderOutfit 

One of the fastest-growing Shopify stores, UnderOutfit has ranked in the top percentile of Shopify brand growth for this year. It’s particularly impressive when you consider that they only launched this top-quality brand of shapewear and underwear in 2021. 

The Challenge 

UnderOutfit was growing quickly, but they were leaving money on the table. Their total conversion rate was struggling, running lower than the industry average. In addition, their overall abandonment rate (mostly consisting of first-timer shoppers) was lagging, despite most orders qualifying for (and selecting) free shipping.

UnderOutfit has a world-class product, and has a very high repeat purchase rate and lifetime value from its customers, but found that a whopping 77% of its first-time customers weren’t completing checkout. First time customers are also much costlier to acquire than returning customers. And to lose them at checkout is painful, as UnderOutfit has already paid the acquisition cost to get them there.

“It's people you already paid for. Because if somebody reaches checkout, you already paid for the traffic- Meta, Youtube, whoever.” - Felix Leshno

We had multiple ambitious goals:

1. Reduce first-time shopper abandonment

2. Reduce overall abandonment rate from 77%  (increasing total conversion rate)

3. Increase retention by communicating trust

4. Push for a faster retention cycle for returning customers by supplying them with the orders earlier

The Solution

PrettyDamnQuick was already optimizing UnderOutfit’s operations team and warehouse to optimize order management, streamline backorders, and enable post-checkout upsells and order edits while providing real-time delivery updates to customers. 

Felix, an experienced ecom operator, immediately saw the opportunity: 

“Logistics really, really affects the cost of acquisition. You can lower your cost of acquisition on social media just by providing the first-time magic. It affects the customer experience, so logistics is really part of marketing.” - Felix Leshno

PDQ immediately got to work A/B testing how different cohorts respond to variables like higher/lower shipping thresholds, and more expensive shipping options, and focused on what they found to be low-hanging fruit: first-time shoppers. 

What PDQ tested:

1. Adding aggressive delivery promise (to stop shoppers from going to Amazon) 

2. Offer first-time shoppers free shipping when their risk of abandonment is high

3. General price testing sensitivity to determine the optimum shipping rates

4. Helping UnderOutfit keep their delivery promise to build more customer trust

Their checkout went from this:

To this:

The Results

After just a few weeks of A/B testing different shipping methods, with a control and test group,
PDQ was making a massive impact:

  • $984,000 annualized increase in topline revenues 
  • 14% reduction for first-time shopper abandonment (from 77% to 63%)
  • Increase of 3 basis points in overall checkout conversion (from 81% to 84%)

“There was no operational change, just pure data-driven optimizations. And the impact, the number we're talking about is close to a million dollars, just slightly shy. Annualized, in a short period of time” - Felix Leshno

So what’s next?

Adding delivery arrival times to all product pages, testing offers at order arrival time to encourage reorders, and lots more. “There's a whole playbook we haven't even begun tackling—like how quickly can we get a customer back?” 

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