Kiddicare Increases Online Sales by 20 Percent; Improving Conversion Rates and Doubling Items per Order

Case Study for IBM Coremetrics Kiddicare

Kiddicare Increases Online Sales by 20 Percent; Improving Conversion Rates and Doubling Items per Order

Established in 1974, Kiddicare is the largest online nursery and baby supplier in the UK and has won countless awards for its cutting edge innovation and commitment to continuous service improvement. The company has used IBM WebSphere with IBM Coremetrics Web Analytics as the backbone of its e-commerce infrastructure since 2006. So, when Kiddicare turned its attentions to harnessing its brand and service equity to improve conversion rates and repeat business, it turned to IBM Coremetrics Explore, LIVEmail and Intelligent Offer to dramatic effect.

Challenge
While many businesses struggle with the challenges of multichannel retailing and, in particular, with fulfilling an offline proposition with online channels, Kiddicare describes itself as very much a technology business that happens to sell baby products. A privately owned family business for more than 30 years, the company was acquired by supermarket chain, Morrisons in early 2011 for its online prowess.

Despite its strong brand and enviable credibility in the online world, Kiddicare is constantly striving for business improvement. Innovation is part of the company’s DNA, and it seeks technologies that support that attitude and enable it to remain agile as an organization.

Having undertaken much work on its brand proposition and the way service is delivered, Kiddicare, once again, reviewed its online business model in late 2010. This sparked an initiative to broaden its business focus beyond new customer acquisition, to include more on repeat business, customer retention and higher order values.

Simon Harrow, Technology Officer at Kiddicare explains, “Up to that point, only 7-8 percent of our business came from repeat customers, which is crazy when our analytics and satisfaction tracking tells us that 98 percent of our customers would recommend us. It felt counter intuitive to have a raving fan base, but no communications strategy post purchase.”

Kiddicare prides itself on delivering an outstanding hassle-free shopping experience. An example of this is its extended next-day delivery promise that allows customers to place online orders as late as 5pm for a guaranteed delivery the next working day, in a specified one hour time slot. It is this commitment to customers that has attracted more than 400,000 customer orders in 2010 alone.

Harrow continues, “Given the known timelines of pregnancy and child rearing, we set about further transforming our customer relationships. We want to personalize the service we offer to our customers to help them individually, depending on the different stage they were at.”

Solution
Already using IBM Coremetrics Web Analytics for continuous optimization, insights and behavioral analysis, Kiddicare added Intelligent Offer, Explore and LIVEmail to mine the large volume of data it collects.

“We didn’t revisit the solutions we had in place. IBM WebSphere and Coremetrics Analytics had been originally selected for their best-of-breed status,” added Harrow. “We looked at the data in the business and the capital opportunities were very apparent. They were very capable of delivering against our growth and technical ambitions.”

The ad-hoc reporting from Explore provides a complete picture of visitor and customer behavior, whether they use computers, mobile devices or shop at Kiddicare’s Peterborough showroom.

Intelligent Offer automatically generates personalized product recommendations based on the richest, most detailed customer insight and the industry’s most sophisticated recommendations engine.

The final tool in Kiddicare’s online armory is its closed-loop email marketing tool, LIVEmail, which powers and analyses highly targeted email campaigns from the company’s extensive visitor and customer behavioral data.

Kiddicare was already an extremely data-rich business having had Web Analytics in place for the previous five years. There is a lot of data to work with and make improvements.

“Not only did we want to leverage and commercialize that highly valuable data, but our site was evolving and modernizing,” explained Harrow. “We are featuring a lot more video and extending our integration with the social networking tools to drive conversion and value in sales. Having these additional modules in place would allow us to better measure customer behavior and how visitors consume the site, then translate that knowledge into customer loyalty initiatives and bigger basket values.”

Results
Kiddicare summarizes its success with the IBM Coremetrics Suite in its ability to identify additional revenue, capture it and deploy its marketing resource in the right areas. This is borne out by basket value analysis that quickly showed an increase of almost 50 percent in the number of items per order. In fact, it took just four months for the number of items per order to rise from 1.7 to 2.5.

Overall online sales at Kiddicare also rose by 20 percent within the first four months of the additional IBM modules going live. The business intelligence it was able to derive from the new systems enabled the company to create new customer incentive initiatives and communications strategies.

It has also helped to redefine Kiddicare’s product marketing strategy and engender more repeat business versus one-off purchases. The company has done this by introducing new products ranges such as its ‘Most Popular Everyday Baby Essentials’, which features the leading items from its portfolio of 650 essential baby products.

LIVEmail has revolutionized the frequency and relevancy of Kiddicare’s email campaigns and behavioral targeting and enabled the company to automate programs that target customers as their children grow. For example, if a customer is buying nappies for an 8-12 month-old child, then Kiddicare can inform them about other products appropriate for a child of that age. This has supported an upturn in sales and enhanced customer relationships with more relevant, targeted mailing.

The technical and marketing teams at Kiddicare have also been able to substantiate some of their common sense ‘gut feelings’ about the impact of video on conversion rates using Explore, and altered the way they shoot video going forward to enhance it.

Harrow concludes, “The value of the data derived from IBM goes beyond our enterprise content management system; it feeds into everything we do from kiosks, to web and email. This will continue as we venture into Android and iPad applications, newer kiosk development and a web site re-design.”