Which Won? Why A/B Testing is Important for Online Growth

 

“Split testing (A/B Testing or Multivariate Testing) is very valuable for a business, and easier to do for an online business and businesses that are already of a decent size,” said Daniel Brady, the Founder of Heavenly Hammocks.

“Any improvement in conversion rate, drives a direct saving in cost per conversion, which flows straight to total profit margin.”

Why is it Effective?

There are many reasons why A/B testing could be an effective tool for e-commerce platforms.

“Say a company spent ten percent of sales on advertising and had an overall profit margin of eight percent,” Brady explained.

“If split testing improved their conversion rate from two percent to 2.5 percent, then their advertising cost would change from ten percent to eight percent of sales, and their profit margin would change from ten percent to eight percent. A 25 percent increase in total profit for the company, only thanks to split testing!”

Examples of A/B Testing

Zalora is one of the leading e-commerce platforms in the Asia Pacific and used A/B testing to increase the number of checkouts by optimising its product page.

“We’ve always been very data-driven. Zalora began about four years ago and we have been A/B testing using VWO for three years. As an early-stage company, we are heavily focused on new customer acquisition, and using data to optimise the site experience is super important for us,” said Liang Jian Tan, the Associate Director of Regional Marketing Analytics at Zalora.

The Variations

Take a look at the three variations that Zalora created – the retailer believed that the customers were unaware that Zalora offered free shipping and return policy on the product pages.

Control – the original page

 

Variation 1

This variation shifts the ‘Free’ to the start of the action buttons.

Variation 2

This variation mowed the ‘Free returns’ to the top alongside with the price.

 

Which Variation Do You Think Won?

Before we announce which variant was chosen for this e-commerce platform, make a comment which variant you would have chosen below.

The Winner

Variation 1 emerged as the winner, which improved checkouts for Zalora by 12.3 percent. There was a major reason why this emerged as the winner:

• The natural reading order allowed customers to process content from right to left. By putting the most important information at the left helped consumers understand the information faster.

 

Where Does A/B Testing Work Best?

“I’d say split testing is more important for businesses in competitive industries or with tight margins,” said Brady. “If the business already has a high-profit margin, then split testing will have less of a drastic effect (eg. profit margin going from 30 percent to 33 percent for a successful business improving marginally more), though it can still deliver noticeable improvements.”

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