Boost your Ecommerce ROI with Data-driven Cross-sell & Up-sell Parisa Rai Data Scientist, Netcore Solutions @RaiParisa

Data Scientist, Netcore Solutions Speaker Parisa Rai Data Scientist, Netcore Solutions Tech Savvy, Machine Learning, enthusiast, insights coupled with technology, one brand at a time @RaiParisa

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Agenda Why Cross-sell? Understanding How to Cross-sell Response Omni-channel Recommendation Engine Best practices for Cross-selling and Up-selling Few Use Cases Around Cross-sell Best Practices Followed by the Industry

1 Why Cross-sell?

Defining cross-selling and upselling Up-selling: Selling a more expensive product to the customer to make a more profitable sale Cross-selling: Selling an additional product which complements the original purchase

Customer Retention An average online store gets 43% revenue from repeat purchases, according to a leading e-commerce platform Amazon was reported to have earned a whopping 35% of their revenue from cross-selling

Shoes + Extra shoe laces Increases Average Order Value + Sports Shoes Sports Shoes of 1.2X price Shoes + Extra shoe laces

2nd Purchase: Anti-virus Improves Customer Life Time Value 1st purchase: Laptop 2nd Purchase: Anti-virus Probability of selling to an existing customer is 60-70% against selling to a new customer is 5-20%

2 Understanding how to Cross-sell

Not always the right fit! Simplest Techniques To Increase Sales Next higher end model Add the on-product copy Not always the right fit! X X

Recommendation Engine Apply knowledge discovery techniques to make personalised recommendations for information, products or services, during the visit from the prospect. Two major techniques used: Item based collaborative filtering (IB-CF) User based collaborative filtering (UB-CF)

New Age Omni-channel Recommendations Single Message Mailing Field Insertion Behavioural Recommendations Omni-channel Optimized Predictive Personalization This is what most businesses currently do REVENUE Rule Based Segmentation PERSONALISATION MATURITY

Item-based Recommendation Matrix Cross-sell Item Primary Item Being Browsed

Response Omni-channel recommendations Response Omni Channel Personalisation Currently browsing on e-commerce platform Previous Transaction History Prospective Customer Response Omni-channel recommendations Recently browsed Social Media Likes

3 Use Cases

Hyper Personalised Recommendations on Mobile App User Frequency of Discounts availed Day of the week for purchases Preferred product category Frequency of Premium product purchases Time spent on website Average order value (Rs.) Change in recommendations A 50% Weekends Electronics 60% 2 hours 10K Display 1.2X products of higher end brands, on weekends B Never Weekdays Beauty Electronics 20% 15 minutes 5K Most reviewed products only C Apparels None 3 hours 7K Display usual brands t-shirts, Wednesdays

Amalgam of App & Website Browsing recommendations User downloads mobile app Browses for hydraulic jack Buys a car cover on website Recommendations on Car Accessories Adds to cart On website, browses majorly for Car Perfumes Transacts  User downloads mobile app Browses for hydraulic jack Buys a car cover on website Recommendations on Perfumes and the hydraulic jack Adds both to cart On website, browses majorly for Car Perfumes Higher value Transaction

Discounted on bundle purchases Non Response Omni-Channel Recommender Engine Implementation Browses website for 30 minutes Add to cart Sent a 10% discount Response Omni-Channel Recommender Engine Implementation Browses website for 30 minutes Add to cart Sent a 15% discount

Recommendations using Email & SMS Channel Data User Product Category Derived Based on Email Opens Product Category Derived Based on Email Clicks Product Category Derived Based on SMS Clicks A None B C

4 Best Practices Followed While Cross-selling

Best practices to Upsell Place upsells on the product page, and in cart abandon mailers Promote most sold or most reviewed products Make sure the upsells are not more than 25% costlier than the original product Use customer personas to make relevant recommendations

Things to remember when cross-selling $8.2 $5.42 Always place cross-sell offers on the checkout page, and in the order confirmation emails and SMSes Suggest items cheaper than the item in cart Go for the easily forgotten items

Never start recommending before the customer has chosen a product Caveats in Cross-selling Never start recommending before the customer has chosen a product Always show less than 5 recommendations, do not confuse the prospective customer

Cross-selling Actually Builds Best Friends Don’t be reckless, cover your new laptop! You will need cartridge for your new printer, won’t you? I think this purple shirt is much like your taste

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