Can an online store really add $3.2 million in incremental annual revenue by adding just one kilobyte to its website?
Yes, if that one kilobyte is a tiny image file containing the correct magic phrase. That phrase could be TOP PICK or NEW ITEM or HOT PICK or TOP RATED. (The image illustrating this blog post has been altered slightly to protect the identity of the etailer that recently clocked this particular boost in revenue.)
Is it magic? Consumer psychology? Or just a smart merchandiser finding exactly the right words? Actually, it’s a little of each. The exact choice of words probably matters less than where the merchandiser places them: On top of product pictures. We call this badging and whenever we deploy it for our clients the result is more consumers making more purchases.
In this recent example, an online retailer–who ranks somewhere between 200 and 250 in the Internet Retailer Top 500–introduced badging for items that had received good reviews from other customers. The buying patterns of shoppers who saw the badges, measured against a control group that did not see them, indicated an increase in revenue of $3.2 million on an annualized basis. All from two words in a one kilobyte image.
The use of these small labels, or badges, to call attention to certain items, particularly when they appear within a collection of items, blends the social media concept of curation with the time-honored brick-and-mortar merchandising strategy of calling attention to one or two products within a group of similar items.
I wrote about badging back in March but I wanted to make sure online retailers were aware of just how powerful it is as they plan their “back to school” merchandising strategies. What better way to draw attention to specific products within the myriad options parents and kids will be considering during what amounts to the second-biggest retail period of the year.
