In March 2011, Gilt Groupe, the leader of high-end online flash sales, partnered with Communispace to create a private online community of 500 of their core shoppers, both repeat and non-repeat Gilt Groupe customers. By partnering with Communispace, Gilt Groupe could have an open and ongoing dialogue with customers in real time. When the community launched, Gilt Groupe knew that shipping costs were a barrier for many shoppers but wanted to learn more, directly from their members. Gilt Groupe had to revise their shipping policy and the community was their vehicle to learn about their customers’ needs. 

SHOPPING FOR INSIGHTS  

At launch, the 500 members of the Gilt Groupe Customer Advisory Board community were vocal about the barriers they encountered when shopping online. Members disclosed that the site’s shipping costs ($7.95 for purchases under $50, and $9.95 for purchases over $50) decreased their impulse purchases, and the perceived level of discount on the site—especially for lower ticket items. Community members revealed that they sometimes didn’t make a purchase because they thought shipping costs were too high. Additionally, by not having the option for a full refund, members often hesitated before making a purchase that might not fit.

By listening to community members, Gilt Groupe discovered that a flat rate shipping charge set at $5.00 would be much more reasonable and accessible. This was a big “ah-ha” moment for Gilt Groupe as they now had an increased understanding as to why members leave items in their shopping carts. Additionally, they were able to take this information and explore other shipping related topics such as the return policy, including return shipping and full refunds on products.

Beyond the cost of shipping itself, Gilt Groupe uncovered frustrations around the inability to return final sale items and the customers’ hesitation to purchase when they are unsure about the brand, sizing, look and feel of an item. Further, they realized that UPS works for some customers, but others wanted the ability to choose from other shipping options.

YOU ASKED, WE LISTENED  

On May 17, 2011, fewer than two months after the launch of the community, an email was sent to all Gilt Groupe members, about 1.5 million shoppers, from Kevin Ryan, CEO of Gilt Groupe, announcing their new and improved shipping policy: “lower shipping, easier returns.” The new policy, fueled by community member feedback, included a new $5.95 flat rate shipping fee, full refunds on returns minus the cost of shipping, and easier and more convenient returns.

“The speed with which we were able to design a survey, field it to our community and get the actionable results back was amazing. We had to make critical strategic decisions in a tight timeframe, and community feedback provided us with invaluable information to enhance the decision-making process.” –Tamara Gruzbarg, Senior Director of Analytics and Research; Gilt Groupe.

By listening to their community members, Gilt Groupe now had a shipping policy that was more accessible to their shoppers because it was designed by their shoppers. The result of the new shipping policy has led to a 10 percent increase in the shopping cart conversion (percent of people placing an order out of all people who placed items into their shopping carts), and a five-point increase in the Point-of-Sale Net Promoter Score.

Here's what a few of the members of the Gilt Groupe Customer Advisory Board community have to say about the shipping policy changes:

“A savings of about $4 may not seem like a big difference, but it is significant when you're deciding to purchase something. I just don't want to spend $10 on shipping. I feel better about making a purchase at the reduced price of shipping.”  

“I am more inclined to make a purchase of something small/inexpensive now that shipping is cheaper. There were purchases in the past I wanted to make for something small, but just couldn't get myself to spend the $10 on shipping.”  

“I can now justify, to myself, buying a single inexpensive item and not pay what I considered too much shipping! Thank you and I look forward to making more smaller purchases as a result of the new policy!”