Benjamin Davis is the CEO of TryNow (https://www.trynow.io/), Try Now, Buy Later software for Shopify Plus brands.After directing a D2C fashion brand, Benjamin spotted a gap in the market for a Try Now Buy Later model and decided to create a software solution for his problem.
I'm joined today by Ben Davis, who is the founder of Try Now.
Ben, tell us about your background and how you started in Ecommerce?
I was running a direct-to-consumer apparel brand, we were on Shopify Plus and we wanted to offer a “Try at Home” model. We had really soft material, incredible garments, and just figured we have so much confidence in our product we wanted to get it into as many homes as possible. We thought if we allow people and allow shoppers to try this product at home, to see the fabric, see the fit, see the style from the comfort of their home they’ll love it and they'll pay for it and they'll keep it. And for that there was no software that existed, so we built TryNow to enable any D2C brand to offer a Try at Home model.
How have you grown the company to date?
There's been inbound there's been outbound, at core we've built out a small sales team but it really comes from referrals.
We launched a business, and the growth that we drive for our brands is very significant.
And so we've really built out a strong community of folks that really understand the Try Home model and want to see it grow.
What type of results from people who have implemented the software have you seen? And how do you think it improved to move the needle on Conversion Rates, Average Order Value and Return on Ads Spent?
So, at its core what we do is you can really boil it down into two things: We drive more orders and we drive bigger orders.
So basically, any dollar that's spent on marketing that doesn't promote a Try before you Buy offer, from my perspective it leaves money on the table. Let’s take apparel business for instance, more orders would be if 100 people come to the site and three people convert, maybe we can get four people to convert. More orders manifests itself in a higher conversion rate, decreased CPAs, increased return on ads spend.
On the bigger order side, we increase AOV and we don't care so much about gross AOV which is what they ordered but we care about what they kept, which is the net AOV after returns.
Are you seeing any positive metrics on retention as well?
Yeah, absolutely. We actually just did an LTV analysis for one of our brands, and it's been live for 18 months now. So we were able to look at the LTV on a six month basis, a 12 month basis, and an 18 month basis. And so at the 18th month time mark the LTV of TryNow shoppers are 37% higher and that's driven by both AOV increases but also frequency.
In many ways, we talk about more orders and bigger orders. We increase conversion rates by a minimum of 20% and we increase Average Order Value after returns by a minimum of 30% to 40%. LTV is the metric that we also really care about and we can move that significantly but it comes down to differentiating your shopping experience. Brands have really differentiated products and how can you create a shopping experience that is as differentiated as the product itself? And if you do that, you drive repeat purchases, you're really competing for share of wallet in many ways.
What are the main objections that you get in regards to the software?
I would say there's one objection that we get every time is where you say: “we're going to increase conversion rates, we're going to increase average order value”, it makes sense if you're allowing shoppers to try home for free, I get that, everyone understands the power that a Try at home model can drive and the one objection that we get every single time is: “what about return rates?”. And it is a totally natural objection, it's an objection that I had myself when I was running a direct to consumer brand, I was thinking that high return rates will eat away my margins and at TryNow, we have a very contrarian view on that: high return rates can be healthy for your business, that's our point of view. Historically, return rates going up were a bad thing because you couldn't increase conversion rate, average order value, LTV by a significant amount. Historically, conversion rate and average order value are very stubborn metrics and so if those metrics are fixed and return rates go up significantly, you're just losing margin but with the try at home model when you're able to increase average order value significantly, you're able to unlock conversion rates, you're able to decrease cart abandonment rate significantly so all of a sudden return rates going up is a natural perspective. We're really switching the paradigm from thinking about return rate as an evil villain to instead just thinking about returns as a natural end to the transaction.
How is TryNow helping businesses with the constant need to offer discounts?
I think over the past year it's been a very discount heavy environment. Many of our brands have used TryNow to also transition away from discounts. So we actually recommend all of our brands when launching a TryNow program to eliminate discounts from the TryNow purchases and orders and we can do that programmatically through our integration with Shopify. And the reason why it's not needed is when you add a bunch of items to your cart, let's say you have a $300 cart but the price of that card is zero dollars, 10% off of zero dollars is $0, so it doesn't further incentivize a purchase. So we can eliminate discounts while still driving growth and it's also helpful just from a brand image perspective as well.
Has anyone said: “we want to go back to the old way” or is the retention rate really high for you guys?
Yeah, it's really high. I mean, once you see the results of implementing a TryNow model, it drives growth significantly.
A branch needs to be ready for that increase in returns but as long as you are expecting that, it is a strategy that works every time.
If you're a brand and you have a ton of confidence in your product, get it into as many homes as possible, shoppers will love it. And if you have confidence in the product, it just engenders trust in that buying process. We just make it easy for products to get out there.
Do you have any predictions where the brands will fall behind if they don't move towards this model?
I think that we're seeing a similar trend to what happened with free shipping and free returns. In 2005 Amazon Prime launched and in 2009 or so Amazon Prime became very prevalent and free shipping and free returns became expected and demanded by the shoppers. People thought that that was crazy at the time, that it was going to eat away their margins but what happened is the brands that started offering free shipping and free returns grew the fastest. It increased conversion rates, It drove great growth. So the first 25% of the people of the brands that move that direction drove incredible growth, the next 50% drove solid growth and the remaining 25% of the brands were forced to do that in order to compete.
So I think, like any market changing trend, the first group of brands that move towards this model are going to benefit the most and see some really strong results and over time I think the returns will be diminished.
So is it applicable to any other industries in the future such as electronics, furniture etc?
Yes, we believe that anything that is discretionary should be tried before it's bought.
I mean, footwear, of course, apparel is obviously natural for us. We work with a mattress company that drives incredible growth, they're seeing about a 36% increase in their return on ads spend from promoting try before you buy. We work in the swimwear verticals, jewelry, cosmetics, fragrances, some meditation wearable devices. So we work with a lot of different types of products and in a fragrance space and the cosmetic space, for example, a very interesting model is a burning where you have the sampling category, where you send samples to shoppers, they can see that product. It’s a super important lever for growth. The challenge with the sampling is that it's a two-step process: You send the samples to the shopper, they like the sample and then have to go back to the website and purchase and there's a huge drop off from people who got the samples, they’re maybe just too busy, didn't get around to it, didn't go to the site and purchase. So what we're doing is converting the sampling process from a two-step process to a one-step process: the company will send the sample to the shopper with an accompanying full sized product so If they like the sample, they keep the product and we'll charge them for it while if they don't like the sample, they just return the full sized product and the shopper is never charged.
Going back to objections, given for example the clear difference between H&M and Gucci, would one or the other be better suited to this model or would it be both?
I think we position this as a premium offering, it is not about affordability, it is not about splitting something into four installments. This is about the fundamental human desire to try something, to have that experience of getting a package, trying things on, seeing what they like and really converting the living room into the fitting room.
On the margin profile, we work with Super brands and we also work with retailers that are reselling other people's goods that have lower margins and it works in either model.
Part of our software, in addition to the payment and logistical infrastructure to power a try at home model is also a very robust dashboard that enables brands to take a look in depth at their inner economics to ensure that the gross profit of the TryNow order is as high or higher than a buy now order. So we'll track that incremental return costs, we'll track that incremental pick and pack rates at the warehouse, that incremental per package on the outbound and the return so that we'll be able to assign costs on an order basis to say what was the profitability of that order and how that matches up to the profitability of your own or orders.
Ben, thank you very much for your time.
Benjamin Davis is the CEO of TryNow (https://www.trynow.io/), Try Now, Buy Later software for Shopify Plus brands.After directing a D2C fashion brand, Benjamin spotted a gap in the market for a Try Now Buy Later model and decided to create a software solution for his problem.
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