Overview

Kronans Apotek has over 320 pharmacies throughout Sweden, from Skåne in the south to Lapland in the north, and quick e-commerce deliveries all across the country. They offer prescription, health and beauty products tailored to anyone’s needs.

Ingrid was founded with a mission to create delivery experiences that fit people’s lives by letting e-commerce businesses deliver sustainable growth and giving shoppers the power to personalize delivery and returns. The result is a better overall customer experience and greater efficiency for both the retailer and the delivery carrier

Challenge

Together with Ingrid delivery platform, Kronans Apotek identified three business challenges in relation to the delivery pricing strategy and sustainability.

First, low order value purchases were found to affect the profit margins. 

Second, product revenue margins weren’t enough to cover the costs of deliveries.

Finally, Kronans Apotek consumers faced little incentive to choose greener delivery options. 

Solution

Conversionista! analyzed the data, created hypotheses and started experimenting with the built-in A/B testing functionality of Ingrid Delivery Checkout. 

What we did was replace the pre-selected free delivery option with a greener delivery method, presented at the top of the delivery checkout. Then explored five delivery cost combinations to identify which price would give the best conversion outcome.

Profitable and sustainable

Pricing experimentation paid off. Kronans Apotek eliminated low value orders that had a negative impact on profit margins — hence the lower conversion rate — and helped their customers make more sustainable delivery decisions. 

With this result we increased the overall net margin revenue by a huge 11%!

✅ 14% conversion rate reduction

✅ 2% increase in total revenue 

✅ 25% increase in greener delivery options

✅ 11% net margin revenue boost

Word from our expert

Andreas Gref – Experimentation Lead 

I had done some previous experiments trying out different combinations of delivery pricing and free delivery limit. From that I already knew that there was great potential, but we hadn’t quite got the right hypothesis…

To get this all to work we needed data on margin and delivery costs per package outside of all the “normal” data. So starting this specific experiment, I knew there was potential, but I would have anticipated for us to run a longer series of experiments before finding gold but we didn’t!

The first thing to strike me with the result is how massive the impact was on the costly, low order value orders. Net negative orders was cut to a quarter! And normally a 2% increase in revenue would be fantastic, in this case it’s just a bonus. When I think of this as a whole, I am really happy to see a win-win scenario for both greener delivery options and profit baked into one. Sustainability and profit can go hand in hand. Sustainability and Optimisation certainly do!

Welcome to download our case slides, and take a deeper look at the test specifics.