+22% contribution margin, even though returns nearly tripled

KICKZ sells basketball sneakers and streetwear online and in its own stores. In fashion retail, a large share of goods comes back. But an A/B test only measures the moment of the order. The testing tool doesn't see what happens afterward.

Our question was: What happens when a page persuades customers so strongly that they order more, but also return more? Then the winner in the test would be a loser on the balance sheet.

On the product page of a basketball shoe, we tested three variants against the original.

Basic optimization: Same content, better presented. The image got larger, the zoom became visible, the title was clearer, and customer reviews moved higher up.

Price focus: The strikethrough price and savings moved to the center. The variant was meant to appeal to price-conscious buyers.

Quality focus: The shoe's features were explained directly in the image. The variant was meant to appeal to buyers who care about technology and quality.

Together with the business intelligence partner nextel, we linked every order from the test to inventory management. That allowed us to assign returns, cancellations, and unpaid orders to each variant.

Emotional selling works. The quality variant increased the add-to-cart rate by 244%. In the end, orders of this shoe were up 43%. The other two variants came in at +13% and +14%.

More persuasion creates more returns. In all optimized variants, the return rate was at least twice as high as in the original. In the quality variant, it was almost three times as high.

Only contribution margin reveals the winner. After returns, cancellations, cost of goods, and shipping costs, the quality variant kept a +22% contribution margin. The basic optimization landed at +2%. The price variant attracted different buyers, with more cancellations and unpaid prepayment orders. Its contribution margin was 13% below the original.

“The party would have been over right here if we hadn't looked very closely at contribution margin.” Michael vom Sondern, CEO of nextel

Measure contribution margin, not just conversion rate. A test with more orders can still cost you margin.

Discounts attract different buyers. If you sell on price, you get customers who are more likely to cancel and less likely to pay.

What the product page promises has to hold up at unboxing. If you set expectations too high, you pay for it in returns.

That's why our ROI model now calculates with net revenue, after returns where possible.