This feature allows you to conduct experiments with your product prices to find out how much GMV you are able to increase by lowering down the product price. It may help you grow your business effectively.
During the experiment, only a fraction of our Joom users (which you set when you create the experiment) will see the experimental discount product price and the other users will see the original price.
⚠️ PLEASE NOTE: The feature is only available for selected merchants. If you don't see it in the Merchant Panel, don't worry, soon it will be available for you as well.
How does it work:
- Joom merchants may set the product price lower than the original selling price by using “Price elasticity” interface for 2 weeks or more (at least 2 weeks, recommended more than 2 weeks) and the experimental discount price will be shown to a group of our Joom customers.
- Our system will do its job and run this experiment for you, so you just need to fulfill your orders (some of the orders will have discount type “Price Elasticity”) as usual.
- At the end of the experiment, the merchant will get the REAL DATA from our customers how much your GMV and other data have changed by adjusting the product price.
🔖An additional tip: If the result shows a much higher percentage of growth in sales & traffic data than the percentage of product price which decreased, it means that merchants are able to get more profit margins even with a lower product price!!
Requirements to use this feature:
- Products with bi-weekly order totals over 100 are eligible to participate in the price elasticity experiment;
- Merchants are advised to add several products into the experiment in order to obtain a valid result;
- Each product can only participate in one price elasticity experiment at the same time;
- If the product also participates in Joom's promotion, the product will be counted as double discount (**elasticity discount will be counted first) . The final price will be calculated as "original price - elasticity discount - promo discount";
Eg. original price= $10, elasticity discount=10%, promo discount= 15%
Calculation: $10（original price) - $1(elasticity 10%) = $9 (price after price elasticity),
$9 - $1.35 ($9* promo 15%) = $7.65（Final price)
5. Experiment requires a period of time to obtain an accurate result. The result may vary depending on the categories, attributes and types of the product.
How to launch the price elasticity experiment?
The group of customers who see the experimental discount price
The remaining customers who see the original price without experiment.
- Log into your Merchant account;
- Click on the “Products” on the left column and open the “Price Elasticity” page;
- Click on the “Create Experiment” button on your right upper side;
⚠️ PLEASE NOTE: The result will be shown as an overall experiment result, not as each product individually.
- Create a name for your experiment;
- Choose the Discount %, Target GMV growth% , Test group size %;
- Discount% : The percentage of price which you would like to drop for the experiment
- Target GMV growth% : The target GMV growth % which you expected to reach when the experiment ends. ( Please set a reasonable value for the experiment, otherwise the experiment might be concluded as a failed experiment and the result will not be shown)
- Test group size%: The size of the Joom users which are able to see the experimental discount price.
- In order to add the products, click on the “Add Products” button;
- Choose the products for the experiment;
You can select the products from the list by ticking ✅ them,
Or insert your product ID manually.
- Click on the “Add Selected” button;
⚠️ PLEASE NOTE: you can add one or several products to the experiment, however each product can only participate in one price elasticity experiment at the same time.
- Once the products are added, click on the “Save” button;
⚠️ PLEASE NOTE:
- Experiment will be launched immediately after you save it;
- You are not allowed to add/remove products once the experiment starts.
- That’s it, you have successfully launched a price elasticity experiment! The experiment will be going while its status is “Enabled”.
You can stop the experiment anytime by switching off the “Status” toggle. We recommend you to run this experiment at least two weeks to get an effective result.
How can you check the experiment results?
- Go to the Price Elasticity page in the Merchant Panel;
What is a successful experiment?
- When there are enough purchases to calculate the difference between test group and control group
- When the GMV target is reached.
Why can experiments be unsuccessful?
In some cases you will not see the experiment results, as we considered it unsuccessful. Some reasons for that are the following:
- The orders of products received in the experiment are too few ( impressions in the control and test group or control group itself alone) for the results to be considered valid. Please check if this happened.
- Your product price should not be too high in the control group;
- There may be similar products on the platform at a much more competitive price;
- The product may not be very popular on the platform disregarding its price.
- Products in the experiment received enough orders and impressions but the GMV target was set too high and it didn’t not reached.
- Check your GMV target, we do not recommend setting it too high.
Select one of the experiments to check its result.
On the experiments page you will see the changes of the following results:
GMV, Purchases, CR, Impressions, Opens, CTR
The system will calculate the difference of purchasing behavior between the test group and the control group to understand the improvement on sales by providing a certain amount of discount.
What does “Red warning sign ❗” and “Yellow warning sign ⚠️” mean?
Warning ❗ (if any)
If there is a problem with a product in the experiment, our system will remove the product from the experiment and show the cause of the error (there can only be one cause) for each product as a red warning ❗ because it may affect the results of the experiment.
Cause of error may be:
- The merchant changed the price of some product during the experiment;
- The merchant removed a product variant or a product from the experiment;
- The merchant disabled a product variant or a product;
- The merchant added a product variant;
- The merchant transferred a product between stores.
Once all products have been removed from the experiment, the experiment will stop. In this case, the system will display the reason: "All products have been dropped from the experiment".
System will also show a "yellow warning ⚠️ “ on products, if something is affecting the experiment, but not enough to stop it.
- One of the product in the experiment run out of stock;
- A product is added to the platform promo, merchant promo or Joom ads (keep in mind that the discounts will be summed up).