The Rise of Try Before You Buy — Benjamin Davis | Boosting Conversions With Try-Before-You-Buy, How Try-Before-You-Buy Increases AOV & LTV, Replacing Discounts With Trials, Best Industries For Free Trials, Amazon’s Use Of Try-Before-You-Buy (#364)

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In this episode of the Ecommerce Coffee Break podcast, we dive into the transformative power of the "Try Before You Buy" strategy for Shopify stores. 

Our guest, Benjamin Davis, founder and CEO of TryNow, shares how his platform empowers over 250 merchants to enhance customer acquisition, increase order values, and drive loyalty. 

Benjamin explains the consumer psychology behind this approach and how it bridges the gap between online and brick-and-mortar experiences. Don't miss these insights on revolutionizing your eCommerce strategy!


Topics discussed in this episode: 

• Why try-before-you-buy is transforming eCommerce. 
• How TryNow bridges the gap between online and in-store shopping. 
• What the try-before-you-buy process looks like for Shopify brands. 
• How try-before-you-buy impacts conversion rates and customer behavior. 
• Why higher return rates can still mean more profit. 
• How try-before-you-buy increases AOV and LTV for brands. 
• What industries benefit most from try-before-you-buy. 
• How TryNow replaces discount strategies with free trials. 

Links & Resources 

Website: https://www.trynow.com/
Shopify App Store: https://apps.shopify.com/trynow
Instagram: https://www.instagram.com/trynow/
X/Twitter: https://twitter.com/TryNowBen 

Get access to more free resources by visiting the show notes at
https://t.ly/0Xuuu  

MORE RESOURCES

Download the Ecommerce Conversion Handbook for store optimization tips at https://tinyurl.com/CRO-ebook

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Transcript

Hey there, welcome to the eCommerce Coffee Break Podcast, where we share actionable tips and strategies to help you grow your online store and sell smarter. I'm your host, Claus Lauter. In today's podcast episode, we discuss the rise of Try Before You Buy. Joining me on the show is Benjamin Davis, founder and CEO at TryNow.

com. So let's get started. Hello, and welcome to another episode of the eCommerce Coffee Break Podcast. Today, we want to dive into the topic of the rise of the try before you buy strategy for Shopify stores. You want to really find out where are the advantages, the benefits to bring this into your business.

And for that, joining me on the show today is Benjamin Davis, is the founder and CEO of trynow. com, a leading try before you buy platform for Shopify merchants. Backed by 24 million in funding from the founders of Paypal, a firm, Kraft Ventures and Shine Capital, Tri now empowers over 250 merchants to drive incredible revenue and bridge the gap between e commerce and brick and mortar.

So let's welcome them to the show. Hi, Ben, how are you today? Great, Klaus. How are you? I'm very well. Ben, let's dive right into it. For those who are new to the concept of Tri, before you buy, can you explain what it actually means and how it works? Yeah, so what we do is we allow shoppers to fill their cart with items to try and only pay for what they keep.

So, let's say you walked into a physical store and you want to try on that shirt you're wearing, a pair of jeans, maybe a couple different sizes, and you go in the fitting room, I say, Hey Klaus, before you go in the fitting room, just give me your credit card. I'll charge you for 327. 32, but if it doesn't fit, no worries.

You can go to the front, get a refund. It'll hit your statement in 14 business days. You'd say, Ben, you're crazy. I'm never going to pay to try these on. And, um, of course, brick and mortar doesn't operate that way, but online does, and that is what's kind of fundamentally. Broken with the e commerce model we've grown accustomed with it, um, uh, but back in 2000 when e commerce came around, everyone said, uh, this is not going to work.

It's going to be hard to sell things online. How are you going to possibly sell? Apparel and other discretionary goods online, but, you know, maybe pet food, uh, pets food would would work. Um, well, you know, fast forward today and obviously those naysayers were wrong, but there was a fundamental truth and what they were saying and, um, what they were.

Yeah. Alluding to is that consumer psychology just prefer to try things before they buy things. That's how we operate. We've operated forever. Um, so we exist to flip the model, allow shoppers to fill their cart, that I'm to try only pay for what they keep behave the same way they do in stores, which is applicable across verticals from cosmetics to apparel to handbags, footwear and more.

So we're the payment and underlying infrastructure that enables that shift. So that makes it really easy for any brand on Shopify. Uh, to sell products on a try before you buy basis. Now, try before you buy, as you said in the beginning, e commerce was not built for that. And Shopify did not support that.

That was just a traditional way of doing online business. Now walk me through, there's a lot of process steps involved. So it's not that easy. It's just send it back and we're done. I mean, walk me through the process of, The whole purchase funnel of and how it differs from a normal purchase online. Yeah, yeah.

So it's a complex process before starting. Try now. I was running a brand, I was running an apparel brand, wanted to offer this try before you buy a program. So we actually did it manually. We did it manually. We tracked packages. We understood, um, the process, uh, at a very. Deep granular level and try now exist to make it super easy for a brand so that it removes all of that complexity for a brand.

So it's just fulfill the order, just like any other order. So try now orders look just like kind of buy now orders with a few small differences, but from an actual. Order step and order flow, upper clicks, uh, the try before you buy button on the product page that fills the cart with items to try the amount due today is 0, the amount if kept is the underlying order value.

They put in their credit card information, their shipping address, complete the checkout all natively through Shopify checkout. We store that card, we vault it, we authorize the card to ensure they have the funds available, and an order is placed on the back end of their Shopify admin. They fulfill that order, we track that package as it makes its way to the shopper's house, and upon delivery, begin the trial.

The brand can customize a few things, the trial length, they can also customize the number of items that a shopper can try. Um, so the shopper will have, let's say 10 days or so to try the products on. Determine what they want to keep, send the rest back, and they'll go through the brand's existing returns flow, whether that's emailing customer support, or most of our brands use a returns portal, like our loop returns or return logic, happy returns, uh, or others.

What kind of uptake rate do you see compared to a normal purchase when you offer try before you buy? Yeah. So it varies by brand. Um, we typically recommend that brands start with a targeted rollout, um, where they place a second button on the product page for all products that are returnable, um, and are not final sale or clearance.

with no marketing, we'll see, you know, at least about a 10 percent opt in. Um, so 10 percent of customers using TryNow, um, often that will increase and we have some brands where it becomes 50%, 60, 70 percent of their business, but that's over time. Once they see that the TryNows are more profitable, um, and that the unit economics are healthier with TryBeforeYouBuy versus BuyNow.

Brands tend to, you know, increase the share, but at launch, we typically target around 10 percent at launch to provide, you know, nice proof of concept. So brands can expand gradually. What we see at that part of the program is new customers, new customers. Gravitating towards try now at much higher rates.

So really helping to fuel new customer acquisitions, reducing customer acquisition costs. Um, and then at about day 60 or so we begin seeing some separation in the net revenue per customers. The LTV cohorts of the try now customer versus a buy now customer tend to be much. And I can walk you through, um, some stats.

Um, but that's really like our, our hero metric. Um, are we driving more net revenue per customer? Um, because it's one thing to acquire customers more efficiently, but it's another thing for them to also, um, be more valuable. And when you're acquiring higher LTV customers and spending less to acquire them, the LTV, uh, to CAC ratio has just become really compelling.

No, absolutely become much easier profitable on the back end. Now, I can imagine a lot of people because there is the try now strategy behind that, that they put more stuff in the cart than they normally would do. Does that have any impact of the average order value overall? It does. It does. It has a big impact.

Um, and I think like that's ultimately, we always go back to the analog around the fitting room, um, or just kind of the store experience. If you walked into a fitting room, you would never, Bring in on average 1. 2 units but if you're an apparel brand on average your AOV is you know 1. 2 to 1. 8 units and that is typically just not enough to activate the type of loyalty that you really see so.

If you talk to any of our brands that have both brick and mortar and also an online product, a shopper that that has gone into a store and placed an order becomes much higher, uh, LTV than a online only shopper. And it's because they get to experience more products. They get to, they get to touch more products.

They get to try on more products. They get to see more products. And we see, um, we see similar results. So Billy Reed is an example of a men's brand that we work with. Um, they've got stores. They also have a strong online presence. Um, and so their net sales per customer for buy now orders. Um, so a customer that never placed a try now, uh, order is 452 and 20 cents at the six month mark.

Um, you compare that to try now, um, which is 811 and 84 cents. So an extra 360 of net revenue per customer at the six month mark for a trial. And that's driven by shoppers ordering, you know, significant, um, on that first order, um, and in e commerce, that cart value just continues to tick up every time you click that add to cart button.

And when you do that, shoppers have hesitancy. Um, and check out anxiety, uh, ensues. Am I, do I, is this going to fit? Is this going to be worth it? This is a really expensive suede, suede shirt. Is it, is the quality going to be as, as I anticipate? Um, is this going to be flattering? Is it going to be too tight in the shoulders?

All of these questions arise. And particularly for a new brand, when you don't know their processes, and if you're going to get your money back in a timely, uh, uh, manner, Just creates a lack of trust and we restore that trust that shoppers can fill their car with more items. They can bring home more of their great products.

And if you get a great, if you get a great business and a great brand and great products, you know, make it as easy as possible to get it into. They're homes. Um, now, you know, of course, the other metric that we do, uh, increase is returns. And so for, uh, that's like in the back of mind of every brand, um, you'll think about tribe before you buy.

I said, this makes a lot of sense. I could see how shoppers would love this. Um, but what about the unit economics now? We increase the return rate for Billy Reed. Um, it's a private equity back business. Um, they're very focused on their KPIs metrics and PNL, um, and a very data driven organization. And initially there was some hesitation.

We'll try now drive growth for us or or will it increase return rates and increase return cost. The good will not outweigh the bad. Um, now obviously when you drive an extra 360 in net revenue per customer, um, the good does outweigh the bad because they're seeing an extra 20. 35 of return costs. But that's, you know, Claus, the, the non con, the contrarian kind of non consensus view behind all of this, which is, um, to drive more profit for your business.

It's okay for return rates to go up and it's a new way of looking at it and historically AOVs are relatively fixed only ways to really drive AOV increases, you know, improving your or optimizing your shipping fresh free shipping threshold or drive adding some in cart upsells or, you know, other tactics like that, but you're typically seeing, you know, 5 to 15 percent lifts in AOV from strategies like that.

Try now in this case in the case of billy reid is driving you know as a seventy nine point five percent increase in the net revenue per customer so it drives definitely step function change and. affects all the metrics and kind of the unit economic model. Now, I think it makes perfect sense that a lot of merchants have this misconception because they only look at one metric and not at the bigger picture.

Now, we were talking about apparel, but you talked to me before that there's other industries or it's suitable for a lot of other industries out there. Give me a couple of examples where it works very well. Yeah. So, um, cover FX is a cosmetics brand and, uh, their team has done a terrific job building out a strategy and a program.

They're part of the broader as beauty portfolio. And in the case of beauty, the brick experience really revolves around. Two companies, Sephora and Ulta, and you got to get into those doors. And when you get in those doors, it drives a lot of growth. And your Shopify site is always at a disadvantage relative to brick and mortar, um, where you go into a Sephora and that whole model is driven around driving trial in store.

Well, how do you drive trial online? And, uh, obviously a very different category than apparel, very different margin structure that facilitates slightly different rollout approaches. But the fundamental consumer psychology is the same. I want to try this product to see if I like it. Um, so that drives really strong growth, even with lower AOVs.

Um, you see much lower return rates in beauty as well. Um, you see similar adoption and very strong, um, customer sentiment. We also work with brands that don't have sizing issues, but they're really around quality and efficacy. Um, so shox is a electronics company. They have a very innovative open ear headphone built for runners and athletes that want to be able to hear.

Um, and so it's bone conducting a unique product. And they launched A campaign with Try Now, um, and their campaign performed as well as their heavily discounted campaigns. And so that's, you know, I think a good case study around thinking about how to market a Try Before You Buy program. When you allow shoppers to try products for free, um, and only pay for what they keep, that cart value is zero dollars.

And so, brands just don't need to use discounts, um, as heavily. And that's true from headphones, to apparel, to cosmetics, to handbags, um, to jewelry and other verticals that we work with. I think very important point that you mentioned, um, that you don't need to use that many discounts in your business anymore, because discounts, obviously they also devalue your brand and they're just a pain in the neck to deal with.

And if you find another way, I think that's probably the better way to deal with that. Now let's talk a little bit about the integration into Shopify. How does that work? Um, what can I customize? So our native Shopify app allows brands to download our app and go live very quickly. Um, it can be self service or they can work with our team to help get them set up, um, as part of a hands on onboarding process.

Um, the process is downloading our app. Dragging our app block onto the product page, um, and that adds a try before you buy button to the product page, a minor adjustment to the cart, uh, to drive a reduction in cart abandonment rates by having due today 0, the amount if capped would be the underlying order value, and then with our integration with Shopify checkout, everything is pre integrated within Shopify checkout.

Out of the box so it's a pretty seamless process i think we're more time is involved is really building this building out the marketing strategy so when brands go live initially they go live in a more of a passive way i gather some order volume see shopper adoption allow some returns to come back in and understand the internet economics once they have confidence that this is driving really strong and profitable growth for the business then we build out a marketing strategy.

Which typically starts with email, SMS, and begin testing into some paid ads. A good proxy for marketing, try before you buy is anywhere where discounts are used in the flow. Replace that with try before you buy. Try to drive those full price sales that are more brand enhancing and then push discounts further down the funnel.

Um, because most shoppers aren't saying. Wow interesting product would love to love to buy it but it's just 10 percent or 20 percent too expensive they're saying interesting product would love to try it and so discounts are effective but they're a blunt tool that don't solve the underlying problem and so hopefully we can drive this full price sales for the segment of shoppers that are just that just require a discount to convert use use those discount codes more sparingly and more targeted at those customers.

I think it was great that you highlighted the difference between what a discount is and try it before you buy because there is just a different roadblock. There's a different, uh, something completely different going on in the buyer's mind. Discounting is not the weapon for everything. And again, you should not really use that too much in your business.

Well, you said there's a bit of a learning curve. What's the onboarding process from your side? If we were to do the hands on onboarding, a brand engages us to get the program live. Up and running and dialed in, um, so we'll be there with the brand at every step of the way. Um, and so the brand, depending on a few different factors around their site, the brand will pay us a fee, but we don't like taking implementation fees.

So we actually credit that against their future fees. It just allows us to spend the time with the brand so that the implementation fee is effectively free. Um, from a technical perspective, um, we'll provide any customizations, which typically can be done out of the box. But to the extent a brand has a very custom site or a headless site, um, it can't be done out of the box.

Um, and so we'll make those adjustments, uh, on their behalf, um, and deliver an end to end, try before you buy program within about five business days. Okay. You already mentioned a couple of brands you're working with. Um, who's your perfect customer? Are there specific industries or verticals that you work more with than others?

We, we're pretty well diversified across, um, across verticals from apparel to filtered shower heads to cosmetics, um, to fragrance, uh, skincare, color cosmetics. Um, so we work across brands. I'd say like. One key denominator is that we work with brands that are confident in, in their products. Um, if they really believe in their products, um, and they want, and they want to get it into, into shoppers homes, um, then we're a great fit.

Um, but whether that's an AOV of 50, or it's an AOV of 500, or an AOV of 5, 000, um, all of them are, are customers. Um, we have customers across all of those ranges. Okay, cool. Tell me a little bit about your pricing structure. How do you charge? Yeah. So we charge a fee of 2. 99 percent of the net order value plus 99 cents in order.

No contracts. It's all order to order. If a brand isn't driving growth with tribe before you buy and try now, they shouldn't pay us. Um, so, uh, very customer centric pricing. Um, They believe in their products, so they allowed their shoppers to try before they buy. Um, we believe in our product, uh, so we allow merchants to try us in a similar fashion.

Okay. That's basically a no brainer to try it out. And, um, just to see what kind of results it brings. And I'm sure it will, for most brands, it will bring pretty good results before our coffee break comes to an end today. Is there anything that you want to share with our listeners that we haven't talked about yet?

I think the last thing I'd leave, I'd leave your listeners with is. Prime Amazon prime tribe before you buy and the growth that they're seeing. It is a, uh, it has been a secret weapon, um, for their soft lines business. Um, and because Amazon does not need to, and they're not required to break it out in their financials and report it separately, they can keep it a bit more under the radar, um, but it is referred to by Amazon's, uh, uh, leadership team as the second most successful Amazon program.

In recent history, second to Amazon Web Services, it's been a huge driver of conversion and a huge driver of LTV and, um, and many brands are on Amazon Prime. Try before you buy. Um, and some of the largest brands, both on Shopify and on Amazon, are, are leveraging that program. So True Classic is an example of a brand that's on Amazon Prime Try Before You Buy.

And they're also a customer of Try Now, um, because in order to ensure that their site maintains feature parity within Amazon and is competitive with Amazon, they need to have that Amazon level infrastructure, um, powering their site. Um, so I'd say, like, keep an eye out for, uh, for the trends and the, and the continued expansion.

But over the past three years, Amazon Prime tried before you buy has, has become a powerhouse, uh, for their soft lines business. Okay. I think that speaks for itself. Amazon is the gorilla in the park. So if they make a lot of money through that and deliver the service that the customer wants, that's a good example that you will have that or should have that in your Shopify store as well.

Where can people go and find out more about you guys? Thanks. Bye. They can go to try now. com, um, and take a look at our site. And we have links to our Shopify app listing there if they'd like to download us and try us for free. Okay, I will put the link in the show notes and you just want to take away Ben.

Thanks so much for your time today. I think that was a very good overview of something I would recommend to every listener to try it out and get a feeling on how this converts much better and you can get rid of your discount codes. Thanks so much for your time today. Thanks, Klaus. I appreciate it.