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Tough terrain: How high-AOV, low-repeat retailers stay competitive

As digital marketing costs continue to rise, retailers of high-cost, low-repeat merchandise—such as mattresses and sofas—have to get creative to make sure business keeps growing.

Buying search terms or social media placements, among other digital tactics, have become an essential part of every retailer’s playbook. The demand is driving up costs: Google paid search cost-per-click (CPC) rose 14% in the last year, according to Retail Dive. As a result, vying to buy search terms like “best mattress” or “best sofa” may not be cost-effective anymore.

If your company faces a similar challenge, some of these ideas may transform your brand’s reach and sales volume.

3 approaches we can learn from mattress retailers

One way to derive similar brand-exposure benefits is to improve your organic search results. Purple’s work to boost search-engine optimization (SEO) for its online mattress store resulted in an 84% jump in monthly traffic from organic search. This lowered the brand’s costs for paid search and brought other benefits at no extra cost, according to this Overthink Group study.

More traditional marketing tactics can also drive results by increasing average cart size. Some mattress companies sell accessories that can be bundled with their mattresses at a special price. Ghostbed, for example, markets several bundles on this landing page. Offers can also vary by season, such as a “going to college” bundle for bedding or other furniture. 

Another creative use of landing pages we’ve seen from mattress brands is the side-by-side comparison. These placements—such as this one from Casper—invite shoppers to consider differing features and price points. This helps anchor consumers’ expectations on price and lets them self-select into the product and price point that suits them. This selection process can work to upsell buyers as they discover product benefits in direct comparison.

How Affirm boosts AOV, customer acquisition

Tough terrain: How high-AOV, low-repeat retailers stay competitive - Image 1

Over the past 7 years we’ve seen how Affirm can deliver similar benefits for brands. Our prequalification feature (right), which informs customers of their spending power as they shop on your site, has helped raise AOV for many of our retail partners. Pro Audio Star, seller of big-ticket music equipment, saw a 33% increase in AOV after implementing prequalification.

The prequalification feature delivers similar benefits for our mattress partners, too. Aggregate  Affirm data from all mattress partners in 2019 shows that AOV was 17% higher with prequalification. 

Affirm’s higher approval rates also yield conversion benefits for high-ticket merchants. Ghostbed saw more than 30% increased customer approvals after switching over from an Affirm competitor. These conversions through the sales funnel can ultimately lower customer acquisition costs, too.

Finally, our Affirm Connect product is also increasing conversion for participating mattress and home furnishing brands. This feature allows your site to integrate additional pay-over-time providers to capture up to 133% more credit-building customers than the standard Affirm integration. As shoppers access the payment option that’s right for them, your sales conversion rises and customer acquisition costs fall.

Today’s high-AOV, low-repeat retailers have to look beyond traditional digital marketing strategies to grow their businesses. A multi-pronged approach that includes conventional marketing levers and innovative partnerships may just add support to give your brand a competitive cushion.

Visit our site to learn more about how Affirm can help deliver these benefits for your business.