Riley + JB Hi-Fi: Increasing revenue and improving the relevance of recommended products with Recommendations AI
Google Cloud results
- Increases average transaction value (ATV) for recommended products
- Extends product recommendations to all products on the website
- Increases conversion rate for products recommended on the homepage
- Improved alignment of the in-store and online experiences
For electronics retailer JB Hi-Fi, a personalized, expert, but relaxed in-store experience is the key to success. Founded in 1974 by John Barbuto (JB), JB HiFi started as a single store in Melbourne, Australia, and aimed to deliver specialist hi-fi equipment and recorded music at low prices. This strategy proved highly successful—by 2021, JB Hi-Fi had grown to more than 200 stores, established a presence in New Zealand, and operated one of the most visited retail websites in Australia.
“When customers visit our stores, our knowledgeable, experienced staff can offer personalized solutions not just for customers’ immediate needs, but also suggest related products that allow those customers to get the most from their purchases,” explains Gary Siewert, Marketing Director at JB Hi-Fi “We wanted our online customers to have a similar experience by giving them personalized, relevant, and timely product recommendations.”
JB Hi-Fi’s buying team had manually recommended products to visitors—a time-consuming process that meant recommendations of three or four associated products accompanied a small portion of the 50,000+ products available on the business’s website.
Capitalising on online presence
However, growing awareness of the need to capitalize on the potential of its online presence, combined with the fact the website increasingly became the face of JB Hi-Fi during the pandemic, prompted the business to review its options.
JB Hi-Fi decided it needed a recommendations personalization tool to complement its existing ecommerce platform. “Given the large number of visits to our website, we felt personalized recommendations would be important for our customers to better find and engage with products,” says Gary. “As such, we wanted to test and measure a number of different use cases, algorithms, and tools.”
The business turned to Google Optimize, a tool natively integrated with Google Analytics—used by JB Hi-Fi to analyze how customers interact with its website and make adjustments as required—to conduct the testing.
In April 2020, JB Hi-Fi conducted A/B testing that hid recommended products from 50% of the visitors to the pages selling 10 high-value, highly visible items and found the average transaction value (ATV) for the business was higher when the recommended products were shown.
The business evaluated a range of tools against its manual recommendations process, with analytics data derived from the placement and testing of widgets through Google Optimize into a BigQuery analytics data warehouse with visualization undertaken through Google Data Studio.
This enabled the organization to track the performance of the various tools being considered in generating revenue and prompting people to engage with and purchase products.
“When customers visit our stores, our knowledgeable, experienced staff can offer personalized solutions not just for customers’ immediate needs, but also suggest related products that allow those customers to get the most from their purchases. We wanted our online customers to have a similar experience by giving them personalized, relevant, and timely product attachment recommendations.”
—Gary Siewert, Marketing Director, JB Hi-Fi
An increase in ATV
JB Hi-Fi found the ATV for the products recommended through Recommendations AI—a machine-learning-powered Google Cloud product that enables businesses to deliver highly personalized product recommendations at scale—increased when compared to its manual recommendations. Furthermore, the conversion rate—people who saw the recommendations and proceeded to purchase—on products recommended on the homepage increased significantly when compared to manually curated products, as did the click-through rates on the homepage and product detail pages.
Furthermore, the tool increased the conversion rate for products offered on the JB Hi-Fi home page, when compared to other recommended products.
JB Hi-Fi realized it needed an expert partner to complete the project and asked Google Cloud for assistance. Google Cloud advised the electronics retailer to engage Riley, an agile cloud-managed services provider with a track record of high standards, following through on activity, and bringing to the fore its core competency of data and machine learning.
Riley’s deep understanding of the Google Cloud advertising assets used by JB Hi-Fi, including Google Analytics and Tag Manager, as well as the BigQuery analytics data warehouse—all key to the Recommendations AI-based solution—also qualified the business as a good fit for the engagement.
“Using our existing investments in Google meant we could implement recommendations faster than we could with most other tools, and the data was more reliable. We need data that is always current as we constantly update our products.”
—Sarah Crooke, Digital Analyst, JB Hi-Fi
Riley delivers in three weeks
“We had a tight timeframe—three weeks—to deliver the project and Riley looked at the art of the possible, flipped the project timeline on its head, delivered what needed to be delivered, and demonstrated the outcomes,” explains Sarah Crooke, Digital Analyst at JB Hi-Fi. “The team then introduced the foundations and built in the required security and governance.”
Riley collected a range of datasets to inform Recommendations AI. These included:
- Product catalogue information derived from Merchant Center, a Google for Retail solution that enables businesses to upload product information into Google for access by shoppers using the search engine
“Using our existing investments in Google meant we could implement recommendations faster than we could with most other tools, and the data was more reliable,” explains Sarah. “We need data that is always current as we constantly update our products.”
Increases monthly average revenue (MAR) from recommended products
Overall, Recommendations AI is helping JB Hi-Fi align its website experience to the personal, professional experience delivered to customers in its stores and to drive increased revenue on recommended products.
“We are working to have a more personalized conversation with our online customers and execute our vision of providing a wide range of products while making sure our customers see what is relevant to them,” says Simon Page, Chief Information Officer at JB Hi-Fi. “Recommendations AI is key to this personalization journey.”