How Rainbow Shops is Improving its Online CX

David Cost has a voracious appetite for innovative technology that turns online shopping into a sublime event. The vice president of e-commerce and marketing for fast-fashion retailer Rainbow Shops pays close attention to traditional e-commerce metrics. However, his guiding benchmark is singular — experience. Sure, the portion of site visitors who end up buying something is important to the business, but so is the amount of time a visitor spends on a site.

It can be a very good sign when shoppers linger on a site, a sign that merchandising is top-notch, that photos and copy tell an engaging story, and that pricing and promotions move aspiration to reality. Or extended time on site can be a bad sign, an indication that site search is wonky, that navigation is confusing, or that checkout is overly complicated.

Cost, who has led e-commerce at Deb Shops and now Rainbow, has carried that perspective since before I first met him nearly a decade ago. Even before “customer experience” was an inescapable mantra at retail shows and conferences, Cost challenged his industry peers to push the boundaries on how they think about it.

It’s what drove him in the early twenty-teens to become a beta customer for a new product from digital experience platform provider Bloomreach when I worked there. And it’s what’s made him and Rainbow Shops a customer of commerce protection provider Signifyd, where I work now.

Cost isn’t about baby steps or settling for good enough. In mid-2022, he took what’s considered a great, and occasionally necessary, e-commerce leap: Moving Rainbow Shops’ digital storefront from one e-commerce platform to another. That cliche about rebuilding the plane while flying the plane? Replatforming is pretty close.

As part of that shift to platform giant Shopify, Cost showed once again that he prefers to be out front on improving experience rather than hanging with the you-first crowd. Sure, site search needs to be crackling, navigation smooth as silk, fulfillment fast, returns friendly and a breeze. But the replatforming was also a chance for the retailer with more than 1,000 brick-and-mortar stores to focus intently on online checkout and payments, a segment of the buying experience that hasn’t received the attention it should have given its vital role in making a sale.

“One of the main drivers in doing that was because of the checkout,” Cost told a conference room full of e-commerce professionals at Signifyd’s FLOW Summit last April. “We really felt that Shopify’s checkout was really almost as good as Amazon’s, and Amazon kind of sets the standard.”

Payments, a less-than-sexy aspect of e-commerce, is having a moment it seems. Maybe more than a moment. Consider the profit squeeze retailers face. The cost of acquiring online customers continues to rise thanks largely to the digital advertising stranglehold by Google, Facebook and Fulfillment continues to be more of a financial burden as consumers expect delivery in two days or less, often the same day or even within an hour.

But payments, it’s become clear, is an area where retailers can find the slack to keep ahead of the squeeze. Analyst group 451 Research concluded that U.S. e-commerce merchants are leaving $36 billion in sales behind annually because of poor checkout experiences.

By improving those experiences — namely by adding the right mix of payment options and eliminating the practice of declining legitimate orders for fear of fraud — retailers can shift that lost money directly to their top lines.

Cost saw the opportunity to create the right payment mix on Shopify, adding Klarna, a buy now, pay later (BNPL) feature and embracing a Shopify payment feature that auto-fills consumers’ checkout forms based on a one-time passcode if they’ve purchased through the payment feature before. He also jettisoned Rainbow Shops’ legacy fraud solution and turned to Signifyd’s solution, which is known for dramatically reducing false declines that Research 451 estimated were costing retailers $16 billion a year.

The new fraud solution has increased Rainbow Shops’ portion of approved orders, Cost says, while providing the retailer’s teams with the transparency to decide, based on data, whether they want to challenge Signifyd’s order declines.

Since moving in July to Shopify and upgrading its checkout experience and fraud protection, Rainbow Shops’ conversion rate has increased between 10 percent and 15 percent, Cost told the FLOW crowd.

“It’s all being done without any time and effort on my staff’s part.” Cost said of Rainbow Shops’ upgraded fraud prevention in an interview after the FLOW presentation. “We know we’re covered from a fraud prevention standpoint and there are a thousand issues that can use our time and effort. It’s nice to know that this is something that touches every transaction that we do and it’s a piece of the business we don’t think about because they do such a good job at it.”

And that’s where Cost’s appetite for technology comes from — not technology for technology’s sake, but for the sake of creating a better customer experience and creating the time for his teams to work on that experience.

How serious is Cost about measuring return on investment using customer experience as a yardstick? Near the end of the FLOW panel, “Removing Friction From the Customer Journey,” an audience member asked how long he tests a new app before determining whether it’s improving customer experience or perhaps harming it by slowing site performance, for instance.

Essentially, Cost says, his team sets base-level performance metrics before deploying an app. And if in tests it doesn’t live up to promises or performance requirements, “we kill it before it even gets started.”

As harsh as it sounds, it’s an indication of the priority he puts on getting it right and getting it right fast. The fact is, when it comes to finding the technology to build an experience that keeps customers coming back, Cost knows that sometimes something is going to get hurt.

For more on the Rainbow Shops story, read the case study.

Mike Cassidy is head of storytelling at Signifyd, a commerce protection provider

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