Maximizing Revenue by Reducing Payment Failures
How REVOLVE maximizes revenue by reducing payment failures and unlocking the value of repeat customers
- +50% of Deco users return to shop at REVOLVE
- 18% of failed US credit card payments recovered*
- 5 Average return-to-site visits for Deco users who were ﬁrst-time REVOLVE shoppers
REVOLVE (NYSE: RVLV) was founded in 2003 with the vision of leveraging digital channels and technology to transform the shopping experience. The eCommerce leader has built a custom, proprietary technology platform to manage nearly all aspects of its business, with a particular focus on developing sophisticated and highly automated inventory management, pricing, and trend-forecasting algorithms. The combination of proprietary technology and an organization built from the ground up to make decisions in a data-first, customer-centric way enables REVOLVE to execute a “read and react” merchandising approach that facilitates constant newness and helps to maximize sales at full price.
The Los Angeles-based company is also recognized as a pioneer and a leader in social media and influencer marketing. REVOLVE’s powerful brand and innovative marketing strategy have developed a deep connection with the hyper-connected Millennial and Generation Z demographics, who came of age in a digital-first world. REVOLVE’s marketing efforts deliver authentic, aspirational experiences and lifestyle content that drive long-term loyalty and engagement, as illustrated by its 4.6 million Instagram followers. In 18 years, REVOLVE has grown into a publicly traded company with $581 million in net sales and $57 million in net income reported for the full year in 2020.
Chief Operating Officer
REVOLVE is laser-focused on delivering exceptional service for our customers, and a smooth payment process is an integral part of the customer experience. Yet, despite our hard work to enable better, faster, and frictionless checkout, prior to working with Riskified and Deco, we were often at the mercy of the payment gateway or the payment processor regarding whether or not credit cards were approved.
As part of its commitment to using data to understand, monitor, and respond quickly to customers’ needs and wants, REVOLVE has always closely monitored its payment authorization performance. For maximum customer satisfaction, the goal was to enable as many successful checkouts as possible, yet analytics showed that a significant percentage of potential customers were failing authorization due to declines by the payment processor, payment gateway, or banks. Even some existing REVOLVE customers with excellent credit were experiencing the costly friction of retrying checkout with another payment method, with many potential transactions still unable to overcome the authorization declines in the end. Another source of customer friction was that there was often no clarity on the reasons for the authorization declines. REVOLVE’s US credit card transactions were especially vulnerable, with millions of dollars of Deco eligible* transactions failing authorization annually.
Looking forward, REVOLVE sought a solution to recapture lost revenue and reduce customer friction throughout the payment process to further enhance customer loyalty and lifetime value.
Chief Operating Officer
Until Deco, authorization failures were a black box, so we had limited recourse to address the revenue leakage related to credit card declines. Our payments oﬀering and optimization strategy would not be complete without Deco.
During 2018, REVOLVE was in the process of updating its in-house risk management systems when it ﬁrst learned of Riskiﬁed and Deco. Deco’s proprietary machine-learning models’ ability to identify the legitimacy of the identity behind an online transaction – better than any bank, gateway, or processor – was not lost on a tech-savvy retailer that has built its own technology platform from the ground up. Riskiﬁed’s years of experience building the world’s best risk engine are at the foundation of Deco’s unique ability to rescue and financially guarantee orders from credit-worthy customers at the point of decline. These unparalleled insights are also the source for Deco’s conﬁdence to take full liability for the credit risk. Equally important, Deco’s commitment to minimize friction in the customer experience dovetailed with REVOLVE’s customer-centric approach.
After two years, Deco matured into a product that during the first two months of 2021 recovered 18% of eligible payment failures in REVOLVE’s largest customer segment: US customers paying with credit cards. With Deco unlocking return shopping trips for more than half of its users, the potential to lift customer lifetime value is truly compelling.
Enhanced Customer Loyalty
+50% of Deco users return to shop at REVOLVE
Converting Payment Failures Into Sales
18% of failed US credit card payments recovered*
Mastering Customer Engagement
5 average return-to-site visits for Deco users who were ﬁrst-time REVOLVE shoppers
Future-Proofing Brand Reputation
28.4% share of Deco users who are first-time REVOLVE shoppers
Chief Operating Officer of REVOLVE
It was a no-brainer for a technology-ﬁrst and customer-centric company like ours to partner with Riskiﬁed on building an innovative solution to drive powerful business outcomes. Deco not only helps us to maximize revenue but also further elevates the service experience for REVOLVE customers.