Freshly Cosmetics give its payments a makeover
One period matters more than any other for Freshly Cosmetics: the time between Black Friday and Christmas. This is when the Spanish headquartered beauty innovator makes a significant portion of its annual income.
Given its importance, peak season is not the time for most businesses to adjust how it processes payments. But Freshly Cosmetics didn't break into one of the most competitive industry sectors by being conservative. It has done it by seizing opportunities with both hands as they appear.
And, just days before Black Friday 2021, the Freshly Cosmetics team took the bold decision to shift its entire payments processing volume from Adyen to Checkout.com. This was after the Checkout.com team used data to identify immediate optimization opportunities to help Freshly Cosmetics capture more revenue over the peak season.
The move drove high-impact results for Freshly Cosmetics. Its acceptance rate increased to 98.54% from around 89%.
Miquel Antolín Civil, Co-founder and CEO, Freshly Cosmetics, says: "To see such a large uplift in sales in such a short space of time is extraordinary and a testament to the technology and people at Checkout.com. There's no other sales, marketing or operational initiative that could result in such a significant and immediate impact to our bottom line."
Prioritizing payments optimization
Freshly Cosmetics began working with Checkout.com several months before Black Friday, initially through its Prestashop plugin. Impressed by what it saw, it wasn't long before it enabled Checkout.com's unified payments platform to unlock its full suite of tools and services. "We couldn't believe how quickly we got up and running. Typically you'd expect to spend weeks or months integrating a core financial platform, but it only took three days."
Once fully integrated, the Freshly Cosmetics team could start A/B testing Checkout.com against its former provider, Adyen. Initially, there was parity in performance between both providers. However, the Checkout.com team continued pushing to improve Freshly Cosmetics' authorization rates.
The focus on authorization rate optimization became a greater priority when Freshly Cosmetics saw a significant increase in sales in the lead-up to Black Friday. "Peak season is a critical time for our business," Miquel says. "We wanted to achieve optimal payments performance to capture as much revenue as possible."
The Checkout.com team jumped into action. A dedicated team analyzed Freshly Cosemetics' payments data — including over 200 unique decline codes — to find opportunities for optimization. "The team meticulously took us through all the data and payment response codes," says Miquel. "Checkout.com clearly communicated with us everything it was doing, what it was discovering, and the positive impact the changes it proposed would have."
Armed with these unique insights, Checkout.com built a strategy to allow Freshly Cosmetics to increase its authorization rates before Black Friday. This strategy included optimizing the payment retry process. Checkout.com also adjusted what transactions went through the 3DS protocol. This helped Freshly Cosmetics realize the security benefits of Strong Customer Authentication while creating a frictionless checkout experience for its customers.
Once the changes were complete, Freshly Cosmetics started A/B testing again. "We gave each provider half of our transaction volume," explains Miquel. "With Checkout.com, our acceptance rate immediately increased to around 90-92%, while the other provider came in lower. It was a no-brainer to move more of our volume to Checkout.com. Then we saw our authorization rate increase further, so we moved all our volume to Checkout.com just before Black Friday."
Of course, higher approval numbers can be a double-edged sword if it means that fraudulent payments are getting through. But this is not the case for Freshly Cosmetics. Since partnering with Checkout.com, it's seen payment disputes fall to zero. And if any disputes do arise, Freshly Cosmetics now has the rich data needed to launch a defense.
Taking Freshly Cosmetics global
The partnership has come just in time to make the most of a recent injection of funding into the business. International growth is the plan — a large part of its €45m in annual sales come from Spain presently. And its ambitions are not limited to the EU. It already has a store in London, a presence in Asia, and will be internationalizing and entering new markets.
That is exciting, but also daunting, admits Miquel. "Doing business in multiple markets is complex. But with Checkout.com looking after our payments, we can continually optimize. Be it switching on new payment methods at the click of a button, building segmented checkout experiences, routing payments more effectively, or applying different authentication and security protocols to individual markets. Having these capabilities to hand means we can move into new markets much faster. It also leaves us free to focus on everything else."
Yet, for all the technological and data capabilities at Freshly Cosmetic's disposal, it's the human side of the partnership with Checkout.com that stands out. "It became clear to us very quickly that Checkout.com takes the notion of partnership very seriously," Miquel says. "Checkout.com wasn't interested in simply selling us a solution and then stepping back. This makes Checkout.com different from other payment providers. Its team in Spain is constantly driving us forward to make the most of every opportunity. And as we expand to other markets, we'll be leveraging its other regional teams to get the local experience and insights we need to achieve our ambitions."