1. Sheplers Whitepaper
A Monetate
Whitepaper
SHEPLERS:
OVER 100 YEARS
OF SMART
MARKETING

2. Sheplers Whitepaper
OVE R 1 0 0 Y EA R S O F SM A RT M A R K E T ING
E X E C U TI VE S UM M A RY :
As a retailer that has been around for over 100 years, Sheplers has a wealth of
marketing and merchandising experience. The company, whose name has become
synonymous with western wear and cowboy boots, is now using that experience to
craft cutting-edge online retailing practices built around testing, targeting, and
personalization of website content and features. This whitepaper describes how
Sheplers has been using Monetate to put its ambitious online retailing plans into
action to improve online revenue, customer acquisition, and other key metrics.

3. Sheplers Whitepaper
A. BAC K GRO UN D
From modest beginnings in 1899 as a saddlery in Wichita, Kansas, Sheplers has become a leading retailer of western
wear, which the company defines broadly as: "apparel and accessories for the country/western lifestyle, including
traditional cowboy wear, fashionable western wear, country-inspired casual wear and authentic work gear."
More than a dozen Sheplers stores can be found in seven states across America. The flagship Sheplers store in Wichita
is today a landmark on the city's Western Heritage Tour. The company also has an extensive direct mail catalog offering.
Since 1998, Sheplers has enabled customers to shop whenever it is convenient for them, from just about any place in
the world, thanks to the Internet and the company website at www.Sheplers.com. Sheplers also makes extensive use of
email for marketing and merchandising. The net effect is a commanding presence in the world of western wear retailing,
across America and around the globe (about a quarter of the company's online revenue is from international sales).
Although the company's roots in retailing can be traced back to the nineteenth century, Sheplers was one of the first
retailers to adopt a twenty-first century approach to online marketing and merchandising. According to Sheplers' Chief
Operating Officer Mark Hampton, the transition to being an Internet business offers both advantages and
disadvantages:
"Online you have competitors both vertically and horizontally. Just about everyone wears shoes, but the percentage who
wear cowboy boots is relatively small. So I would characterize our market as a vertical, composed of narrow categories
like cowboy boots and western shirts. That means an inherently smaller online audience than horizontal competitors like
Amazon.com and Zappos, companies that are selling things across broad categories, like books,
music, and footwear in general."
As search technology has evolved, the ease with which consumers can find specialty items—for
example, snip toe alligator boots—has compensated for the existence of online superstores that
attempt to sell anything and everything (for the record, the first three organic results in Google for
snip toe alligator boots right now belong to Sheplers). In other words, the company was quick to
see the benefits of search engine optimization and pay-per click-advertising. According to
Hampton:
"Early on we started building our website for good organic search results. We got into PPC early
and in a big way. We paid a lot of attention to conversion and custom landing pages. In fact, we
Snip Toe Alligator Boots
still have over 300 customized landing pages specifically for top search engine keywords."

4. Sheplers Whitepaper
B. T E S TI NG , T E S T IN G , 1 - 2 -3
Sheplers aggressive approach to search engine optimization and pay-per-click advertising has paid off. Today, around
60 percent of traffic coming to sheplers.com is coming there for the first time, in other words: new visitors. That is good
news because it means the company is continuing to reach people who potentially can be converted into new
customers. So the question then becomes: How do you make sure you convert as much of this new traffic as possible
while continuing to provide a satisfying site experience to established customers? For Sheplers the answer was a simple
3-step process:
Test the key elements of conversion, including the landing page experience;
1 product location and selection, the add-to-cart process; and the checkout
process.
Implement test winners so that changes identified as beneficial can begin
2 earning incremental revenue as soon as possible.
Monitor the results to make sure that any changes you make continue to
3 pay off.
Although Sheplers has an experienced team of in-house IT experts running the website at sheplers.com, managing this
type of testing project through traditional IT channels can take a long time. Sheplers wanted to test aggressively, with
instant feedback, so the company turned to Monetate.
When Sheplers installed Monetate's testing and targeting platform it decided the first task should be to make the
purchase flow as smooth as possible. Reducing friction in the item selection and checkout process can increase both
revenue per session and average order value as well as reduce cart abandonment rates. Before targeting more visitors
“
with promotional messaging that encourages them to buy, you want to make sure it is easy for them to do just that, to
follow through on the course of action you are trying to nurture, namely adding items to the cart and checking out.
“
Monetate really understands the challenges faced by multichannel
retailers today. They have developed a unique marketing-oriented
solution that smooths the path to coordinating content and messaging
across all channels.
Bob Myers, CEO, Sheplers

5. Sheplers Whitepaper
C AS E S T U D Y # 1 : G E T T H E C A R T R IG HT
The primary goal of this first series of tests was to improve purchase flow and reduce the cart abandonment rate. A
variety of screen elements were tested and changed. The effect of removing certain steps in the checkout process was
also tested. For example, what happens when you let customers check out directly from the cart page instead of having
to click "Checkout" after reviewing their cart?
During a test period of 10 days, the various changes made by Sheplers SHOPPING CART CONVERSION RATE
resulted in a much lower cart abandonment rate and a 3.33 percent
increase in conversion rate. While that might not seem like a large
number, the annualized projection of incremental revenue generated by +3.33%
these changes was a seven digit number (ample enough to eliminate any
lingering skepticism about the value of testing).
Sheplers is not inclined to say exactly what changes were tested during
this friction reduction testing cycle, however, if you look at the
sheplers.com checkout page today you can see that it is a model of
simplicity which follows many of the best practices in user interface Original cart Optimized cart
design while maintaining the company's unique style and visual branding.
The approach taken by Sheplers, to test some of
the basic elements that influence conversion and
purchase flow, is itself a best practice in
marketing optimization. After all, you don't want
to expend a lot of effort persuading people to put
things in the shopping cart if clumsy processing
then causes the cart to be abandoned.

6. Sheplers Whitepaper
C . DI GGI NG DE E P E R: B RA ND S & C A TEG OR IES
In developing it's website, Sheplers has wisely leveraged the lessons learned from many decades of brick-and-mortar
retailing. The design of a real-world retail store is based on how most shoppers travel through the store to find what they
want. Merchandising in the store aims to prompt purchases by presenting tempting offers at appropriate points in that
journey.
The brick-and-mortar shopping
experience actually offers some
advantages over online shopping
says Hampton. For example,
customers can feel fabrics and
try on boots. But an online store
can do something that no brick-
and-mortar store can do:
"rearrange the store to fit
customer needs and intent,
customizing the shopping
experience based on which
'door-to-the-store' they enter
through."
Consider someone who enters
the Sheplers online store by
clicking through from a search for
"boots on sale." Now compare that site visitor with someone who searched for "Tony Lama exotics." One can assume,
since Tony Lama is a brand of boot, that both people have some interest in buying boots. However, one can infer
significant differences between the two visitors with respect to product category, brand, and price range. Boots are a
product category. Tony Lama is a brand. And "sale" is a price, or at least an expression of preference for a lower price.
Even before the Internet, smart multichannel retailers like Sheplers were analyzing statistical synergies between brands,
price ranges, category purchases, and so on. According to Hampton the company has been working for some time to
"leverage these synergies online in terms of what we show to different customers on the website."

7. Sheplers Whitepaper
C AS E S T U D Y 2 : M IX IT UP
Sheplers decided to use Monetate to capture preference and intent inferred from traffic sources such as pay-per-cick
advertising and organic search, then use that information to customize website content. For returning visitors Monetate
also feeds data about past product views and purchase behavior into the customization mix.
Sheplers tested this strategy by making modifications to the home page for people expressing interest in leather
outerwear like leather jackets and coats. The impact of these customized content changes was a 48 percent lift in
conversion rate. In other words, visitors who were presented with the customized content chose to make a purchase
almost 1.5 times more often than the control group (a subset of people who were not shown the custom content even
though they met the criteria).
48% Higher conversion rate lift
Home page without targeting Home page targeting user preference
Even though this test was targeted at a relatively small segment of shoppers—those expressing interest in leather
outerwear through PPC clicks and keywords in search—the annualized incremental revenue lift from this strategy was
projected to be worth six figures. Needless to say Sheplers continues to test and implement different ways of
customizing content based on customer brand and category preferences.
“
“
When you are trying to deliver the best possible website experience to
each and every customer, with a minimum of pain, Monetate is a huge
asset to have on your side.
Bob Myers, CEO, Sheplers

8. Sheplers Whitepaper
D . HE AD W E S T W IT H G E O- T A R G ETIN G
Through its operation of brick-and-mortar stores over many decades, in numerous states, Sheplers has learned that
tastes vary by region, even in a relatively narrow vertical market like western wear. Cowboy boots with pointed toes might
sell better in some states while other states prefer snip toes. Justin boots are big in the Northwest. Wrangler jeans are
more popular than Levis in some states. Hampton calls this "brand pocketing."
Justin Boots in
the Northeast
Snip toes in
the Northwest
Pointed toes in
the South
Not surprisingly this phenomenon of brand pocketing is also found in online retailing where some brands, products, and
categories are more popular and convert better, according to geography. The geo-targeting technology built into
Monetate has enabled Sheplers to leverage these geographical preferences.
Geo-targeting means changing the content of your website based on the location of the person looking at it. This is
possible because, whenever you visit a website from your desktop, notebook, net book, or other device, the web server
detects the IP address of the device. That can be used to determine your general location. The usefulness of this
information can be illustrated with a simple yet profitable example that leverages the fairly universal shopper preference
for saving money.

9. Sheplers Whitepaper
C AS E S T U D Y 3 : T A X E S IN TEXA S?
Geo-targeting can be used to increase conversion by saving customers money, namely the sales tax they might avoid
paying on their purchase from your website based on their location. These days, shopping by price is almost
synonymous with shopping online and Shepler's customers are no exception. Sheplers knows that many shoppers
carefully weigh all the factors that affect the final cost of their purchase, including sales tax. Since the sales tax payable
on web purchases can be up to 10 percent and varies by shopper location, Shepler's has adopted what can only be
described as an online retailing best practice: Let visitors know up front if their purchases are likely to be "tax free."
This is not only helpful in closing
the deal, but if you point out the
potential savings as soon as
shoppers land on your site, rather
than waiting until they get to the
checkout page, it can reduce
bounce rates. Above you can see
a simple creative that Sheplers
displays on the home page
whenever Monetate's geo-
targeting capabilities indicate a
site visitor is located in a state
where the company does not
collect sales tax.
Actually, the creative above is not
as simple as it looks. The name of
the state is automatically inserted
into the graphic by Monetate at
the time it is rendered, thus avoiding
the need to make separate creatives for all the states to which the messaging applies (dynamic rendering of text based
on targeting variables is just another way in which Monetate improves productivity and helps you save on internal
resources).
6.48%
Revenue Per Session Increase
As for the value of this strategy, tests showed that revenue per session rose 6.48 percent when these tax free creatives
were rolled out (as measured against a control group). For Sheplers that translates into a projected annual revenue
increase well into six figures, achieved without discounts, or free shipping, or anything else that would erode margins.

10. Sheplers Whitepaper
C AS E S T U D Y 4 : L E T ' S G E T LOC A L
Shepler's is now experimenting with changes to the home page content based on visitor location and what the company
knows about buying preferences in that location. For example, if you are shopping at Sheplers from a state with a
marked preference for Wrangler you might see Wrangler products above the fold when you land on the home page.
While the company is not prepared to detail the results of these tests, partly because they are ongoing, it is clear that the
strategy pays off when you get it right.
For example, changing the sheplers.com home page for visitors from Japan produced a conversion rate improvement of
116 percent. If you are inclined to think that a doubling of conversion rate is an exaggeration we should point out that
many other Monetate clients have seen comparable results from country-specific targeting. The World Wide Web truly is
worldwide and it turns out that a lot of people outside America like to buy from America (remember that 25 percent of
Sheplers' revenue is international).
Would it be worth customizing content for visitors from different countries or regions or states if you had to implement the
necessary site changes piecemeal through your IT department? Possibly not, but rolling out this kind of targeting with
Monetate is literally a few minutes of effort, and that is Marketing department effort, on Marketing's schedule, not an IT
project that has to be placed in the IT queue.

11. Sheplers Whitepaper
C AS E S T U D Y 5 : G E O- T A RGETIN G C ON VEN IEN C E A N D
C OMP LI ANC E
A third benefit that Sheplers has found in geo-targeting is improving the site experience by hiding items that a shopper
cannot buy. For example, various laws are in effect that limit the distribution of certain "exotic boots" to some locations,
like California. It is also illegal to ship some exotic boots from America to other countries. Hiding items that cannot be
shipped to a customer's location reduces shopper frustration and calls to customer service.
Sheplers has even used Monetate to help out the IT department.
There are times when a website has to be taken down for
maintenance purposes. Those times are different in different
locations. For example, if you are taking the site down at 1:00 am
Central time that is 11:00 pm Pacific time. Sheplers has used
Monetate to display a banner that warns shoppers about downtime in
their time zone, dynamically generated from the "local time" targeting
variable.

12. Sheplers Whitepaper
E . CO NVE R SION T H RO UG H C U R A TION
All of these targeting capabilities and merchandising
strategies come together when you look at how
Sheplers is using two complimentary technologies
that are on the cutting edge of digital marketing:
badging and curation. In this context curation means
identifying items that are deemed worthy of greater
attention and badging means visually highlighting
those items.
Why are curation and badging important to online
retailing? Consider the fact that Sheplers stocks 10
categories of Work Boots. In the "Pull-on" sub-
category alone there are 60 different styles. When a
shopper gets to a web page with 60 choices, it helps
to know which items are new, which are best sellers,
top-rated, and so on. Fortunately, Monetate
technology makes that easy, whether you're selling
boots or jeans or western shirts.
Of course, if you had to create new product shots
every time the curation changed then badging would
be prohibitively expensive. That's why Monetate developed technology that can
automatically display small images, the badges, on top of your original product images.
The Monetate marketing platform will do this on your website according to whatever
business rules you lay down. For example, if a product SKU is in a list called "new" or
"on-sale" then Monetate will float the appropriate badge over the image of any product
whose SKU is on the list. You can tell Monetate to do this
whenever such a product is displayed, or only on certain
pages, such as a search results page.

13. Sheplers Whitepaper
C AS E S T U D Y 6 : RE S P E CT T HE B A D G E
Badges are a digital reincarnation of the age-old merchandising strategy of calling attention to specific products within a
range of goods, such as items that you are particularly keen to sell. And badges are effective: adding bestseller badges
on category pages at Sheplers produced a conversion rate lift of more than 3 percent. The deployment of "Savings"
badges on category pages increased average order value by 2 percent. Using a "New" badge on product detail pages
produced a 1.63 percent increase in the "add to cart" rate. Individually, these might not seem like big percentage
increases, but taken together the annualized revenue increase from these badging campaigns is a seven figure success
story.
1.63%
Increase in add to cart rate
It should be noted that the bestseller badge is a little smarter than the others. While the "New" badging is triggered by a
list of SKUs that Sheplers uploads through its Monetate dashboard, Monetate curates the best selling products
automatically because Monetate knows what is being sold and when.
A simple business rule triggers display of the bestseller badge when an item crosses the predefined threshold for
bestseller (for example, the 10 most frequently purchased items in the last 30 days). In other words, Sheplers can just
set this merchandising campaign and forget it. As customer buying habits change, so does the bestseller badging,
without consuming any additional resources.
Sheplers knows that badging pays so it is using Monetate to get even smarter, combining geo-targeting with its
accumulated understanding of brand synergies to present different bestsellers to visitors from different states, based on
what is selling best in the visitor’s state.

14. Sheplers Whitepaper
F. TH E S H I PP IN G N E W S
When we asked Sheplers' COO, Mark Hampton, where he saw
Monetate making the most difference to the company, he pointed to
shipping. Obviously, shipping is a key factor in the online retailing
equation, an equation that is different for each retailer.
Take the case of Zappos, an online retailer that is more horizontal than
vertical, selling every type of footwear. Free shipping and free return
shipping are a big part of the company's business model and
marketing strategy. Clearly there are costs associated with that strategy,
beyond the shipping costs themselves. Return rates at Zappos are
reported to be high, partly because some people intentionally order
multiple styles in multiple sizes and return most of them.
Any online retailer who is considering offering free shipping needs to
proceed carefully, paying close attention to the effect on both the top
line and the bottom line, overall revenue and net profit. One strategy is
to offer free shipping selectively. According to Hampton:
"We have determined, with Monetate tests, the importance of free shipping offers to leverage the top line and the
incremental contribution."
Free shipping can
increase the top line but
will also raise costs.
That’s okay if the
bottom line keeps
growing.
A key variable in the shipping equation for Sheplers turned out to be location. Detailed analysis of sales figures revealed
a group of states converting at lower than average rates. The company suspected the presence of primary retail
competitors in those states was the culprit, with Texas being one example. It made sense for Sheplers to target those
states with free shipping offers and see if that produced a significant lift in conversion and top line revenue while tracking
net contribution to the bottom line.

15. Sheplers Whitepaper
C AS E S T U D Y 7 : F RE E S HIP P IN G SOMEW HER E
With its geo-targeting capabilities, Monetate enables online retailers to test and execute a wide range of shipping
promotions. These include reducing or dropping the shipping charges based on distance from warehouse, distance
from competitors' stores, or location within a particular region, metro area, county, ZIP code, or state. Shipping can be
reduced or waived for all purchases for a limited time, all orders over a certain amount, all orders of a particular brand or
category, and so on.
Getting Monetate to tell
shoppers from Texas that they
get free shipping while
showing different messages to
shoppers from other states is
very easy. The big question
for Sheplers was the net effect
on revenue. Would the
increase in sales pay for the
cost of the free shipping?
In a situation like this you
need your testing platform to
be nimble. You also want it to
report results in real time. In
other words, you want to be
able to see the effects of the
targeting immediately and
quickly turn it off should those
results prove negative.
Monetate lets you do that, but
fortunately Sheplers did not
have to turn the test off early.
After four days the Monetate
dashboard showed a 57 percent increase to the top line.
Sheplers was also seeing a 20 percent increase in net contribution even though it was paying for shipping. The test
proved the value of offering free shipping to shoppers in states where the company faced strong competition. As a
bonus, in addition to the very positive financial numbers, this test showed that the strategy produced a 48 percent
increase in new customer acquisition. Annualized contribution to the bottom line? Sheplers prefers not to say, but it is
reasonable to assume that this strategy was a Texas-sized success.
20%Increase net
48% Increase new customer acquisition
contribution

16. Sheplers Whitepaper
G. T H E R O U N DUP
From the case studies described here you can see the breadth of Sheplers’ implementation of Monetate and get some
idea of it's impact on Sheplers’ business processes and performance. In addition to the various strategies described
above, Sheplers uses Monetate on a regular basis for traditional A/B split testing to decide on the best creatives and
other variables. For example, the company recently decided to try a different design for its "Percentage Off" badges. The
winner produced a 4 percent revenue improvement over the loser and an annualized revenue improvement projected to
be well into seven digits.
When we asked Mark Hampton to summarize the benefits of deploying Monetate he summed it up in two words:
information and partnership. Then he elaborated.
Information: "The accuracy and detail of the information that Monetate
1 provides to the business is not only more informational than that available
from standard analytics packages, it is directional. In other words, it is
helping the company decide the direction to take in order to take its
marketing to the next level."
Hampton points to the availability of real-time data on multiple parameters when testing and targeting in Monetate,
parameters like bounce rate, new customer generation, average order value, revenue per session, and cart
abandonment.
"Monetate is not only telling me if what I am doing is profitable but it is also indicating why it's profitable. You can tell if a
test is reducing the abandon rate or speaking more effectively to a new customer than it is to a returning customer. Data
like that points you in the direction of how you can do even better."

17. Sheplers Whitepaper
Partnership: Although Monetate's software is very easy to install and use,
2 Hampton says Sheplers is deriving a lot of benefit from the working
relationship the company has developed with the Monetate Strategic
Service Team.
"These guys help us stay focused on moving forward, not just making changes and measuring them, but deriving
learnings and implementing them."
Hampton cites the early testing on the shopping cart as an example. Those tests indicated a need to make changes,
and Sheplers implemented them. But in some other areas, like badging bestsellers, Hampton says the Monetate team
acted as "the forward scout" and encouraged experimentation to prove the value of changes that can go on to become a
permanent part of the site design.
In summary says Hampton, "Before Monetate, we were forced to do our own tests or just guess. Faster testing and more
tests has freed up development time to do other things. Monetate lets you prioritize. For us, further personalization is the
next big thing, based on what people have viewed or are looking at. And with Monetate we are ready to take it on."
After more than 100 years of retailing, Sheplers is a great example of an established enterprise that is looking to the
future, pushing the envelope of digital marketing and merchandising, and reaping rich rewards where others have yet to
tread. “
“
Monetate gives us the ability to test everything in real time, against a
control group, under the exact same conditions as the target group;
and that gives us a lot more speed and confidence when making
marketing decisions.
Bob Myers, CEO, Sheplers
“
“
The longer we work with Monetate, the more we learn about our
customers and how to apply that knowledge to further improving our
return on marketing spend.
Nick Bomersbach, VP, Digital Commerce, Sheplers

18. Sheplers Whitepaper
As the leading independent provider of testing, targeting, and personalization for websites, Monetate helps
major consumer brands deliver personalized content and offers to different traffic segments. And we do this
while eliminating IT from the marketing process.
Everything that Monetate does is enabled by a single tag that you cut-and-paste onto your site, no IT resources
required. With that one simple action Marketing can bypass IT and access Monetate’s unique marketing
optimization features from A/B testing to product badging and geo-targeting of promotions and messaging.
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