Challenge

Eight Sleep was launched in 2015 with a mission to improve its customers’ sleep experiences through sleep fitness technology. Fueled by the success of the Pod—along with significant celebrity endorsements and several successful rounds of funding—Eight Sleep quickly grew from a crowdsourced startup to a leader in the sleep technology space.

Eight Sleep’s growth has also been fueled by continual innovation. In 2022, the company introduced Autopilot, a subscription service that uses the information collected by the Pods to adjust their temperature in real time, provide sleep and health reports, mitigate snoring, and wake up sleepers with a gentle vibration and thermal alarm.

As Eight Sleep’s technology and business model advanced, the company realized that the capabilities of its original payment provider couldn’t keep up. “We reached a point where our existing system wasn’t a solution for the long-term success of our business model, and we had to consider other options,” said Alexandra Zatarain, VP of brand and marketing at Eight Sleep.

Eight Sleep wanted to continue its growth by expanding into new markets around the globe. However, its existing payment provider required the company to set up a new storefront for each country, a time-consuming, labor-intensive process that would have created a fragmented network of discrete sites.

What’s more, the checkout experience provided by Eight Sleep’s original payment provider was slow and not intuitive. The hosted checkout solution consisted of three separate pages and took several seconds to load, leading to a significant number of customers abandoning their cart before purchasing. In addition, Eight Sleep lacked the ability to test different solutions or customize them to the needs of its evolving business model. And the payment provider’s fraud management features were flagging too many legitimate purchases as false positives and triggering chargebacks.

Eight Sleep wanted a new payment solution that would allow the company to build its own checkout solution in the same mode as its sleek and intuitive website—a simple page that customers could breeze through without a second thought. The solution would need to have better fraud protection and make it easier to add alternative payment methods, particularly buy now, pay later options that would help increase conversions on Eight Sleep’s big-ticket products.

And since the one-time purchase of a Pod required the simultaneous purchase of an automatically renewing Autopilot subscription, the company wanted a solution that would capture both in a single transaction. The new payment provider would also need to improve on the previous billing solution, since Eight Sleep’s subscription model was experiencing a high card failure rate, which was leading to high rates of involuntary churn.

Solution

Eight Sleep chose to replace its existing payment provider with Stripe, using a combination of Stripe Payments and Stripe Billing.

With Payments, Eight Sleep was able to create a single storefront to serve all 14 countries in which it already operated, as well as new markets it might target for expansion. In addition to supporting more than 135 currencies and over 100 payment methods in 195 countries, Payments gave Eight Sleep access to Stripe Radar for fraud protection. Radar detects and blocks fraud using machine learning that trains on billions of data points from across the Stripe network—without blocking legitimate customers.

When designing its checkout page, Eight Sleep used Stripe’s Optimized Checkout Suite—which includes Stripe Elements, a set of embeddable prebuilt UI components—to improve checkout flow and drive conversion. For example, the Payment Element allowed Eight Sleep to present customers with a wide array of payment options, including buy now, pay later options for the US and international markets. Meanwhile, the Express Checkout Element gave Eight Sleep the ability to offer one-click wallets, and Link—Stripe’s accelerated checkout experience—made it possible for customers to autocomplete their shipping and billing addresses.

As the Eight Sleep team was building its new checkout experience, they also implemented Billing to manage Autopilot subscriptions that would be captured at the same time as a product purchase. Stripe’s professional services team helped design and test the solution, which used Payments to charge for a one-time Pod purchase and the first year of Autopilot subscription. The solution also used Payments to send the same payment information through a Billing API to record the subscription sign-up and establish an annual renewal date.

Payments also provided advanced features designed to reduce churn, including Adaptive Acceptance—which uses machine learning to optimize authorization requests for issuers—and Stripe’s card account updater, which helps maintain up-to-date customer card information. Several Billing features can further reduce involuntary churn, such as automated failed payment emails and Smart Retries, which uses machine learning to retry failed payment attempts at the best possible times.

The holiday shopping season, which accounted for a significant portion of the company’s revenue, was just a few months away when Eight Sleep chose to partner with Stripe. That tight timeline inspired Eight Sleep to work with Stripe professional services to accelerate the implementation.

Eight Sleep developers took the lead in integrating Payments and Billing, with close support guidance and expertise from Stripe’s professional services team. The two teams shared a Slack channel for daily communication and held calls and workshops to resolve any questions the Eight Sleep team had on Stripe technology and integration strategy. The Stripe professional services team also assisted by testing Eight Sleep’s Stripe setup to ensure the solution was working as planned.

Results

Optimized checkout experience leads to 70% increase in purchases

Building a new checkout solution using the Optimized Checkout Suite created a dramatically better user experience. Where the old checkout solution required customers to navigate through three pages, the new solution is a single page that loads immediately.

With those improvements, plus other optimizations such as collecting payment information at the top of the page, Eight Sleep saw a 70% lift in conversions from add-to-cart to purchase.

“We were able to measure quite accurately what the lift was, and suddenly we were seeing way more purchases year over year,” said Zatarain.

Going forward, the flexible nature of Elements will help Eight Sleep to continually fine-tune its checkout solution. By constantly testing different configurations of its checkout page, Eight Sleep developers will be able to identify enhancements to further improve conversion rates.

45% decrease in chargeback rate

Stripe Radar’s sophisticated machine learning helped Eight Sleep significantly reduce the number of transactions wrongly flagged as fraudulent, contributing to a 45% chargeback rate decrease.

50% reduction in subscription renewal failures with Stripe Billing

The built-in features of Billing, including Smart Retries, reduced failed renewals from 32% to 15%. “We’ve been able to dramatically decrease our involuntary churn rate,” said Zatarain.

Collaboration enables Eight Sleep to launch in the first region within two months

To avoid holiday season disruptions, Eight Sleep’s small team of developers worked in close collaboration with Stripe’s professional services team to launch the new payments solution first in the UK, Europe, and Canada, completing the process in just two months. The team then launched its Stripe-driven payment and billing solution in the US two-and-a-half months later.

“We have a lean team, and working with Stripe professional services really accelerated our integration, as did the quality of Stripe APIs and documentation,” Zatarain said.