e-Commerce: When a brick & mortar adopts the codes of a pure player
→ Get stable returns on investment or consistent growth by increasing the monthly media budget by 25%, every month
→ Turnover increase of 282% for a 196% budget increase
→ Building new, long-term trust relations enabling innovative high-season strategies and exclusive off-season inventories
“blue2purple is a service provider who allowed us to focus on our core competencies. Our team was really pleased by the positive impact that their work had on our sales.”
Pierre Lother | CEO @ Motorkit
A unique positioning in Belgium
A predominant stakeholder on the replacement parts market, Motorkit offers a stock of over 33 different product types deliverable in 15 countries.
The launch of the online shop could only be done by taking an inevitable logistics aspect into account: inventory management. The strategy that was set up absolutely had to reach a stable or growing return on advertising spend (ROAS) by increasing the monthly media budget by 25% all year long.
To manage incremental, controlled growth, the initial optimization strategy focused on direct, indirect and collateral semantic universes. When this step was implemented, retargeting the Search inventory and creating specific audiences paid off. Two categories appeared: browsers who had been shown messages and visitors converted on certain key pages.
As an e-Commerce, Motorkit opted for a strategy with an unlimited budget based on the return on advertising spend. In other words, the media spending increased by 25% from one month to the next as long as the expected goal was met. Thus the brand could be positioned online in a secure and controlled manner. This bidding strategy proved to be a profitable one because blue2purple succeeded in developing the income according to the media spending. ROAS remained stable despite the yearlong increase in media budgets.
Implementing automatic rules in the AdWords interface allowed for consistent optimization of the Costs per Click (CPCs). An identical strategy was developed for daily budget management, thus facilitating automatic optimization by the Google algorithms based on campaign performance. The machine learning methodology helped push performance to a higher level, which allowed for the use of signals that might not have been seen in manual bidding management.
Long-term, high-performance results
A 196% growth in the media spending was correlated with a ROAS that was stable or higher in comparison with the previous year. Seasonal peaks allowed growth to be absorbed in the slower months while maintaining a performance level identical to the least active months.
Average yearly media spending recorded a 196% growth while generating a 282% increase in yearly income. The amount of the average basket resisted by avoiding multiple orders and, through a domino effect, that of delivery costs.
So yes – a brick & mortar can successfully adopt the rules of a pure player
Pure player strategy applied to a brick & mortar
Motorkit, a stakeholder with a niche position in motorcycle replacement parts, is competing against stiff online competition from sellers in neighboring countries. For this brand that is traditionally highly-respected offline, the challenge of a web launch implied rigorous inventory management and a growth rate that is as tightly controlled as it is ambitious.