Glue Store is an Australian retail company focused on online sales. They evaluate the success of their marketing campaigns using key performance indicators related to traffic, engagement, conversions, and revenue. Their analysis shows that search engine optimization, social media promotion, and site usability improvements were particularly effective at driving new customers and sales. Overall, they found that evaluating different marketing channels allows them to optimize spending and identify their most successful strategies.
Deborah Glue is a multi-channel fashion retailer that specialises in urban street wear, denim and lifestyle apparel. We stock over 100 international & local brands and we have 26 Store located in NSW VIC & ACT. As a business we were late on the online offering and we launched a simple site in January 2011. Soon after launch Amblique was engaged to audit our site and develop a digital strategy for the business. Together we have been able to grow the online business substantially month on month and have already exceeded our end of year targets, as a business we ’ re really embracing the retail meets e-tail mentality. For us this is just the beginning of our online journey and we are excited about the future.
Justus Full service eCommerce consultancy Est 2006, 42 staff focused on retail We do: strategy, platform implementation, digital marketing We deliver: traffic, engagement & conversions We work with over 25 retail brands. For most of our clients we do everything from strategy to build etc. With glue we came in after the build and are currently engaged for strategy and online marketing only. Hi everyone, I'm Justus, I'm the online strategy director at Amblique. In my role I work closely with our clients to develop their overall digital strategy which is then executed as a tactical programs to drive traffic, engagement and conversions. Just a quick introduction on Amblique. We are a full service ecommerce consultancy and have been in the digital space since 1999. The business is very hands-on, we have a team of 45 staff including developers, project managers, designers and specialised marketing consultants. We do strategy, platform implementation and digital marketing with the aim to drive traffic, engagement and conversions for our clients. Multi-channel retail is our focus area and we work with about 25 brands in this space.
Justus Amblique was engaged develop initial strategy based on our experience with other multi-channel retailers Before you decide where to invest your online dollars you need to carefully Identify your target market online – who is your online customers, does he/she differ to your in-store customer, how will you reach this customer, etc. Define goals and KPIs for traffic, engagement, social growth, email growth, open rates, average sale, conversion rates etc. Build tactical marketing plans to drive traffic, engagement and ultimately conversions In some cases you can use the goals you have set and mathematically work backwards to determine the level of effort / investment required with your tactical plans to deliver on this The Glue Store a good story that demonstrated how a relatively small retailer can take advantage of the growing ecommerce market through nimble execution. The site has only been trading for 9 months and there is a lot more to do but the journey so far has been fun. We work with other retail brands that are further along the ecommerce path and plan to integrate our learnings from those to Glue in the coming months. Now before you decide where to invest your online dollars you need to clearly identify your target users. Who is your online customers? Does he/she differ to your in-store customer? how will you reach this customer? etc. For some brands we find that the online buyer differs from the typical instore customers but in terms of Glue store we have only found a heavier skew towards females online.You then need to define your goals and KPIs and design tactical marketing plans to deliver against these. In many cases you can use the goals you have set and mathematically work backwards to determine the level of effort / investment required with your tactical plans to deliver on this. For example you might say that you need x hundred thousand visitors at y conversion rate with z average sale to reach your goal. You can then look at the cost of your traffic sources a build a cost per aquisition model.
Justus Before I go into setting specific KPIs in more detail I want to talk about how we evaluated the effectiveness of tactical campaigns or optimisation efforts When looking at 3 key metrics Traffic – the cost per visitor Engagement – the cost for depth / time of visit (usage of features) [i.e. online video] Revenue – straight ROI cost of sales Now before I go into specific KPIs I want to talk about how we evaluate the effectiveness of tactical campaigns or optimisation efforts. We looking at 3 key metrics: 1. The cost of traffic - how much will this cost per visitor or how much will this save per visitor 2. Engagement - what is the cost to drive extra engagement in terms of extra time per visit or dept of visit 3. Conversion - this the raw ROI in terms of the cost to generate revenue Looking at raw ROI alone does not always work, especially in a multi-channel environment. You need to understand how traffic and engagement affects in-store sales even when not directly linked to online conversions.
Justus These are the KPIs we defined targets for Overall ROI for the business Conversion rate – important to segment this by sale and non-sale period and different traffic sources Time on site – 5min+ Revenue growth – seeing small traffic and conversion we set conservative goal of $1m by the end of the year – our run rate exceeded this four fold 5 months later Average sale – across out fashion clients we see a 1.5-3x larger average depending on the base (the lower the bigger the multiple) Facebook likes – i.e. 2k new fans per month. Engagement (i.e. activity over the user base is very important) Email – i.e. grow list by 4k subscribers per month while achieving strong open rates 9mo in, we’ve achieved a number of KPI targets we wanted to achieve by Dec ‘11 Now looking to co-develop strategy with Glue Store for 2012 We decided to set targets around revenue, conversion, site engagement, social growth & engagement and email list growth & engagement. When Amblique was initially engaged Glue had just launched the site and received moderate traffic and some sales - a few thousand a week. We set conservative targets and aimed for a million in sales for the rest of the calendar year. Nine months later we exceeded our target four fold based on our run rate. We are very pleased with this result and look forward to ongoing growth. Tim is going to go into more details on what drove this sales volume. Conversion rates are always a hot topic and in many cases this can be the lowest hanging fruit. We see conversion rates range 0.5-3.5 % in online fashion in Australia. An overall site statistic is not always very meaningful and we segment expected rates by sale vs. non sale period and by traffic source. Sale periods and branded traffic sources will often be much higher. In terms of average sales value we see a 1.5 to 3.5 multiple on the in-store sale. As a general rule the lower the average in-store sale the higher the multiple online. So if your in-store sale is $30 you may do $70-120 online while if you in-store sale is around $120 only may only be $150-220. The glue store site has delivered a consistently bigger online sale value. These numbers can be affected by sales strategies including product and freight based promotions. Stats? Sales? Actual numbers? For social we set a target to grow the fan base by 2000 per month while maintaining a strong social engagement. This is an important concept to monitor. We devide the total monthly interactions (i.e. comments, likes, shares, etc.) by the total social fan base on a monthly basis and monitor this as a key metric. There is not point in having a large fan base without a strong 2 way dialogue. A drop in this rate indicates fatigue and content issues. Email marketing is a key component and we set to grow our list to 120,000 members while maintaining strong open and click-through rates. I will go into the effectiveness of the various channel in more detail later at the end of the presentation but for nowI will hand over to Deborah.
Deborah * Now we’re 9 months down the track, I’d like to share what we did to save and what we spent on
Deborah “ Hands up in the room, anyone who had $1mil to spend on a dedicated online warehouse from day 1 that looks like this? ” Well, like 100% of you in the room, our first few months were about proving to the business that online was a channel worth investing in. We had a limited budget and really had to be selective on warehouse infrastructure and integration spend – and let me tell you, our warehouse didn ’ t look like the one here with robots. It quickly became apparent that the business had underestimated the power of online and we exceeded expectations and this stretched our fulfilment capabilities. We ’ ve now prioritised system integration and online inventory allocation to improve fulfilment as a business and integrating our 4 systems So if you ’ re tackling this now, my advice is that every dollar you spend in infrastructure is a few dollars you ’ ll save in overtime.
Deborah From day one, we were lucky the business was committed to promoting the web store in all offline marketing channels If you ’ re ecommerce manager, make sure you fight for your web store to have a presence on all offline marketing. We tag on our web address on: Banners and store window in our retail shops Printed Media in several Fashion Magazines Radio, Billboards, and catalogues. We also included it on TVCs and Cinema The reason I say this is that we found that two thirds of our revenue come from branded traffic. This demonstrates that offline marketing is worth investing in – even if you ’ re pure play
Deborah No one knows our brand like we know it, so all our marketing, concepts, styling and post production is done in house. Being in a fast paced industry this really works for us. We took this approach in setting up our online store, and we weren ’ t afraid to be hands on. We setup our own studio, scouted for models amongst our staff and do all our web design in house. This allowed us to maintain consistent brand image and to be cost effective. Through this, we are more proactive and can get product online any day of the week.
Deborah Here are some examples of our online summer look book where we’ll be able showcase new trends and let visitors purchase the look which should increase cart average value
Deborah One of areas we did choose to spend on was to engage Amblique to make sense of our data and to understand our online customers. In order to drive growth each month we needed actionable insights to help the site hit our targets and we ’ re looking to do some more advanced behavioural user analysis in the coming months. Some things we do look at is visitor segmentation, traffic sources, page level performance and other attributes to drive conversions which Tim will go into further
Tim Now we’ve given you a bit of insight into where we invested and where we saved, I’m going to discuss some specific areas we had some wins in
Tim Firstly, new customer acquisition. One of the broader goals of the web site was to reach out to new customers beyond Glue’s physical store network. We’ve been able to achieve over 20% of all revenue from regions outside of the city stores and we’re obviously looking to continue to grow that revenue
Tim When we looked at how cities such as Perth and Brisbane were performing, we found unbranded traffic made up over 3x more than it did in cities where Glue had a presence. Interestingly, we saw a 43% higher conversion rate outside the store network where we didn’t have local online shoppers going offline like we had in cities such a Sydney This really demonstrates the power of unbranded traffic, but also indicates how much of an impact the web store has in driving offline sales, and we’ve seen similar trends for our other fashion clients We ran a promotion via Facebook where you received an SMS voucher which was redeemable in store or online and found ¾ claimed theirs offline
Tim So, what were these unbranded traffic sources? One of the most cost effective unbranded sources for us was ShopStyle which is a brand and store aggregator Whilst many of you in the room will be running AdWords campaigns, it ’s important to consider these niche paid traffic sources We found ShopStyle was able to deliver a good volume of visitors at a 27% lower CPC and with a 255% higher per visit value
Tim And of course, there ’ s the big one - organic search. This was one of the largest traffic sources for Glue was organic search Back in January we did keyword research to identify opportunities and the areas we focused on were generic keywords such as “men’s jeans”, “summer dresses” and the 100+ brands that Glue Store stocks. The stocked brands have been performing very strongly for us as we were able to leverage awareness and piggy back off their marketing campaigns Once we identified these keywords, we optimised content for search engines and ensured Glue Store was getting links from their stocked brands and relevant fashion sites Overall, organic has delivered a huge ROI and we ’ve grown visits 788% and revenue over 2,400% from the baseline we set at the start of the year Stats are Jan-Feb vs. Jul-Aug 2011
Tim Once we started driving serious traffic to the site, the lack of online stock was a real conversion hurdle for us Glue now uploads new stock weekly and we’ve seen a direct correlation between an increase of unique product pages to revenue The bottom line is, you can have all the visits in world but if you don’t have the product, you’re not going to convert
Tim Once we more product online, the next hurdle we faced was allowing users to efficiently find it We used our organic keyword research to identify new sub-category, brand & colour options for guided search and overnight we saw a 62% higher conversion rate over the site avg.
Tim Even at a department level, we saw the per visit value increase 82% for womens jeans and 34% for dresses I’ll now hand over to Justus to give some insights into what we did in the social space and to wrap up Stats are 4wks prior vs. 4wks after
Justus We developed a social strategy for Glue Store as part of the overall strategy. We identified Facebook as the key platform for our target market and designed a content strategy that was focused on daily posts with baited hooks (posts with questions) which would encourage users to comment, like, etc. We used fanning ads within Facebook to drive fan acquisitions and targeted users based on demographics, interest, brands and competitors. The Facebook page has been growing rapidly and is used daily as a marketing communications tool and as a customer service tool. We used the page to run promotions online and in-store and found this to be very effective. Glue runs regular warehouse clearance sales and we decided to promote one event in March via Facebook. We quickly had over 3500 RSVPs and hand an overwhelming response. The event was so successful the riot police had to turn up to control the crowd at one stage. I have some pictures of this... Soft tone, speaking directly consumers All questions – stock enquiries, return questions Competitions Cost effective Viral
Justus March 2011 Now doing a few a year
Justus
Justus The ecommerce market has matured in the last year, realise we need to be smarter in marketing online Different channels have different drivers for consumers Price, latest fashion Need to explore all these options to see what is a good fit for our brand Where does our existing target market lie in channels? Someone looking at clearance channels very different to mobile or social (softer sell) The ecommerce market has matured in the last year and we need to continuously improve our online marketing efforts. There are increasingly more channels you can use and each has different drivers for the consumer. We have looked at the lowest hanging fruit for Glue so far and will be concentrating on mobile and additional aggregation channels. We will also continue to improve our paid and organic search efforts including targeted remarking which has been effective for other sites.
Justus I want to finish off with a summary of the different channels we have used so far and their effectiveness. I have charted this out to compare the cost per visitor over the $ ROI. Email marketing is still the killer app when it comes to fashion ecommerce but you need to consider that email is really a remarking exercise. Any email is generated from a customer that has either been to the website or gone into store which means we most likely had to attract that customer via another channel. SEO has been by far the strongest performer for Glue. We have optimised generic keywords i.e. t-shirts, jeans, etc. as well as all stocked brands g-star which is now delivering a third of all sales. In terms of paid search ShopStyle has been the most effective so far but Google AdWords can offer much more volume. Facebook has not generated significant online sales but has been effective in promoting sales events as I have shown you before. Now keep in mind it has only been 9 months since launch and there is much more todo. If anyone has any questions please feel free to ask, or come and see any of us after this. Tim and I will also be at our stand D6 in the expo hall for the next couple of days so feel free to pop-by. Thanks.