Selling everything from toys and clothes to home goods and baby gear, Shopko operates over 360 stores in small to mid-sized communities in 25 states. One of Shopko’s biggest pursuits for 2017 was the Buy Online, Pickup In Store (BOPIS) initiative. This effort drives in-store traffic from online purchases and takes advantage of high margins without having to deal with shipping costs. Once in store, customers also tend to buy more than just the item they came for, effectively increasing AOV by cross-selling in-store.
One of Shopko’s highest priorities in 2017 was to optimize cost efficiency from search and shopping specific to BOPIS. The client saw online advertising as an opportunity to drive in-store traffic where margins are particularly high and profitable. As long as margins were strong, their ROAS goal could be flexible.
Our biggest challenge: moving the needle for BOPIS without Local Inventory Ads.
First, we implemented a restructuring of Shopko’s AdWords account so they would be primed for sustainable and scalable success through the holidays. We adjusted all targeting by creating separate campaigns into two audiences: (1) consumers within 40 miles around a Shopko business location, and (2) audiences nationwide with interest in Shopko products.
By pouring more budget into store radius campaigns, we were able to drive much higher impression share regionally where conversion rates and store visits were higher. National campaigns were then optimized to ROAS since in-store visits were significantly less likely to occur.
Once in store, customers also tend to buy more than just the item they came for, effectively increasing AOV by cross-selling in-store.
We also broke out device-level segmentation and restructured bidding optimizations for more consistency. We created separate campaigns targeting desktop, mobile and tablet devices to allow fluid and nimble optimizations.
Desktop traffic traditionally drove the most efficient online revenue, but we covered our bases by cutting desktop and switching to mobile-forward budgeting after the December 16th Shipping Cutoff date. We did this to drive both store visits when shipping was no longer available and also for regional campaigns just before big in-store sales. Doing so drove a 115% increase in BOPIS orders YoY.
The second phase of our restructuring involved moving budget away from Non-brand Search terms and shifting that money into Product Listing Ads. Transferring spend this way ensured we spent Non-branded dollars more efficiently—Non-brand budget went from 17% search/83% PLAs to 9% search/91% PLAs—and created significant growth in revenue: with a massive increase in budget, Shopping went on to produce 98% of total revenue compared to 58% the year prior.
Another particularly profitable approach for Shopko went against what most advertisers strive for during the holiday season: Front loading spend before Thanksgiving.
From Shopko’s perspective, if sale products are priced too competitively, overall profit during sales are lower than non-sale days. This budget flighting strategy meant big pushes in spend during early November to account for higher margins and pulling back over the Black Friday to Cyber Monday time period when competition heats up; we prioritized in-store visits during the big day instead. Doing this increased profitability 9% YoY for the weeks leading up to Thanksgiving and a profitability increase of 73% YoY for Black Friday.
Our team pushed BOPIS products specifically by investing in ad groups and product categories that indexed high in-store visits based on Google Analytics ID-level reports. These reports listed products that people historically bought online and picked up in store, so we pushed spend to those exact products to drive more traffic and orders. We also expanded that scope to push other products that were similar (based on “product type”).
This strategy drove higher visits as tracked by Google and maximized store traffic during a particularly crucial time period. By driving growth in products linked to store visits, we were also able to create the opportunity to upsell customers while they were shopping at a brick & mortar location.
For example, we noticed kitchen utensils over-indexing in store visits before Thanksgiving, so we pushed spend to spatulas, serving spoons, whisks, and the like to continue maximizing store traffic.
With this targeted increased spend on kitchen utensils, for example, PLAs drove the number of store visits up 254% WoW and increased revenue 218% from in-store visits during the week before Thanksgiving.