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With ROAS up by 120%, Dermstore Unlocks Ongoing Opportunity on Google Shopping

THE SCOOP

Data-driven decision making is the mantra in the marketing department at Dermstore, the second largest skincare and beauty e-commerce site in the U.S.

This Target subsidiary has no shortage of e-commerce data for its broad product catalog. The challenge is understanding that data and being able to use it to optimize Google Shopping ROI at scale. That’s why Dermstore sought a new partner—Sidecar—to turn Google Shopping into a time-saving and cost-efficient revenue driver.

PROFILE

Retail Category
Health and beauty
Website
dermstore.com
Headquarters
El Segundo, CA
Channel
Google Shopping

The GOAL

Harnessing Meaning From Data

Dermstore faced a challenge that plagues many large retailers with diverse product catalogs: turning volumes of e-commerce data into strategies for scaling Google Shopping performance. More elusive: doing that for every product in the catalog, without straining human resources.

“We have a lean SEM team of two,” said Joshua Lane, Senior SEM Manager for Dermstore. “We created and managed all product groupings manually through Google Ads, and used an in-house bidding tool to help save time setting bids.”

At the time, Dermstore was structuring campaigns based on price ranges. This is often a more effective strategy than the traditional approach of grouping products by type and category. Still, Dermstore saw that some products were underperforming, and wanted to isolate them to set different bids.

“Our approach wasn’t letting us go deep,” said Bumsoo Kim, Director of Marketing for Dermstore. “We knew that our products range in performance throughout the year, depending on factors like seasonality and promotions. We wanted to break out products based on that performance and search interest. But it was impossible to analyze data manually and bid products individually.”

Like many retailers, Dermstore also found that its mobile shopping ads on Google had low performance. The retailer recognized it had the data to inform an intelligent mobile strategy, but lacked the bandwidth to create one.

Lane added: “Our team simply didn’t have the opportunity to optimize campaigns and determine how to take our Google Shopping effort to the next level.”

That’s when Dermstore started evaluating the market for a partner with the expertise and approach required to manage a complex and data-intensive channel like Google Shopping. Dermstore appraised several technology solutions that supported Google Shopping. Sidecar for Shopping stood out on several measures.

“Sidecar would occupy very little of our team’s time,” Lane said. “Its machine learning engine is highly sophisticated. We can just put in our main KPI—return on ad spend—and know the technology will work efficiently to meet our goals. We were also very comfortable with Sidecar’s account services and the e-commerce team who’d be guiding our success.” 

BY the Numbers

550
Brands
in product feed
31x
Mobile Revenue Growth
in 6 months
120%
ROAS Improvement
in 6 months YoY
40
Hours Saved
per month

The STRATEGY

People + Data + Algorithms

Dermstore worked with its dedicated customer strategy team at Sidecar to discuss its business goals, historical performance, and competitive landscape. The partners defined a new Google Shopping approach that would allow Dermstore to capitalize on its swaths of e-commerce data to meet aggressive return goals for Google Shopping.

This approach started with a thorough review of Dermstore’s feed to optimize product attributes. Sidecar’s team restructured Dermstore’s campaigns based on desktop and mobile traffic to begin improving ROI by device—a key growth area for the retailer.

The team implemented Sidecar for Shopping to manage these campaigns. The machine learning technology is designed to ingest multiple and varied datasets unique to the retailer—its product data, user location, search query trends, device performance, and audience behavior.

This data fuels the algorithms’ bidding decisions for each of Dermstore’s products, every day. As this data accrues, Sidecar deepens its understanding of the retailer’s catalog, performance trends, and search behavior surrounding its products. The result is even more customized algorithms that continually grow in their ability to make decisions personalized to Dermstore’s business.

Even products with little traffic receive an intelligent, data-driven bid. That’s because Sidecar’s algorithms collect and attach relevant data to these products to inform the bidding strategy and drive performance.

“We saw an immediate lift in desktop and mobile performance with Sidecar,” Kim said. “After just the first week, Sidecar improved the ROAS of our desktop Google Shopping ads by 108%. ROAS of mobile ads improved by 212%.”

Performance grew consistently over the next several weeks. Dermstore and Sidecar determined it was time to take the approach to the next level.

“Dermstore is looking for a partner who can help us scale,” said Kim. “Shopping ads will become an increasingly larger player in the coming years. We need to control and maximize what those ads can do for us. That’s why we work with Sidecar.”

Sidecar recommended Dermstore prioritize search queries in its Google Shopping strategy—an approach aimed at driving another major goal for the retailer: increased ROI. Sidecar’s team created campaigns for traffic originating from branded search terms. This traffic tends to be more likely to convert, and as a result, is often worth higher bids.

Sidecar also created other campaigns for traffic coming from non-branded search terms. This traffic is typically less likely to convert, and is frequently an area to save spend. These campaigns were added to the already-existing device-specific campaigns.

Sidecar then implemented the Search Query Manager capability of its Google Shopping solution. The feature analyzes every search term driving traffic to the retailer’s ads. Based on the traffic’s conversion potential, Sidecar adjusts product bids to meet Dermstore’s goals.
Shopping ads will become an increasingly larger player in the coming years. We need to control and maximize what those ads can do for us. That’s why we work with Sidecar.
Bumsoo Kim
Director of Marketing for Dermstore

the results

ongoing opportunities

Dermstore saw significant performance gains during its first six months with Sidecar. Google Shopping revenue grew by 212% year over year. ROAS improved by 120%. Mobile ads began performing well for the first time, generating a 31x revenue increase, while their ROAS improved by 288%.

At the nine-month point, Dermstore’s Google Shopping revenue was up fourfold year over year. ROAS was up by 156%. Additionally, since the partnership began, Sidecar has followed through on its ability to save time, giving 40 hours back to Dermstore monthly.

As revenue and ROI have consistently improved, Dermstore has added new budget to Google Shopping. “We’ve seen Sidecar’s technology meet and exceed our KPIs, giving us the confidence to invest more on Google Shopping,” said Lane.

The improved performance has translated into stronger brand visibility on the Google search engine results pages. “We realized early on that product listing ads would become a central part of e-commerce marketing. Today, Google Shopping is a critical way we maintain strong brand visibility and stay in front of our customers, whatever product they’re seeking,” Kim said.

Dermstore’s shopping ad success has also contributed to new optimizations within its paid search strategy. “Because we’ve found success now with both shopping and paid search ads on Google, we can push certain brands and products through one format or the other, depending on what the competitive landscape is like and how our items perform there.”

Perhaps most important, Dermstore has no plans to simply enjoy the success. It’s looking to explore new ways to apply Sidecar’s core technology and continually optimize performance with its customer strategy team.

“We’re always asking ourselves, what’s next?” said Kim. “We’re collaborating with Sidecar to determine how we can leverage our partnership to take our business to the next level. We’re focused on initiatives like uncovering the areas of our catalog that can become even more efficient, and better optimizing our feed.”

Continuous improvement can become challenging, however, in the face of evolving business goals and a shifting retail landscape. Dermstore is confident in its relationship with Sidecar, and the support Sidecar can provide to scale performance.

“Goals can change quickly and often in e-commerce,” said Kim. “One month or quarter could have a big revenue push. The next month or quarter could be focused on ROI and margin. On top of that, like many businesses, our marketing KPIs and strategy shift every year. We look to Sidecar to adapt to those changes and evolve with our business needs.”

Kim summed up Dermstore’s perspective on its partnership with Sidecar: “Not only are we seeing great performance, but we have so much more to look forward to with Sidecar, as a partner and a technology." 

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