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How Lighting New York Made Google Shopping a Cornerstone of Its Multichannel Marketing

THE SCOOP

Lighting New York is one of the largest online retailers for lighting in the U.S. Part of its success is due to a highly sophisticated paid search strategy that is supported by cross-channel conversion tracking. That approach allows Lighting New York to identify when its online marketing efforts drive sales on other channels. However, it struggled to attain strong profits on Google Shopping. Maintaining individual bids for its massive catalog proved challenging, but the retailer knew that if it could scale campaigns for its entire catalog, and better leverage its cross-channel data, Google Shopping could be a lucrative channel. That’s where Sidecar came in.

PROFILE

Retail Category
Lighting & Decor
Website
Headquarters
New York City, NY
Channel
Google Shopping

The GOAL

Achieve Profits at Scale

Founded in 1992, Lighting New York has become a leading online retailer for lighting fixtures and home decor, boasting over 130 brands and more than 200,000 SKUs. A large part of the retailer’s success is its paid search program, which drives a significant portion of online sales. The retailer also experimented with Google Shopping while it was in beta and had initial success. But once Google released the ad format to the public and competition increased, Lighting New York found it much more difficult to drive profits.

“Manually managing a platform like Google Shopping at scale is very hard, particularly when you have the amount of inventory we have,” explains Aaron Covaleski, Manager of Digital Advertising at Lighting New York. “We have a relatively small performance marketing team and creating the campaigns for these one hundred-plus brands and adjusting the bids across those campaigns was really time intensive.”

Because the returns did not justify the effort, Lighting New York invested very little in the Google Shopping channel and the team relegated it to a small part of the overall marketing strategy. Still, Aaron knew that if his team could find a solution that took away some of the manual burden while implementing a data-driven, granular approach to bidding, the channel could become incredibly profitable and fill a gap in Lighting New York’s marketing strategy. That was what drew him to Sidecar.

“We looked at several different technologies and solutions, but Sidecar stood out for two reasons: the strategic collaboration with its channel experts and the company’s Search Query Manager technology,” says Aaron.

Aaron realized Sidecar’s Search Query Manager, a core feature of Sidecar’s channel solutions, could empower Lighting New York to automatically focus greater spend on high-intent and high-converting search queries, and cut spend on the under-performers.

Search Query Manager, used for both shopping and paid search ads, analyzes words and phrases in consumer search queries to automatically identify and categorize new positive and negative keywords, allowing them to be organized into separate ad groups, with the right bid.

“We had looked at keyword targeting as the solution for Google Shopping in the past,” says Aaron. “It's very hard to do at scale, but we saw that Sidecar’s AI technology would enable us to target high-intent keywords for a couple hundred thousand SKUs. That was a really big deal, and it was a huge deciding factor in working with Sidecar.”

BY the Numbers

200k
SKUs
on lightingnewyork.com
32%
Revenue Growth
in first four months
13%
Increase in Conversions
in first four months
2%
Decrease in Cost
in first four months

The Strategy

Focus on High Intent Queries to Amplify Returns

Lighting New York launched with Sidecar in September of 2018. The AI-driven and automated approach to Google Shopping made an immediate impact, with revenue more than doubling in the first four months, compared to the prior period.

During this time frame, Lighting New York set a goal to increase ROAS by 140%.To meet this benchmark, Sidecar’s team built the campaign strategy around high-intent search queries and top performing products. Sidecar employed its artificial intelligence technology to quickly identify high-performing products and increase bids accordingly, while reducing spend on low performing SKUs.

For example, in the lighting market, most fixtures come with multiple parts and the part numbers are often included in high-intent searches. “Anyone who is searching for a very specific part, and includes that part number in their search, knows what they’re looking for,” explains Aaron, “They’re ready to buy.”

Because the Search Query Manager is built on natural language processing (NLP) technology, it is able to recognize these valuable queries and direct those searches to a high-intent, numerical campaign. This campaign has significantly higher bids than the non-numerical campaigns, ensuring that Lighting New York’s ads appear before high-intent shoppers.

Similarly, Sidecar also created a branded campaign, which targets search queries that include any of the brand names that Lighting New York sells. Using NLP technology, Sidecar can identify any variation of a branded query, regardless of whether the brand is spelled correctly or not, and determine what level bid will drive the greatest return for that specific query.

Sidecar also took into account upper and mid-funnel searches by creating a non-branded campaign. This campaign is bid lower than the branded and numerical campaigns so that Lighting New York can still engage these shoppers without hurting overall profitability. Sidecar’s NLP technology can even identify when queries have a research intent, such as “best outdoor lighting,” and bid these top-of-funnel searches appropriately. This allows Lighting New York to map its marketing funnel to Google Shopping and nurture consumers at every stage of the shopping journey.

A critical aspect to Lighting New York and Sidecar’s partnership is how the organizations collaborated to incorporate Google Ads into a multichannel marketing approach. Lighting New York understands that Google Shopping ads influence sales on a variety of channels, both on and offline.

Using Data Driven Attribution (DDA) and phone conversion tracking, Lighting New York is able to see how its Google Shopping campaigns drive sales across channels. DDA is Google’s algorithmic attribution model that assigns credit to each channel that influences a sale. Sidecar’s team uses data from both DDA and phone conversion to gain a better understanding of overall performance and better guide the profit-driven strategy.

For example, if a shopper clicks on a Lighting New York shopping ad and then later calls the retailer to make the purchase, Lighting New York’s conversion tracking tool, paired with DDA, attributes a portion of that sale to both Google Shopping and the phone order. A significant portion of Lighting New York’s revenue on Google Shopping is tied to these phone orders. With greater insight into this data, the Sidecar team can better structure and optimize campaigns and take into account the full marketing funnel to identify new opportunities.

Finally, as more data accrues on these campaigns, Sidecar’s customer success team continually evolves the strategy while the technology targets more granular behavior. “Because the campaigns have matured, Sidecar is now able to take into account different pricing tiers, layer in demographic data, and take into account psychographic data,” says Aaron. “Those changes will help refine these campaigns over time and make them even more efficient.” 
Sidecar has opened an entirely new revenue stream for us that we weren’t able to tap before.
Aaron Covaleski
Manager of Digital Advertising
Lighting New York

the results

A Brand New Revenue Stream

In the first four months of working with Sidecar, Lighting New York saw an immediate impact on its Google Shopping campaigns. Attributed revenue increased 111% period-over-period. Conversions increased 87%. Conversion rate grew 83%. What’s particularly impressive, and highlights Sidecar’s strategic focus on profitability, is that amidst all of this growth, overall PLA cost decreased 2%.

Aaron says that Lighting New York would not have been able to achieve this level of efficiency, at scale, without Sidecar’s AI and automation technology. That automated, deep learning approach identified highly profitable products that were not driving conversions for Lighting New York in the past. “Sidecar has opened an entirely new revenue stream for us that we weren’t able to tap before,” says Aaron.

In addition, Lighting New York had full transparency into how its campaigns were tracking with Sidecar’s reporting platform Sidecar Connect. The platform empowered Aaron and his team to quickly track metrics like ROAS, revenue, conversions, conversion rate, and more. “Having the ability to check that data and have a single source of truth when I'm evaluating Sidecar’s efficiency was incredibly helpful. It made it much easier to report on key deliverables to my management team and allow them to better evaluate our Google Shopping performance.”

He adds that Sidecar’s people, along with its technology, were critical to the retailer’s Google Shopping success: “Sidecar’s customer success reps have been rock stars. They don't rest on their laurels. Every time we have some new metric of success, they're immediately digging into the data and looking for the next way we can push it forward.”

Looking ahead, Aaron is excited to see how recent campaign updates, including breaking out products by price tiers and targeting specific demographics on Google Shopping, will impact growth. “As Sidecar accrues more data, and our campaign structure becomes more sophisticated, we anticipate Google Shopping will drive even more revenue for the business in the months and years ahead.” 

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