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How Margin-Based Bidding Surged wehkamp’s Profitability in Google Shopping

THE SCOOP

wehkamp is the Netherlands’ largest online retailer with 145 million annual site visitors. It began as a mail order company and launched its digital store during the infancy of e-commerce in 1995. Now purely online, wehkamp prioritizes innovation to stay ahead in the Dutch market. That’s why the retailer started working with Sidecar.

PROFILE

Retail Category
Apparel & Lifestyle
Website
Location
Zwolle, Overijssel, Netherlands

The Problem

untapped opportunities

Google Shopping has become a key channel for wehkamp’s search campaigns, providing the reach the retailer needs to expose its 300,000 products to consumers across the Netherlands. But during its early foray into the channel, the retailer hit a sticking point.

“Our main challenge was profitability,” said Peter Gerritsen, Online Marketing Analyst for wehkamp. “We have a large product assortment with very different profit margins. There’s no way that one campaign and one ROAS target would let us achieve profitability throughout our entire catalog.”

Instead, wehkamp identified a ROAS target for each of its five product categories, and created several campaigns for each category. But with this structure, some products were drastically underperforming, while others were drastically overperforming, hampering wehkamp’s ability to generate maximum revenue from every item.

The retailer recognized it could improve profitability by taking a totally new and different approach to Google Shopping: It wanted to group its products into campaigns based on margin, and assign each campaign a ROAS target that aligned with the margin and overall business goals.

Implementing this strategy manually would be nearly impossible due the sheer complexity and volume of data that wehkamp would have to manage. The retailer began pursuing an automated, data-centric technology that would relieve wehkamp of manual work and let it achieve a high level of granular control. While evaluating solutions, wehkamp discovered Sidecar for Google Shopping.

“Sidecar for Google Shopping makes decisions based on many large datasets, not guesswork,” said Gerritsen. “It can also manage our catalog by margin. No other technology we saw could do that. Those are just a couple reasons we chose Sidecar.”

BY the Numbers

300k
Products
in catalog
27
ROAS Goals
in Google Shopping
27,031
Automated Bid Changes
in 90 days
185%
Mobile Revenue Growth
YoY

The solution

Managing by margin

Sidecar’s e-commerce team helped wehkamp identify 27 new ROAS targets and created 54 campaigns, each containing products with similar margins. Those campaigns are now optimized by Sidecar for Google Shopping.

The technology uses machine learning algorithms to continuously digest and analyze channel data, sitewide metrics, product attributes, and search behavior to gain the most precise picture of trends impacting overall campaign performance.

“Google Shopping is all about the numbers, so using a complete dataset is a big advantage for us,” said Karim Kamel, Online Marketing Specialist for wehkamp. “Before Sidecar, we were making decisions based only on our Google Shopping metrics, which limited our understanding of how our products were really performing.”

As the technology learns performance trends, it continues to drive a smarter and more efficient bidding strategy. This bidding strategy includes managing desktop and mobile traffic separately, enabling the technology to optimize spend based on different consumer behaviors.

The bidding strategy also includes Sidecar’s Search Query Manager. This capability analyzes the performance of searches to rank queries—and individual words within them—according to their value to wehkamp’s business. The technology assigns corresponding spend to keywords to help maximize ROI.

“Sidecar makes Google Shopping success look effortless—although we know the technology is hard at work every day, making sure we’re taking advantage of all the right opportunities in the right way,” Gerritsen said.  
Sidecar’s technology helps our marketing department scale and become more strategic. It gives us automation, efficiency, intelligence—and most important, profitability.
Karim Kamel
Online Marketing Specialist for wehkamp

the results

it's the little picture that counts

wehkamp has gained extreme granularity around its Google Shopping effort with Sidecar. The retailer has nearly twice as many campaigns, all based on margin and each with a fine-tuned ROAS goal appropriate for every product in a given campaign. As a result, wehkamp is able to drive profitability at a product level while maintaining all its ROAS goals.

Mobile has also shown significant growth, now that Sidecar is capitalizing on opportunities for individual products to generate revenue and save spend, according to device. Revenue from smartphones is up by 185% year over year.

“Sidecar’s technology helps our marketing department scale and become more strategic,” said Kamel. “It gives us automation, efficiency, intelligence—and most important, profitability.”

The technology learns more about wehkamp’s market and catalog every day, enabling it to manage campaigns with greater granularity over time. Sidecar made 27,031 automated bid changes in the first 90 days—an average of 2,102 weekly. Nine months later, the technology averaged 2,774 automated bid changes weekly, a 24% increase.

wehkamp also continues to work closely with its dedicated customer success team at Sidecar to develop its Google Shopping strategy, plan for promotions and other seasonal shifts in demand, and ensure the technology is generating the best possible results the retailer can achieve from Google Shopping.

“We don’t have to constantly check our results to know that Sidecar is on track with our goals,” said Gerritsen. “Sidecar’s team is always thinking with us and looking for new opportunities to grow Google Shopping into an increasingly successful part of our e-commerce strategy.”

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