Redcats UK

Redcats UK and Efficient Frontier find success targeting new customers through PPC

The Redcats UK (part of Redcats Group) stands at the forefront of fashion, design and e-commerce with a portfolio of renowned brands. The company runs ongoing PPC campaigns through its search agency Efficient Frontier for three of its most successful online brands; La Redoute, Vertbaudet and Daxon. La Redoute, the Fashion and Home decoration multi-specialist, strives to make haute-couture accessible to everyone. Vertbaudet covers fashion for babies, mothers-to-be, children and pre-teens as well as baby care items, toys, and children's bedroom decoration and furnishings. Daxon offers senior fashion for daily living, combining comfort, elegance, fashion and affordable price.

The Brief

History tells us it is more expensive to acquire new customers than exploit the loyalty of existing ones but most etailers will agree that PPC driving new clients is more valuable than paying for clicks that reactivate existing customers. Redcats UK were especially keen to push new client acquisition through PPC since their brands already had a high degree of customer loyalty.  Redcats UK issued Efficient Frontier with the task to drive users to the La Redoute, Vertbaudet and Daxon websites with a strong focus on new users.

The Solution

The solution presented by Efficient Frontier was based on its unique, powerful search engine marketing technology which uses predictive modelling to automate the bidding process. Efficient Frontier found a way to attribute more importance to the new customer by giving their conversions a higher weighting using their proprietary bid optimization technology. Through historical performance analysis Efficient Frontier's technology was able to learn which keywords were more popular with new clients. The automated technology would then give them a push and a larger portion of budget.

The Results

By weighting new user and existing user revenue differently, Efficient Frontier actively chased new user revenue more aggressively without compromising on those keywords that drive repeat visitors. By doing this, from March - May 09, Efficient Frontier increased the percentage of revenue driven by new users which translated into a significant improvement on this mature, high revenue advertiser.

Following on from the success in this test, Efficient Frontier carefully considered the targets for each keyword group, and the type of customers that they might attract. The decision was made to continue to optimise towards both existing and new customer data for Brand terms, separating Generic terms into their own portfolios to chase new customer revenue only.

One of the interesting trends that emerged saw generic 'fashionable' and seasonal keywords more likely to attract new users. Some examples include 'Ankle Boots' and 'Trench Coats' as well as variations on classic search terms with a modern twist, such as bright colours. In the retail sector, the focus on longer tail generic keywords is increasingly important; in the month of September 09, 48% of keywords that drove new customers had no existing customer activity.

It was also noted that that some core generic terms attracted high volumes of both new and existing customer revenue. For Redcats, it was important to consider the implications of optimising towards only new customer revenue. The portfolio level approach allowed them to introduce a hybrid technique of chasing revenue alongside the new solution.

Jonathan Beeston, European Client Services Director comments, "The adoption of ecommerce and the price comparison nature of the internet means loyalty is much tougher in the digital marketplace. To be able to weight importance to a particular audience is key to succeeding in online retail."

Next Step

Since the data demonstrated a profitable way to target new users, additional resource was allocated into increasing conversions. Efficient Frontier tested a new landing page for "new user" keywords in which a banner appears at the top of every landing page that displays a new customer offer. The banner incentivises new customers to purchase with a £10 discount offer on their "first purchase". After successful testing the banner was implemented to appear on landing pages for all generic keywords.

Guy Knight from Redcats UK  says, "Data is the key to both customer loyalty and digital marketing and it is through Efficient Frontier's sophisticated technology that we were able to successfully target new customers through deep data analysis and automated bidding. This data also gives us insight into the search behaviour of existing vs. new customers, which is an invaluable tool for future marketing decision making."

About Redcats Group

In apparel, home furnishing and leisure, Redcats Group brings together 14 brands in home shopping : Avenue®, Woman Within®, Jessica London®, Roaman's®, KingSize®, The Sportsman's Guide®, The Golf Warehouse®, La Redoute, La maison de Valérie, Vertbaudet, Cyrillus, Somewhere, Daxon and Ellos, present in 30 countries. Redcats Group generated 3.69 billion euros of sales in 2008, including 42.2% on Internet and employs approximately 20,000 associates. Redcats Group is based on a multichannel distribution network combining e-commerce (more than 60 web sites) catalogues and stores (nearly 600). Sales are split between France (48.3%), USA (29.7%), Scandinavia (8.7%) and the rest of the world (13.3%). Redcats Group is a PPR Company. For any further information: www.redcats.com