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PRIMEAU VÉLOOMNICHANNEL DRIVING IN-STORE SALES
How Primeau Increased Sales by 27% During Bicycle Retail’s Worst Year In a Decade
MARKET CONTEXT
BIKE SHOPS ARE HURTING. A LOT.
-39.5% MASSIVE DECREASE
in the number of independent bicycle shops in the U.S. in the past 15 years.
(Statista)
-8% YoY SALES
“Suppliers shipped 8% fewer bikes over the first 9 months of 2016 compared with the same period in
2015” (BPSA, October 2016)
+27% Primeau YoY growth in
first 6 months of Omnichannel.
Omnichannel started paying off on day 1.
-THE MARKET- -PRIMEAU VELO--THE MARKET-
Except one, apparently...
MARKET CONTEXT
WHAT HAPPENED
Since 2009, the rise of pureplay eCommerce cycling juggernauts like Chain Reaction Cycles, Wiggle, ProBikeKit and others have changed cyclist expectations when it comes to service, pricing and the entire bicycle and bike accessories shopping and buying experience. Cyclists instantly went from the bike shop to the Web, where their favorite brands are discounted on a daily basis.
With Amazon-like competitors selling some components for near cost (and shipping them for free anywhere in the world), passionate cyclists can now find a better deal within minutes. Ouch. Then, in 2016, the cycling market as a whole started slowing down.
Instead of bracing for impact and managing “through the storm”, Primeau Velo did what any bike racer would; they went all-in for the win and used omnichannel to reinvent their business.
Here is what their pure omnichannel experiment looks like, 1 year later.
HOW IS PRIMEAU VELO
OUTPERFORMING THE MARKET?
+
An Omnichannel Story Almost 100 Years in the Making
The Primeau family has been building its reputation in the cycling business
for nearly a century, and each generation has left its mark.
1928
Lucien Primeau opens a bike rental shop in Montreal’s East-End, renting bikes for 20¢ a day.
1957
André Primeau, Lucien’s son, opens Primeau Cycles on Montreal’s south shore.
Pierre Primeau, Lucien’s other son, opens a separate Primeau bike shop on Montreal’s north shore.
1974
Éric Primeau, Lucien’s grandson, partners with André, his father, before eventually buying his shares as well as his uncle’s business in 2009, creating Primeau Vélo.
1988
All-In on Omnichannel. Primeau Vélo undertakes a complete makeover, from brand to site, from stores to backstore (ERP, etc.).
2015 2017
After 1 year, every element of the eCommerce business plan has been achieved and Primeau Vélo is growing fast in an unstable market.
A bicycle retailer with 2 stores, 3 generations and nearly 100 years of history,
Primeau Velo saw the tide changing and decided to go all-in on omnichannel.
Primeau’s killer combo: combining extremely knowledgeable and passionate
staff, local shop sentiment and world class infrastructure.
PRIMEAU VELO
The StrategyDeliver an omnichannel
environment that provides the in-store feel through every interaction, then
promote the heck out of it. The local bike shop just
went global.
The Plan Do or die.
Reboot the entire infrastructure and approach to selling by going “all-in” on
omnichannel, meeting passionate customers
where they already connect and play.
The PartnersPrimeau worked with
Absolunet to combine Magento’s omnichannel
potential with the agency’s market-beating digital
performance expertise, as well as Microsoft’s LS Nav
Retail solution and ERP as well as InRiver’s PIM System.
Cross-pollinate leads.
Facilitate pre-purchase research and interactions on
every channel, providing a consistent experience that
matches the cycling enthusiasm you find in
store.
Leverage to ROPO Effect.
“Research Online, Purchase Offline”. Use
every customer touchpoint to facilitate the customer
journey and answer questions.
Attack + optimize every angle.
Match resources to opportunities and capitalize
on the cycling fraternity. From selling in the off-season to using chat to drive in store
traffic and reducing in-store time-to-sale by 50%.
Mission: Increase 1:1 interactions while
making the digital shift and going all-in on omnichannel.
OF A BIKE RETAILER’S SALES OCCUR IN THE SPRING.
Actionable Insight
75%
In-store sales increased 27% year-over-year while elsewhere, the market is going down.The general consensus among North-American bicycle
retailers was that 2016 was one of the more disastrous years
in recent memory. No one told Primeau Velo, who were too
wrapped up in their omnichannel shift to notice. That, and
the 27% sales increase in their stores, achieved without
increasing payroll.
90% ROPO EFFECT: $9 generated in stores for each dollar sold online in Q1-2016Primeau’s Q1-2017 ROPO Effect is estimated at 90%
compared to an already desirable 70% computed for the
same quarter last year. That means that for every $1 sold
online, digital has created $9 of in-store revenue.
A Few Key FiguresLESS THAN ONE YEAR LATER
eCommerce generated 20% of “slow season” sales during Q1
While eCommerce’s share of sales is generally considered
mature once it reaches between 5 to 10% of total sales,
Primeau Velo’s site generated 20% of total sales during the
first quarter. The digital investment is having a huge impact in
the pre-season - every bike shop owner’s dream/best case
scenario.
Primeau’s first quarter eCommerce sales have already matched 70% of all eCom sales from last yearQ1 sales have positively affected the forecast for the year in
progress and put the retailer in a strong position, both
competitively and financially, to ensure that 2017 is the
company’s best year yet, sales-wise!
A Few Key FiguresLESS THAN ONE YEAR LATER
SECRET WEAPONS
RESEARCH ONLINE, PURCHASE OFFLINE
OMNICHANNEL EXPERTISE
Leveraging The ROPO Effect.
1
The ROPO EffectResearch Online, Purchase Offline
Improve the omnichannel integration to foster the ROPO effect
Today’s customer journey is increasingly complex and
nonlinear. The ROPO effect showcases how different
channels work together to contribute to omnichannel sales.
Research online, purchase offline (ROPO), is a new trend in
buying behaviour where customers research relevant
product information to qualify their buying decision, before
they actually decide to buy their favourite product in the local
store.
For example, a poor ROPO effect of 50% indicates that for
each sale generated online, one sale was generated offline
thanks to the web; a 1:1 ratio. In Primeau’s case, the ROPO
ratio is currently at 9:1, or 90% (the higher, the better. 90% is
off the charts.)
Thus, a strong digital strategy not only has a strong impact
on eCommerce sales, it can have an even stronger impact on
offline sales and overall Omnichannel growth thanks to the
ROPO effect.
Partner Insight:
STRATEGIC ADVANTAGE
THE ECOMMERCE BUSINESS PLAN
PERFORMANCE MARKETING EXPERTISE
Omnichannel growth + marketing governance: When and how to use an
eCommerce Business Plan (eBP)
3
Primeau Velo’s move towards digital leadership was never a technological decision; it was a business decision.
Before any code was touched, Primeau mandated Absolunet to devise an eCommerce Business Plan (eBP), which takes a high level approach to any digital initiative and applies it in a real world, real business context; a blueprint for any business’ omnichannel and digital ambitions, that provides a roadmap and key decision-making insight throughout the process.
Betting the business on Omnichannel and the digital experience: Not without an eBP.
Primeau Velo’s eBP provided:
● Sales and marketing projections, including multiple customer journeys based on variable personas as cycling touches a broad and diverse customer base
● An end-to-end SEO and SEM forecast, including winnable battles and ROI projections based on multiple scenarios (% of sales that can be generated from Google, FB, etc.)
● SWOT and competitive benchmarks to understand Primeau’s context in a digital marketplace
● Insight into consumer behavior that could be capitalized upon.
After 6 Months:
○ Real sales and marketing figures were within $1 of the eBP’s projections.
○ Preliminary financial results for the recently completed fiscal year show that Primeau is ahead of eBP projections and is revising, with Absolunet, their already ambitious growth projections for 2017 and 2018.
The eCommerce Business Plan and Roadmap: Does it work?
● Take advantage of the new site’s potential to improve visitors’ omnichannel experience
● Compute the ROPO effect● Make accurate financial forecasts per
channel and maximize the eCommerce net profit margin
● Diversify traffic sources to avoid dependence, with a strong focus on ROI
● Enhance the customer journey by improving personalization of the online experience and online interactions with the retailer
● Better clarify online promotions, ensuring visitor’s understanding regardless of point of entry
● Reinforce omnichannel synergies
From day-1, Primeau’s eBP has enabled them to:
Primeau still uses the eBP to:● Be used as a business roadmap which is
updated annually, include per channel revenue breakdown
● Plan and control eCom and eMarketing expenses, considering HR and COGS.
● Measure performance and agree on upcoming priorities
● Defining key SEO battles and track optimization progress
● Create campaign-relevant landing pages to ensure a consistent message
● Develop new features based on learnings
● Identify the best technological partners to serve the eBP objectives
Absolunet’s growth marketing team developed an extensive SEO checklist specifically for Magento-powered platforms. Primeau is using it to crush SEO in its market.
● Primeau’s platform was designed for conversion, to take the customer on a journey from Search to Sale. The checklist, along with constant optimizations, allowed the retailer to not only own the SEO-space in a competitive landscape, Primeau actually doubled its “search-driven-sales”.
● Absolunet’s SEO checklist is applied to every Magento project’s SEO lifecycle. It is a grid-based approach which measures a client’s detailed objectives, priorities and KPIs against a list of every SEO point to be implemented.
● Combining experience with best practices and data-driven insight with up-to-the-minute expertise, Primeau was able to identify and seize every opportunity to win the fierce SEO + SEM battles in its in market.
How Primeau Uses SEO+SEM to Generate 70% of Online Sales.
1 OF EVERY 3 IN-STORE
CUSTOMERS SHOWS UP WITH THEIR PHONE IN
HAND
#ROPO EFFECT
Omnichannel Insight
Post-omnichannel-shift, 1 out of 3 in-store visitors had their phone in hand with information or parts they were looking at, or looking for.
ONLINE CONVERSIONS JUMP TO 30% WHEN A CHAT SESSION IS INITIATED.
20% OF IN-STORE VISITORS USED CHAT TO ASK PRODUCT QUESTIONS BEFORE COMING. #ROPO
Omnichannel Insight
TECHNICAL CHALLENGE
INTERDEPENDENT SYSTEMS
TECHNOLOGICAL EXPERTISE
Making it all work together
2
Primeau “All-In” omnichannel shift wasn’t exclusively a financial move. The sheer technical complexity and implications of every element of the business had to be carefully evaluated, planned and deployed. In Primeau’s case, the technical/technological/logistical ballet had to take into consideration the following:
● Absolunet implements Magento ● Bell Createch implements Microsoft NAV ERP● InRiver’s PIM system integrated into and synchronized to Magento to create
Primeau’s endless aisles and meet customer demand ● Integration of LS Retail’s Point of sale system● Synchronize Smart-Etailing for all product information● Branding partner completely revamps Primeau Velo’s brand and brand
collateral● Financial consolidation of 3 Primeau Velo structures into one, including a shift
from one accounting system to another.● All automated. All synchronized. All in the same fiscal year.
Synchronizing data, Implementations and partners. Oh my!
Synchronizing data, Implementations and partners. Oh my!
ONE YEAR INTO OMNI
CHANNELKey Performance Indicators
Summary of Primeau Velo’s KPI, One year after the omnichannel shift:
● 27% Year-over-year (YoY) sales increase
● In-store sales increase
● Higher revenue per employee
● Extended selling season
● Multiple contact points (Website, Messenger,
LiveChat, In-store, Phone)
● Faster inventory turnaround
● Reduced in-store time-to-sale from 40 to 20
minutes
● Revised revenue growth forecast for year 2
● Exploring new channels and marketplace
opportunities
Partner Insight:
Massive Omnichannel growth is no accident.
It starts with a company’s vision and
their will to see it through.
It then becomes a matter of choosing
the right partners, the right strategy and
the right technologies.
Which is where Absolunet comes in.
We help organizations transform digital
potential into business results.
Key Takeaways
A digital growth strategy drives
business results.Sustained ROI stems for a well-devised
yet adaptable strategy. Multiple gains,
achieved through relentless analysis
and optimization, help these
incremental improvements achieve a
tipping point. A “Fail-fast” approach
must be combined with business sense;
the client/agency relationship is at the
core of every successful omnichannel
story.
Omnichannel still requires great service.
Primeau’s approach remains true to their
roots as competitive cyclists and their
passion transpires at every customer
touchpoint; from chat to site to store, all
the way to the continued relationship they
maintain with their clients long after the
initial purchase; the brand’s pulse can be
felt throughout the entire customer
journey. Omnichannel is vital to their
digital capacity, but it is Primeau’s passion
for cycling that creates the customer
connection.
Ready to become the next eCommerce success case study?
Jason Hughes
Vice-President of Sales
jhughes@absolunet.com
+1.877.979.2276 ext. 391
We should talk.Charles Desjardins
Partner, Executive Vice-President
cdesjardins@absolunet.com
+1.877.979.2276 ext. 301
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