Using Multi-buy Promotions to Increase Average Order Value by 23%

Zoku hired us to elevate the brand above the noise in the US marketplace in an already saturated category. The brand has the added complexity of being premium priced within the category. Its product portfolio comprises space-saving storage solutions and on-the-go products to help transport and store food for school lunches, offices, picnics and beyond. With a vast product suite, we were able to leverage multi-buy promotions that led to a sharp increase in Amazon’s Average Order of Value.

Opportunity

As premium-priced products in an ultra-competitive category in the US marketplace, Zoku realised it would need to explore all avenues to reach its full potential on the platform. Although the brand already had some solid sellers, the sales of the broader portfolio needed to increase. After trying several tactics, none of which got the desired results, they sought a partner.

They realised they would need an Amazon agency partner to help them get the most out of the Amazon US marketplace. In addition, they wanted an agency that could provide a clear and achievable plan for their wider product portfolio that would result in significant growth.

Zoku turned to FordeBaker to find the answers to what works (and what doesn’t) on Amazon. They wanted an agency with experience and capabilities of handling premium-priced products in competitive categories that had a significant deal of seasonality about their products. With vast experience in all these facets of Amazon, we began working with Zoku to help them get the most from the US marketplace.

Solution

A fundamental principle when we kick off with any new client is to learn as much about the brand as possible and do a deep dive into all the products and competitors both on and off Amazon to get a crystal clear picture of where the brand stands amongst the market and the opportunities still to be explored.

As part of this deep dive:

• We reviewed the client’s and competitors product pages on Amazon to identify the products that are frequently bought together
• Carried out market basket analysis, enabling us to understand consumer purchase behaviour on a deeper level
• Reviewed ranking data to understand product-level performance and also spot seasonal trends
• Utilised this information to combine seasonality and consumer behaviour to create impactful multi buy promotions that grouped complementary products
• Combined less popular products with more popular ones and helped give the low-performing products a boost as a result.

The multi buy promotions have the added benefit of a lower acquisition cost, as you only pay for the advertising once. With acquisition costs on Amazon being quite high, a small discounted promotion like this is a good way to reduce advertising spend as a percentage of sales and therefore improve profits

Beyond the benefits to the client, it also makes life easier for the Amazon shopper. As the multi buy promotions make sense, they provide convenience for the customer. A better customer experience can also lead to good reviews, converting more people and boosting organic ranking. A vital part of the marketing flywheel is to begin to drive sales on autopilot.

Amazon Revenue Flywheel

With these seasonal trends identified, we were able to carry out further SEO research to prepare for the high season (summer and back to school). First, we researched keywords applicable during high season and added those keywords. As a result, these products ranked for search terms in advance to be in place when volumes rose..

As Zoku had an extensive product suite with existing A+ already, it was eligible for premium A+, and we were able to execute a more persuasive and eye-catching A+ that incorporated video and additionally had the benefit of being able to cross-sell within the A+ itself.

Beyond that, the FordeBaker advertising team focused on top-performing SKUs to efficiently utilise the ad spend and give customers more value to justify the higher price point and compete in the food storage category.

Result

With a client focused on profitability over revenue growth, it meant we needed to look at creative ways to grow the account. For example, Zoku had previously tried virtual bundles but received no positive results. With this in mind, we created a multi-buy promotion instead and got significant results from month 1.

After a month of running the multi-buy promotion, Zoku has seen multi-buy orders increase by 802%, a massive leap from before starting the relationship with FordeBaker.

This had the bonus of seeing the brand’s Average Order Value increase by 23%. In addition, we achieved 9% TACoS and a 16% increase in organic sales to total sales. This low TACoS and high organic sales was great for Zoku’s margins with improved organic sales meaning paying less in customer acquisition costs.