3/12/13

How Russia’s X5 chain retailer wins new web customers

Targeting web searchers with product images boosts sales for its e-commerce site, E5.ru.

Paul Demery , Managing Editor, B2B E-commerce

When retail supermarket company X5 Retail Group N.V. launched the E5.ru e-commerce site in Russia early last year to sell non-food general merchandise, it used multiple forms of online marketing to attract thousands of new customers per day. But after many of the early visitors left without making a purchase, the retailer started winning customers by showing them images of products before they arrived at E5.ru, says Georgiy Levin, head of advertising and marketing communications. For visitors who left E5-ru without completing a purchase, it showed them images based on products they had considered buying.

X5 developed its new targeting application last year with myThings, a Tel Aviv, Israel-based company that recently opened offices in the United States (Scottsdale, AZ), Brazil and Japan.

MyThings works with retailers like X5 to host images and descriptions of their products, then serves the images up in banner ads placed on web sites via online advertising networks. It displays ads showing images of particular products based on a consumer’s shopping intent, such as when she looks at an image of a particular type of coffee maker—say, a 10-cup electronic automatic drip coffee machine—on a comparison shopping site in an ad network and reads product reviews about it. When X5 bids to place that type of coffee maker in a myThings targeting ad, myThings’ software will display an X5 ad with an image of a product either exactly the same or similar to what the shopper had viewed. Clicking that ad brings the shopper to E5.ru.

MyThings charges for its ads only when the shopper makes a purchase, which on average works out to between $10 and $60 per acquired customer, says Michael Swope, myThings managing director for the U.S. market, who is based in Scottsdale, AZ. MyThings also provides creative services, including ad copywriting and placing product images into banner ads, but charges no other fees, he adds.

MyThings also displays ads, or retargeting ads, with product images on advertising network sites after a shopper has abandoned a client’s web site without completing a purchase. “MyThings brings these prospects back via a personalized display advertising solution, significantly decreasing our cost per order,” Levin says.

With the “pretargeted” product image ads shown before a customer first arrives on E5.ru, ads which X5 first deployed in December, the retailer has both lowered its cost of acquiring customers in Russia and increased its new-customer retention rate, he adds. Levin notes that myThings’ ads may cost more per individual order than other forms of marketing, but that new customers brought in through the program buy more products. “It offers a very good cost per client,” Levin says.

MyThings says it personalizes more than 3 billion ad impressions per month and operates in 16 countries, including the United Kingdom, France, Germany, Brazil and Japan as well as Russia and the U.S. It works with more than 600 retailers worldwide, including more than 100 in the U.S., Swope says.

Topics:

ad impressions, Brazil, Georgiv Levin, Israel, Japan, Michael Swope, myThings, pretargeting, retargeting, Russia, Scottsdale, targeting, X5, X5 Retail Group N.V.

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