E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
The apparel retailer serves up ads based on consumers’ gender and browsing behavior.
Apparel e-retailer Karmaloop LLC says click-through rates, revenue and average order value driven through its retargeting advertising efforts increased significantly in May when it showed consumers who visited the e-retail site but left without any purchases display ads based on their browsing behavior.
The e-retailer conducted the 30-day test with MediaForge. The online advertising firm collected data related to consumers’ browsing behavior on Karmaloop and used the information to serve up ads tailored to what its systems perceived as the gender of the browser. For example, a consumer who browsed only women’s apparel later saw ads designed to appeal to women shoppers. If a consumer browsed both men and women’s apparel, that person later received an ad designed to be gender neutral. Karmaloop and MediaForge further customized the ads to display items from the categories the consumer browsed during the visit.
Natasha Chu, director of e-commerce and digital marketing at Karmaloop.com, says the click-through rate for the tailored retargeted ads increased 19.5% during the test period compared with the 30 days prior. Revenue generated from the ads based on each 1,000 impressions served jumped 35.3%, and average order value increased 8.5%. “It’s pretty exciting to see such a lift,” Chu says.
The test also showed that men and women respond to retargeted advertisements differently. Consumers who browsed women’s apparel and were thus categorized as women and saw women-targeted ads clicked on ads more often than men, but converted at a lower rate than men. When compared with the group that saw ads meant to be gender neutral, women who saw ads targeting women converted at twice the rate and men converted at three times the rate.
Chu says Karmaloop will expand how it tailors retargeted ads to consumers based on their on-site behavior because the retailer saw such positive results during the test. She says she’ll add location-based data to the targeting mix so that Karmaloop’s Canadian customers—the e-retailer’s largest international market—will see ads that display any special international shipping promotions the e-retailer has available. The e-retailer also will add video content to its retargeted display ads and may base the clip shown on the perceived gender of the consumer.
“For Karmaloop our men and women shoppers behave very differently,” Chu says. “We have over 300 brands that range in genre. A woman shopper looking at a Lady Gaga-style super-outrageous women’s shoe is different from a guy looking at a pair of sneakers or a hat. This helps us serve them better.”
Karmaloop.com is No. 180 in Internet Retailer’s Top 500 Guide.