PRIMEAU VÉLO OMNICHANNEL DRIVING IN-STORE SALES. How Primeau Increased Sales by 27% During Bicycle Retail s Worst Year In a Decade
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1 PRIMEAU VÉLO OMNICHANNEL DRIVING IN-STORE SALES How Primeau Increased Sales by 27% During Bicycle Retail s Worst Year In a Decade
2 MARKET CONTEXT BIKE SHOPS ARE HURTING. A LOT. Except one, apparently... -THE MARKET- -THE MARKET- -PRIMEAU VELO- -8% -39.5% +27% MASSIVE DECREASE in the number of independent bicycle shops in the U.S. in the past 15 years. Primeau YoY growth in first 6 months of Omnichannel. Omnichannel started paying off on day 1. YoY SALES Suppliers shipped 8% fewer bikes over the first 9 months of 2016 compared with the same period in 2015 (BPSA, October 2016) (Statista)
3 MARKET CONTEXT WHAT HAPPENED + HOW IS PRIMEAU VELO OUTPERFORMING THE MARKET? 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.
4 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. Lucien Primeau opens a bike rental shop in Montreal s East-End, renting bikes for 20 a day All-In on Omnichannel. Primeau Vélo undertakes a complete makeover, from brand to site, from stores to backstore (ERP, etc.). Pierre Primeau, Lucien s other son, opens a separate Primeau bike shop on Montreal s north shore André Primeau, Lucien s son, opens Primeau Cycles on Montreal s south shore 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 After 1 year, every element of the ecommerce business plan has been achieved and Primeau Vélo is growing fast in an unstable market.
5 PRIMEAU VELO 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. The Plan The Strategy The Partners 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. Deliver 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. Primeau 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.
6 Mission: Increase 1:1 interactions while making the digital shift and going all-in on omnichannel. Leverage to ROPO Effect. Research Online, Purchase Offline. Use every customer touchpoint to facilitate the customer journey and answer questions. 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. 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%.
7 Actionable Insight 75% OF A BIKE RETAILER S SALES OCCUR IN THE SPRING.
8 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 A Few Key Figures LESS THAN ONE YEAR LATER 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 Q Primeau s Q 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.
9 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 A Few Key Figures LESS THAN ONE YEAR LATER 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 year Q1 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!
10 SECRET WEAPONS RESEARCH ONLINE, PURCHASE OFFLINE 1 OMNICHANNEL EXPERTISE Leveraging The ROPO Effect.
11 Partner Insight: Improve the omnichannel integration to foster the ROPO effect Today s customer journey is increasingly complex and The ROPO Effect Research Online, Purchase Offline 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.
12 STRATEGIC ADVANTAGE THE ECOMMERCE BUSINESS PLAN 3 PERFORMANCE MARKETING EXPERTISE Omnichannel growth + marketing governance: When and how to use an ecommerce Business Plan (ebp)
13 Betting the business on Omnichannel and the digital experience: Not without an ebp. 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. 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.
14 The ecommerce Business Plan and Roadmap: Does it work? 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.
15 From day-1, Primeau s ebp has enabled them to: 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 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
16 How Primeau Uses SEO+SEM to Generate 70% of Online Sales. 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.
17 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. 1 OF EVERY 3 IN-STORE CUSTOMERS SHOWS UP WITH THEIR PHONE IN HAND #ROPO EFFECT
18 Omnichannel Insight 20% OF IN-STORE VISITORS USED CHAT TO ASK PRODUCT QUESTIONS BEFORE COMING. #ROPO ONLINE CONVERSIONS JUMP TO 30% WHEN A CHAT SESSION IS INITIATED.
19 TECHNICAL CHALLENGE INTERDEPENDENT SYSTEMS 2 TECHNOLOGICAL EXPERTISE Making it all work together
20 Synchronizing data, Implementations and partners. Oh my! 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.
21 Synchronizing data, Implementations and partners. Oh my!
22 Summary of Primeau Velo s KPI, One year after the omnichannel shift: Partner Insight: ONE YEAR INTO OMNI CHANNEL Key Performance Indicators 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
23 Key Takeaways 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. A digital growth strategy drives business results. Omnichannel still requires great service. Sustained ROI stems for a well-devised Primeau s approach remains true to their yet adaptable strategy. Multiple gains, roots as competitive cyclists and their achieved through relentless analysis passion transpires at every customer and optimization, help these touchpoint; from chat to site to store, all incremental improvements achieve a the way to the continued relationship they tipping point. A Fail-fast approach maintain with their clients long after the must be combined with business sense; initial purchase; the brand s pulse can be the client/agency relationship is at the felt throughout the entire customer core of every successful omnichannel journey. Omnichannel is vital to their story. digital capacity, but it is Primeau s passion for cycling that creates the customer connection.
24 Ready to become the next ecommerce success case study? We should talk. Jason Hughes Charles Desjardins Vice-President of Sales Partner, Executive Vice-President ext ext. 301
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