Case Study

Furniture Retailer With 35+ Locations Achieves 27% Sales Increase with 60% Reduction in Ad Spend

Introduction

  • Background: Furniture retailer in Chicago and surrounding areas with 35+ retail locations and national web presence.

  • Research Question: How did we help the retailer optimize its advertising strategy to improve ROI and drive sales growth?

Client Profile

  • Company Overview: Established furniture retailer with a strong physical presence in the Chicago market and an expanding online presence.

  • Industry Context: Competitive retail furniture market with increasing emphasis on omnichannel strategies.

  • Problem Statement: The retailer was spending and increasing amount of ad spend nearing $8 million annually with stagnant sales and declining ROI.

Actions Taken

  • Advertising Strategy Audit: Conducted a comprehensive audit of the retailer's existing advertising strategy, including channels, messaging, and targeting.

  • Performance Metrics Analysis: Analyzed key performance indicators (KPIs) to identify areas for improvement, such as click-through rates, conversion rates, and cost per acquisition. 

  • Campaign Optimization: Focused advertising efforts on products/SKUs with the highest RoAS by micromanaging at the SKU level vs. campaign level.

  • Targeting Refinement: Refined targeting criteria to reach the most relevant audience segments based on demographics, interests, and behaviors.

  • Messaging Optimization: Developed compelling and persuasive ad messaging that resonated with the target audience.

Results

  • Improved ROI: Achieved a significant increase in ROI/RoAS through optimized targeting, messaging, and making decisions on promoting or demoting ad spend at the SKU level vs. campaign level.

  • Increased Sales: Increased sales by 27% while reducing ad spend from $8m to $3.2m as well as reduced Agency spend by 70% using a flat fee vs. charging a percentage of ad spend (Conflict of interest).  

  • Reduced Ad Spend: Reallocated ad budget to more effective channels and tactics, resulting in cost savings.

  • Enhanced Brand Awareness: Increased brand visibility and recognition through targeted advertising campaigns.

Methodology

  • Data Collection: Collected data through advertising platform analytics, sales data, and customer surveys.  Micromanaged shopping ads and made spend decisions @ SKU level

  • Data Analysis: Analyzed data using statistical methods and qualitative analysis techniques to identify trends and insights.

Conclusion

  • Summary of Key Findings: The retailer's optimized advertising strategy successfully increased ROI, drove sales growth, and reduced ad spend.

  • Recommendations: Recommended that other retailers in the industry conduct regular advertising audits and optimize their strategies to improve performance.

Future Research: Suggested potential areas for future research, such as exploring the impact of emerging advertising technologies on ROI.