How an e-commerce retailer learned to ditch short term gains for a powerful marketing plan

A large online retailer learned a valuable lesson from an ultimately failed advertising campaign.

A profitable sales campaign proved to ultimately be a failure for an e-commerce retailer and forced the company to dramatically overhaul its marketing strategy.

Huckberry, which earns more than $70 million a year in revenue, sells men’s clothing as well as various goods such as furniture, lamps, camping equipment and even pizza ovens.

In 2017 the site began selling a growler, a transportable jug used by breweries to sell takeaway craft beer.

The company had a hugely successful ad campaign with the growler, but there was a catch.

Huckberry advertised the product in the lead-up to the Christmas holiday season and it quickly became one of the site’s best selling items, co-founder Richard Greiner told the Problem Solvers podcast.

“We were very bullish on the growler walking into the holiday season — we bought deep into the inventory and set up and a handful of, what we call, paid social campaigns,” he said.

This means the advertising was typically displayed on social media sites such as Facebook and Instagram.

“It was a campaign that we were excited about. We launched it, and we saw great initial success,” Mr Greiner said.

“Right out of the gates, we saw incredible return on ad spend.”

Based on the positive reaction to the growler, Huckberry decided to go harder on pushing the product to potential customers.

Huckberry made a dramatic shift to focus its business on a male audience. Source: LinkedIn

Mr Greiner said it was their “most successful campaign in the moment”, but, he said there was an emphasis on “in the moment”.

Like any successful modern retailer, Huckberry said it likes to dissect how their customers found the brand and use that information to be more precise with targeted advertising.

“What we quickly found was that cohort of customers that we acquired from the campaign, the initial read was they were not looking like good customers,” he said.

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The co-founder described these buyers as bad customers because once the Huckberry team analysed the data from the sales, they discovered they were largely one time visitors to the site.

Repeat customers are vital, Mr Greiner says, because they make multiple purchases without the company needing to continually spend money attracting a single purchase.

“So we started digging into literally customer by customer, through thousands of orders that came from this campaign, and started looking at each customer and trying to put together a pattern and some trends,” he said.

“And what we saw was that it was largely women making the purchases.”

Given the Christmas time period, the company concluded these women were buying the growler as a gift for a man and would therefore not likely return to buy something for themselves.

“There’s certainly an opportunity cost with our marketing spend,” Mr Greiner said.

“I would rather acquire half the amount of really solid customers, through better targeting and better audiences, than I would acquire these one-act customers.”

From 2018, the e-commerce site decided to focus its advertising strategy to avoid one time buyers and attract repeat customers.

“We’ve significantly narrowed in the targeting on our paid marketing campaigns,” he said.

“For instance, we will typically exclude women in a paid campaign.

“We will also really narrow in the age group.”

The products sold by Huckberry are premium, therefore it was decided to ignore offering its goods to a younger audience who couldn’t typically afford what was for sale.

“Really focusing on that 25 to 40-year-old guy who is square in our target market,” Mr Greiner says.

This dynamic approach to advertising is expensive, but he said the lifetime value of each customer rose by 20 per cent in response to the new strategy.

“It was a change that the whole company needed to hear and needed that vision and leadership change,” he said.

This included changing the language of advertisements and general dialogue of the company to make it more focused on a male customer.

“It just helps everybody frame that we are a guys company, our core audience is men.”

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