Case Studies / HD Supply
Omnichannel Retail · 2021 Muse Award WinnerHow We Turned $3.4M in Ad Spend Into $98.8M in Revenue
HD Supply is one of the largest industrial distributors in North America: 270 branches, 44 distribution centers, and roughly 800,000 SKUs. Their website and their stores had always been operated as separate businesses, so nobody could see what advertising was really worth. We merged them into a single omnichannel metric and rebuilt the account around it.
80 Years of Industrial Distribution
HD Supply’s two leading business units, Facilities Maintenance and Construction & Industrial, have more than 80 years of experience, holding leadership positions in the maintenance, repair, operations, residential, non-residential, and specialty construction sectors.
With 270 branches and 44 distribution centers across 36 states and 6 Canadian provinces, they offer approximately 800,000 SKUs of high-quality, name-brand, and proprietary products at competitive prices. Their core purpose is to improve their associates’ lives and equip them to deliver exceptional customer experiences every day.
They hired Zebra Advertisement to advertise their industrial construction products online and generate foot traffic to their store locations. Our hypothesis was that Google Shopping would lead to substantial growth.
Two Businesses, One Budget, No Shared Metric
The project needed a solution to increase omnichannel ROI. Their main sources of revenue were the website and the physical locations, and both had always been operated as separate entities, which made it impossible to judge what advertising actually produced.
- Attribution. Aligning management around a new strategic approach and changing the attribution system of the marketing budget to an omnichannel model.
- Scale. Managing bids and budgets across more than 300 campaigns.
- Proof before budget. We had to demonstrate results before the company would scale spend, which meant a deliberate, baby-step approach with in-depth reporting at every stage.
Integrate the Channels, Then Build in Three Phases
Our strategy consisted of first integrating online and offline channels, then breaking the project into three phases to guarantee a rapid start, strong client base development, and an increase in the return on the marketing budget.
Grow In-Store Conversions Through Targeted Search
After HD Supply approached us, we set up over 220 campaigns targeting specific product categories, combining shopping, call, search, and display. We merged in-store visits and online sales into a single target metric, monitored performance through an API-based reporting system, and modified bids using our proprietary API to maximize ROI.
Visits grew from 3,710 in January 2018 to 11,000 in December 2018 as the account shifted to omnichannel optimization.
Shift Bidding Toward Omnichannel ROI
Starting December 2018 we moved from conversion optimization bidding to bidding that maximized both transactions and in-store visits. Direct pay-per-click conversions decreased, exactly as expected, while in-store visit rates and average order values rose. Because an in-store visit is worth more than an online transaction, the trade was a win for the business, and four-digit ROIs appeared from month one.
| Month | Ad Cost | Total Revenue | ROI | Calls From Ads |
|---|---|---|---|---|
| 2018 | 09 | $91,763.61 | $2,487,204.77 | 2,610.45% | 402 |
| 2018 | 10 | $151,082.19 | $2,808,217.89 | 1,758.74% | 633 |
| 2018 | 11 | $99,687.66 | $2,385,137.63 | 2,292.61% | 550 |
| 2018 | 12 | $65,120.87 | $1,515,764.52 | 2,227.62% | 423 |
| 2019 | 01 | $88,803.87 | $1,084,582.75 | 1,121.32% | 455 |
| 2019 | 02 | $48,066.92 | $1,619,078.76 | 3,268.38% | 545 |
| 2019 | 03 | $71,030.92 | $2,206,722.10 | 3,006.71% | 540 |
After phase two began in December 2018, return on investment climbed 29% in three months, from 2,227% to 3,006%.
Local Awareness That Drives Store Visits
We created a video campaign for everyone living within 10 miles of a retail store who had visited the website without completing a purchase or coming into the store. It proved video was a huge opportunity, and it is still running today. We also leveraged the data from the first two phases to build over 200 smart shopping campaigns, 200 dynamic search campaigns, and 180 local campaigns, one smart shopping and dynamic search campaign per product brand for budget control, and one local campaign per retail location so each store manager’s budget and product needs were accommodated.
| Campaign | In-Store Visits | Total Cost | Cost per Visit | In-Store Revenue | ROI |
|---|---|---|---|---|---|
| YouTube Brand Lift | 56,534 | $367,128.37 | $6.49 | $10,253,953.05 | 18,000% |
An Attribution Model Everyone Agreed On, and Rules at Scale
- We built the attribution model first. Getting the whole company to agree on how online and offline results would be counted was the unlock. Only then did we optimize toward omnichannel ROI and report in depth. We are now working to include phone calls and map direction requests in that model.
- We created rules across over 600 campaigns to identify low-performing search terms retrieving our ads, then automatically decreased bids or paused them.
- We monitored shopping performance by SKU, raising or lowering bids based on conversions and margins rather than treating 800,000 products as one block.
- We proved it before we scaled it. The baby-step approach meant every budget increase was backed by reported results, which is how a program this size earns internal support.
Key Success Factors
346,086 In-Store Visits
Generated as a direct result of our marketing efforts, a 230% increase in in-store visits over the previous year.
$74,685,358 In-Store Sales
Sales attributed to those in-store visits since January 2018, on top of the online revenue the campaigns produced.
$98,891,457 Revenue
Total revenue generated since January 2018 on $3,462,829 of ad spend, a 2,756% return on investment.
$350 Average Order Value
We increased the average online transaction value to $350, with an estimated average in-store value of $215.80.
626,942,548 Reached
People reached through the online advertising efforts across search, shopping, display, and video.
Profitable Through COVID-19
The pandemic was a wild card, but the detailed structure of the account allowed the business to maintain profitability throughout and keep growing spend.
Want This Kind of Return on Your Ad Spend?
Tell us about your business and your goals. We will show you exactly how we would approach it, what it costs, and what results to expect, with a reply within 24 hours or less.
Get in Touch