Royal Design – A profitable growth story
-20%
(Cost / Gross Margin) decreased by 20% alongside a steady (Cost / Revenue) 3% decrease
23%
Avg. profit per product has increased by 23% since we started optimising towards profit
92%
Non-brand revenue has grown by 92% since the implementation of value-bidding towards profit
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Precis has consistently pushed us to innovate and advance our digital capabilities. This is perfectly aligned with the culture we have at Royal Design Group. The technical data solutions we have deployed together will allow us to outsmart the competition for years to come. Pushing hard to innovate in this space has significantly contributed to our growth and EBITDA performance.
Success factors
1. Tailored margin data
A custom data model was designed in collaboration with Royal Design. Drilling down to the profit level per SKU enabled smart bidding algorithms in Google Ads to reduce waste on unprofitable segments. As well as zoom in on high-profit opportunities in both Search and Shopping campaigns.
2. Optimise for what matters most
SKUs with similar revenue might have significantly different profit margins. It turns out that the profit margin varies significantly among Royal Design’s vast inventory of over 20 000 SKUs from multiple brands. Optimising for profit margin instead of revenue ensures profitable growth and removes the risk of selling products at too high a marketing cost to margin in Google Ads.
3. Profitable growth in multiple markets
The newly designed profit margin data exposed differences in profit opportunities between markets, enabling Royal Design to shift its ad investments to the markets where it most efficiently can grow with profit. At the same time, this profit-priority approach enabled Royal Design to revisit their inventory and ensure they do not ship unprofitable products to multiple markets.
