Digital marketing agency for smart business growth.
Our client, a leading eCommerce brand competing in the wildlife care industry, has been offering a discounted product bundle featuring three high-demand product lines for the last 2 years. The composition of this bundle, along with the discount applied, is updated monthly to maintain customer interest and drive sales. During the last six months of 2024, sales of the bundle doubled. However, there was limited visibility into the overall impact on business profitability and the performance of other similar product lines.
Sales performance review; a comprehensive analysis of historical sales data for product bundles identified a strong correlation between the discount offered and sales volume, highlighting the price sensitivity of these bundles.Additionally, during certain months, promotional efforts through social media and eCRM campaigns were implemented. This allowed for an isolated assessment of marketing effectiveness, quantifying its direct impact on sales performance.
Cannibalisation analysis; by evaluating the sales performance of product bundles in comparison to other similar product lines, clear evidence of sales cannibalisation was identified. The analysis revealed that customers who might have purchased full-margin products instead opted for discounted bundles, leading to a shift in revenue distribution. Furthermore, the extent of cannibalisation was found to be directly proportional to the discount level applied, providing valuable insights into pricing strategy optimisation.
Profitability review; by reviewing the financial impact of the lost(cannibalised) sales and assessing it against the profits generated by the discounted bundles, it was possible to create a summarised business case for the activity.
Over the following months, Piper worked with the client to optimise the value of the discounted bundles, seeking to maximise the revenue of the bundle, whilst minimising the cannibalisation effect on other product lines. Over the following 6 months of closely controlled tests, we were able to generate an 8% increase in profitability of the collective products and bundles.
