DEATH OF PUREPLAY RETAIL

INTELLIGENCE REPORT DEATH OF PUREPLAY RETAIL CUSTOMER ACQUISITION

Further Down the Funnel Rather than emulate the volume-driven search strategies of competitors, evolved retailers have adopted a distinct approach. These retailers bid on substantially fewer keywords, and pay more for each visitor acquired through paid search ($1.79 per visitor, compared with $1.14 per visitor for e-tailers). Instead of casting a wide net from a keyword perspective, evolved retailers target consumers that are significantly further down the purchase funnel, via bids on specific, product- related terms.

Proper Cloth, Casper, Harry’s and Birchbox each pay over $2.00 per visitor acquired through paid search. Noticeably, the top traffic-driving keywords to these sites are both more expensive and more specific than the leading keywords for e-tailer sites. By prioritizing bids for a smaller set of core terms (e.g. “monthly subscription box” for Birchbox; “bed in a box” for Casper), evolved pureplay brands recognize more efficiency in search spend by only bidding on conversion- driving terms.

Death of Pureplay Retail: Monthly Paid Keywords vs. Cost Per Site Visitor Via Paid Search October 2015, n=23 Pureplay Retailers, n=19 Evolved Pureplay Retailers ■ Pureplay Retailer ■ Evolved Pureplay Retailer

Death of Pureplay Retail: Cost Per Click for Top Traffic-Driving Paid Keywords By Percentage of Traffic Driven to Select Evolved Pureplay Retailer Sites

Top Paid Keywords

Cost per Click

$6

Proper Cloth

1. Custom Dress Shirts 2. Sea Island Cotton 3. Thomas Mason

$4.84

$5

$1.42

$1.14

Via Paid Search

Casper

Proper Cloth

$4

Harry’s

$6.79

1. Mattresses 2. Mattress 3. Bed in a Box Casper

Cost Per Website Visitor

$6.28

$3.48

$3

$1.24

1. Dollar Shave Club 2. Razor

Birchbox

$2

$6.55

Monthly Keywords Purchased

$3.05

3. Blades Harry’s

0K

200K

400K

Overstock

$1

$2.45

1. Ipsy 2. Oribe 3. Monthly Subscription Box

Zulily

$4.23

Asos

Etsy

$0

$3.87

Birchbox

$0.00

$2.00

$4.00

$6.00

$8.00

Source: L2 Intelligence Report: Death of Pureplay Retail, January 2016.

Source: SEMrush 2015.

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January 12, 2016