In the midst of the COVID era, Fitness Reality emerged as a standout player in the fitness category. They experienced a surge in demand, prompting them to order a significant amount of inventory. However, as the market normalized, they found themselves with an excessive stock of certain products.
Sales projections fell short of expectations, causing the need to sell through this surplus inventory that was slated for phase-out or simply overstocked. In October, with the 2022 peak season approaching, and cash flow issues, it became crucial to move the inventory while maintaining profitability. If they did not move the inventory quickly, it would be at a loss when it did. Financial constraints would prevent them from ordering new equipment and models from the manufacturers with the surplus inventory still on hand—selling through the existing inventory would allow them to procure new units at a lower cost, enhancing their overall profitability.
The peak season represented an opportunity to leverage ad campaigns to move the inventory but it also represented the challenges of Q4 seasonality meaning competition would be higher, and therefore, CPC during a time when cash was already tight.
Nectar's advertising team came to the rescue with a plan for success.
Nectar developed a comprehensive approach to deliver against Fitness Reality's goals:
The core approach was to increase the brand’s share of voice while scaling their spend with a similar or better total ACOS. The plan was to increase Fitness Reality's ad spend relative to the overall organic sales while also delivering more impressions and click-throughs with Amazon’s sponsored campaigns for better reach and brand awareness. As reach and profitability were the main objectives, Nectar opted for individual target ASINs with Sponsored Display and Sponsored Product ads to hone in on specific targets that were most similar to our products while also focusing spend on unbranded and generic terms for higher impressions within their category.
The breakdown:
Nectar had a challenging Return on Advertising Spend (ROAS) target of 7 or higher. Additionally, they prioritized generating over 50% of the revenue from New-To-Brand Sales, further expanding our customer base and driving sustainable growth.
Nectar's targeted advertising campaign delivered exceptional results for Fitness Reality:
Overall from Oct-Dec:
Through Nectar's targeted Amazon advertising strategy, Fitness Reality experienced remarkable revenue growth and improved advertising efficiency. By strategically optimizing campaigns, focusing on revenue-generating ASINs, and leveraging data-driven insights, Nectar successfully increased sales and enhanced visibility for Fitness Reality's surplus inventory.
Using top notch video content for sponsored brand video to drive sales and new-to-brand customers.
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Unlocking incremental growth opportunities with conservative spending through categorization and ad strategy.
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Utilizing data-driven insights to boost sales performance and optimize budget allocation for maximum ROI.
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Using Amazon's Demand Side Platform to drive sales and a significant lasting increase in ROAS.
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