E-commerce Transformation Through Data Intelligence
The Challenge
A multi-channel retailer approached us with a clear mandate: Eliminate unprofitable orders while driving significant growth in gross profit (GM3) and EBITDA. With increasing advertising costs and complex inventory challenges, they needed a solution that could identify exactly where their marketing budget was being wasted and where opportunities were being missed.
Traditional ROAS metrics failing to identify truly profitable products
Siloed data preventing holistic view of marketing impact on profitability
Rising acquisition costs eroding margins across their product catalog
Our Approach
Rather than viewing marketing simply as a cost center, we developed a comprehensive solution that connected critical business data points to marketing decisions:
Unified Data Foundation
We integrated their backend sales data, margin information, inventory levels, competitive pricing, and marketing costs into a centralized Google Cloud environment.
Profit-Driven Analysis
Our proprietary algorithm calculated the true Cost of Profit (CoP) for each product, revealing which items were silently eroding margins despite appearing successful through traditional metrics.
Strategic Product Segmentation
We developed a sophisticated BCG matrix that categorized their entire product catalog into actionable segments:
- Stars: High-selling, high-margin products with efficient ad spend
- Cash Cows: Volume sellers with moderate margins and good efficiency
- Potential Stars: High-margin products with growth potential
- Underperformers: Products where ad spend was actively eroding profits
- Phase Out: Low performers that failed to meet minimum profitability thresholds
- Untested Potentials: High-margin products with limited marketing history
Dynamic Adaptation
Our algorithm continuously monitors price competitiveness, sales trends across channels, and promotional activities to refine recommendations in real-time. This ensures marketing decisions always reflect current market conditions and consumer behavior.
The system automatically adjusts recommendations based on stock levels, preventing wasted spend on out-of-stock or low-inventory items. Additionally, we leverage AI to identify seasonality trends, allowing the platform to proactively increase or decrease ad spend per product ahead of demand fluctuations.
The Results
Within Six Months
- 16% Growth in GM3 (Gross Margin after marketing costs)
- 30% Increase in EBITDA
- Significant reduction in unprofitable marketing spend
- Improved inventory turnover across product categories
Business Impact
- Enhanced decision-making across marketing, purchasing, and pricing teams
- Complete visibility into how marketing investments impact bottom-line profitability
- Shift from sales volume focus to profit-driven optimization
- New capabilities to optimize marketing spend across their full product range
"This transformation wasn't simply about optimizing marketing campaigns — it was about fundamentally changing how marketing decisions integrate with broader business objectives."
Ready to transform your e-commerce performance?
Run a free analysis of your Google Shopping account to see how our algorithm could optimize your product campaigns.