PRIMEAU VÉLOOMNICHANNEL DRIVING IN-STORE SALES

How Primeau Increased Sales by 27% During Bicycle Retail’s Worst Year In a Decade

MARKET CONTEXT

BIKE SHOPS ARE HURTING. A LOT.

-39.5% MASSIVE DECREASE

in the number of independent bicycle shops in the U.S. in the past 15 years.

(Statista)

-8% YoY SALES

“Suppliers shipped 8% fewer bikes over the first 9 months of 2016 compared with the same period in

2015” (BPSA, October 2016)

+27% Primeau YoY growth in

first 6 months of Omnichannel.

Omnichannel started paying off on day 1.

-THE MARKET- -PRIMEAU VELO--THE MARKET-

Except one, apparently...

MARKET CONTEXT

WHAT HAPPENED

Since 2009, the rise of pureplay eCommerce cycling juggernauts like Chain Reaction Cycles, Wiggle, ProBikeKit and others have changed cyclist expectations when it comes to service, pricing and the entire bicycle and bike accessories shopping and buying experience. Cyclists instantly went from the bike shop to the Web, where their favorite brands are discounted on a daily basis.

With Amazon-like competitors selling some components for near cost (and shipping them for free anywhere in the world), passionate cyclists can now find a better deal within minutes. Ouch. Then, in 2016, the cycling market as a whole started slowing down.

Instead of bracing for impact and managing “through the storm”, Primeau Velo did what any bike racer would; they went all-in for the win and used omnichannel to reinvent their business.

Here is what their pure omnichannel experiment looks like, 1 year later.

HOW IS PRIMEAU VELO

OUTPERFORMING THE MARKET?

+

An Omnichannel Story Almost 100 Years in the Making

The Primeau family has been building its reputation in the cycling business

for nearly a century, and each generation has left its mark.

1928

Lucien Primeau opens a bike rental shop in Montreal’s East-End, renting bikes for 20¢ a day.

1957

André Primeau, Lucien’s son, opens Primeau Cycles on Montreal’s south shore.

Pierre Primeau, Lucien’s other son, opens a separate Primeau bike shop on Montreal’s north shore.

1974

Éric Primeau, Lucien’s grandson, partners with André, his father, before eventually buying his shares as well as his uncle’s business in 2009, creating Primeau Vélo.

1988

All-In on Omnichannel. Primeau Vélo undertakes a complete makeover, from brand to site, from stores to backstore (ERP, etc.).

2015 2017

After 1 year, every element of the eCommerce business plan has been achieved and Primeau Vélo is growing fast in an unstable market.

A bicycle retailer with 2 stores, 3 generations and nearly 100 years of history,

Primeau Velo saw the tide changing and decided to go all-in on omnichannel.

Primeau’s killer combo: combining extremely knowledgeable and passionate

staff, local shop sentiment and world class infrastructure.

PRIMEAU VELO

The StrategyDeliver an omnichannel

environment that provides the in-store feel through every interaction, then

promote the heck out of it. The local bike shop just

went global.

The Plan Do or die.

Reboot the entire infrastructure and approach to selling by going “all-in” on

omnichannel, meeting passionate customers

where they already connect and play.

The PartnersPrimeau worked with

Absolunet to combine Magento’s omnichannel

potential with the agency’s market-beating digital

performance expertise, as well as Microsoft’s LS Nav

Retail solution and ERP as well as InRiver’s PIM System.

Cross-pollinate leads.

Facilitate pre-purchase research and interactions on

every channel, providing a consistent experience that

matches the cycling enthusiasm you find in

store.

Leverage to ROPO Effect.

“Research Online, Purchase Offline”. Use

every customer touchpoint to facilitate the customer

journey and answer questions.

Attack + optimize every angle.

Match resources to opportunities and capitalize

on the cycling fraternity. From selling in the off-season to using chat to drive in store

traffic and reducing in-store time-to-sale by 50%.

Mission: Increase 1:1 interactions while

making the digital shift and going all-in on omnichannel.

OF A BIKE RETAILER’S SALES OCCUR IN THE SPRING.

Actionable Insight

75%

In-store sales increased 27% year-over-year while elsewhere, the market is going down.The general consensus among North-American bicycle

retailers was that 2016 was one of the more disastrous years

in recent memory. No one told Primeau Velo, who were too

wrapped up in their omnichannel shift to notice. That, and

the 27% sales increase in their stores, achieved without

increasing payroll.

90% ROPO EFFECT: $9 generated in stores for each dollar sold online in Q1-2016Primeau’s Q1-2017 ROPO Effect is estimated at 90%

compared to an already desirable 70% computed for the

same quarter last year. That means that for every $1 sold

online, digital has created $9 of in-store revenue.

A Few Key FiguresLESS THAN ONE YEAR LATER

eCommerce generated 20% of “slow season” sales during Q1

While eCommerce’s share of sales is generally considered

mature once it reaches between 5 to 10% of total sales,

Primeau Velo’s site generated 20% of total sales during the

first quarter. The digital investment is having a huge impact in

the pre-season - every bike shop owner’s dream/best case

scenario.

Primeau’s first quarter eCommerce sales have already matched 70% of all eCom sales from last yearQ1 sales have positively affected the forecast for the year in

progress and put the retailer in a strong position, both

competitively and financially, to ensure that 2017 is the

company’s best year yet, sales-wise!

A Few Key FiguresLESS THAN ONE YEAR LATER

SECRET WEAPONS

RESEARCH ONLINE, PURCHASE OFFLINE

OMNICHANNEL EXPERTISE

Leveraging The ROPO Effect.

1

The ROPO EffectResearch Online, Purchase Offline

Improve the omnichannel integration to foster the ROPO effect

Today’s customer journey is increasingly complex and

nonlinear. The ROPO effect showcases how different

channels work together to contribute to omnichannel sales.

Research online, purchase offline (ROPO), is a new trend in

buying behaviour where customers research relevant

product information to qualify their buying decision, before

they actually decide to buy their favourite product in the local

store.

For example, a poor ROPO effect of 50% indicates that for

each sale generated online, one sale was generated offline

thanks to the web; a 1:1 ratio. In Primeau’s case, the ROPO

ratio is currently at 9:1, or 90% (the higher, the better. 90% is

off the charts.)

Thus, a strong digital strategy not only has a strong impact

on eCommerce sales, it can have an even stronger impact on

offline sales and overall Omnichannel growth thanks to the

ROPO effect.

Partner Insight:

STRATEGIC ADVANTAGE

THE ECOMMERCE BUSINESS PLAN

PERFORMANCE MARKETING EXPERTISE

Omnichannel growth + marketing governance: When and how to use an

eCommerce Business Plan (eBP)

3

Primeau Velo’s move towards digital leadership was never a technological decision; it was a business decision.

Before any code was touched, Primeau mandated Absolunet to devise an eCommerce Business Plan (eBP), which takes a high level approach to any digital initiative and applies it in a real world, real business context; a blueprint for any business’ omnichannel and digital ambitions, that provides a roadmap and key decision-making insight throughout the process.

Betting the business on Omnichannel and the digital experience: Not without an eBP.

Primeau Velo’s eBP provided:

● Sales and marketing projections, including multiple customer journeys based on variable personas as cycling touches a broad and diverse customer base

● An end-to-end SEO and SEM forecast, including winnable battles and ROI projections based on multiple scenarios (% of sales that can be generated from Google, FB, etc.)

● SWOT and competitive benchmarks to understand Primeau’s context in a digital marketplace

● Insight into consumer behavior that could be capitalized upon.

After 6 Months:

○ Real sales and marketing figures were within $1 of the eBP’s projections.

○ Preliminary financial results for the recently completed fiscal year show that Primeau is ahead of eBP projections and is revising, with Absolunet, their already ambitious growth projections for 2017 and 2018.

The eCommerce Business Plan and Roadmap: Does it work?

● Take advantage of the new site’s potential to improve visitors’ omnichannel experience

● Compute the ROPO effect● Make accurate financial forecasts per

channel and maximize the eCommerce net profit margin

● Diversify traffic sources to avoid dependence, with a strong focus on ROI

● Enhance the customer journey by improving personalization of the online experience and online interactions with the retailer

● Better clarify online promotions, ensuring visitor’s understanding regardless of point of entry

● Reinforce omnichannel synergies

From day-1, Primeau’s eBP has enabled them to:

Primeau still uses the eBP to:● Be used as a business roadmap which is

updated annually, include per channel revenue breakdown

● Plan and control eCom and eMarketing expenses, considering HR and COGS.

● Measure performance and agree on upcoming priorities

● Defining key SEO battles and track optimization progress

● Create campaign-relevant landing pages to ensure a consistent message

● Develop new features based on learnings

● Identify the best technological partners to serve the eBP objectives

Absolunet’s growth marketing team developed an extensive SEO checklist specifically for Magento-powered platforms. Primeau is using it to crush SEO in its market.

● Primeau’s platform was designed for conversion, to take the customer on a journey from Search to Sale. The checklist, along with constant optimizations, allowed the retailer to not only own the SEO-space in a competitive landscape, Primeau actually doubled its “search-driven-sales”.

● Absolunet’s SEO checklist is applied to every Magento project’s SEO lifecycle. It is a grid-based approach which measures a client’s detailed objectives, priorities and KPIs against a list of every SEO point to be implemented.

● Combining experience with best practices and data-driven insight with up-to-the-minute expertise, Primeau was able to identify and seize every opportunity to win the fierce SEO + SEM battles in its in market.

How Primeau Uses SEO+SEM to Generate 70% of Online Sales.

1 OF EVERY 3 IN-STORE

CUSTOMERS SHOWS UP WITH THEIR PHONE IN

HAND

#ROPO EFFECT

Omnichannel Insight

Post-omnichannel-shift, 1 out of 3 in-store visitors had their phone in hand with information or parts they were looking at, or looking for.

ONLINE CONVERSIONS JUMP TO 30% WHEN A CHAT SESSION IS INITIATED.

20% OF IN-STORE VISITORS USED CHAT TO ASK PRODUCT QUESTIONS BEFORE COMING. #ROPO

Omnichannel Insight

TECHNICAL CHALLENGE

INTERDEPENDENT SYSTEMS

TECHNOLOGICAL EXPERTISE

Making it all work together

2

Primeau “All-In” omnichannel shift wasn’t exclusively a financial move. The sheer technical complexity and implications of every element of the business had to be carefully evaluated, planned and deployed. In Primeau’s case, the technical/technological/logistical ballet had to take into consideration the following:

● Absolunet implements Magento ● Bell Createch implements Microsoft NAV ERP● InRiver’s PIM system integrated into and synchronized to Magento to create

Primeau’s endless aisles and meet customer demand ● Integration of LS Retail’s Point of sale system● Synchronize Smart-Etailing for all product information● Branding partner completely revamps Primeau Velo’s brand and brand

collateral● Financial consolidation of 3 Primeau Velo structures into one, including a shift

from one accounting system to another.● All automated. All synchronized. All in the same fiscal year.

Synchronizing data, Implementations and partners. Oh my!

Synchronizing data, Implementations and partners. Oh my!

ONE YEAR INTO OMNI

CHANNELKey Performance Indicators

Summary of Primeau Velo’s KPI, One year after the omnichannel shift:

● 27% Year-over-year (YoY) sales increase

● In-store sales increase

● Higher revenue per employee

● Extended selling season

● Multiple contact points (Website, Messenger,

LiveChat, In-store, Phone)

● Faster inventory turnaround

● Reduced in-store time-to-sale from 40 to 20

minutes

● Revised revenue growth forecast for year 2

● Exploring new channels and marketplace

opportunities

Partner Insight:

Massive Omnichannel growth is no accident.

It starts with a company’s vision and

their will to see it through.

It then becomes a matter of choosing

the right partners, the right strategy and

the right technologies.

Which is where Absolunet comes in.

We help organizations transform digital

potential into business results.

Key Takeaways

A digital growth strategy drives

business results.Sustained ROI stems for a well-devised

yet adaptable strategy. Multiple gains,

achieved through relentless analysis

and optimization, help these

incremental improvements achieve a

tipping point. A “Fail-fast” approach

must be combined with business sense;

the client/agency relationship is at the

core of every successful omnichannel

story.

Omnichannel still requires great service.

Primeau’s approach remains true to their

roots as competitive cyclists and their

passion transpires at every customer

touchpoint; from chat to site to store, all

the way to the continued relationship they

maintain with their clients long after the

initial purchase; the brand’s pulse can be

felt throughout the entire customer

journey. Omnichannel is vital to their

digital capacity, but it is Primeau’s passion

for cycling that creates the customer

connection.

Ready to become the next eCommerce success case study?

Jason Hughes

Vice-President of Sales

jhughes@absolunet.com

+1.877.979.2276 ext. 391

We should talk.Charles Desjardins

Partner, Executive Vice-President

cdesjardins@absolunet.com

+1.877.979.2276 ext. 301