Babyshop tracks profitability and customer lifetime value

Executive summary:

Babyshop, a premier online retailer, transformed its marketing data management with Funnel. Adopting Funnel enabled comprehensive reporting, efficient analysis of customer lifetime value, and empowered the marketing team to take ownership of its own data whilst relieving the data team of menial tasks. Consequently, Babyshop significantly improved its foundation on which to make strategic marketing decisions. 

Key results:

• Babyshop has complete reporting coverage of its marketing data through Funnel
• By using Funnel to collect all marketing spend, Babyshop is able to analyze the profitability and lifetime value of its customers.
• Funnel’s powerful and user-friendly data transformation layer has let the marketing team take ownership of its own data, in addition to sharing the data with Babyshop’s data warehouse and data team. 

Company profile:

Babyshop.se, founded in 2006, is a leading European online retailer specializing in exclusive children's fashion brands, offering a wide range of clothing, shoes, and accessories for children, along with toys and nursery essentials. The company emphasizes a premium shopping experience and exceptional customer service. Besides its online presence, Babyshop also has a flagship store in Stockholm and has been recognized with several prestigious e-commerce awards.

The challenge: Manual work and limited insights

In 2019, the scaling ecommerce Babyshop was facing two important challenges with its marketing data. The first was that the marketing team relied on manually downloading spend reports into spreadsheets which was both tedious and not very granular, limiting the team to the most basic insights. At the time, Babyshop’s marketing team spent money on 15 different marketing platforms and the manual work involved collecting that data meant that it was only feasible to collect data and build reports on a weekly or monthly basis. 

The second challenge was that the data science team at Babyshop was looking into building a data model that would allow them to calculate and track gross profit margins and customer lifetime values. Calculating gross profit margins requires revenue and cost-of-goods sold data, but ecommerces also want to account for other large cost drivers like marketing costs, tolls, fulfillment and shipping costs. This meant that the data team needed a way to collect all of its marketing costs and store it in their data warehouse. If successful, this would offer granular and powerful insights to the leadership functions at Babyshop, as well as the marketing team as it would allow them to track and shift their investments to products and campaigns that are the most profitable. David Feldell, Data Science Lead at Babyshop, stresses that this is a key objective as: "Babyshop is focused on driving profitable paid marketing."

In order to solve both these challenges, Babyshop needed a way to automate the collection of all its marketing cost data, not just for the largest platforms, and they set out to find a solution. 

The solution: Moving from ETL to a marketing data hub

The data team at Babyshop had experience using an ETL-tool for automating some of its marketing data collection, naturally making it the first option to try. Whilst capable of bringing marketing data into Babyshop’s data warehouse, it merely brought in raw data in tables that then had to be cleaned and transformed using SQL. If the ETL-tool covered all the marketing platforms Babyshop used, and the end-users were solely in the data team, this would not be a dealbreaker in itself. But Babyshop was looking for a solution that also let their marketing team be agile in setting up its own data sources and transforming data without having to learn SQL, meaning that the ETL-tool at best only solved one of the challenges. 

At this point, the team at Babyshop learned about Funnel and upon testing it, David immediately saw that it would help them solve both of its challenges, and importantly one that the ETL-solution could not: "It's great for a performance marketer to be able to do data transformation, which is hard otherwise if you don't have this easy-to-use interface". 

The result: Full reporting coverage, tracking profits and lifetime values

Once the marketing and data teams started using Funnel, they became convinced that it could help them meet the challenges of both teams. As David explains: "The marketing team can decide what data to import and how it should be categorized. They can create dimensions, rename things that are incorrect, group data into different subgroups, and then automatically send that data to our data warehouse, and the other reporting tools that the marketing team use”. 

Rachel Wathelet, in Babyshop’s marketing team, was ecstatic to finally have a tool that helped eliminate the blind spots she used to have: "It's made my day-to-day much easier. Because it's so user-friendly, manipulating the different data sources, metrics and combining them is a piece of cake. Thanks to Funnel, I've got a good overview now of the various channels and markets, can compare periods, and do it all super fast."

This means that the marketing team is empowered to take ownership of the data it generates, whilst the data team benefits by not having to maintain data pipelines and wrangle raw data, and instead focus on truly value-adding activities. In the case of the data team at Babyshop, this meant using the clean marketing data provided by Funnel and the Babyshop marketing team and blending it with transactional and user data to enable analysis of gross profit margins and customer lifetime values.