Driving huge growth at Waterstones

By Clockwork Affiliates & RedBrain 

Waterstones was founded in 1982 with the ethos to be ‘your local bookshop’. And it has since grown to operate more than 280 retail locations, employing over 3,500 people. Clockwork Affiliates have worked with Waterstones since 2016 to manage their affiliate program. Director Chris Brown has spoken about the experience, performance and results since RedBrain was introduced as a CSS partner in 2018.

Business Outline:

Waterstones was created as a book shop run by book lovers. So marketing and social media focuses on the books themselves, with a focus on in-store locations rather than advertising as a sales channel.

The Waterstones eCommerce platform originally launched in 2006. And the eCommerce strategy has been concentrated on the strength of the brand and sharing a  love of books. As a result, Waterstones haven’t operated paid search or display advertising campaigns in recent years. The focus has been entirely on the affiliate channel and in house content creation with the individual social media channels developing their own written, audio and video content in house.

The Situation Before Working with RedBrain:

Waterstones and Clockwork Affiliates had built a large affiliate network with more than 700 partners driving traffic to them. But Waterstones weren’t active in the Shopping space, so there was an opportunity to drive incremental sales, and compete more effectively with Amazon.

As a business model, Waterstones can’t match the price reactivity of Amazon, but there are a lot of potential customers who trust and support the brand.

With a good working product feed, with around 90,000 regularly updated items, the CPA model used by RedBrain as a CSS partner meant a low risk in time and effort for a potentially large reward in incremental sales.

What Clockwork Affiliates and Waterstones did:

Clockwork Affiliates began their Waterstones campaign with RedBrain in January 2018. This was launched on the CPA model with a base rate set for commissions, and the basic existing Waterstones product feed.

“We ran it for six months until June 2018. The results were good. We saw a nice uplift. They weren't quite breaking into the top 10 in terms of our affiliate programme but it was a good solid start from them.”

After reviewing the performance, Clockwork Affiliates asked Waterstones to agree on an increase in CPA commission by 2%. This was the first test to improve the performance of the Shopping campaign, and was accompanied by a monthly review of the results. This also looked at the impact on organic traffic for any cannibalisation.

“Everything was coming back fine. So, we thought, ‘OK, what else can we do?’ Going into peak quarter 4 of September 2018 we thought let’s have a raise of another 1% here… The results were phenomenal, to be honest, and the peak season generated huge amounts of incremental traffic”.

At this point RedBrain started to become the biggest performer within what has become a large and well-established affiliate programme.  Waterstones were really happy with the results, and reviewing the revenue delivered, at least 90-92% of it was incremental.

“So, we looked at adding a second CSS partner and wondered if this would increase costs or impact on the existing campaign. And RedBrain were really helpful with that. They explained that costs wouldn’t increase, how the offering is different from other CSS providers, and to feel free to add a second partner for a chance to get even more exposure”

The end of 2018 also saw a switch to the full product data feed, which includes close to 140,000 items.

This continued from January until August 2019, at which plan Clockwork Affiliates reviewed their plans to increase sales and revenue for the peak Q4 period. Speaking to both CSS partners for advice and forecasting, the recommendation was to increase the CPA by a further 2%.

“We were getting less than 20% of the traffic share at the current rate… by increasing the CPA by a further 2% we’d get an extra 10-15% of those potential customers.

We had a phenomenal Q4, it was Waterstones best ever. And that incremental volume is really impactful here”.

Something Clockwork Affiliates and Waterstones focused on was keeping the product data feed healthy by updating it, increasing the number of items included, and having an eCommerce manager check it on a daily basis.

They also responded to any feedback from RedBrain to improve the feed, including areas like better product imagery and other optimisation.

Performance and Results:

During the launch period from January until June 2018, RedBrain immediately started delivering around 4% of the total affiliate sales for Waterstones.

After increasing to a 6% CPA fee in June, the improvement in results was nominal, although this may also be down to the seasonal effect of typically lower sales in the Summer months.

But following this with an additional 1% increase in September led to a huge change.

“RedBrain went from being 4% of the affiliate revenue at the start of 2018 to achieving 30% by the end of the year. The September increase seemed to really trigger RedBrain being able to send huge traffic volumes, and conversion rates stayed very steady. At that point, December 2018 became the best Waterstones had ever had. So, we were very, very happy with it”

In 2019 our two CSS partners drove almost 2.5 million clicks, resulting in over £1.7 million in revenue, and they are now 46% of the affiliate channel. “We have a very big affiliate programme with some large partners driving significant revenues, but the two CSS partners are essentially way out in front”

There’s been a big year-on-year increase, and each month through the affiliate channel saw a minimum of 80% annual growth. With some periods up as much as 120%, it averages to between 101-102% growth month-on-month for 2019.

In 2020, Waterstones has grown online partly due to the ongoing COVID-19 situation. And our CSS partners have driven more than £900,000 in sales before the end of March. They’ve become really important in the last few days and weeks, as the search activity on book titles and related topics has really increased.

Future Plans:

“Obviously, we plan to continue our existing successful partnerships. And we’re really looking to grow the Shopping campaigns and work closely with our CSS partners to further improve performance.”

This includes working with RedBrain to incorporate Showcase Ads in a beta programme which allows Waterstones to advertise with more dynamic offerings. Along with improved imagery, this should increase conversion rates during the coming 12 months.

Clockwork Affiliates are also looking to set up Smart Shopping with Waterstones to include options for retargeting. Along with opening up API access to the total of more than 500,000 items on the Waterstones ordering system, rather than the existing 140,000 or so products in stock.

“With the CSS partners it’s working really well. So, for us, it’s the next steps and what we can do to tweak it a bit more.”

Key takeaways

  • There are huge potential incremental traffic and revenue volumes in Google Shopping results.
  • It can deliver results on more generic search terms in addition to specific product queries
  • Working on a CPA model is risk free for retailers.
  • Using two or more CSS partners will give you more exposure and increase incremental revenue. And it’s also important to work with a good affiliate agency that knows what they’re doing.
  • It’s important to tweak the commission rate to find the right balance. And it’s important not to be shy about increasing rates. That money won’t be pocketed by the CSS, but gets used by them to improve the campaign performance.


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