GOREWEAR, a running and cycling apparel brand known for its GORE-TEX jackets, faced a challenge with its AOV for Performance Max campaigns. The AOV was relatively low in comparison to the average price of their ‘signature’ products. Google’s automated algorithms were driving the performance of low-value products due to having higher conversion rates. While this led to increased sales volume, the low-margin nature of these products were limiting the profitability of the campaigns. GOREWEAR found itself falling into a discount trap, relying on markdowns and promotions to push sales. This focus on discounted, lower-margin items was worsening the issue, pulling attention away from their higher-value, more profitable new arrivals. These low-margin products were also dominating shopping ads, which consequently reduces the sales potential of GOREWEAR’s higher-margin products.

To address this, we implemented a product segmentation strategy within Performance Max campaigns. This tailored solution focused on prioritising higher-value products while managing the performance of lower-margin items. Our comprehensive approach included these key steps:

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1. Adding new custom labels

We implemented custom labels based on the price of products, as well as categorising items by outlet, discounted, new arrivals and best sellers. This enabled more precise targeting and budget allocation.‍

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2. Creation of High and Low AOV Performance Max campaigns

By creating different campaigns based on the product value, we gained greater control over budget distribution. This ensured that higher-value items were prioritised for increased visibility and spend.‍

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3. Segmentation of outlet items

We moved outlet and discounted items into a separate campaign, allowing us to better control spending on these lower-margin products. This also enabled us to assign a higher ROAS target for these items to counteract the lower margins.

After segmenting the products by value, we saw a sudden increase in AOV, which culminated in a 29% year-over-year increase. This led to a significant boost in sales of GOREWEAR’s signature products, such as jackets by +108%, and bibs & tights by +64%. 

In addition to the increase in sales, there was a significant uplift in the contribution of jackets to the total number of sales. Jackets, which accounted for just 9% of total sales in 2023, now contributed to 21.8% of sales in 2024—a remarkable 143% uplift.

The percentage of sales including discounted items within GOREWEAR’s Performance Max campaigns dropped to 28%, compared to 36% sitewide. This indicates a shift towards more profitable, full-price sales.

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“PK balances a proactive strategic approach with being completely immersed in the day-to-day success of our ongoing business goals.”‍

Jenny Wassmer, GOREWEAR