For many brands, sales through retail partners vastly outnumber their direct sales, making partner bidding an essential part of a marketing and sales plan. But is there a point at which that kind of symbiotic relationship turns toward the negative? This post will walk through what positive partner bidding might look like for a brand like this, using Villeroy & Boch, a brand that manufactures fine china, as an example. It will also give a couple of examples of when a brand might want to step in and curtail its partners’ search advertising.
Case Study: Villeroy & Boch
Like many of the brands discussed in this series, Villeroy & Boch sells more product through its retail partners than directly off their website or own retail locations. According to their 2013 Annual Report, their products are available at 5,800 points of sale internationally, including their own website, 155 self-branded stores, 60 factory outlets, and 570 consignment stores run by the brand itself. With the large amount of china purchased through department store wedding registries and the frequent turnover in designs being manufactured, it makes sense for a brand like Villeroy & Boch to encourage partner bidding by resellers, although the company’s opening of several new retail stores in the past year suggests they are well-aware of the increased revenue to be gained through direct sales.
Helpful Partner Bidding
Similar to KitchenAid in the first part of this series, a BrandVerity search for “Villeroy and Boch” reveals that many retail partners, including Macy’s, Bloomingdale’s, Amazon, and Replacements.com, bid on their search terms. The optimal partner bidding situation for Villeroy & Boch looks something like this:
As you can see in the screenshot, on this Google search for “Villeroy & Boch,” the organic hits yield their own website in the top two positions and the search ads have their website first, followed by a variety of retailers including Macy’s and Replacements.com. If we click through both of those top two search ads, we’ll find that both Bloomingdale’s and Replacements.com direct their consumers to dedicated Villeroy & Boch pages with lists of the various products they have for sale.
While Villeroy & Boch would save money through a direct sale, their partnerships with large, nationwide department store retailers like Bloomingdales and china-specific sites like Replacements.com allow their brand to grow and expand, and they’ll still probably get the sale at the end of the day.
Harmful Partner Bidding
A more negative result arises when partners beat Villeroy & Boch in positioning on the SERP, as seen here:
Or when the links in those search ads do not direct a consumer to a brand-specific results page as in this example:
In this case, clicking through the Replacements.com link does not take us to a brand-specific page with every Villeroy & Bloch pattern ever manufactured. Instead, it takes us to this page:
While the advertised fork is made by Villeroy & Boch, the odds are low that it’s what the consumer was looking for, creating unnecessary frustration for the customer.
Finally, a partner like Replacements.com—which sells not only new merchandise, but also vintage, second-hand, and discontinued products—creates another level of potential downside for a brand. According to the website’s FAQ, customers cannot specify that they want “never used” versus “previously used” china:
Since we inspect and grade each piece for quality before it is inventoried, we do not separate pieces based on new or previously owned status. Rest assured that any piece you purchase from us is fully guaranteed and comes with our 30-day, no-questions-asked return policy.
As a result, a consumer may very well end up buying used products from Replacements.com even if they wanted and were searching for a new product. In that case, Villeroy & Boch sees nothing from the sale. Further, depending on what the consumer wanted or expected, the brand may lose out in both customer loyalty and satisfaction.
What could Villeroy & Boch do?
The frustrating-but-true theme of this blog series is that while there is no perfect solution to the potential issues surrounding partner bidding, constant vigilance is the first step toward minimizing negative impact. In this case, because Replacements.com is a retail partner of Villeroy & Boch (in addition to purchasing product from estate sales and other dealers, the company also purchases directly from Villeroy & Boch), the brand might have more capacity to curb bidding that they feel is not to their advantage. They could perhaps ask the company not to bid on certain terms or require that search ads lead to brand-specific result pages. Another option might be for Villeroy & Boch to encourage partner bidding by retail partners who do always buy directly from them, like Bloomingdales or Macy’s, in order to be sure that they do receive as much profit on a sale as possible.
At the end of the day, the best thing a brand like Villeroy & Boch can do is closely monitor this kind of partner bidding in order to see exactly how others are using their name in advertising. While it’s unlikely that a brand as established as Villeroy & Boch has much to fear from a few badly placed search ads, their ability to remain a leading name in the tableware industry is dependent on simultaneously protecting their customer experience and their profits. Vigilance regarding their resellers’ use of their name is a crucial step in that direction.
What do you think the best practices for a brand like Villeroy & Boch would look like? Let us know in the comments below or contact us directly at BrandVerity!
