Ubun helps lift sales 190% for Kagome by improving repeat purchase and conversion rates

Goals

Founded over 100 years ago, Kagome established itself as a trusted household name in Japan’s food industry. The company is well known for its long-selling products, including Yasai Seikatsu 100 (Vegetable Life 100), and a wide range of tomato-based and vegetable beverages. Kagome began selling on the Amazon store in 2007 and has seen consistent sales growth, particularly through repeat purchases of its vegetable juice sold in bulk cases.

As Kagome’s business on Amazon expanded, determining the right advertising budget became a challenge. Due to the company’s strong brand equity and already high baseline sales—relatively unaffected by advertising—traditional budget-setting methods based on Advertising Cost of Sales (ACOS) proved less effective. To address this, Kagome began working with Amazon Ads partner Ubun in 2023, with the goal of expanding its new-to-brand customer base and optimizing its ad investment on Amazon.

Ubun is a full-service digital marketing agency that helps retail brands grow on the Amazon store. Together, Kagome and Ubun focused on boosting repeat purchases and overall sales by enhancing their advertising strategy with tools that prioritize return on investment (ROI).

Approach

To measure average revenue per user (ARPU) and new customer cost per acquisition (N-CPA) metrics per purchase, Ubun implemented its proprietary Ubun BASE automated reporting tool in conjunction with Amazon Marketing Cloud (AMC). These metrics are essential for establishing advertising budgets based on ROI. However, because Kagome’s products are known for high repeat purchase rates, accurately calculating these indicators had been a challenge.

Using AMC’s Flexible Shopping Insights, Ubun gained access to organic purchase insights from repeat customers, enabling a more accurate calculation of advertising costs. The analysis revealed that Kagome’s ad investment was falling short of the level required to acquire new-to-brand (NTB) customers, resulting in missed sales opportunities. In response, the 2024 advertising budget was increased by 130% to ensure that profits generated from six months of ARPU would match the N-CPA.

Using its Ubun BASE tool, Ubun visualized the N-CPA at both the keyword and audience levels, enabling real-time optimization of ad operations to improve ROI. In addition to optimizing N-CPA, Ubun also aimed to maximize ARPU by increasing the repeat purchase rate. To achieve this, they launched marketing automation campaigns via Amazon DSP engaging audience segments identified through Recency Frequency Monetary (RFM) analysis.¹

To reach top-of-funnel customers, Ubun expanded its high-value audience segments surfaced through RFM analysis by leveraging AMC’s custom audience feature to include lookalike audiences. AMC Audiences allowed for the creation of more relevant audience segments based on behavioral history. Furthermore, Ubun utilized Amazon DSP to deliver video ads on Twitch, to focus on the acquisition of NTB customers.

Results

Following a series of ad campaigns, Kagome’s total sales increased by 190%² year over year, marking its highest-ever quarterly revenue. In Q4 2024, sales from NTB customers via advertising rose by 149%³ compared to the same period the previous year, driven by increased ad investment and optimized N-CPA. In addition, the conversion rate among viewers of Kagome’s video ads was 111%⁴ higher than those who were not exposed, demonstrating the effectiveness of the campaign strategy.

Sources

¹ An analytical method that ranks customers based on three metrics: Recency (most recent purchase), Frequency (purchase frequency), and Monetary (total purchase value). Commonly used to identify high-value customers.

^2-4 Advertiser-provided data, Japan, 2024.