DAVIDsTEA expands internationally with Labelium and sponsored ads

Offering great tea, friendly store environments, and above-and-beyond customer service, DAVIDsTEA opened its doors for the first time on Queen Street in Toronto, Canada, in 2008. On a mission to help every customer make the best cup of tea possible, the brand’s product line includes over 100 teas—exclusive blends, seasonal collections, traditional teas, and matchas—in addition to innovative tea accessories designed in house.

What began as a single storefront soon became one of Canada’s top tea retailers, with over 175 DAVIDsTEA locations and an established brand presence in the region. On Amazon.ca, one of its sales channels, the company saw 2.5x month-over-month growth after launching Amazon Ads campaigns. Between 2018 and 2019, one year after launching these campaigns, DAVIDsTEA experienced a nearly 400% increase in sales on Amazon.ca, almost half of which could be attributed to advertising. These Amazon Ads campaigns also boosted product and brand visibility with roughly 25 million total impressions served.

In October 2018, DAVIDsTEA decided to launch its brand on Amazon.com with the goal of increasing year-over-year sales while increasing brand awareness in the United States. While already available in the US, both in a number of small retail shops and on the brand’s existing website, the company knew it had an opportunity to increase brand recognition among US customers. It looked to Amazon to help educate and engage US audiences on the DAVIDsTEA brand. The brand partnered with digital marketing and performance agency Labelium to help manage its paid media efforts.

We sought Labelium’s help because they specialize in Amazon Ads. Since our team needed to focus its efforts on other areas of the business, we relied on the expertise of the Labelium team to help drive our Amazon strategy, especially as we looked to expand our business in the US.

– Damon Sloane, Vice President, Ecommerce & Customer Engagement at DAVIDsTEA

With the company’s US launch on Amazon, DAVIDsTEA aimed to grow its new customer pool and increase overall revenue in the short term, while its longer-term goal was to become a leading retailer in the US beverage category.

As the Labelium team crafted the US expansion strategy, they kept a few learnings in mind that informed their approach to advertising DAVIDsTEA on Amazon.com:

• Always-on strategies are important to continually reach and engage new and returning customers throughout different points in the customer journey.
• Seasonal events represent key opportunities to reach new customers and grow brand awareness.
• Using existing keyword strategies from their Canada campaigns could help them understand what works or doesn’t work for customers in the US.

However, there were also a few key differentiators that needed to be accounted for in DAVIDsTEA’s strategy for reaching customers in the US versus Canada:

1. Branding: While DAVIDsTEA was renowned for its branding and high-quality products in Canada, this wasn’t yet the case in the US. So it was important for the Labelium team to educate customers on the company’s brand story with a Store alongside Sponsored Brands campaigns instead of solely focusing on product detail pages.
2. Category differences: Since tea was still a developing category in Canada, the company found that their ads had a higher chance of displaying for generic shopping queries. In the US, with more budding tea businesses selling on Amazon and with less DAVIDsTEA brand recognition, it was important that the agency identify more ways to help build brand authority. For example, Labelium enrolled the company in the Amazon Vine program to help drive recognition and relevance by garnering more ratings and reviews among US customers, focusing on the items featured in Sponsored Products campaigns.
3. Product assortment: It was clear from the start that the preferences of customers in Canada differed from those in the US. So while the agency team used existing keywords from the campaigns in Canada, they also relied on Sponsored Products automatic targeting to discover new keywords and product targeting to reach new customers. For example, in Canada, where brand recognition was higher, customers were more likely to buy specific tea flavors. But in the US, DAVIDsTEA experienced more success with gift sets or samplers that offered an introduction to the brand and its products. In this case, the agency used product targeting to grow visibility by showing ads for the gift sets and samplers to customers looking for similar brands or products.

With these learnings and differentiators in mind, Labelium decided to increase ad spend across Sponsored Products, Sponsored Brands, and Sponsored Display in the months before Q4. This timing allowed them to build relevancy for both the brand and featured products going into the holidays, the busiest time of year. With a full-funnel strategy that included prospecting to engage new customers and remarketing to help drive sales, Labelium was able to help DAVIDsTEA achieve both their short- and long-term goals.

Since launching a US-specific expansion strategy in October 2018 with Labelium’s help, DAVIDsTEA has experienced over 20% increase in total sales on Amazon. This rise in sales has contributed to over 13x year-over-year growth for the brand in the US since its launch.

Amazon Ads helps us empower our clients to become leaders in their respective categories both in their home countries and when expanding into new regions. With tools like the Amazon Vine program and features like automatic targeting, Amazon makes it easy for us to help grow our clients’ international businesses.

-Brian Etcovitch, Account Director at Labelium

Following their success, the team at Labelium put together these three recommendations for launching Amazon Ads campaigns when expanding into new countries:

1. Two countries, two strategies. Remember to look at the maturation and saturation of your category in the new region you’re hoping to reach. You shouldn’t have the same expectations for customer preferences or set the same standards of sales in different countries with different levels or brand awareness or competition.
2. Use automatic targeting. Automatic targeting ads can help you better understand customers in new regions. These ads can help you discover new keywords and shopping queries that customers within your country of origin may not be using.
3. Use Amazon’s ad types to their fullest. Use the different types of ads (Sponsored Products, Sponsored Brands, and Sponsored Display) at different points throughout the customer journey alongside Stores to showcase the brand’s story, so you can ensure you’re achieving your goals across the funnel by driving awareness in addition to sales.