Data analytics – the secret behind a growing e-commerce business
During the last several years, companies selling products online have witnessed a staggering amount of growth. However, the flip side of this growth is that the competition is also rising, and the retailers must understand all the dimensions of e-commerce strategy to stay on top. Brands should capitalise on this opportunity by utilising data analytics that allow them to ensure higher stock availability, predict risks, and optimise their strategies to reach the targeted audience with greater accuracy. Knowing what is important to track, and how best to use the data to make informed strategic decisions for growth is important. Having a holistic view of the e-commerce market, and keeping an eye on the hygiene and growth metrics across all marketplaces where a brand is looking to expand its business is crucial.
The Indian e-commerce industry is valued at 81 billion U.S. dollars and is forecasted to reach 200 billion U.S. dollars by 2027 (Statista). Brands are seeing double-digit online sales, especially when it comes to selling fast-moving & essential products, which have seen huge growth during Covid. While these are some categories that are gaining momentum rapidly, others, such as clothing and luxury, are struggling to thrive during these unprecedented times. What many brands don’t realise is that they haven’t yet utilized the capabilities of these online marketplaces to their fullest potential.
There has been a significant rise in the number of online shoppers, which is expected to reach 220 million by 2025. Expansion in technological advances is offering consumers convenient access. Increasing consumer awareness and changing lifestyles have driven the expansion of the eCommerce industry, making it a prime destination for brands seeking to extend their reach. Brands often hear of the incredible eCommerce success stories and wonder what they did differently. Here are some important things to keep in mind –
● E-commerce platforms have changed the way people shop. This trend has shifted towards mobile shopping, with more than 83% of consumers making purchases on small screens rather than computers. The customer experience for content and targeting has to be moulded accordingly.
● Zero moment of truth refers to the buying process when the consumer researches a product prior to its purchase. Customers these days are preferring searching on eCommerce platforms than search engines. 62 % of the Indian users begin their product research on Amazon, while others use multiple platforms for their research (Amazon advertising report)
● As much as 56% of shoppers expect product availability to determine their affinity towards purchasing brands(think with Google report). A lot of larger brands, despite dominating the offline market, are falling behind the competition in the online marketplace. Is being present on these marketplaces enough? Or do they need to look at a broader perspective before truly becoming industry winners? These brands are still struggling to establish themselves in eCommerce due to their conventional approach and underestimating the importance of selling products on the internet. While others who have started leveraging these online platforms, and have taken their first steps towards Omni Channel growth, are still lacking in a lot of aspects. Competition from smaller brands, order fulfilment, customer experience, visibility, returns, finding the right marketplaces, and increasing marketing spends are some of the factors holding them back. There are also many brands that have everything correct From the right talent to sufficient eCommerce budgets, they have it all on their plate. What they are lacking is the ability to utilize these resources to their fullest.
We discussed how a customer’s purchase decision is affected by several factors. Here are some elements that need to be considered by brands while devising an eCommerce strategy:
1. Eliminating Sales loss by avoiding Out of Stock Instances
When consumers repeatedly see a product out of stock on a product page, it makes them shift to competing brands. As a result, 42% of customers cited limited stock as a primary concern that drove them to switch to other brands than their initial preference. In addition, brands that have a vast portfolio on multiple platforms might face issues tracking inventory manually. By the time they can consolidate the reports from the different channels, significant sales loss and customer shift towards competitor brands would have occurred.
Using channel intelligence tools for tracking and analyzing inventory, sales, buy box, sellers, and stock status is essential to identify sales trends across zip codes and channels, plan for events and seasonality, and optimize fill rates to reduce your sales loss.
2. Pricing & promotions are playing a significant role in the sale of products online.
A survey by 10S revealed that 78% of customers made purchases solely based on deals and promotions, and 71% of them cited switching brands in the hunt for a better coupon. There are thousands of brands listed across multiple eCommerce channels, and to be on the top of the game, a brand needs to know its competitor’s actions, especially regarding what prices they are offering to their customers, promotions they are running, and how frequently they make changes in them.
Hence, tracking competitors’ pricing and promotions to understand their strategies better, and to ensure that correct discounts are running on their own products while red-flagging any deviation from the plan is essential to identify and design more competitive campaigns and better utilize the available budgets.
3. Reviews are a goldmine of customer feedback and significantly affect a brand’s online reputation.
Reviews have a substantial impact on a buyer’s consideration journey throughout the research and purchase funnel. Customers expect brands to respond within two days. When brands use every piece of feedback constructively to shape the customer’s journey, it shows that they care about their customers, increasing their likelihood of retaining them. Brand managers need insights to help them develop a robust strategy to give customers what they want and maintain their online reputation. But when your presence is on multiple channels, it gets challenging to analyze the scattered data.
That’s where detailed sentiment analysis can help, a technique where you use Natural Language Processing (NLP) OR Machine Learning to infer consumers’ sentiment from their comments/reviews. With it, brands can access all the information available across multiple channels and receive relevant, valuable data on customer reactions to price, delivery, product, packaging, performance, and quality. It is also crucial for brands to identify the areas where their competitors’ are outperforming them so that they can take prompt action to maintain their brand’s position in the marketplace.
4. The product detail page is more than just a listing tool.
Your eCommerce product page is your shop window and salesperson. If it doesn’t look good or has missing content, it will not engage the customer to stay or make a purchase.
Regular content audits play an important part in quickly identifying and addressing the shortcomings in the product display page content, in comparison with industry benchmarks and brand guidelines. It can provide comprehensive scorecards that highlight whether the information displayed is correct and complete to improve the discoverability and buyability of your products and highlight gaps that need to be fixed.
The mobile search industry has been dominating its desktop counterpart for some time. 71% of consumers state that they are likely to complete the purchase via mobile. Sellers need to ensure that their content is optimized for mobile search to boost revenue, otherwise, traffic to the content will be limited and ineffective.
5. Search is one of the most important touchpoints for a brands’ visibility and customers’ accessibility
In fact, 60% of visitors on Amazon India don’t scroll past the first page of search results. With over 100mn product related searches happening on platforms like Amazon daily, a brand needs to keep an eye on the search terms (keywords) on which it is getting maximum visibility and consider various aspects such as:
o What ranking are the products getting while being searched by those particular keywords?
o Does this change over time, or does the brand need to change the keywords regularly?
o What kind of keywords are being used by the customers and competitors?
o What should be the proportion of the brand and generic (non-brand) keywords in the brand’s keyword bundle?
Identifying search metrics is essential for brands because it tells them the online visibility performance they are getting when a customer searches for their product; Further, it helps devise keyword bidding and planning strategies. By tracking the % share for each keyword and category in the Top 20 search results, the brand will be able to understand what share they hold compared to the competition and whether they have sufficient % share to leave an impact on customer mindset for higher conversion rates.
The right tool can help brands analyze a wide range of data, including conversion rates, product visibility, SKU availability, product categories, and more, to devise business strategies. However, only tracking these metrics is not enough, brands need to analyze and cross-reference them with sales, advertising & competition data. Taking a comprehensive overview of all key metrics and their effects on each other can help a brand make strategically sound decisions to accelerate their growth.
Read the article on timesofindia.indiatimes.com