What an exciting month we’ve had at DataWeave! Our team flew down to gorgeous Cape Town, South Africa to attend the 8th edition of #EcomAfrica! After months of Zoom calls and virtual events, it was a refreshing change to see our customers in person and meet some of the movers and shakers in eCommerce and some of the top South African brands.
Top eCommerce Companies in South Africa
My last visit to South Africa was before the pandemic. Things have changed since then, & the difference was stark! The eCommerce landscape had a paradigm shift during Covid-19 and grew exponentially. My customers spoke to me about the new opportunities, growth potential as well as challenges that came in because of this boom. For one, eCommerce in South Africa has become more competitive than ever – from online retail to grocery and food delivery to even alcohol delivery! All retail businesses seem to have jumped onto the eCommerce bandwagon.
A recent Deloitte report found that over 70% of South Africans shop online at least once a month & 2 out of 3 respondents said they plan to increase their frequency of online shopping. 65% said they know what they want, search online & check all stores that stock the product to compare prices. Price is one of the key factors that influence consumer purchase decisions. Other critical factors include delivery fee, delivery time, promotions & discounts & product assortmentto name a few. In order to stay ahead in this highly competitive arena, both retailers and brands need to make data-driven decisions about critical KPIs like pricing to stay ahead of the competition.
Increased Online Shopping & Online Shopping Frequency
We’ve been working with customers in South Africa for over 4 years now, even before the pandemic. So on Day 2 of the event – S.Krishnan Thyagarajan “Krish”, President & COO, Dataweave had a chance to share our learnings and experience from all these years and how user data is critical to getting ahead & winning the eCommerce race in South Africa.
For the purpose of Krish’s keynote address, we tracked pricing insights for a finite set of categories across key South African retailers like Checkers, Pick n Pay, EveryShop, Incredible, Makro, Waltons, Shoprite & Dis-Chem to name a few over a period of 16 months from Dec 2020 to April 2022. We highlighted price increase and decrease opportunities and how each retailer reacted in order to stay competitive, increase sales and protect margins.
BATTLE of the eCommerce GIANTS!
Key Highlights from the Keynote
Increasing prices where an opportunity exists helps retailers increase their margins exponentially. Pick n Pay had the highest action rate (73%) when it came to capitalizing on price increase opportunities v/s Dis-Chem at 11%.
When it came to price decrease opportunities (in order to stay competitive with rival brands) Takealot was the most responsive retailer – they capitalized on 30% of the opportunities, followed by Pick n Pay at a close second (28%) and Shoprite & Dis-Chem at just 4%.
Most retailers took between 1 – 5 days maximum to make price changes which means responsiveness to the market among all retailers is high making it more important for online retailers to always be on their toes.
The 2 categories where most retailers capitalized on Price Increase Opportunities were Sauces & Condiments and Crackers & Biscuits.
Watch the Impact of price increase & decrease opportunities on Private Label brands!
See how product stock availability impacts price changes over a 16-month period.
Find out which brands are in the lead in the Skin Care, Pet, Baby, Laundry & Cleaning Aid categories
If you’re an online retailer in South Africa & need insights on staying competitive with the right pricing, product assortment, delivery time, delivery rates, and the other key influencers that affect customers’ choice of online retailers, sign up for a demo with our team at DataWeave to know how we can help!
Social commerce is the selling of goods and services within a social media platform. Brands use social platforms such as Instagram, Facebook, Snapchat, and Twitter to promote and sell products. These platforms have become an integral part of consumers’ everyday life because they continue to engage users with relatable content, making them scroll their feeds for hours.
The Social Commerce model capitalizes on this high user engagement & moves social media beyond its traditional role in the top-of-the-funnel marketing process by encouraging users to shop without leaving their preferred apps. According to the Social Media Investment Report, 91% of executives agree that social commerce is driving an increasing portion of their marketing revenue, and 85% report that social data will be a primary source of business intelligence.
Let’s talk a little bit about why brands should consider selling via social media platforms:
Social Commerce vs. eCommerce vs. QCommerce
While they may fall under the same umbrella of online selling, social commerce, quick commerce, and eCommerce are three very different concepts
eCommerce refers to online shopping via a (retailer or brand) website or app. Customers can access these platforms via desktop or mobile devices. However, the sales funnel generally looks the same. These brands and retailers use top-of-the-funnel tactics like social media content, digital ads, and other marketing strategies to encourage customers to visit the online store. There are three main types of eCommerce businesses: Business-to-Business (Alibaba, Amazon Business, eWorldTrade), Business-to-Consumer (websites such as Amazon, Rakuten, and Zalando), and Consumer-to-Consumer (platforms such as eBay & Etsy).
Quick Commerce (or QCommerce) refers to eCommerce businesses that deliver goods within a couple of hours or even minutes. Although it’s sometimes used interchangeably with on-demand delivery or instant commerce, the idea of quick commerce has been around in the food industry for ages now. It has been recently ushered into the mainstream by evolving consumer preferences for quicker delivery of groceries and FMCG goods.
Social commerce brings the store to the customer rather than redirecting customers to an online store. It removes unnecessary steps and simplifies the buying process by letting the customer checkout directly through social media platforms, creating a frictionless buying journey for the customer. Additionally, social media platforms are mobile-friendly, a huge benefit for brands because increasingly more and more customers are accessing the internet through mobile devices.
Social Commerce
Rise of Social Commerce
First used in 2005 by Yahoo!, ‘social commerce’ refers to collaborative shopping tools such as user ratings, shared pick lists, and user-generated content. Social media networks snowballed throughout the 2000s and 2010s, alongside a general increase in eCommerce, leading customers and merchants to quickly recognize the benefits of buying and selling through social media networks. Social media platforms have since evolved from merely a showcase tool for brands. They now serve as virtual storefronts and extensions of a company’s website or brick and mortar stores, capable of handling the buying experience.
Top Social Commerce Platforms
Social media platforms aim to keep visitors engaged on their platforms for as long as possible. Increased time in-app or on-site maximizes their opportunity to serve ads, a primary source of revenue generation. Social media platforms have millions of active users and they have a great power to help companies and individuals build their brands, interact with consumers, and support after-sales. Here are the top social commerce platforms:
Facebook
Facebook introduced Facebook Shops to capitalize on the commercial opportunity by allowing vendors to advertise and sell directly through the platform. Facebook integrates social commerce with shopping, allowing users to purchase products smoothly. Facebook shops offer a smooth user experience where users can review products and get recommendations from trusted acquaintances. Customers can directly interact with the merchant’s customer service department post-purchase.
Instagram
60% of people discover new products on Instagram. Owned by Facebook, Instagram facilitates in-app shopping and handles the entire transactions within the app itself. Users scrolling on Instagram often wants to follow trends and replicate the looks of their role models or favorite influencers. By offering purchasing options in the app, Instagram benefits from the platform’s rich visual imagery and videos, allowing businesses to sell an idea rather than the traditional process of selling a product.
TikTok
Shopify partnered with TikTok to introduce shopping and drive sales through the younger and seemingly ever-expanding TikTok audience. With TikTok for Business Ads Manager, brands and merchants can create in-feed video-based content depending on their product offering. This partnership allows Shopify merchants to expand to the TikTok audience.
Snapchat
Snapchat has recently launched Brand profiles, a feature that allows users to scroll through a merchant’s products and buy them in-app. This new experience is powered by Shopify too. Merchants can create Brand Profiles or Native Stores that allow users to purchase products from the app.
Pinterest users are there for Shopping Inspiration
Pinterest
Pinterest is also an image-based platform where users create boards of their favorite wedding accessories, home decor, fashion trends, etc. Pinterest doesn’t specifically offer social commerce for the global audience. Rather, it allows business accounts to create ‘Product Pins’ that are displayed in the brand’s Pinterest shop. Only U.S. customers can purchase within the app. Users from other countries are redirected to the eCommerce site to complete the sale. We have added Pinterest to this list because 89% of Pinterest users are there for shopping inspiration.
Pinterest is an image-based platform where users create boards
Why Should Brands Care About Social Commerce
To enhance social media presence and brand awareness
If your target demographic is in the 18-to-34 age range, they’re already on social media and waiting to shop while they scroll. According to Sprout Social, over 68% of consumers have already purchased directly from social media and nearly all (98%) consumers plan to make at least one purchase through social or influencer commerce this year. You can enhance brand awareness by selling on social media platforms. Influencer marketing is an amazing way to build brand awareness since customers are now seeking authenticity from micro-influencers rather than big-name celebrities.
To generate social proof
90% of online shoppers say that they read online reviews before making an online purchase. Whether it’s an automated follow-up email or a message through the social media platform, ask for a review after your product has been delivered to the customer. You can also offer incentives like a contest to encourage previous customers to weigh in and share their experiences. These steps will allow you to collect social proof since it’s vital to build a positive reputation online. You can also ask customers to create small product review videos that you can share on your social feeds in creative ways. You can also post user-generated content, create a carousel of positive comments, or host a live video with happy customers.
Social Proof
To simplify the buying process for consumers
Traditional eCommerce involves several steps. It starts with displaying ads on social media platforms and customers being redirected to the business website for completing the transaction. To complete the transaction, customers also have to create an account or manually fill in the credit card details and delivery address. On the other hand, social is only a three-step process — find, click and buy.
Counterfeit Products
Conclusion
While social commerce is proliferating, it also has a few setbacks like the rise of counterfeit products. Counterfeiting has expanded into social media and has become an under-reported but vital hub for counterfeiters. A counterfeit detection solution can help brands and merchants identify & remove fake and unauthorized products. Technologies like image recognition can help in counterfeit detection by capturing fake logos and discrepancies. Removing counterfeit products will help brands safeguard customer loyalty and prevent fake products from harming your bottom line.
Here’s how DataWeave helped Classic Accessories, a leading manufacturer of high-quality furnishings & accessories identify counterfeit products across multiple retail marketplace websites eliminating 22 hours of time spent per week conducting manual audits – read the case study here.
Are you a brand or a retailer worried about counterfeits? Sign up for a demo with our team to know how we can help you track, identify and eliminate fakes!
As inflation continues to hike costs for consumers and supply chains challenge them to maintain loyalty, there is still an active audience willing to pay the ultimate price for the convenience of food and alcohol delivery. That being said, we analyzed 8 popular Retail and Delivery Intermediary websites and 11 popular ‘Cinco de Mayo’ keywords to see which Brands are predicted to win the battle of Digital Shelf Share of Search this holiday.
2022 Cinco de Mayo Share of Search Insights – Top Brands for ‘Cinco de Mayo’
Opportunities for Food & Bev on Cinco de Mayo
While most of our analysis focused on popular Cinco de Mayo food and beverage products, none of these brands populated on either Target (pictured on left below) or Walmart (pictured on right below) page 1 search results for the term ‘Cinco de Mayo’. Keyword search results for this term are dominated primarily by décor brands as indicated below.
Brands Achieving Top Share of Search for Food and Beverage Categories on Cinco de Mayo 2022
Share of Keyword Search Results – Alcohol Category
Three of the most popular alcohol types sought out during Cinco de Mayo are ‘Mexican Beer’, ‘Mezcal’, and ‘Tequila’. Below are the brands dominating Share of Keyword Search results on each of the major retail websites we researched.
AmazonFresh, Meijer, Kroger, and Sam’s Club Share of Search – Beer, Mezcal, and Tequila Keywords on Cinco de Mayo 2022
We also reviewed the same keyword performance across popular delivery intermediaries to see how Share of Keyword Search altered for ‘Mexican Beer’, ‘Mezcal’, and ‘Tequila’. The results are below for TotalWine, Instacart, Drizly and GoPuff:
TotalWine, Instacart, Drizly, and GoPuff of Search – Beer, Mezcal, and Tequila Keywords on Cinco de Mayo 2022
The keyword ‘Agave’ is also a popular search term within the alcohol category during the time leading up to Cinco de Mayo. We reviewed keyword search performance at various zip codes to see how price points that populated on page 1 search results varied given the change in median income. Below are the results:
Share of Search for Alcohol by Price Point and Zip Code on AmazonFresh
Share of Keyword Search Results – Grocery Categories
We also reviewed some of the most popular grocery items purchased during Cinco de Mayo by Keyword Share of Search results to see which brands are primed to win the Digital Shelf this year. Below are the results for Target.com and Walmart.com.
Walmart and Target Share of Search – Food and Beverage Keywords on Cinco de Mayo 2022
Below are the results for the same popular grocery items and alcohol keywords related to Cinco de Mayo and the page 1 results seen for Brand Share of Search on Safeway.com.
Safeway Share of Search – Food and Beverage Keywords on Cinco de Mayo 2022
Access to these types of real-time digital marketplace insights can enable retailers and brands to make strategic decisions and help drive profitable growth in an intensifying competitive environment. Be sure to reach out to our Retail Analytics experts for access to more details regarding the above analysis, and let us know what other holiday insights you’d be interested in seeing this year. Happy Cinco de Mayo!
Finding the right price often requires a trade-off between margin and price perception. Brands may want to defeat competitors’ prices on all their products, but that can often lead to losses because sales directly link to price perception. Instead of trying to stay competitive across the board on all products, brands must identify key value categories (KVCs) and key-value items (KPIs) whose prices buyers tend to remember and price those products competitively. In this scenario, they can make up for lowered prices on key products by fixing higher prices on other products.
Consumers’ perception of price fairness largely determines their experience with a brand. Brands selling online can often have a disconnect between their prices and what customers expect their prices to be. However, that does not mean spiraling downwards by getting trapped in discounting cycles and heavy promotions that can harm your bottom line. Instead, brands require real-time monitoring across thousands of stock-keeping units (SKUs) to identify key categories and items they need to price with care. In this blog, you’ll learn about price perception and the factors that influence it.
What is Price Perception?
Price perception is the perceived worth of a product or service in the consumer’s mind. It is one of the leading variables in the consumer’s buying process. Buyers are unaware of the true cost of production for the products they buy. Instead, they make buying decisions based on an internal feeling about how much certain products are worth and which brand offers them the best value. To offer competitive prices and yet obtain a higher price for products, brands often pursue marketing strategies to improve the price perception of their brand and products.
Price Perception
However, brands should not fall into the trap of assuming that price perception is a competitor’s price index. It’s not about offering the lowest price on certain SKUs. Not every brand strives to offer the lowest prices. Some brands take a slightly different approach to ensure the right value for their products. For example, take a look at Trader Joe’s, a grocery chain that has never claimed low costs. They’ve always taken a holistic approach to their pricing and customers to build a loyal following. And it worked well for them. Trader Joe’s can boast one of a high-value perception score, despite not having rock-bottom prices.
Marketplaces such as Walmart and Amazon may not have the best prices on every item. Still, customer perception is that they will have the lowest prices and will often shift the share of sales towards such platforms over businesses that offer the same or even lower prices.
Some things to consider:
What do your customers think of your brand?
What are the key factors that are driving your customers’ price perceptions?
Is your product mix properly aligned with your brand perception?
Are you communicating the most important and relevant information to your customers?
Is your message being received and understood?
Who do your customers see as your competitors, and why?
Price positioning is pricing products or services within a certain price range. It indicates where certain services or products lie in relation to competitors’ pricing and in the mind of different customers. A brand’s price positioning has a huge impact on whether the products are seen as priced low or not. The following is a great way to understand the price-value matrix:
Price Positioning
Your brand’s position in this matrix will depend on your pricing objectives, competition, and customer loyalty. Price positioning helps the marketing and operating teams understand customers’ perceptions of your brand and convince customers to buy your products. Brands need a holistic approach toward setting prices for their products in order to drive conversions through intelligent pricing and competitive insights.
Factors that influence Price Perception
Price-Quality Relationship
Price is often an indicator of product quality. The general rule is that the higher-priced products are perceived to have better quality, implying that brands should consider a rational quality-price relationship in their pricing or promo strategy. For example, it might not be best practice to have similar prices for both good and low-quality products because customers will perceive low-quality products as overpriced and might not purchase from you.
Price-Consciousness
Customers aren’t price conscious about every product. Instead, they are only price conscious about certain products under the best price guarantee or BGP. For instance, if buyers find your BGP products more expensive than your competitors, the cheaper products in your assortment will still be perceived as expensive.
Value-Consciousness
During markdown periods, ensure that you are not undermining the efforts to shape and maintain price perception by offering extreme or complex discounts. In an attempt to clear stocks, promotions simply confuse the shopping experience for customers and further deteriorate trust in your brand. Your promotional offers should keep price perception during the holiday season or clearance sales by offering a simplified promotional program. Start by understanding which price mechanics and SKUs work best for your target customer segment. You should also reduce over-communication on hero deals else buyers will assume that you incorrectly price products during new seasonal launches.
Prestige Sensitivity
Gerald Zaltman, a Harvard professor, argues that 95% of all purchasing decisions are subconscious. Luxury brands are a great example of how psychology directly links to price perception. Customers buy premium or luxury products to demonstrate their social status. In this scenario, buyers don’t hesitate to buy expensive products from certain brands even if they are explicitly overpriced. Thus, brands selling premium products will have to ensure pricing is coherent with buyers’ expectations.
Every customer wants to know they’re getting the best value. They use the highest and lowest prices in a range to understand how expensive a product or brand is. So, by removing high price point lines with low volume, customers will see more minor price points around the store. Brands must merchandise entry price points to help customers identify the lowest prices and improve the perception of their product ranges.
Product Range
How to adjust Price Perception
Here are three ways for brands to improve price parity:
Marketing to influence Price Perception
An efficient pricing management strategy will focus on competitiveness and establishing the right price perception among your customers. You can influence customers’ price perception by improving the look and feel of your online stores since simpler designs are often reflections of lower prices. Another great way to influence price perception is to offer loyalty and reward programs that also improve brand loyalty and reinforces the vision of an economy store irrespective of the prices of your products.
Competitive Analysis
Brands can understand price differences after a competitive analysis. Customers often search for similar products across brands to find the best deals, and you will be able to understand customer opinion through competitor analysis.
Price Management Automation
A price monitoring platform can help brands to stay on top of promotions and discounts offered by their competitors. A price intelligence software will help brands associate products by similarity criteria and compare the pricing of their products with those of competitors. It offers a detailed view of the market and ensures that brands take care of their bottom line.
Conclusion
When a consumer comes across a similar low-priced product or service from a different brand, they may see it as a good deal or might perceive it not worthy of their time or money. What consumers think about your brand’s price is just as important as the actual price of that product. A buyer may sense a company as “upscale” and assume that they have high prices, or they may see a brand as a discount retailer whose prices are too high for its reputation. At times, consumers might also see cheaper alternatives as inferior. It’s not easy for a brand to understand its customers’ perception of price vs. value it offers. Brands need a long-term, dynamic pricing strategy that matches the demands and trends of a global, competitive market. And in order to drive sustainable growth, they need to make smarter pricing and promotion decisions with insights into competitive pricing.
Learn how DataWeave can help make sense of your and your competitor’s pricing & promotional strategies and help your brand build the right Price Perception. Sign up for a demo with our team to know more.
According to MarketingCharts, 63% of online shoppers start their buying journey on Amazon. This shows that customers believe they will find the products they are looking for with competitive prices and excellent customer service on Amazon. Amazon is one of the most dominant eCommerce marketplaces with 197 million users and 112 million Amazon Prime members. Brands can sell on Amazon to capitalize on this vast customer base by showcasing and promoting their products properly.
In this article, we’re going to take a look at the top 7 strategies to sell effectively on Amazon:
1. Boost Product Discoverability using Ads
Amazon Advertising helps sellers, brands, and agencies to drive profitability by making sure product discoverability is high & shoppers are able to find their brand with ease. The ads on Amazon fuel product discovery and improve conversion rate. The advertising options on Amazon are designed to help brands increase exposure, generate incremental sales, boost organic rankings, and drive growth.
Amazon has three PPC programs: sponsored product ads, sponsored brands ads, and sponsored display ads. Brands can increase visibility on Amazon with these three paid campaigns. You can sponsor products or your brand for related searches on Amazon. Businesses only pay for clicks received.
Sponsored products are for individual product listings that appear on shopping results pages and product detail pages. Sponsored brands are for showcasing brand portfolios such as logo, custom headline, and a selection of products on the shopping results page. The last is sponsored display, a self-service advertising solution for displaying ads on and off Amazon.
Promotions for Brand and SKU’s
2. Improve your Amazon SEO using effective Product Descriptions
To effectively sell on Amazon, businesses first have to understand the A9 algorithm. Amazon uses A9 Algorithm to decide which products are ranked in search results, emphasizing sales conversions. This algorithm helps Amazon promote listings that are more likely to result in sales.
Keywords in product descriptions are one of the main driving factors that the Amazon A9 algorithm looks for in determining relevance to search queries and setting rankings on its results pages. Therefore, brands must integrate high volume and significantly relevant keywords as part of their listings. Crafting product descriptions with the right keywords will provide compelling reasons for buyers to purchase the product and for the A9 algorithm to better rank the brands. Brands can analyze and optimize their content to improve discoverability across Amazon. Accurate product descriptions help users make informed decisions and allow brands to deliver a consistent customer experience.
Detailed Descriptions and Highlights
3. Improve your Product Visuals
Avoid using standard visuals when displaying your products in Amazon’s image gallery. Product images are the hook that encourages visitors to click on your products. However, Amazon has specific image requirements that you’ll need to adhere to while presenting products. When shopping on Amazon, potential buyers are looking for high-definition and clearly visible photos. Thus, you will need diversity in images if you want your product and photos to stand out.
In addition to images, brands can make their product descriptions better through video content. Videos help your brand to stand out, build a more personal relationship with customers, and lead to increased sales. One study on eCommerce sellers found that using product videos increases sales for online stores by 144%.
Product Images
4. Switch to Intelligent Pricing & Win the Buy Box
Intelligent and competitive pricing is the most essential lever for revenue growth. With advanced technology like AI and analytics, brands can get insights into competitive pricing and develop an intelligent pricing strategy to calculate real-time changes in pricing optimally.
Amazon wants to give the consumer the best value for their money and thus has a Buy Box option. The white box on the right side of the Amazon product detail page is called the Buy Box, and customers can directly add items for purchase to their cart. However, not all sellers are eligible to win the Buy Box.
Thanks to Amazon’s customer-obsessed approach and high competition, only businesses with excellent seller metrics have a chance to win a share of Buy Box. Amazon weighs low prices with high seller metrics. If your brand has near-perfect performance metrics, having higher prices can still get you a share of the Buy Box. In contrast, brands with mid-range metrics will probably need to focus on offering the most competitive price.
But, why is the Buy Box important? According to BigCommerce, 82% of sales on Amazon go through the Buy Box, and the rate is even higher for mobile purchases. Getting insights into your competitor’s pricing with our Digital Shelf Solution will help you improve seller metrics and find the right pricing strategy for your products.
5. Provide Plenty of Social Proof
Testimonials can increase sales page conversions by 34%. Social proof has emerged to be of great importance in the eCommerce world, and it isn’t limited to recommendations from people customers know in the “real world.” A survey conducted by BrightLocal revealed that 31% of consumers reported that they read more online reviews in 2020 than ever due to Covid-19.
Product ratings and reviews on Amazon are at the center of the recommended products section, product listing page, and search results. Interestingly, customer feedback also has a huge impact on a brand’s ODR or Order Defect Rate. It is one of the most critical measurements tracked by Amazon. ODR is a measure of customers who have had a negative experience with you as a seller. Amazon uses it to assess a brand’s health as a seller. The ODR indicator is driven by customer feedback, so review management is the primary step for brands to avoid an Amazon ODR warning and improve their order defect.
6. Go Global
The Amazon marketplace is available in countries and markets worldwide, allowing brands to explore new territories and sell their products globally. Each foreign territory has a unique Amazon site that resonates with its culture and audience, making it easy for global sellers to compete with other brands. If your eCommerce brand has the operation capacity to expand globally, Amazon offers state-of-the-art international logistic capabilities.
Brands can expand in European countries like France, Italy, Netherlands, Germany, Spain, etc., and Asia Pacific locations like India, Japan, and Australia. Amazon is also available in emerging eCommerce locations like the Middle East, Brazil, Turkey, and Singapore.
7. Build a Branded Store
One of the best strategies to stand out on Amazon is to feature your products on a branded Store. Amazon has free tools that allow grants to build an online store where brands and sellers can showcase products and connect with customers. These stores look different from the typical Amazon listing layout and also have the option to create detailed pages with A+ content.
Build your Brand Page
For instance, Netgear, a company that offers technology-related products has an excellent branded store on Amazon. The brand has embedded images and videos that address buyers’ needs and how users’ lives are affected by using their products. The most attractive feature about this store is that they have integrated the value offered by their products into new use cases because of the current pandemic. For example, they’ve used phrases like “Make Online Learning fast and fun” and “Work from office at office speed.” Additionally, the categories and search tab help buyers search for specific products easily.
Creating branded stores allows you to build a beautiful brand experience for customers and offers a multi-page, immersive shopping experience. Brands can pick unique designs, integrate promotions, and use rich media to create a custom curation of handpicked products.
Conclusion
Amazon has 9.7 million sellers worldwide, of which 1.9 million are actively selling on the marketplace. The competition on Amazon is fierce, and it’s continuously increasing. Despite a large number of active sellers on Amazon, only a tiny fraction generates a significant portion of its total sales. Fewer than one in ten active Amazon sellers generated over $100,000 in annual sales, and only one percent of them hit the $1 million sales mark. Use these strategies to develop a comprehensive understanding of the Amazon platform and how to sell effectively on the platform while maximizing your presence amid rising competition.
No matter where your eCommerce business sells, there are some fundamentals that brands have to get right to achieve sales targets. Brands need to find the right product/market fit, nail their lead acquisition strategy, and design a qualified sales funnel to turn prospects into leads and eventually returning customers. They will also have to analyze their customer’s buying journey and get insights into competitors’ strategies to understand what works for their business.
If your eCommerce business is struggling, read this blog to learn about steps you can take to increase sales and keep your business afloat.
1. Lack of social proof
Customers often check for reviews or testimonials before making a purchase. Our decisions are consciously or unconsciously influenced by the opinions, choices, and actions of people around us. Social proof helps brands build customer trust, adds credibility to their business, improves brand presence, and validates customers’ buying decisions. 92% of consumers are more likely to trust user-generated content (UGC) and non-paid recommendations than any other type of advertising. Additionally, brands should also find ways to combat negative reviews since bad reviews can sometimes be extremely damaging.
Understanding these reviews or the impact of your brand’s social proof is critical. At DataWeave, we help brands analyze online reviews to understand customer sentiment and adapt to feedback to enhance their experience with your brand.
2. Slow site speed
Site speed of the home page and checkout page on your D2C website can be a roadblock. Slow sections on your site like My Accounts, checkout, and cart are often overlooked when it comes to tracking site speed. Brands should run their checkout process at least once a month to ensure it’s fast, smooth, and bug-free. You can optimize images, strip unused scripts, implement HTTP/2, etc., to improve site speed and performance.
3. Poor customer service
69% of US consumers say customer service is very important when it comes to their loyalty to a brand. Guaranteeing a return customer is important to maintaining customer loyalty. While the focus is on the first purchase for new customers, your brand’s customer service will determine if first-time customers become repeat buyers. Loyal customers are known to spend 67% more on a brand product than new customers, even if they make up only 20% of your audience.
Types of customer service
4. Failure to send traffic to popular products
Be it your own D2C website, or when selling on a marketplace, you should be able to drive traffic to your best-selling products. One of the best ways for sending traffic to popular products on your website is to run paid ad campaigns and reach new audiences with influencer marketing on social media. Brands can also attract customers with organic media such as writing blogs and producing podcasts.
If you’re looking at driving traffic to key products on Amazon & other such marketplaces, sponsored ads are the way to go! Sponsored ads help your best-selling products more discoverable & helps shoppers find your brand with ease.
5. Inadequate pricing
Finding the right pricing strategy for your eCommerce business is crucial for optimizing sales and increasing revenue. The first step is to perform a competitor and historical data analysis to get a general idea of the market and then develop a pricing strategy that is the right fit for your products. Brands also have to ensure that they have dynamic pricing that can adjust according to supply and demand.
One of the biggest mistakes that eCommerce businesses can make is targeting the wrong audience. It’s crucial for brands to define that target audience and then tailor products and marketing toward them. To increase sales as an eCommerce business, brands have to understand their audience, their interests, and how to appeal to their interest. Start by creating ideal buyer personas that represent your ideal customers. Also, segmenting audiences and targeting various groups based on buyer personas for ad campaigns will lead to better sales and revenue.
Targeting the right audience
7. Poor product descriptions
One of the major and common mistakes by eCommerce brands is using irrelevant product descriptions that are not optimized for the product. Customers don’t add products to their cart if they have difficulty finding sufficient information relevant to the product. Brands should write attention-grabbing descriptions optimized for SEO that are informative for the users. Here are some tips to optimize content to drive more eCommerce sales.
Due to COVID-19, many businesses have had to modify or temporarily shut down their daily operations. However, finding new revenue streams can be a great way for eCommerce businesses to make up for the lost income and keep the company afloat. The best solution is to diversify your product offerings by offering commonly purchased products in bundles.
9. Low-quality visuals
Businesses fail to hit their sales targets because of low-quality visuals in product descriptions. High-quality and custom images can improve conversion rates from both marketplaces and image-based channels like social media. Social media users are attracted to exciting, high-quality content that conveys a desirable lifestyle. Brands should use high-resolution, attractive pictures of their products. Brands can also utilize UGC and influencers to help build up their content libraries.
Low-quality visuals
10. Wrong Assortment. Poor Availability
When your target audience lands on your eCommerce store and cannot find what they’re looking for, it leads to a poor shopping experience, but more importantly a lost sale for your brand! While you cannot have endless inventory, it’s essential to optimize your assortment & product availability to decrease the chances of your customer walking away. Assortment & availability optimization begins with analyzing current and historical inventory trends. If done manually, assortment can be a time-consuming task. A healthy assortment can increase retail sales by creating a positive shopping experience for your customers and encouraging them to return to your store again.
11. Bad eCommerce UX
Offering a sub-standard user experience is a common reason why eCommerce businesses find it difficult to increase sales. According to a study, the conversions can fall by up to 7% for every one-second delay in page load time. Businesses can use a countdown clock on their landing page and exit pop-ups to improve conversations. Your landing page and product descriptions should provide information that helps your users make a better and more informed decision.
Conclusion
If your eCommerce’s business sales are tanking, improving site speed, customer service, social proof, and product descriptions are some of the levers you can pull to remedy the situation. Brands should also work on improving online reviews & ratings, availability, assortment, visuals, and website UX to improve customer experience. These steps not only increase loyalty but also improve customer retention.
Need help tracking online pricing for your eCommerce business? Or decoding customer sentiment from reviews they’ve left for your products? Or do you need insights into your product assortment and availability? Sign up for a demo with our team to know how DataWeave can help!
According to the Statista Fashion eCommerce report 2021, the compound annual growth rate (CAGR) for online fashion is predicted to be 10.3% between 2018-2023. The widespread need for trendy fashion presents a challenge for fashion brands to succeed in a highly crowded and competitive space. With eCommerce shopping becoming more prevalent, fashion brands aren’t just competing for brick-and-mortar sales. Instead, they’re also competing for those late-night or impulse purchases from online customers.
Looking to 2022 and beyond, this blog will highlight 9 things to build a thriving fashion eCommerce brand:
1. Allow shopping on multiple channels
Breakdown of Shopping journeys in Apparel
Typically buyers from diverse age groups prefer different sales channels. Some prefer large retailers, and some choose web stores. If you know where your customers like to purchase your products, you can leverage the power of search engines and marketplaces to improve your sales. Multi-channel retailing helps fashion eCommerce brands to sell and promote products on a platform and device of the audience’s choice.
A brand should offer support and access to its products across all platforms, channels, and devices. It helps fashion brands to reach customers where they prefer to shop. If your customers prefer to shop on a computer or an app, your brand can offer a seamless customer experience.
2. Don’t sell on the Homepage
Your online fashion store homepage is more about increasing credibility and trust among potential buyers. Your ideal home page shouldn’t display products or their prices. Instead, it would be best to integrate promotional and marketing strategies on the landing page to encourage visitors to explore your product categories and the rest of the website. You should have an intuitive interface that makes navigating the pages easier. You can also use the homepage to promote seasonal offers and new launches. Fashion brands can also display customer reviews, awards, brand achievements, and web security trust seals to increase the conversion rate.
Don’t sell on the homepage
3. Product Descriptions with Unique Stories
Product descriptions often get overlooked or underutilized even though they are important for eCommerce businesses. Your products won’t sell with spammy and same product descriptions. The modern product description is all about communicating a product’s worth and value with a story that captivates your buyer’s attention. Identify areas where your content & images don’t align with your product or represent it in the best light. Make sure to deliver an enhanced consistent brand experience across all online channels to improve your conversions.
4. Focus on Review and Ratings
Rating & Review of a fashion brand
Customer reviews have a huge influence on a buyer’s purchase decision, especially in the fashion industry. Encourage your consumers to leave reviews on your brand website. Reviews help fashion brands to build trust for their products and convert customers. Legitimate customer reviews help your shoppers to get crucial insights into what previous buyers liked or disliked about a particular product.
However, you should stay away from paid-for or false reviews usually encouraged by unscrupulous sellers as they are easy to spot and hurt your rankings. You must remember that receiving reviews also includes dealing with negative comments. They should be used to improve your upcoming product offerings.
5. Sell Looks
The product can be combined with in the detail page
Successful fashion brands don’t simply sell individual products. Instead, they sell complete looks that inspire shoppers to purchase the entire stylish look. As an online fashion brand, you’re not selling clothes; you’re selling an elegant collection of wearable art. When visitors reach your online store, you should appeal to their fantasies and sentiments through aesthetic look books that are both pleasing and congruent with your brand. Most successful online fashion shops are inspirational and visual. Look books help brands pair their previous season items or dead stock with new stock and increase sales. Brands can also share these look books on social media or in their monthly newsletters to increase reach.
6. Provide Promotions and Offers
Fashion brands can take advantage of plenty of sales throughout the year, from New Year celebrations to Black Friday, Cyber Monday, and Christmas. Brands can leverage these high sales periods to sell looks and gift items to boost sales. Just make sure you’re measuring the effectiveness of your online promotions. Holiday and festive sales also offer an excellent opportunity to plan strategic discounts to get rid of old stock. Since trends in the fashion industry have been changing rapidly, you can use discounts to get rid of dead-stock or out-of-trend items each season.
7. Be active on social media
Social media is a way to promote your brand, increase trust among your audience, and entertain your audience with exciting content. You can also engage the audience by providing gift coupons or giveaways. Brands can promote products while keeping their audience engaged with engaging content and promotional offers.
Social media is a great way to get influencer support, either organically or through a paid partnership. Brands have to focus on every element of social media marketing strategy, right from choosing a platform, creating Instagram/Facebook shops, jumping on trends/events, and tracking customer sentiment.
8. High-quality product photography
Capture every detail of your product
Nothing is worse than ordering a piece of clothing online and not getting what you saw on the website. Not being able to accurately convey fashion products will hurt your bottom line. Fashion brands must use top-notch product photography that includes high-quality visuals, such as multiple angle views, 360-degree images of each product, accurate depictions of all color options, and the option to zoom in on product attributes.
High-quality product photography
A recent game-changer in the fashion industry has been including different sets of models to accurately feature clothes of various shapes, heights, and weights. Instead of displaying a dress in only one size, fashion brands can have multiple models wearing various sizes for the same article of clothing.
9. Stay up to date with new trends
Fashion eCommerce brands have to be particularly careful of continuously updating their product offering with the latest fashion trends for each season. They can boost sales with an in-demand product assortment. Continuously updated fashion inventory signifies that the brand is up-to-date with the latest fashion trends in the market and has unique products to offer. You can always get creative with new styling, better looks, and personalized product recommendations.
Conclusion
Fashion eCommerce is rapidly growing and transforming at a staggering rate as technologies continue to advance. Traditional fashion brands can now expand their reach from brick-and-mortar shops to digital and eCommerce platforms to reach shoppers across the globe. The new digital selling opportunities also come with considerable challenges – from staying up to date with ever-evolving trends to managing dead stock. Are you a fashion brand that needs help monitoring your product content? Or measuring the effectiveness of your online promotions? Or decoding customer sentiment from reviews they’ve left for your products? Sign up for a demo with our team to know how DataWeave can help!
Online reviews have revolutionized how customers purchase products and services. In fact, eCommerce success for certain products hinges on the ratings and reviews. With this, have come the pitfalls of corruption in eCommerce.
New brands trying to establish a presence and capture critical mass have been known to resort to soliciting fake and paid reviews to uplift their brand in search rankings. Similarly, these brands can also encourage fake negative reviews on competitor’s listings to bring down their value. Bots and paid manual reviews are usually employed to rake up the review count. Review sites like TrustPilot, Google Reviews, and marketplaces like Amazon are littered with fraudulent reviews. In fact, Guardian calculated that 3.6% of all reviews on TripAdvisor were fraudulent. According to a 2021 report by Statista, 46% of the 2.7 million online fake reviews that were removed were five-star reviews!
Fake online reviews are misleading since customers shopping both online and offline rely on reviews to make purchase decisions. Fake reviews also pose further problems because they deceive consumers into spending money on a product or with a company they may not have otherwise chosen.
Federal Trade Commission (FTC) made a recent announcement to send penalties to over 700 brands and retailers for fake endorsements and reviews. While this notice references influencer content and testimonials, it also applies to customer reviews.
In this blog, we will discuss the importance of reviews for brands and retailers, spotting fake reviews on Amazon, and steps that eCommerce companies can take to tackle fake reviews.
Customers are more likely to purchase if other customers, even strangers, agree that it was a great purchase. Reviews also make brands more visible.
Why are fake online reviews so resilient?
A significant reason is that the ROI of getting fake reviews increases profitability & sales multifold. For example, an extra star on Yelp can increase a restaurant’s revenue by 5% to 9%. FTC has said that the expenditure on fake reviews can provide a 20x return. However, fake and incentivized reviews are a huge problem. Amazon, one of the largest eCommerce marketplaces, banned incentivized reviews in 2016. It took down suspicious reviews and has taken legal action against sellers who violate its policies.
Online Reviews
How to Spot a Fake Review on Amazon
Marketplaces, Google, and review sites like Yelp can get hundreds of thousands of reviews daily. In a survey by PCMag that interviewed 1,000 US shoppers who looked forward to shopping on Prime Day 2020, only 16% were very confident about detecting fake Amazon product reviews, and 24% were confident they could do it. The rest of the survey respondents were somewhat or not confident they could pick out the fakes on Amazon. Here are our best tips for spotting fake reviews on marketplaces like Amazon:
Duplicate Content: If you notice dozens of reviews with the same description and title as if they were copied and pasted multiple times, they’re most likely fake reviews.
Multiple Reviews on the Same Day: Another identification of fake reviews is when there are dozens or multiple reviews on a single day. There can be a bunch of both positive and negative reviews for products.
Unverified or Anonymous Reviewers: You can see if the review is from a verified buyer on Amazon. Brands can also check if they have any record of the reviewer’s purchase to weed out fake reviews.
Incorrect Language: Fake reviews can come from people outside your country. If you notice multiple reviews with similar incorrect words and common errors, there is a good chance those reviews are fake, and someone paid the reviewer to write them.
What can eCommerce brands do to protect themselves against fake reviews?
Follow a zero-tolerance policy for fake reviews.
The major step is to ensure that fake reviews are never posted on your site. Allowing fake reviews negatively affects your business and your bottom line. You can hire a third-party UGC moderator that uses data-driven, anti-fraud methods to evaluate reviews. It will be a much more successful and quicker step in protecting your brand’s reputation.
Don’t screen out negative reviews.
While receiving a negative review might be the worst nightmare, they’re necessary for a successful UGC program. Customers are more likely to purchase from a business that responds to all reviews, including negative reviews. Customers said that negative reviews have more detailed product information, while 32% of those customers think they’re less likely to be fake. Besides, brands that respond to negative reviews gain customers’ trust and loyalty. Here are some Tips on how to Respond to Negative reviews online.
Be transparent about how you collect UGC.
Brands can ensure that their customers trust user-generated content by being honest about how they collected it. Companies should never ask for paid or incentivized positive reviews. Instead, brands should empower their customers to leave honest feedback. If you’re offering free products, a chance to win something, or discount coupons in exchange for an unbiased review, then the review should specify how it was collected. For example, you can add indicators like “this reviewer received a coupon or a free product in exchange for honest feedback.
Maintain trust
Having fake reviews causes a loss of trust, with many consumers believing that they have seen fake reviews for online and offline businesses. Removing fake reviews doesn’t only help with revenue and brand trust, but it also helps brands to maintain trust among their existing and future customers.
Conclusion
Fake reviews are one of the biggest reputation killers and a huge problem for eCommerce platforms, brands, and customers. Brands must take the necessary steps to minimize the risk of fake reviews and expand businesses among authentic users. Although modern text generation tools are becoming more competent in writing realistic reviews, there are AI- and ML-backed tools that can accurately detect reviews written by other machines.
Need help tracking your online ratings & reviews? Or decoding customer sentiment from reviews they’ve left for your products? DataWeave offers a customizable and scaleable data solution to analyse ratings and reviews for online retailers and brands vis v vis their competitors. Sign up for a demo with our team to know how DataWeave can help.
When it comes to brands – the biggest story of 2021 was the astronomical growth of Brand Roll-ups. For the uninitiated, Brand Roll-ups are companies that acquire multiple digital consumer brands and then scale these brands 100x by leveraging their own operational expertise across eCommerce platforms, Supply Chain, Warehousing, Marketing, and so on.
Thrasio is the poster boy for the Brand roll-ups and is valued at over 10 Bn USD.
Brand rollups have raised over $12 billion in 2021 and the trend only seems to be accelerating in 2022. Not only Brand Roll ups, but VCs too have been pouring money into digital brands. In India, 77+ brands have raised more than 2B USD in 2021. In the US this number is estimated to be north of $10 billion.
Cumulative capital raised by Amazon Aggregators
Scaling fast doesn’t come easy. It comes with its own set of challenges. So even with ample experience in running and scaling brands, Brand roll-ups are posed with unique challenges.
Challenge of Scouting the right brand
There are 1000s of online consumer brands and new ones are launching every day. Every Brand roll-up wants to be the first one to scout a brand – but this is not easy.
The challenge here is to identify & pick the right brands without having access to any sales or financial data. Every Brand Rollup has a wishlist with regards to the number of SKUs, price points, reviews, and ratings as well – but don’t have tools in place to scout brands with these criteria in mind. And across multiple platforms and categories, the problem gets more complicated.
This is an ongoing problem since a brand that was not selling well yesterday may start hitting higher sales numbers a week down the line – and that is why Brand scouting has to be a continuous process.
One way these aggregators have solved this challenge is by offering mouth-watering referral fees for referring a brand. But this is not a sustainable long-term solution.
Data Comes to the Rescue
What Brand Roll-ups need is a continuous and automated data first Brand Scouting solution to enable them to scout the right brands.
What are all the brands in a category of interest?
Which of these brands is within the filters of Number of SKUs, Price Range, etc.?
Which brands have shown an exceptional rise in search rankings?
Which brands have shown the most increase in the number of ratings and reviews?
Which brands have the highest gain in the customer ratings?
What are the estimated sales and market share of the brands?
DataWeave’s Brand Scouting Solution is a comprehensive solution to help Brand Rollups and VCs scout for the ideal brand that fits their acquisition profile. We leverage public data collected from multiple eCommerce platforms to get them the desired information on brands they’re looking for.
For all the focused categories (Typically 30-40) – we collect data of all the SKUs (Typically 15,000-20,000) and aggregate that at a Brand level:
Ranking – Usually Brand Rollups are not interested in the Brands which are on the first page. But, they are interested in the brands which might be b/w 500 to 10,000 ranks but are showing an exceptional gain in ranking week on week.
Brand Discoverability & Ranking on Amazon
Ratings – It’s important to look at brands that are showing high improvement in ratings or have consistently shown high ratings. The proportion of 5 stars vs. 1 star is an important metric here.
Number of Reviews and Ratings – We enable you to find brands that have both high ratings as well as a high number of reviews. This is a very good metric to find the brands in a category that are getting exceptional customer love.
Brand Popularity Tracker
Filters – We enable filtering in terms of – No. of SKUs, Price Range, Rating and Reviews and even can eliminate established brands so that you only see the brands which qualify your criteria. We also enable you to separately analyze brands that are buying sponsored ads in a category, so you have a clear distinction between organic and sponsored growth of these brands.
Trends – What is important is not just the static performance on the day of analysis – but a trend analysis over a period of time to find the brands which are growing exceptionally.
Brand Score Trend, Average Rating trend & No of Reviews Trend
… but, wait there’s more.
We compliment Brand Scouting with three more solutions to provide the right context and further analysis needed to provide comprehensive insights into the category and platforms where you are scouting for brands:
Category Analytics: When you are looking at a category and the brands in that category, it is often important to understand how dynamic that category is. We can help analyze:
If the category is crowded with more brands per product.
Does it have space for new brands?
What is the number of new brands entering that category?
We can also help with benchmarking the category – to help understand how the brand that you are scouting is doing when compared to its category peers.
Rank Group versus Price, Rating & No of Reviews
Sales & Share: We can also provide a good directional estimate of the sales and market share of all the SKUs in the category wherein you are scouting for brands. These are estimates powered by our proprietary machine learning algorithms and can help you solidify your hypothesis around a blog or a category.
Revenue by Price Points
Sentiment Analysis of Reviews: Customer reviews tell more about the qualitative aspects of the SKU and the brand itself. Our algorithms can help understand what features of a brand or a product do customers really care about. We can answer questions such as:
Which features are mentioned most commonly?
Which features are mentioned positively or negatively?
What adjective is used to describe that particular feature?
Customer Sentiment Analysis
The suite of Brand Scouting and complementary solutions is evolving rapidly as the space is evolving rapidly. We are supporting several VCs and Brand Roll-ups globally to scout for brands.
The best aspect about DataWeave is our ability to scout brands across 2,000+ eCommerce platforms globally across geographies. We are super stoked to be playing an enabler in the Brand Rollup revolution.
The challenge for Brand roll-ups is not over by just scouting and acquiring a brand. The journey is just about starting – the next challenge that the Brand Rollup faces now is to scale up these brands.
The challenge the Brand Rollup face is unique and very different from a single brand operator or even traditional CPG conglomerates.
DataWeave’s flexible product philosophy enables Brand Roll-ups to diagnose and measure the performance of multiple brands across multiple platforms in one dashboard.
Customers love discounts, and promotions are the most effective tool to attract shoppers and increase sales during the holiday season and clearance sales. According to a survey, 76% of UK customers look for discounts before purchasing a product. Promotional discounts encourage customers to try new brands. And this is why brands often have a special coupon for first-time users.
According to Software Advice, discounting tops the pricing strategy for retailers across all industries. It is preferred by 97% of survey respondents over other promotional strategies.
Share of Respondents
Retail Trends in the UK for 2022
The arrival of the Omicron variant in December 2021 slashed the shopping mood of UK customers and led to a 3.7% monthly drop in retail sales, but sales were still higher than February 2020 levels when Covid-19 first hit worldwide. Sales during the holiday season in 2021 took a hit due to a consistent decline in product availability and an increase in prices. Inflation too started to rise in 2021 and is expected to increase by 7% by spring 2022. However, despite inflation, retail sales jumped back in January 2022. In fact, it is predicted that inflation will be a key driver of sales growth, with underlying demand across categories being uneven. Keeping that in mind, let’s look at sales growth across categories in 2021 and projected growth in 2022.
Category Breakdown: Sales growth 2021/22
Discounting Trends we saw in the UK in 2021
Methodology
We tracked prices on the three biggest Sales Days in the UK – Amazon Prime Day, June 21st & 22nd 2021 – Black Friday, Nov 26th, 2021 – Cyber Monday, Nov 29th, 2021
Categories tracked: Beauty, Fashion, Electronics, Home Improvement, Furniture
Websites tracked: Amazon UK, OnBuy, eBay UK, Etsy, Wayfair, Selfridges, John Lewis
Prime Day, Black Friday, and Cyber Monday are three of the biggest sales days with comparable discounts. However, according to new research, in 54% of cases, it depends on the category of product you’re after that determines the volume of discount you get. For example, tech items such as smartphones, laptops, games consoles, smartwatches, and wireless speakers were cheaper on Black Friday but may not necessarily have been cheaper on the other sale days.
We wanted to see which sale period had the most number of products on discount during the three big sale events. We also wanted to see which of those three sales would’ve been the best for consumers to get a higher section of products at a discount.
How Big were the Discounts?
Discount across 3 key Sale Days
32% of products went on discount during Black Friday, 35% on Cyber Monday, and only 6.6% on Prime Day. One factor contributing to the low Prime Day percentage is the fact that not all retailers participate in discounting wars during Prime Day since it’s an exclusive Amazon-only sale. Customers looking for the best deals would’ve gotten them during the holiday season with a combination of the Black Friday & Cyber Monday sales.
Another interesting thing to note is the percentage discount – on Prime Day, only 0.2% of products had a discount of over 50% of all the discounted products. While on Black Friday & Cyber Monday that number was 1.7% & 1.3% respectively.
In conclusion, more products were offered at a discount on Black Friday & Cyber Monday; and the total percentage discount on those products was also higher.
Which Categories had the Maximum Discount?
Discounts by category
On Black Friday, an estimated 47% of consumers in the UK planned to shop for electronics, whereas 40% of customers planned to shop for clothing and footwear during Black Friday to Cyber Monday. The top-selling categories across the 48 hours of Amazon UK’s Black Friday 2021 sale included Home, Toys, Beauty, Books, and Health & Personal Care.
Our data shows that Categories with the highest discounts were Beauty and Electronics with the highest discount on all 3 sale events. These 2 categories had discounts on over 40% products on Black Friday & Cyber Monday while categories like Home Improvement were in the 30 – 35% range, Furniture in the 27 – 32% range and Fashion has the least products on discounts at a little over 15%
In the fashion category in the UK, Amazon UK offered the highest percentage of items with a price decrease (31.6%), whereas eBay offered the most significant magnitude of price decrease (14.3%).
Which UK Retailers gave the most discounts?
OnBuy is an emerging marketplace in the UK that offers impressive discounted prices and is taking on top UK marketplaces like Amazon. It’s ranked Britain’s fastest-growing eCommerce platform in 2020 and also the fastest grower by traffic. The low listing fees starting at 5% allow sellers to competitively price their products, making them more accessible to a greater number of buyers with huge discounts. The most prominent deals and discounts are highlighted on the landing page and featured across OnBuy’s social pages to grab the audience’s attention.
Discounts by Retailer
This was clearly reflective in the data we gathered from the 3 big sales in 2021. Most retailers in the UK, including Amazon offered at best 20% of their products, in the categories we tracked, at discount. The only outlier was OnBuy – OnBuy offered close to 90% of their products at discount!
OnBuy was able to offer a comparatively high number of discounted products than their competition because the magnitude of the discount was much much lower. The platform offered minimal discounts; out of the 90% of discounted products, 80% of those products had discounts that were less than 10%. As opposed to other retailers who had under 7% of their products on discounts of less than 10%.
OnBuy’s discounting strategy built a perception that they were the biggest discounters, even when the discounts were not as deep.
Black Friday v/s Cyber Monday – which one was better for holiday shoppers?
Discount by category- Black Friday VS Cyber Monday
Black Friday kicks off the holiday shopping season and is synonymous with some of the most significant sales after Thanksgiving. But until recently, Cyber Monday has become a great way for eCommerce retailers to capitalize on holiday discounts and expand their most beneficial sales events of the year.
In 2021, retailers pulled in $8.9 billion in Black Friday online sales and a total sales of $10.7 billion on Cyber Monday. In the YOY review, Black Friday saw a decline of 1.3% from 2020’s record of $9.03 billion, and Cyber Monday saw a drop of 1.4%, only $100 million shy of $10.8 billion in 2020.
Across Beauty, Home Improvement, Electronics & Furniture categories, we saw that more products were on discount on Cyber Monday v/s Black Friday. However, the opposite was true for the Fashion Category. In the Fashion Category, we saw a marginally higher number of products on Discount during Black Friday than Cyber Monday.
Discount percentages across categories
Across both sales, the Electronics category offered the highest discounts at over 40% of products discounted compared to other categories on both Black Friday & Cyber Monday. However, a very small fraction of the products had a discount of over 50%, indicating the lack of ‘BIG blockbuster deals’ in this category. At the same time, the Fashion category offered the least number of deals with less than 20% products on discount, but the highest magnitude of discount across the board! On Black Friday, 3.8% of products had discounts higher than 50%, and 2.6% of products on Cyber Monday. In most other categories, between 1 – 1.5% of products had over 50% discount. However, Fashion brands offered more than 50% discount on 2x the average number of products on both sale days.
Why did the Fashion Category offer such high discounts? Brands are now capitalizing on customers’ need for instant gratification in the age of see-now, buy-now fashion trends by offering their products at high discounts. It also allows them to quickly eliminate overstock. However, this has given rise to fast fashion, a trend that focuses on rapidly producing low-quality clothes in huge volume. Fast fashion focuses on replicating trendy pieces like streetwear and fashion week designs, not four times a year but every week, if not daily. Fast fashion promotes brands to manufacture and sell low-quality merchandise that goes out of trend as soon as buyers wear it once. There is little to no time for quality control, and pieces are thrown away after a few wears. In the UK alone, 300,000 tonnes of used clothes are buried or burned in landfills each year. However, every element of fast fashion from rapid production, competitive pricing, to trend replication has a detrimental impact on the planet.
Conclusion
The effects of COVID-19 can be seen far and wide in the UK retail industry, especially with a steep rise in inflation. Fortunately, even though retail sales in the UK declined during the 2021 holiday season due to the Omicron variant, they increased during Black Friday and Cyber Monday. Sales also jumped back in January 2022 and are further projected to grow by 5% in 2022. Additionally, brands can sustain the impact of disruptive factors throughout 2022 by ensuring their Digital Shelf is updated and flexible enough to react swiftly to both threats and opportunities in order to maximize the chances of success.
For many brands, pricing strategy boils down to guesswork — shooting in the dark and hoping consumers are willing and happy to pay. However, the ‘throw it at the wall, and see what sticks’ pricing strategy leads to big pricing mistakes. Pinning down an optimal price for products requires a clear picture of ideal customers, understanding each customer segment’s behavior, a solid grasp of your product’s value, and an analysis of competitors. Pricing analytics can help brands track a wide range of pricing metrics with cutting-edge analytical tools and use insights to get ahead of their competition. This analysis uses historical data to understand how previous pricing and promotion activities affect brand, sales, and customer price perception. It often involves identifying opportunities and weaknesses in competitors’ pricing strategies and exploiting them to improve sales and revenue.
Pricing analytics helps brands understand how product pricing and promotions affect profitability and the steps they can take to optimize their pricing structures. Brands can leverage their pricing and consumer data to design appropriate pricing models for achieving their sales goals.
Here is a brief overview of pricing analytics, its benefits, and ways to improve sales with historical pricing analytics.
What is historical pricing data analytics?
Historical Pricing Data Analytics
Pricing analytics uses historical pricing and demand data to understand how pricing activities have affected profitability and overall brand. It also helps to optimize a brands’ pricing strategy for maximum revenue. Manual tracking of pricing for brands with numerous product lines, multiple selling points, different customer tiers, and complex product bundles is a huge challenge. Brands from every sector and industry vertical, manufacturing and distribution to retail and eCommerce, can benefit from pricing analytics.
There are three types of pricing analysis:
Descriptive
Descriptive pricing analytics involves analyzing historical data to evaluate how customers have perceived and reacted to pricing fluctuations in the past. It analyzes metrics such as month-on-month sales growth, average revenue per customer, year-on-year pricing changes, or changes to the number of registrations to a particular service over a specific period.
Predictive
Although brands can’t accurately predict how pricing changes will reflect sales, they can use predictive pricing analytics to get insights into the best possible chance of doing so. Predictive pricing analyzes historical data with statistical algorithms and machine learning to predict the price and trends of products in the future. It also helps brands to optimize their prices with future goals.
Prescriptive
Prescriptive pricing analytics is the opposite of descriptive analytics. Unlike descriptive analytics that helps brands explore their historical data to understand customer response after an event, prescriptive analytics help brands design better and more informed strategies. With prescriptive analytics, brands can shape their growth strategies to achieve more sustainable results over the long term.
Benefits of historical pricing data analytics
Benefits of Historical Pricing Data Analytics
Acquire insights into customers price perception
While analyzing the metrics to understand pricing optimization, brands can also gather valuable insights into their customer’s price perception. Pricing analytics helps brands understand which customer segments are the most (and least) profitable and how each segment responds to specific pricing strategies. With historical pricing data analytics, brands can also intelligently link pricing and promotions by first determining customer price sensitivity then gauging the effectiveness of promotions.
Fully Optimized Pricing
Historical pricing analytics means eliminating guesswork from deciding the optimal pricing for a given product. By analyzing historical pricing data, brands can discover how their past pricing and promotional decisions impact profitability. Based on this historical data, they can also test various pricing strategies like value-based and dynamic pricing. It also allows brands to learn which customer segments are most likely to respond positively to price change. These insights from pricing analytics will drive more effective (and profitable) pricing decisions.
Recognize pricing tiers that work the best
Many brands have gaps in their pricing strategy — underpriced or overpriced tiers, pricing leaks, markup errors, or neglected upsell opportunities. Tiered pricing models are prevalent in subscription-based brands where brands offer tiers to meet the needs of diverse customer segments. With historical pricing analytics, brands can improve their pricing tiers and get insight into the right number of tiers and optimal prices for each. Pricing analytics will comb a brand’s historical data to find tier pricing mistakes to improve sales and revenue.
Planning Pricing Strategies and Promotions
Promotional pricing decisions are critical for any brand, as pricing perception is directly linked to consumer demand and profits. Brands have to carefully plan promotions that include variables such as list prices, special offers, advertisements, and discounts while ensuring profit margins. With predictive analytics, brands can determine optimal discount levels, keep a close eye on the competition, and announce promotional offers when customers are likely to purchase. Historical pricing analysis also helps predict revenue and determine optimal locations and platforms for promotional ads.
Discover profitable channels
Not all sales channels bring equal revenue to your brand. Historical pricing analysis can help you determine the most effective quality, volume, and revenue channels. Brands must understand which marketing and sales channels bring quality leads that convert to paying customers. It also helps to determine which eCommerce channels are most profitable so you can optimize your budget and identify channels you should be investing in as a part of future customer acquisition strategies.
Metrics to track
Metrics to Track
Here are a few pricing analytics metrics that can help brands to understand customer behavior towards pricing:
Willingness to Pay (WTP)
WTP, also known as price sensitivity, is the maximum price your potential customers are willing to pay for your service or product. It is an essential part of pricing strategy since you have no other way of understanding whether your product can yield an augmented product value. Numerous factors are responsible for a customer’s willingness to pay, and it’s not static. Brands must track willingness to pay for all customer segments to ensure that the product is priced competitively and drives maximum profit while staying in line with current market conditions.
Feature Value Analysis
Feature value analysis, also known as relative reference analysis, measures the most important features to customers in relation to other features of a product or service. Analyzing critical features to customer segments will help brands price products based on basic or premium components. It can also help to better bundle your services or products so you can drive the most revenue.
Average Revenue per User (ARPU)
The average revenue per user is the revenue generated from the sum of active users divided by the total number of users in a monthly time frame. Delving deeper into ARPU can help brands compare numbers with rivals and check how all products or customer segments perform.
Lifetime Value (LTV)
Lifetime Value offers a complete picture of a user’s journey and the average revenue that the user will generate throughout their engagement as a customer with your brand. It helps brands determine various economic decisions such as marketing budgets, profitability, forecasting, and resource allocation.
Customer Acquisition Cost (CAC)
A successful and profitable brand needs to balance its customer acquisition cost or CAC. It is about spending the right amount of resources and time to drive new customers without jeopardizing their lifetime value and revenue. Correct calculation of CAC helps brands to quantify their sales funnel and determine the efficiency and profitability of their strategies.
Conclusion
Historical pricing analytics is a powerful tool, and it can make a huge difference to a brand’s potential by increasing sales and unlocking incredible profitability in a relatively short time. Historical analysis of pricing and promotions data will help brands get better marketing returns than relying on traditional pricing approaches.
Leveraging pricing analytics will prevent brands from blindly reacting to competitor price changes and support solutions for scaling up price transformation efforts. By using historical pricing data, brands can more effectively segment their customers for marketing and promotion strategies. Properly utilizing predictive analytics and past sales data can help cut costs and keep profit margins high by adjusting production and prices according to market trends. Need help tracking your competitor prices? Or want historic pricing insights for your own brand? Or need to track the efficacy of your online promotions? Sign up for a demo with our team to know how DataWeave can help!
Most brand & marketing professionals fear negative feedback and reviews. Negative reviews and ratings can not only hurt your organic product visibility online, but they also impact real business outcomes and purchase decisions potential customers will make about your product.
… but getting negative reviews is not always a bad thing. These unflattering reviews help give consumers real insights into your product and help them understand their features, attributes, benefits, and downsides better as described by other customers to give them a more realistic picture. Shoppers trust user generated reviews more than content brands share with them, which is why it’s really important for brands to interject in these conversations, address negative reviews and nudge customers towards building trust in their products.
Here are a few things to keep in mind when responding to negative reviews.
Be actionable and solution-oriented with your responses!
Even the strongest brands can’t avoid negative reviews, but what sets one apart from the other is how they tackle these reviews. A prompt and solution-oriented response can actually help salvage a negative situation in a lot of cases.
Build Brand Trust
Let’s take a look at Clinique & the unique approach they took towards responding to negative reviews. Shown above is one of its bestselling products Moisture Surge™ 100H Auto-Replenishing Hydrator. This product got an average of 4.7 stars since its launch in early 2021. 99% of customers even said they would recommend this product. And, in comparison to the over 370 positive reviews, there were just 5 negative reviews! Instead of basking in the glory of the numerous positive reviews, Clinique chose to promptly reply instead & not dismiss negative reviews even if there were just a tiny number. This goes a long way for any brand.
Negative feedback
Clinique not only addressed the customer’s concerns but also offered a ‘no questions asked’ refund and insisted that the customer take the conversation offline through a customer care agent. This action will help Clinique build long-term trust with not only the customers who had given them a low rating but the new ones too, who may stumble upon these negative reviews and see first-hand how customer-centric the brand is.
Respond promptly to keep things under control
A quick response to a negative review is supercritical. Even if you’re unable to resolve the customer’s problem immediately, acknowledging the review promptly lets them know their concern is a priority. On the plus side, it may also help them calm down and hold them back from posting even nastier comments. Aim to respond within 24 – 48 hours from the time a negative review is posted.
The quicker a customer hears from you, the more sincere your words will feel to them.
Prompt Response
Here’s an example of how Chobani yoghurts tackled a negative review. You’ll notice, they responded almost immediately when a customer complained about the “RANCID” tasting yoghurt. Responding minutes after the review came in shows their seriousness towards dealing with the situation and that they value customer feedback. Apart from prompt response, they even offered to investigate and work towards a solution.
Look for a chance to take the discussion offline
Negative Feedback System
Take the conversation offline by giving a phone number or email where customers can connect with a real person or brand representative. The goal is to move the conversation from a public forum to a private channel where a personal touch can be added. It could be a customer care number, a DM on a social platform, or a direct call back to the customer to listen to the details of their complaint. Additionally, connecting offline helps resolve issues faster without letting the problem escalate.
Do NOT get defensive
When it comes to responding to negative reviews, as a thumb rule pushing back or getting defensive is an absolute no-no. Being humble and accepting of negative feedback is important, and responding with grace, is even more important.
Let’s look at this example of a negative review left by an irate customer about the terrible IKEA customer service. Instead of getting defensive, IKEA politely acknowledges the feedback, apologies for the inconvenience, and offered a solution to help the customer sort out the issue with the order immediately!
Customer Feedback
A brand’s response to a negative review not only helps the individual who left the review in the first place but actually impacts other customers who will read it months down the line.
Remember to follow-up
Many times brands jump in promptly when a customer posts a negative review. They’re solution-oriented and some help resolve customer issues immediately too. The hard part’s done! However, where a lot of brands fall short, is when it comes to following up with customers once their concern has been addressed and they’re back to being brand advocates again.
Keeping that thought in mind, if it’s possible to get a customer who left a negative review to update or change it after their concern has been resolved could be a very impactful way to build brand trust. According to the Retail Consumer Report, 33% of customers turned around and posted a positive review, and 34% deleted the original negative review after having received a response from the brand or retailer in question.
Conclusion
Even though brands have limited to almost no control over how customers perceive their products online, they can still participate and interact with customers to improve their online reputation. They can listen in on the online conversations and adapt to customer feedback promptly based on what shoppers are discussing via reviews. Also, don’t filter the types of reviews when responding to your customers, and aside from the positive and neutral reviews, treat your negative reviews with extra care. Resolve them responsibly to win a customer for life!
Competition is a fundamental and healthy part of commerce that protects customers by keeping prices low and the quality of services (and choice of goods) high.
Healthy competition drives prices down, but it can harm brands and their reputation without a pricing policy. The manufacturer or brand designs MAP or Minimum Advertised Pricing policies to stipulate retailers’ lowest price point to advertise the product. It is an agreement between distributors and manufacturers about the minimum price that retailers and resellers can advertise the product for sale.
Most legitimate brands have a MAP policy, especially brands that rely heavily on brand identity. It becomes critical that they maintain price parity across retailers. When a retailer violates MAP policies, brands can penalize them under the agreed-upon terms or terminate contracts.
In this blog, you will learn about MAP policy, its benefits, and tips on tackling MAP violations.
1. What is a MAP policy?
MAP Violations
MAP stands for Minimum Advertised Price, and brands create MAP policies to ensure that retailers don’t advertise their products below the specified price. However, it only controls advertised prices, ensuring the retailers don’t display a lower price in online listings or advertisements. Since it doesn’t cover the checkout price, retailers can sell products at a lower price through promotional offers like discounts and cashback during checkout.
MAP policies ensure a price war between eCommerce platforms does not devalue products and that an even playing field is set among retailers that allow everyone to drive margins. Brands have a legal right to withdraw products if a retailer advertises products below the minimum advertised price. Brands can also restrict future sales or refuse to replenish products after the current stock has sold out if an eCommerce platform, reseller, or distributor violates MAP policies.
In the U.S., MAP policies fall under federal antitrust law since they restrict advertisement pricing rather than the last sales price. However, in the UK and the EU, violation of minimum advertised pricing is an infringement of current competition laws.
2. Why Does Having a MAP Policy Matter?
Having a MAP policy protects both brands and retailers while ensuring consumers get the best-priced items. Following are the benefits of having a MAP policy:
a. Prevent margin erosion
Although online retailers are willing to take a margin cut to attract traffic, selling products below MAP can significantly hurt a brand’s bottom line. Setting a minimum advertised price benefits both parties. It allows shoppers to purchase products at the best-valued price & also creates a balanced economy and prevents hyper-competition of products between retailers. However, manufacturers must set a realistic pricing policy that matches current market demand, ensuring eCommerce platforms implement MAP while taking care of the margins.
b. Retain brand identity
Brand Protection
Price is one of the essential indicators consumers use to determine the authenticity and value of a product. Constant price fluctuations can negatively impact a brand’s reputation. Brands need to safeguard their pricing to create a consistent price perception. Price changes often make the buying decision complex since consumers no longer have a clear reference of prices. It also shifts purchasers’ attention from the brand and product features to its price. With price fluctuations, brands that were used to be differentiated for their features can be seen as commodities.
Low prices & MAP violations on an online platform can even be a sign of counterfeit products or unauthorized sellers. However, customers might hold the brand responsible if they purchase counterfeit products from a retailer at lower prices. A negative product experience with a retailer will also reflect the brand’s reputation. An effective MAP policy that enforces consistent pricing will ensure that customers hunting for the best deals will stick with the most legitimate retailers.
Comparing prices has become an essential and common milestone in every consumer’s purchasing journey. It’s imperative that a brand ensures price parity across platforms and stores because substantial pricing variations on different platforms can make customers suspicious of a brand. Consistent pricing across eCommerce platforms ensures brands maintain their identity. MAP policies also allow retailers to maintain profit margins while avoiding price wars.
d. Combat revenue loss from illegitimate sales
While most authorized sellers or distributors comply with pricing policies, unauthorized sellers or grey market sellers have no obligation to follow a brand’s MAP pricing infrastructure. Brands can reduce risk with an authorized seller badge on retailer websites. This will help customers to verify authorized retailers and resellers of your products & help safeguard your brand equity online.
3. Tips on Implementing MAP policy and Tackling violations
Enforcing and tackling MAPs comes down to two things: monitoring the market for infringements and then acting on those violations. Here are a few tips for tackling MAP violations:
Implementation of MAP Policy & Tracking Violations
a. Communicate actively with retailers
To maintain a positive relationship with retailers and avoid confusion, brands should create proper communication strategies and channels to accompany the launch of the MAP policy. The policy should be easy to understand, but legal advisors are necessary to understand the jargon of the document. Brands can use checklists, videos, and well-briefed brand reps to communicate their policy clearly with retailers.
b. Reward retailers for compliance
Retailers who follow MAP guidelines can lose out to platforms that do not follow these pricing guidelines. Non-MAP following platforms undercut the price of products to drive sales and secure higher traffic. In such instances, brands can incentivize MAP following retailers to encourage them to comply with MAP guidelines while not affecting the competitive edge. It can be in the form of laxity of rules during promotion seasons like New Year, Christmas, and Black Friday sales. The laxity of rules for promotional seasons should be used as an exception to the general rule, and outlined in the guidelines.
c. Implement an AI-driven MAP monitoring
When product distribution is spread across the globe through a network of resellers and retailers, keeping a close watch on all platforms for multiple products can become difficult. With the expansion of online marketplaces, manually tracking the pricing of numerous products on multiple platforms is time-consuming and unsustainable. An automated AI-driven monitoring platform can track the pricing of all products sold across hundreds of online platforms and identify violations around the clock. Such platforms can alert brands of violations, price inconsistencies, or suspicious activities in real-time.
d. Send cease and desist to MAP violators and unauthorized dealers
Brands must enforce a MAP policy to ensure price parity among retailers and resellers. Brands must systematically monitor prices across retailers, social media, marketplaces, and price comparison websites. Whenever brands encounter a MAP violation, they should take action by sending a cease and desist letter to unauthorized sellers. For legitimate sellers, brands can notify them and outline the steps that will be taken if they don’t comply. Brands must be consistent in enforcing MAP policy violations, signaling retailers and unauthorized sellers that there will be repercussions for MAP violations.
MAP Policy
4. Conclusion
The trend towards online shopping helps businesses to cut overheads, allowing their products to be sold at a significantly reduced price. Although price appears to be the most effective consumer attraction strategy, significantly lowering product prices can devalue products and hurt brand reputation in the long term. However, including and enforcing MAP policies helps brands to manage their reputation and allows retailers to manage their margins.
Want to see first-hand how DataWeave can help brands track MAP Violations, Counterfeit products, and identify unauthorized sellers? Sign up for a demo with our Digital Shelf experts to know more.
Busy lifestyles, urbanization, aging populations, and smaller households led to the preference for convenience and efficiency in eCommerce deliveries. However, the Covid-19 pandemic caused a massive shift in customer demand and buying decisions. The modern consumer journey moved from takeaway food to online shopping to quick or same-day deliveries. With evolving digital touchpoints, customers now favor fast deliveries and convenience.
According to a 2020 survey by KPMG in the UK, 43% of consumers chose next-day delivery, a 4% increase from last year. Interestingly, 17% of consumers abandoned a brand if they faced a longer delivery. Standard delivery time has shortened from 3 to 4 days and two-day shipping to next-day or same-day delivery. This increasing trend of quick delivery has led to the boom of quick commerce or Q-Commerce. Quick commerce or on-demand delivery refers to retailers that deliver goods in under an hour or as quickly as 10 minutes. The rise of Q-commerce is caused by changing consumer behavior and rising expectations since the pandemic.
In this blog, you’ll learn about quick commerce or Q-Commerce and its benefits. You’ll also read about factors to consider for quick commerce and tips to implement this business model.
1. What is Quick Commerce?
On-Demand Delivery
Quick commerce or on-demand delivery is a set of sales and logistics processes that empowers eCommerce businesses, restaurants, grocery chains, and manufacturers to deliver products in less than 24-hours. A study shows that 41% of consumers are willing to pay for same-day delivery while 24% of customers will pay more to deliver their items within a one- or two-hour window.
Changing lifestyles and customer behavior directly impacted the rise of Q-Commerce. The takeaway food industry had used quick commerce for many years. But with Q-Commerce businesses consistently cutting delivery time, quick commerce for instant grocery delivery has become a new trend. For instance, India-based online grocery delivery firm Grofers rebranded to BlinkIt amid rising competition, promising 10-minute instant delivery.
2. How quick is Quick Commerce?
The post-pandemic lifestyle & the rise in the number of small and single-person households has led to an increase in demand for products in small quantities that need to be delivered sooner than later. Sometimes in as little as 10 minutes! This trend is oriented towards specific products such as packed or fresh foods, Groceries, Food delivery, Gifts, Flowers, Medicines to name a few.
Quick Commerce Categories
Local shops that can reach more customers with less friction have swapped traditional brick-and-mortar warehouses to cater to an urban population. These online Q-Commerce stores can deliver goods from favorite stores and offer a vast choice of products that are available 24/7. However, it requires real-time inventory management, data-driven pricing management, innovative logistics technology, a fantastic rider community, and a proper assortment.
3. Factors to consider for Quick Commerce
Competitive Assortment & Pricing
a. Assortment
With growing competition, getting product assortment right isn’t easy for quick commerce businesses, yet it’s critical to their success. To optimize assortment for quick commerce stores, they need to understand how demand differs between demographics and various stores. Since quick delivery involves packed and fresh products, it is even more essential to carry a unique assortment for each store.
Data analytics will help Q-Commerce businesses understand which products are repeatedly purchased in every store. It also helps identify high-demand gaps in your competitors’ platforms. Assortment analytics can help distinguish shifts in customer behavior across short- and long-term demands. The key to increasing sales is shaping inventory to match the overlap between market opportunity and consumer interest. With assortment analytics, they can determine the optimal mix of products for their daily inventory.
b. Pricing
Pricing information is readily available on quick commerce businesses, allowing customers to compare prices before making purchase decisions. Before deciding on a product, shoppers actively track the best deals on platforms across various Q-Commerce delivery platforms. According to a survey, 31% of consumers rated price comparisons as the essential aspect of their shopping experience. Understanding price perception can help quick commerce companies to optimize their pricing strategy while remaining competitive.
A competitive pricing strategy does not imply that Q-Commerce businesses have to cut prices. Instead, it’s about adjusting prices relative to your competitors but not significantly impacting the bottom line. Competitive pricing provides real-time pricing updates, allowing quick commerce platforms to drive sales by nailing their pricing strategy.
c. Delivery Time
Grocery Delivery Race In India
Delivery time has become the game-changer in quick commerce, with platforms fighting over shorter delivery times. Unpredictable factors such as specific delivery windows, last-minute customer requests, and traffic congestion can wreak havoc in your planning. Optimizing your delivery time can improve operational efficiency through faster delivery, quick route planning, and driver monitoring.
Big eCommerce platforms like Amazon offer same-day or next-day delivery to prime members with no extra fee on minimum order criteria. The only demand of customers who do not worry about discounts or lower wholesale prices is quick delivery. The demand for quick delivery services has led to many global retailers offering same-day delivery to meet those expectations.
d. Demand Forecasting
Since quick commerce is a viable solution for certain products, businesses must determine what customers want and when they want it. Q-Commerce businesses can use historical data to predict future sales patterns with demand forecasting. It ensures that Q-Commerce businesses can limit wastages and their inventory can cater to a targeted market. Demand forecasting also helps to replenish stock based on real-time data. Furthermore, companies can identify bottlenecks and points of wastage in the supply chain with a demand-driven system in place.
4. Benefits of Quick Commerce
Q-Commerce Benefits
a. Competitive USP
Q-Commerce businesses get new value propositions because customers that need immediate delivery are willing to try new brands and order from new stores. It also allows online Q-Commerce businesses to compete with global marketplaces and brick-and-mortar stores.
We at DataWeave have helped quick-service restaurants (QSRs) that are going the Q-Commerce route & selling via food aggregator apps to increase their revenue significantly. Our AI-Powered Food Analytic solutions have helped QSRs diagnose improvement areas, monitor key metrics, and drive 10-15% growth. Our data has helped them understand availability during peak times, monitor product visibility by region, track competitors, and choose suitable banners for promotion. Read more about that here.
b. Increase margins
A study from Deloitte suggests that 50% of online shoppers spend extra money to get convenient delivery of the products they need during the pandemic. These customers also paid extra for on-demand fulfillment and bought online pick-up in-store options.
Since the assortment of products in quick commerce is relatively small, Q-Commerce businesses can drive sales for their most profitable product lines. There is a potential for greater margins because wealthier demographics often require convenience. For instance, time-stranded professionals value convenience over discounts.
c. Customer experience is paramount
With quick commerce, retailers can meet customer expectations and exceed them, fostering brand loyalty. Quick commerce addresses customer pain points such as running out of food before a small party or getting a birthday present for your friends. It can simply help people who cannot make it to the shop or stock up essentials.
5. How to implement Quick Commerce
Implementation of Quick Commerce
a. The need for local hubs
To pack and deliver products in under an hour, businesses must be located close to the customers. Therefore, quick commerce relies on local warehouses that can serve customers in immediate proximity. Since the duration of two-wheelers is less likely to be impacted by heavy traffic or parking spaces, delivery services employ riders to deliver products.
b. Ensure you have the right analytics in place
Another essential part of running a quick commerce business is to have a web or phone application that can facilitate online ordering and offer accurate stock information to customers. Q-Commerce businesses also need a real-time inventory management tool that will provide insights into stock levels and allow for quick reordering and redistribution of products. This will also prevent deadstock and stockouts.
DataWeave’s Food Delivery Analytics product suite helps companies to increase order volumes, understand inventory, and optimize prices. It also provides access to discounts, offers, delivery charges, inventory, and final cart value across all your competitors.
c. It’s all about stock availability & assortment
Q-Commerce in the Grocery Delivery space is excellent for specific product niches like packed or fresh foods and vegetables, drinks, gifts, cosmetics, and other CPG products that customers use every day.
The stock assortment is as important in the Food Delivery space with restaurant chains like McDonald’s or Burger King that generate as much as 75% of their sales from online orders. These businesses have to make sure they’re carrying the most in-demand product assortment there is.
Conclusion
Same Day Delivery
The rise of quick commerce represents the next big change in eCommerce, accompanied by a shift in consumer behavior towards online grocery shopping and food ordering. When positioned with proper assortment and pricing, instant delivery services can allow Q-Commerce businesses to capture the influx of consumers looking for speedy delivery. By tapping into big data from quick commerce markets, Q-Commerce businesses can gain insights into consumer demands.
If you’re a Q-Commerce business in the Food Delivery or Grocery Delivery space, reach out to our experts at DataWeave to learn how our solutions can help you understand the best Pricing Strategy, Delivery Time SLAs, Assortment Mix you need in order to successfully sell on Q-Commerce platforms.
Growing awareness of personal hygiene and changing lifestyles has contributed to a significant development of India’s cosmetics, beauty, and personal care products. The Indian cosmetic industry reached a value of USD $26.1 bn in 2020. The major boom in sales is because of rising digitization, social media marketing, and the advent of eCommerce beauty platforms. However, the increase in demand and technological advancements has led to a competitive landscape for Indian and international brands competing for digital and physical channels. As of February 2019, 18.92% of respondents spent between 700 to 1700 rupees, and 43.9% spent up to 700 rupees monthly on cosmetics and personal care products in India.
Monthly spend on Personal Care Products in India
Shattering stereotypes and gender norms, India is also seeing a revolution in the male grooming industry, which is expected to reach INR 319.82 bn by 2024. The D2C market is expanding beyond metropolitan cities, and at present both D2C brands and startups have launched over 177 new products for men. “We realized there is an opportunity to create India’s first experiential brand exclusive for men,” says Hitesh Dhingra, Co-founder, The Man Company. He adds ecommerce business has grown almost by 200 percent. In a similar vein, Shantanu Deshpande, founder, and CEO, Bombay Shaving Company, concurs and adds the pandemic boosted online sales. He says that it has become easier for the company to compete with big brands on marketplaces like Amazon and Flipkart.
With the onset of the pandemic, it has become more and more important for these D2C brands to have a strong digital presence and an even stronger Digital Shelf when selling on platforms like Amazon, Flipkart, Nykaa, and the likes. On these marketplaces, brands need to track critical KPIs like product discoverability, stock status & availability, reviews and ratings, pricing & promotions to make sure they’re optimizing product performance across all online channels to amplify their eCommerce growth.
So which beauty and grooming brands and categories have a strong Digital Shelf and are dominating on Amazon? Let’s take a look.
Men’s Grooming Brands and Categories
Methodology
We tracked the first 250 products on Amazon against certain keyword searches specific to India’s Beauty & Grooming space. – Keywords specific to women’s grooming: anti-aging Cream, Face Mask, Paraben-free Shampoo, Onion Hair Oil, Body Wash, Moisturizer – Keywords specific to male grooming: Beard Oil, Hair Wax for men, Shaving Cream, After Shave Lotion, Beard Trimmer
Share of Search (SoS) – The percentage of products that appeared on the search results page on Amazon belonging to a brand against a specific keyword or category.
Data Scrape time period: From 14th Oct 2021 to 10th Nov 2021
THE BEAUTY IS IN THE DATA
On Amazon, brands use sponsored ads to increase visibility and drive more sales. When we looked at the product category with the most aggressive ad spends, products in the men’s grooming category came out on top and had the maximum number of sponsored products. 26% of beard trimmers were sponsored, followed by Beard Wax and Beard Oil at 25%. During the lockdown, more men started searching online for new products and watching instructional videos on how to groom their beards or how to get a salon-like shave at home. Demand for razors and trimmers is up by 50% compared to last year,” said Sidharth S Oberoi, founder and CEO, LetsShave. In contrast, we saw that only 11% of after-shave lotions and 15% shaving creams were discounted.
Percentage of Sponsered Items per Product Category
For women, we saw a similar trend. 24% of products in the Paraben-free Shampoos and Onion Oil category was sponsored. In contrast, only 5% of anti-aging creams were sponsored. Additionally, 21% of products in the face mask category and 23% in body wash were sponsored.
Competition is fierce in these categories, making an artificial boost necessary for increasing discoverability. In fact, we saw that the competition was the fiercest in the face mask category, which had the highest “1st Page Change Rate.” It is an indicator of how much the results on the 1st page for a particular keyword change from time to time. This reflects higher competition and brands constantly updating their digital shelf KPIs to ensure their products appear on page 1. One of the biggest reasons why brands need to constantly gauge their online visibility is to track their sponsored & organic ranking compared to competitors.
Driving sales using a smart Discounting Strategy
Price can play a big role in the final purchase decision. So we looked at two things wrt price across all these beauty & grooming products.
Which product Category had the maximum number of products on discount?
… & how large were these discounts?
Percentage of Products on Discount
We saw that almost 55% of products in the body wash category & 46% of anti-aging creams were available at a discount. Beard Oil & Onion Hair oil had the least number of products discounted at 29% each.
Magnitude of Discount
How high were these discounts? Let’s take a look.
The highest discount was seen in the beard oil and moisturizer category, with an average discount of 17% across all products. The average discount trend across most product categories ranged between 14 to 17%, so we did see some consistency there.
Consumers worldwide don’t make a purchase decision without reading online reviews. Online reviews and ratings have become a significant milestone in the modern consumer shopping journey, and eCommerce brands can leverage reviews as valuable sales tools. Given a choice between loyalty programs, discounts, reviews, and free shipping, online shoppers say reviews are the most important factor while making a purchase. Consumers trust user-generated content (UGC) more than product information and videos created by brands.
Number of Reviews per Product Category
We looked at product reviews to check consumers of which categories are actively sharing their experience and found that three categories stood out — beard trimmers, moisturizers, and paraben-free shampoo. At the same time, beard oil was the product category with the least number of reviews.
Companies can build consumer trust by identifying and acting on negative feedback. But in order to do that, they first need to de-code and understand the collective sentiment behind these reviews. DataWeave’s AI-Powered solutions can help brands break down & analyze online reviews and give them a wealth of insights to enrich their market research as well as create a seamless customer experience.
UNDERSTANDING THE COMPETITION ON AMAZON
When selling on Amazon, brands need to make sure shoppers find their products with ease. Keyword searches are the top ways consumers discover and find products across eCommerce sites. We tracked search visibility for the following keywords to see which brands had the highest share of search and appeared on the 1st page on Amazon.
Be in any product category – moisturizers, shampoo, anti-aging cream, Mamaearth & WOW featured against most keywords, showing popularity among customers. WOW Skin Science raised $50 million in April 2021, and Mamaearth raised $50 million in July 2021. These two fresh-faced brands have built credibility among health- and environment-conscious users. They are big competitors when it comes to natural and toxin-free products. It’s their high product visibility in multiple categories that is likely leading to better discoverability, higher sales & increased valuation, and brand value.
Rankings of Top Brands in various cosmetic categories- (A)
Rankings of Top Brands in various cosmetic categories– (B)
Who were the Amazon Bestsellers?
Products on Amazon that have the highest sales in their respective categories are called Amazon Bestsellers. The Amazon Bestsellers rank is based on product sales and sales history where the list undergoes an hourly update. The bestseller ranking or bestseller badge is available in the product information section on the product page. The rankings are determined by comparing sales and historical data with products in the same category or subcategory.
Brands can make it to Amazon’s bestseller list by optimizing their listings, encouraging reviews, and listing products in the relevance of categories. Although Amazon does not consider reviews for product ranking, they help users convince them to buy your product.
Here are the Brands we say that made it to #1 on the Amazon BestSeller List for the following product categories.
Amazon Bestseller List
Gillette made it to the top in the aftershave lotion and shaving cream category, while D2C brands Ustraa made its mark bearing number 1 on Amazon Bestseller list for hair wax for men and beard oil.
Amazon Bestseller List
Products from Nivea and L’Oreal made it to #1 seller in 2 categories each. Interestingly, in the Paraben-Free shampoo category, when D2C brands like WoW, Mamaearth have a stronger value proposition, traditional brand L’Oreal had the best-selling product.
L’Oreal must’ve pulled various levers and built a robust Digital Shelf to get to the top – from optimizing their content, ensuring product availability, tracking ratings and reviews, and proper competitive pricing.
Conclusion
An increase in new D2C brands in popular and trending categories has led to increasing competition. Unless a brand can position itself in front of the target audience and command their attention right away, another brand can step in and grab the sale. Do you know if your brand is prepped and ready to make an impact on marketplaces like Amazon? Or simply just wondering if your Digital Shelf is optimized with the right price, discounts, reviews, and keywords? Our team at DataWeave can help! Reach out to our Digital Shelf experts to learn more!
Business has been anything but usual this holiday season, especially in the digital retail world. The holiday hustle and bustle historically seen in stores was once again occurring online, but not as anticipated given the current strength of consumer demand and the reemergence of COVID-19 limiting in-store traffic. While ‘Cyber Weekend’, Thanksgiving through Cyber Monday, continues to further its importance to retailers and brands, this year’s performance fell short of expectation due to product shortages and earlier promotions that pulled forward holiday demand.
Holiday promotions were seen beginning as early as October in order to compete with 2020 Prime Day sales, but discounting, pricing and availability took an opposite direction from usual. This shift influenced our team to get a jump start on our 2021 digital holiday analysis to assess how drastic the changes were versus 2020 activity, and to understand how much of this change has been influenced by inflationary pressures and product scarcity.
Scarcity Becomes a Reality
Our initial analysis started by reviewing year-over-year product availability and pricing changes from January through September 2021, leading up to the holiday season, as detailed in our 2021 Cyber Weekend Preliminary Insights blog. We reviewed popular holiday categories like apparel, electronics, and toys, to have a broad sense of notable trends seen consistently throughout various, applicable marketplaces. What we found was a consistent decline in product availability over the last six months compared to last year, alongside an increase in prices.
Although retailers significantly improved stock availability in November and early December 2021, even digital commerce giants like Amazon and Target were challenged to maintain consistent product availability on their website as seen below. While small in magnitude, there is also a declining trend occurring again closer toward the end of our analysis period, post Cyber Weekend, across all websites included in our analysis.
Source: Commerce Intelligence – Product Availability insights for Home & Garden, Jewelry & Watches, Clothing & Shoes, Bed N Bath, Lighting & Ceiling Fans categories
Greater Discounts, Higher Prices?
With inflation at a thirty-nine year high, retailers and manufacturers have realized they can command higher prices without impacting demand as consumers have shown their willingness to pay the price, especially when threatened by product scarcity. Our assessment is that while some products and categories have responded drastically, manufacturers’ suggested retail prices (MSRPs) have increased nearly seven percent on average from January to December 2021. MSRP adjustments are not taken lightly either, as this is an indication increased prices will be part of a longer-term shift in product strategy.
Source: Commerce Intelligence – Pricing Insights for Bed & Bath, Electronics, Furniture, Healthy & Beauty, and Fashion categories on Amazon.com & Target.com each month in 2021 comparing price increases from January 2021 base
Our 2021 pre-Cyber Weekend analysis reviewed MSRP changes for select categories (Bed & Bath, Electronics, Furniture, Healthy & Beauty, and Fashion) on Amazon and Target.com, and found around forty-eight percent of products on Amazon and thirty-five percent of products on Target.com have increased their MSRPs year-over-year, but kept pre-holiday discount percentages the same.
Looking more specifically as to what year-over-year changes occurred on Black Friday in 2021, we observed MSRPs increasing across the board for all categories at various magnitudes. This indicates why 2021 discounts appeared to be greater than or equivalent to 2020 for many categories, when in reality consumers paid a higher price than they would have in 2020 for the same items.
Source: Commerce Intelligence – MSRP Pricing Insights for Bed & Bath, Electronics, Furniture, Healthy & Beauty, and Fashion categories on Black Friday November 27th, 2021, versus average MSRP pricing for the same SKU count from November 20-26th 2021
On Amazon.com, categories like health & beauty have already increase MSRPs by a much greater percentage and magnitude versus Target.com leading up to and during Black Friday 2021, while other categories like furniture have increased MSRPs evenly on average across both retail websites. The below chart cites a few specific examples of year-over-year SKU-level MSRP, promotional price, and discount changes within found within the electronics, furniture, fashion, and health & beauty categories.
Source: Commerce Intelligence – MSRP Pricing Insights for Bed & Bath, Electronics, Furniture, Healthy & Beauty, and Fashion categories on Black Friday November 27th, 2021, versus average MSRP pricing for the same SKUs on Black Friday November 26th, 2020.
Fewer, but Deeper Discounts
From October through early November 2021, fewer products were discounted compared to this same period in 2020, and the few that were saw much deeper discounts apart from the home improvement category. The most extreme example we saw in discounts offered was within furniture where only three percent of SKUs were on discount in 2021 compared to twenty-six percent in 2020. Interestingly, the magnitude of discount was also higher pre-Cyber Weekend 2021 versus 2020, but this trend was not exclusive to furniture and was also seen within electronics, health & beauty, and home improvement.
Source: Commerce Intelligence – Pricing Insights for Bed & Bath, Electronics, Furniture, Healthy & Beauty, and Fashion categories on Amazon.com & Target.com Pre-Black Friday average selling price during November 20-26th 2021 versus average selling price from November 13-19th 2021 compared to Pre-Black Friday average selling price during November 19-25th 2020 versus average selling price from November 12-18th, 2020.
Within the furniture category, the subcategories offering the greatest number of SKUs with price decreases on Black Friday 2021 were rugs by a wide margin, followed by cabinets, bed and bath, and entertainment units, but the magnitude of discounts offered were all under twenty percent.
Source: Commerce Intelligence – Pricing Insights for Bed & Bath, Electronics, Furniture, Healthy & Beauty, and Fashion categories on Amazon.com and Target.com on Black Friday November 27th, 2021, versus average pricing for the same SKUs from Pre-Black Friday November 20-26th 2021 and Black Friday November 26th, 2020, versus average pricing for the same SKUs from Pre-Black Friday November 19th-25th 2020
Accounting for this phenomenon could have been retailers’ attempts to clear inventory for SKUs which hadn’t sold even during the period of severe supply chain shortages. With more products selling at higher prices this year, retailers were also able to use fewer SKUs with greater discounts to attract buyer in hopes of filling their digital baskets with more full-priced goods, helping to protect margins heading in to Cyber Weekend. Scarcity threats also encouraged consumers to buy early, even when not on promotion, to ensure they would have gifts in time for the holidays.
The same trends seen pre-Cyber Weekend 2021 were also seen on Black Friday with a year-over-year decrease in the percentage of SKUs offered on discount versus 2020, and steeper price reductions for the discounted products which can also be attributed to the increase in MSRPs.
Source: Commerce Intelligence – Pricing Insights for Bed & Bath, Electronics, Furniture, Healthy & Beauty, and Fashion categories on Amazon.com and Target.com on Black Friday November 27th, 2021, versus average pricing for the same SKUs from Pre-Black Friday November 20-26th 2021 and Black Friday November 26th, 2020, versus average pricing for the same SKUs from Pre-Black Friday November 19th-25th 2020
2021 Black Friday Price Increases?
We all know Black Friday is all about price reductions, discounts and deals and so it’s rare to see actual price increases, yet for Black Friday 2021, trends ran counter to this. We observed price increases across all categories for around thirteen to nineteen percent of SKUs, with an average price increase of around fifteen percent in 2021 versus an average of only two percent in 2020.
Source: Commerce Intelligence – Pricing Insights for Bed & Bath, Electronics, Furniture, Healthy & Beauty, and Fashion categories on Amazon.com and Target.com on Black Friday November 27th, 2021, versus pricing for the same SKUs from Pre-Black Friday November 20-26th 2021 and Black Friday November 26th, 2020, versus average pricing for the same SKUs from Pre-Black Friday November 19th-25th 2020
At an account level, we noticed a few interesting differences happening on Black Friday 2021 versus 2020 regarding category price changes. On Target.com, almost ninety percent of the bed and bath SKUs analyzed had a price change on Black Friday in 2021 versus 2020 with eighty-two percent presenting a higher price year-over-year versus only around seven percent showing a decrease, where on Amazon nearly forty-four percent of bed and bath SKUs showed an increase in price and around thirty-eight percent showed a decrease. Except for the health and beauty category on Target.com, more than half of the SKUs in each category saw a price increase on Black Friday versus a price decrease.
Source: Commerce Intelligence – Pricing Insights for Bed & Bath, Electronics, Furniture, Healthy & Beauty, and Fashion categories on Amazon.com and Target.com on Black Friday November 27th, 2021, versus average pricing for the same SKUs on Black Friday November 26th, 2020.
The magnitude of year-over-year price changes seen on Black Friday 2021 was significant across all categories, but the magnitude of price increases found on Amazon.com within the health and beauty category outpaced the rest by far. We reviewed three hundred and sixty-five SKUs on Amazon.com within the health & beauty category and saw almost eighty-three percent of them had a price change with around thirty-one percent decreasing prices and around fifty-two percent increasing prices. This means that within the health & beauty category on Amazon.com, more than fifty percent of the SKUs tracked were sold at a one hundred and seventy-six percent higher price on average during Black Friday 2021 versus 2020.
Source: Commerce Intelligence – Pricing Insights for Bed & Bath, Electronics, Furniture, Healthy & Beauty, and Fashion categories on Amazon.com and Target.com on Black Friday November 27th, 2021, versus average pricing for the same SKUs on Black Friday November 26th, 2020.
The subcategories offering the greatest number of SKUs with price increases on Black Friday 2021 were cameras, followed by men’s fragrances, laptops, and desktops & accessories, but the magnitude of discounts offered were all under ten percent.
Source: Commerce Intelligence – Pricing Insights for Bed & Bath, Electronics, Furniture, Healthy & Beauty, and Fashion categories on Amazon.com and Target.com on Black Friday November 27th, 2021, versus pricing for the same SKUs from Pre-Black Friday November 20-26th 2021 and Black Friday November 26th, 2020, versus average pricing for the same SKUs from Pre-Black Friday November 19th-25th 2020
The Aftermath Post-2021 Cyber Weekend
Extending this analysis beyond the holiday weekend, we analyzed price change activity from December third through the ninth across the top US retailers (chart below) and found that price decreases have been very minimal, comparatively speaking. Though there was a spike in number of price decreases from December 8th to the 9th, the percentage of SKUs with price decreases was still very low (less than three percent). We anticipate this trend will continue into 2022.
Source: Commerce Intelligence – Pricing insights for Home & Garden, Jewelry & Watches, Clothing & Shoes, Bed N Bath, Lighting & Ceiling Fans categories
A Sign of Things to Come
A confluence of inflationary trends, product shortages and consumer liquidity have driven many marketplace changes to occur simultaneously. Government programs in the form of stimulus checks, have put extra money in consumers’ hands, and so they’ve been more willing to spend. That, coupled with the shock in the supply chain, has motivated people to buy far ahead of the 2021 holiday season. Hence, retailers have needed to rely much less on across-the-board discounts. Promotions have been more strategic – we’ve seen deeper discounts over fewer products, likely used to draw consumers in to buy certain items, and once they’re there, customers are buying everything else at a non-discount level. When these factors once again normalize, we could see a return to the “race to the bottom” that has occurred since the financial crisis of 2008-2009, but for once, retailers may be able to maintain some pricing power as the 2021 holiday shopping season played out.
Even though performance was not as anticipated and holiday sales did not grow as rapidly as they did in 2020, Cyber Monday was still the greatest online shopping day in 2021. Through it all, retailers managed to keep their digital shelves stocked and orders filled in time for the holidays for the most part, running the risk of housing aged inventory if goods didn’t arrive in time. Despite predictions for steep promotions in January 2022, with supply chains still challenged and inflationary pressures still full steam ahead, we don’t anticipate much in the way of enhanced discounts to continue beyond the holidays.
Access to these types of real-time digital marketplace insights can enable retailers and brands to make strategic decisions like how and when to address inflationary pressures, while also supporting many other day-to-day operations and help drive profitable growth in an intensifying competitive environment. Continue to follow us in the coming weeks for a detailed 2021 year-end review across more retailers and categories. Be sure to reach out to our Retail Analytics experts for access to more details regarding the above analysis.
For eCommerce companies, holidays are the busiest season of the year. Whether creating brand awareness with your marketing campaigns or freshening up your landing pages or finding new ways to segment & understand your customers, the list of tasks seems endless. It’s the time of the year when most people look forward to shopping for friends and family.
The holiday shopping season begins with Black Friday and Cyber Monday and leads to the December holidays, including Christmas and New Year. Consequently, proper planning and marketing are essential for a successful holiday season.
In fact, holiday sales during November and December are forecasted to be between $843.4B – $859B, up 10.5% over 2020, according to the National Retail Federation (NRF). For online stores specifically, sales are predicted to increase between 11% – 15% to a total of between $218.3B and $226.2B driven by online purchases.
This guide will share eight promotional strategies retailers can use during the holiday season. We will also discuss how data analytics can help retailers improve their promotional strategies.
Using data analytics to guide promotional strategies
Promotional Strategies
Data is the foundation of every successful marketing campaign. Data analysis helps companies understand which graphics worked well and campaigns that generated the most revenue. Gathering data and running analysis helps companies improve their next marketing campaign. Retailers can also get deeper insights into campaigns/channels with the highest conversion rate or average order value (AOV).
With data analytics, retailers can prioritize campaigns and channels that resonate the most with their customers this holiday season. But, it would be best to try more than one promotional strategy to ensure you double down on what works without placing all of your eggs in one Christmas-themed basket.
Here are four ways that data analytics can help guide promotional strategies:
a. Customized alerts for listing pages
Data analysis helps retailers determine if certain products are out of stock on their rival’s website and adjust their own pricing accordingly. It allows retailers to grab market share for trending items. For example, if you get an out-of-stock alert for a particular product at competitors’ stores, you can invest more in advertising that product on your online store. In addition, customized alerts keep retailers informed about their inventory status, allowing them to plan promotions and ads. They can see which products are becoming commoditized due to intense competition and which ones offer better revenue opportunities.
b. Maximize conversions by tracking product trends
Assortment Analytics
Customers are always looking for products that are currently trending. With assortment analytics, eCommerce companies can get insights into hot trends, allowing them to stock in-demand categories and products. Integrating assortment analytics with AI-powered image analytics can also provide insights into attributes that are popular among customers. By filling gaps in their current assortments, retailers can improve conversion rates and increase revenue.
Here’s a case study on how DataWeave helped Douglas, a luxury beauty retailer in Germany boost sales by building an in-demand product assortment
c. Monitor competitor promotions
Promotional Insights
With increased competition and consumer demand for deals, it has become important for retailers to monitor their competitor’s promotions. Monitoring promotions helps retailers to optimize their ad spend accordingly. AI-powered image analysis tools can capture important information from competitors’ ad banners and deliver insights into metrics that are working to deliver sales.
d. Optimize margins with a data-driven pricing strategy
Pricing Intelligence
It has become challenging to price products in recent years since digital tools enable price transparency across channels. Although this trend is excellent for consumers, it makes competition fierce for retailers. A data-driven pricing strategy incorporates a variety of factors, including industry needs, competitor analysis, consumer demand, production costs, and profit margins.
With data-driven competitive pricing, retailers can keep pace with the changing eCommerce environment with real-time pricing updates. It also helps them optimize margins and quickly respond to changes in prices on rival stores.
Promotional Strategies for the Holiday Season
a. Virtual Webrooms
When customers want to see a product in-person, they go to a store showroom. It helps them make a purchase decision. However, with the Internet, eCommerce companies can bring this tactic online. The only difference between showrooming and webrooming is that the former takes in-person, whereas the latter happens digitally. Webrooming grew in popularity during the COVID-19 pandemic. Instead of spending weekends browsing stores, consumers took to the Internet for most of their product research.
A webroom allows customers to explore products from every angle, providing them with the complete in-person showroom experience online. Webrooming is a powerful holiday marketing strategy, especially regarding expensive purchases. Customers prefer to understand how the product will look. However, building a webroom is extensive and requires retailers to hire developers and professional photographers.
Webrooms allow retailers to share their collections, schedule virtual appointments, share 3D product images, set up virtual fitting rooms for clothing products, and accept purchase orders. For example, in 2015, Tommy Hilfiger launched its first digital showroom in Amsterdam to improve sustainability and minimize its carbon footprint. Through remote wholesale selling and digital product creation, a digital showroom helped Tommy Hilfiger transform the buying journey and retail value chain.
b. Loyalty-rewarding sales and perks
Customer Loyalty
Consider building customer loyalty during your holiday promotions. First, encourage your holiday shoppers to become loyal customers by offering bonus rewards, contests, or giveaways when they sign up for your loyalty program. You can encourage them to purchase right away by providing instant discount coupons or points for a reward to redeem on their next purchase. For maximum impact, you should run this promotion throughout the holiday season.
Second, you should attract your current loyalty program members with discount codes. Offer free shipping or provide a one-day-only discount code to ensure your customers choose you during their last-minute purchases. With these rewards, you’ll attract customers who are window shopping and simultaneously bring your loyal customers back throughout the holiday season.
c. Charitable Tie-Ins
AmazonSmile
Research shows that customers are four times more likely to purchase from brands with a strong sense of purpose. With the festive season being the time of giving, working with a charity and giving back to your community is a great way to reach out to customers.
After a tough one and half years because of the pandemic, people want to give back and help those in need this holiday season. You can partner with a non-profit and run campaigns that allow customers to give back. It’s also great for sharing your brand mission with your customers. For instance, Amazon allows customers to shop from AmazonSmile, which donates 0.5% of their eligible Charity List purchases to a selected charity, at no extra cost to the customers.
Consider partnering with an organization within your industry. For example, you can pair up with a non-profit that collects and gives clothes to the needy if you sell clothes. You can involve customers by asking them to exchange old dresses for coupons or cash discounts.
d. Omni-channel customer experience
Omni-channel marketing provides customers with a seamless, consistent, and cohesive experience over multiple marketing channels. Omnichannel marketing aims to provide a meaningful and cohesive experience that inspires your customers to make a purchase. Unlike multichannel marketing, this strategy puts the customer at the center of marketing campaigns and elevates the cross-channel customer experience.
Omnichannel shoppers spend 10% more money and purchase 15% more items than the original shoppers. eCommerce companies can use historical data to analyze successful channels and create a more transparent marketing strategy for the holiday season. Omnichannel analytics will provide a holistic picture of customer data that will help retailers to better meet the customer’s requirements and predict inventory.
e. Buy now, pay later (BNPL)
Buy Now Pay Later (BNPL)
Technically, buy now, pay later isn’t a promotional idea since your customers will still be paying the full price. However, BNPL allows them to delay their payments and not pay in full right away at checkout. Buy now, pay later needs to be on every eCommerce company’s holiday promotions plans. Various retailers, including Walmart, offer affordable monthly payments at the pace of 3 to 24 months with Affirm. Target also has a similar scheme with Sezzle and Affirm. Whereas Sephora and Macy’s offer 4 interest-free payments with Klarna.
BNPL is especially popular with millennials and Gen Z shoppers and will factor into their 2021 holiday shopping plans. Research showed 62% growth in the use of buy now, pay later service in consumers aged 18 to 24. Giving customers a means to manage their budgets during holidays while still taking home their purchases will attract more customers. While the customer doesn’t pay the full price right away for their purchase, businesses still get the total worth of the item. In the eCommerce industry—nearly 50% of BNPL users say they use it while shopping online, and among them, 45% use the service frequently.
f. Buy One, Get One
The last promotional idea is a classic buy one, get one offer. Everyone likes a good BOGO promotional offer. In fact, 66% of shoppers from a survey preferred BOGO over other promotions. It’s a win-win promotional strategy for retailers and customers. With this offer, people shop and stock up on gifts for their friends and family, while retailers make a more significant profit than 50% off sales. People prefer to get 100% off on a product over 50% on two items.
BOGO sales are best to move inventory by giving shoppers a deal they can’t pass up. If you have stocked up extra items during Black Friday, you can move those last-minute gifts as end-of-year BOGO sales, making room for new merchandise in January.
Conclusion
In this post, you saw that there’s more to holiday marketing than a few social media posts. eCommerce companies can use these holiday promotional ideas to offer Loyalty-rewarding sales and perks, buy now pay later service, and an omnichannel customer experience. Regardless of which strategies you’re using, remember that historical data analytics and early planning will play a significant role in increasing your sales and revenue.
Proper planning backed by insights into key metrics will help your team develop a one-of-a-kind holiday marketing strategy to drive your holiday sales upward. From sharing gratitude to offering personalized experiences, retailers have various options for promoting business this holiday season.
Learn how DataWeave can help make sense of your and your competitor’s pricing, promotional, and assortment data this holiday season. Sign up for a demo with our team to know more.
Traditionally, retailers have staged multiple promotions between Black Friday and before Christmas Day to keep consumers excited about holiday shopping, so it’s easy to see why one more promotional day might fall into relative obscurity. As if ‘Early Start’ offers to Black Friday and extended ‘Cyber Weekend’ promotions weren’t enough to plan for, eBay added another day into the mix called ‘Green Monday’, much to the benefit of consumers, as it furthers the window of opportunity to secure a bargain during the holiday season.
Green Monday falls on the second Monday of December and has historically been one of the greatest sales days of the year for eBay, often attracting last-minute shoppers or those searching for last-minute deals. However, because of the 2021 Global Shipping Crisis, there is speculation that Green Monday may be the last chance this year to have items delivered in time for Christmas. For this reason, we believe it could turn into quite a fruitful event for participating retailers if it encourages procrastinating shoppers that traditionally spend closer to December 25th to buy earlier in the season.
This isn’t the first year retailers outside of eBay have offered Green Monday promotions, however. Our team has been actively monitoring activity on this day from 2017 through present, to not only assess which retailers participate in the event, but also to understand how the discounts may change surrounding the event. The categories monitored include Apparel (Clothing, Shoes & Jewelry), Bed and Bath, and Home and Garden, and we’ve identified products offered on discount by comparing each applicable product’s price on Green Monday versus the most commonly seen price for the product offered throughout the month of December.
Better Promotions Than Boxing Day
Taking a closer look at 2020 Green Monday discounts within the categories and retailers analyzed, apart from Wayfair.com, we see all offered more SKUs on discount on Green Monday versus the days leading up to and out of the event. Kohls.com led the pack with around 93% of SKUs offered on discount, followed by Macys.com with 95%, and Wayfair.com with 83%. Overall, the number of SKUs on discount on Green Monday were greater than the SKUs offered on discount on Boxing Day, which is traditionally known as a great day to bargain shop.
Source: DataWeave Commerce Intelligence – Promotional Insights tracking Apparel, Bed & Bath, and Home & Garden category product’s online price on Green Monday 2020 in the US versus regular prices for the same products in the month of December each year.
What’s in Store for Green Monday 2021?
The insights we’ve tracked over the last four years have not indicated any signs to an end for Green Monday any time soon. As we see it, for consumers it is an extremely convenient time to order holiday gifts, and for retailers it is a good time to build brand trust and loyalty by fulfilling last minute orders at a great value, in time for the holidays.
Our prediction for the categories analyzed is to expect to see more retailers participate in Green Monday 2021 to a greater degree (more SKUs on sale and enhanced promotions). For retailers in this analysis, we would anticipate HomeDepot.com to enhance the number of offers to match 2020 competitive activity, and for Wayfair.com to look at increasing the number of offers on Green Monday versus the period leading into the event.
If you are interested in learning more about the details behind this analysis or our Promotional Insights solution, be sure to contact us. We can help you evaluate the effectiveness of your holiday promotional spend with access to near real-time marketplace insights on the brands, categories, and products your rivals promote, including discounts, campaign frequency and duration and more.
To make faster, seamless deliveries possible, brands need to tighten their supply chain. The pandemic has put a lot of stress on the global supply chain. The supply shock that began in China in February and the demand shock that followed as the global economy shut down uncovered weaknesses in production strategies and supply chains. Temporary trade restrictions and shortages of pharmaceuticals, critical medical supplies, and other products, further added to the problem.
As a consequence of all this, brands have to reduce or even eliminate their dependence on sources that are perceived as risky and rethink their use of lean manufacturing strategies that involve minimizing the amount of inventory held in their global supply chains. In the post-pandemic world, the supply chain will take center stage, and managing it efficiently with technical support is going to be what gives one brand an upper hand over the others.
1. Micro fulfillment is emerging as the need of the hour
Emerging Micro Fulfillment
Retailers are now faced with unprecedented omnichannel fulfillment complexities. Not only do customers expect faster order fulfillment and delivery, but they’re also opting to ‘buy online and pick up in-store (BOPIS)’ or ‘click-and-collect’. Amazon has spent billions of dollars on building its shipping infrastructure, including its existing operating 175+ fulfillment centers across the world and investing nearly $1.5 Bn to build an air hub in the US. Walmart, on the other hand, is relying on its existing footprint across 5000+ US stores to help deliver online orders faster.
All this is hinting towards micro-fulfillment emerging as a strategy retailers are using to make the fulfillment process more efficient and their supply chain more ready — from receiving an online order to packing it and offering last-mile delivery. This approach will certainly work towards imparting speed to localized, in-store pick-up and combine it with the efficiency of large, automated warehouses. Delivery speed and costs are more important than ever to retain customers and foster brand loyalty. In fact, this will become a big differentiator for grocery e-commerce as the number of people making online grocery purchases has increased drastically the world over and a recent report indicated that in the US, 46% of people use online delivery more now than before the COVID crisis, and 40% use online pickup more.
2. Use big data to tie-in loose nodes
Supply chain management is held at the heart of every successful e-commerce company. Supply Chain efficiency always ensures that the right product reaches the right place at the right time. It ensures cost reduction and enhancement of cash utilization. That is why it is important to stay alert and tie-in all loose ends in the supply chain architecture. Big data can come in handy here and it is that quantitative method and structure that can be used to improve decision-making for all activities across the supply chain. While the role of big data is extremely exhaustive and full-pronged across the entire supply chain design, it is important to understand it in theory in a simplified way so that brands can incorporate it to make their backend operations seamless.
Big data is all about real-time analytics and it primarily does two very important things in making supply chain management easy
It expands the dataset for analysis beyond the traditional internal data held on Enterprise Resource Planning (ERP) and supply chain management (SCM) systems.
Big data apply powerful statistical methods to both new and existing data sources. This helps give structure to new insights. This in turn allows forecasting and helps improve supply chain decision-making capabilities for your brand, all the way from the improvement of front-line operations, to strategic choices such as the selection of the right supply chain operating models.
3. Improve ROI by introducing automation to the mix
Introducing Automation to Improve ROI
Introducing automation will help take care of tasks usually done manually, such as placing orders, processing changes, data entry, and much more. This frees up time and cuts down on human errors leading to error-free, faster processes. Adidas for instance has been able to reduce 60% of its operational supply chain costs just by switching to end-to-end automation. The largest sportswear manufacturer used automation across 400 factories by bringing in standardized, reusable processes to deliver the best results in a cost-effective way across the supply chain, marketing, finance, retail, and eCommerce. On the supply chain part, with automation, the brand was able to globally attend to supply chain service desk management, vendor onboarding, PO change management, Contract form approval, product data verification, and other such tasks in real-time. This highly successful initiative helped the brand save a lot of time, it earlier lost in manually attending to internal processes and reduced the time to market for Adidas by two-thirds. Moreover, automating systems helps cut down slacks and in return allows the supply chain to stay agile and alert for any unforeseen situations. This readiness further boosts the framework towards growth.
4. Eye the future and introduce robotics
Robotics is the next big thing in Future
Autonomous technology is not the next big thing of the future but is the most important thing at present defining the face of the supply chain. Autonomous robots are expected to see strong growth over the next five years. In fact, according to the Boston Consulting Group (BCG),the global robotics market is estimated to reach USD 87 Billion by 2025. It is believed that more than half of this will be allocated for the retail market. In fact, it is not uncommon to find giant beetle-like robots moving around busily with vertical shelves stacked on them inside Amazon’s warehouse in southern New Jersey, US. Tesco for instance uses Radio Frequency Identification (RFID) robots who are used to scan inventories for entire stores in just an hour (as against seven hours for a store employee) with far fewer errors.
Even though every word of this sounds too futuristic to be believable, this is the reality for now and retailers are beginning to realize that innovation must set in holistically and extend far beyond just the warehouse or supply chain.Autonomous mobile robots (AMRs) are fast becoming commonplace in warehouses, helping warehouse workers to fulfill orders quickly and efficiently. There are a few different types of robots that companies are considering, and each has its own unique set of advantages. AMRs in totality enable workers to be more productive due to constant collaboration and promote agility, cutting down on slacks and errors.
A cohesive and well-defined supply chain where you can leave enough room for tweaks in the future owing to evolving trends will surely help you gain an edge over your competitors through the entire lifecycle of your product. Getting a grip over the supply chain is necessary now as, by 2025, many supply chains may shift from global flows of goods and services to national, regional, and local networks of buyers and suppliers. So, integrating the supply chain keeping an eye on the global and local is the real deal!
