The DataWeave Blog

Category: Stockouts

  • It’s not easy being a Bakery Brand: Insights from Digital Shelf

    It’s not easy being a Bakery Brand: Insights from Digital Shelf

    By 2028, Fortune Business Insights projects that the global bakery products market will reach USD 590 billion. The CAGR (Compounded annual growth rate) for 2021-28 is estimated at 5.12%. Products in this segment include bread, buns, cookies, tortillas, salted snacks, English muffins, bagels, confectionery food, hot dogs, cakes, popcorn, and so on.

    Due to disruptions in the global supply chain caused by lockdowns and border closures, the pandemic has had a negative impact on the demand for bakery products and snacks worldwide. However, the market is not only changing, but consumer demand is increasing. Post-pandemic, health, food, and safety have gained renewed attention.

    People across the world are making healthier choices with a focus on wellness. 

    A growing number of people are interested in plant-based foods and beverages, reducing sugar consumption, and understanding the link between lifestyle and health, including obesity and diabetes. As a result of these trends, food producers are reshaping their product strategies to meet new consumer demands.

    In this article, we take a look at the ways companies can leverage data to inform their e-commerce strategy.

    What’s driving up the demand for bakery products?

    More people are choosing easy-to-use bakery products and snacks over other foods due to urbanization, convenience, western diets, and women’s participation in the workforce. Additionally, innovations in baking systems, food technologies, ingredients, formulations, and product ideas are providing customers with a greater level of choice, flexibility, and freedom.

    How is e-commerce changing the game for bakery product companies?

    To optimize their supply chains, bakery food and snack companies must better understand e-commerce metrics given the wide variety of products available and eventually convert sales. There are several measures that companies need to pay attention to. 

    Stock availability metrics, discounts across locations, and share of search results – are all critical metrics companies need to track. In addition to providing manufacturers and retailers with an insight into the trends, DataWeave’s tools also allow them to make better business decisions and ultimately improve their bottom line. 

    Grocery Retailers and Bakery Brands tracked

    Methodology

    • Data Scrape period: February 2022 to September 2022
    • Country: Canada
    • Grocery Retailers tracked: Atlantic Superstore, Fortinos, InstaCart, Loblaws, Voila, Walmart Grocery, Zehrs.
    • Bakery brands: Betty Crocker, Dempsters, Hostess, No Name, Presidents Choice, Quaker, Vachon, Doritos.
    • Category tracked: Bread and Bakery, Chips, Crackers, Deserts, Snacks.

    Share of Search Analysis

    Which brands feature the most on e-commerce portals?

    When listing items on e-commerce platforms, share of search is crucial. The highest share of the top ten or top twenty items available on these platforms is correlated with how many times the item may be viewed. As a result, it would have a greater chance of being selected by the customer.

    By Retailer for Category “Desserts”

    Share of Search for Brands in each retailer
    • In Walmart Grocery, Vachon has the highest share of search at 41%, whereas Betty Crocker, Presidents Choice and No Name had the lowest share of search at 0%, in the Desserts Category.
    • In Loblaws, Presidents Choice had the highest share of search of 34%, whereas Dempsters had the lowest share of search of 2%  in the Desserts Category. 
    • The brand Presidents Choice consistently ranks high in the share of search results for Desserts across multiple retailers, including Atlantic Superstore, Fortinos, Instacart, Loblaws, and Zehrs – except at two retailers, Voila and Watlmart Grocery, where its share is zero.

    Trend of Share of Search for “Desserts”

    Share of Search analysis by Brands over Time in category “Desserts”
    • Share of search had dropped by around 4% for No Name, whereas for Vachon, it increased by 3% from Jan’-22 to Sep’ 22
    • By brands, Presidents Choice had the highest share of search at 42%, whereas Betty Crocker had the lowest share of search at 12% between Jan’ 22 and Sep’ 22 in the Desserts Category.

    Availability Analysis

    Which products are widely available across e-commerce portals?

    The availability of the product on the e-commerce portal is one of the key indicators of meeting customer demand. Brands can use insights from DataWeave to strategize how to restock their inventory and ease customer demand. Based on data analysis, brands can also determine which products to prioritize on which platforms.

    By Category

    Availability analysis by Category over Time
    • Availability of all five categories was around 52% in Feb’ 22, which steadily increased to 61% until Aug’ 22 and has reduced to reach 55% availability in Sep’ 22
    • Sliced Bread category has seen the most drop in availability by 12% between Jun’ 22 and Sep’ 22
    • The tortilla category has the most rise in availability. It has increased by 16% between Feb-22 and May-22. It also showed an overall rise in availability of 5% from Feb-22 to Sep-22

    By Location

    Availability analysis by Location and Category
    • Across categories, Snacks & Candy had better availability at 73% than Bread & Bakery, with 56% availability.
    • By Location, New Brunswick had more than 65% availability across all three categories; the closest Location is Nova Scotia, with 63% availability.
    • Alberta had the highest availability of 100% in the Snacks & Candy category and the lowest availability of 21% overall in all three categories (weighted aggregate)

    Discounts Analysis

    Several discount-based insights can be studied on e-commerce platforms. From location-based trends, retailer-based trends, and manufacturer-based insights. These insights can help companies make the most of the revenue opportunity while creating an attractive value proposition for the retail consumer.

    By Category

    Discount analysis by Category
    • Discounts of all three categories were around 24% in Feb’ 22, which steadily reduced to reach 15% in Sep’ 22
    • Snacks, cookies & chips category has contributed the most to the drop in discounting, which dropped by 17% between Apr’ 22 and Sep’ 22
    • The Tortilla Category does not have any discount in the month of Jul’ 22

    By Retailer

    • Discount on Bread & Bakery category in Walmart Grocery was around 9% in Feb’ 22. It steadily increased to 13% by Jun’ 22 and thereon reduced to reach 11% availability in Sep’ 22.

    By Location

    • Across Retailers, Nova Scotia had the highest availability of discounts at 22%, whereas New Brunswick had the lowest with discounts at 9% in Bread & Bakery category.
    Discount analysis by Retailers and Locations – Alberta, Ontario, New Brunswick, Nova Scotia
    Note: Analysis does not cover all locations

    Bakery and snack product manufacturers on e-commerce platforms have access to a rich trove of insights they can leverage to benchmark their strategies. They can better understand customer demands, align their supply chain and critically understand the trends impacting their bottom line. Engaging with a third-party platform like DataWeave’s Digital Shelf Analytics  can help brands unlock tremendous value. 

  • 5 Ways to Manage and Improve Stock Availability

    5 Ways to Manage and Improve Stock Availability

    Stock availability is the degree to which a brand or retailer has inventory of all their listed items to meet customer demand. Product availability becomes even more critical when they have to respond to unforeseen changes in demand and supply. To maintain the ideal stock availability levels for all items, they need robust inventory management tools to ensure real-time updates on current stock and accurate insights into upcoming demand.

    However, managing stock availability is not a clear-cut science. Retailers must balance the change in demand and keep stock availability in check. 

    Why Stock Availability Matters

    One of the challenges of running a retail business is to optimize inventory and associated costs. Maintaining stock availability in stores is critical for offline retail businesses. And when selling online, making sure products are available across different retailers and marketplaces can have a huge impact on sales and conversions. 

    1. Understocking: It’s when a brand’s product fails to meet consumer demand. If this happens often enough, customers may not return to the brand’s website or app because of the initial experience. Understocking is not a brand’s fault entirely since they might not always be able to anticipate a change in demand. However, it’s about a their ability to adapt to a quick change in the market trends through historical analysis and accurate forecasting. 
    2. Overstocking: It’s when a company orders too much inventory. Holding too much stock will lead to higher storage costs, shrinkage, and obsolescence losses. Another loss occurs if the brand can’t quickly sell the items — diminishing the value of the products. 

    We gathered data to see the impact of a short-term stockout on Amazon for one of our customers. Read more about what we uncovered & how deep the damage was, here.

    7 Ways to improve stock availability 

    1. Collect Accurate Data

    Availability across Brands and Categories

    When multiple items are moving through a supply chain, companies can easily run into inventory inaccuracies. Discrepancies between the values of your system and the actual inventory of products can lead to understocking or overstocking. The best way to avoid discrepancies in inventory is to invest in an inventory management tool that gives you real-time updates on your stock. This is applicable for offline retail businesses. 

    2. Managing eCommerce inventory

    Availability at Individual Product Level
    Availability at Individual Product level by regions

    Effective eCommerce inventory management is as important as making sure products are available in stores. Keeping track of your inventory levels and ensuring that you’re always well-stocked can avoid lost sales and keep your company running smoothly. Brands must ensure their stock is available across all the online platforms they sell. Access to real-time inventory data can help to keep a close eye on stock status across all marketplaces & retailers the product is available. Retailers also need to keep track of market trends to ensure they have the right inventory assortment to match customers’ demands. 

    3. Understand Consumer Demand

    The only way to accurately predict future demand is to rely on historical data about your customer purchase trends. What do your customers purchase during holiday seasons? What are the upcoming trends in your category? Having data-backed answers to such questions will help brands and retailers properly stock up their inventory.

    4. Adequate forecasting 

    Anticipating demand will help determine which products should be stocked during which seasons. Tracking past sales and metrics such as economic conditions, seasonality, peak buying months, and promotions will help brands predict demand. Analyzing such statistics will also help you get insights into the target market.

    Availability across regions

    5. Improve supplier relationships

    It’s important to rely on a supply chain that delivers your shipment promptly. In fact, you should foster close relationships with your suppliers to trim costs and improve stock availability. You should be able to share key details such as future demands, so suppliers can ensure timely delivery. 

    Availability Analysis
    Availability Analysis across Retailers and Categories

    Consequences of Inefficient Inventory Management

    What are the effects of overstocking?

    Tied-up cash: Money spent on overstocking is tied-up money that your company could have put to better use. You can use it to pay off debts, wages, and rent. Inventory often has a limited shelf life due to material degradation, changing consumer trends, spoilage, and obsolescence.

    Product expiration: If your brand offers time-sensitive goods or perishable items, overstocking can lead to product obsolescence and expiry. eCommerce platforms that also sell time-sensitive goods or grocery delivery apps are forced to sell products at below-margin prices to free up resources, leading to losses. 

    What are the effects of understocking?

    Poor customer experience: Poor product availability will lead to low customer satisfaction & dropping customer loyalty. 

    Missed sales: Customers could gravitate towards the competition to make their current purchase if a product is unavailable at your online store. The more freequent the stockouts, the more lost sales. 

    Conclusion

    To avoid the knock-on effects of overstocking and understocking, companies need a real-time view of their inventory, both online & offline. At DataWeave, we help companies decrease their latency period between stock replenishment and efficiently plan their supply chain. If you need help tracking your eCommerce product availability, reach out to the experts at DataWeave to know how we can help!

  • Prime Day Germany 2022 – highlights from the 2 day annual shopping festival!

    Prime Day Germany 2022 – highlights from the 2 day annual shopping festival!

    In 2022, Amazon sold 300 million products during Prime Day – selling roughly 100,000 items per minute. Since Amazon started Prime Day in 2015 to celebrate its 20th birthday, the shopping festival has grown into a holiday and rivals Black Friday and Cyber Monday in the U.S. and Singles’ Day in China. 

    According to RetailDetail, the leading B2B retail community in Benelux, Amazon is planning a 2nd Prime Day shopping festival in the autumn, just a few months after its annual Prime Day event. The retailer has asked its sales partners to prepare for a promotional event in the autumn where they have until the beginning of September to propose attractive discounts, with at least 20% discounts. This year’s second Prime Day may occur in October, with or without the same name. 

    But before that, let’s examine what happened in Germany this year on Prime Day 2022.

    Methodology

    • We tracked Amazon.de both before & on 12 & 13th July 2022, on Prime Day.
    • Categories Tracked – Electronics, Wine & Spirits, Grocery, Furniture, Fashion, and Beauty. 
    • We looked at Additional Discounts offered on Prime Day: Additional Discount is the extra discount on an item during Prime Day when compared to the Pre-Prime day price.
    • We also looked at Post Prime Day Discounts, which were the discounts offered after the 2-day event ended.

    What kind of Discounts did Amazon.de offer?

    Amazon Prime Day will be significant, especially for customers hoping to get discounts amid soaring inflation. Both Amazon as well as other sources reported that electrical and electronic items were the most popular purchases, followed by general retail products. Electrical and electronics saw the value of transactions soar 90% on the first day. Mobile phones and accessories were the most popular, with transaction values almost doubling to 96% on day one.

    Discounts across Categories on Amazon.de
    Discounts across Categories on Amazon.de
    • Based on trends from past events, Amazon likely knew electronic items were going to be best sellers. Keeping this in mind, they made sure to offer high discounts in the electronics category. They offered a 6.5% additional discount on electronics on Prime Day. And once the sale ended, they continued to discount electronics by 1.3%.
    • The Fashion category also had a fair bit of discounts and came in at a close second at 5.9%
    • Looks like Amazon discounted everyday use items minimally. Groceries had an additional discount of just 1.8% on Prime Day, and wine and spirits had 2% extra discount.  
    Discounts on Electronics Category on Amazon.de
    Discounts on Electronics Category on Amazon.de
    • Within Electronics, in the four categories we tracked, we saw the highest additional discounts were offered on Bluetooth earphones (10.6%) and Smartwatches (9%)
    Discounts on Fashion Category on Amazon.de
    Discounts on Fashion Category on Amazon.de
    • Jeans and Sunglasses had the highest discounts at 8.6% & 7.6% respectively.
    • Sneakers & Watches too had additional discounts of 6.6% on Prime Day.
    • Post the Prime Day event, Amazon retained an average of 1.5% discount across all products in the fashion category instead of pricing them at the original price. 
    • However, in the case of women’s T-Shirts, they increased the price by 1.7% from the pre-event price.

    Discounts across Price Tiers

    Retailers must consider several factors when making strategic discounting decisions, including customer buying behavior, the type of discount offered & the volume of discount offered. The best discounting approach will vary depending on the product and other factors like the original selling price of the product.

    Now let’s compare the discounting strategy Amazon used in the Electronics v/s Fashion category on Prime Day.

    Discounts across Price Ranges
    Discounts across Price Ranges
    • Interestingly, in both the Electronics and Fashion categories, Amazon increased prices for the lowest-end products between the €0-10 range by 3.6% and 13.2%, respectively, during the sale instead of discounting them! Maybe this was a strategy to drive consumers to higher-value products with greater discounts? 
    • Another similarity in strategy was that most of the mid-priced items had maximum discounts. In electronics & fashion both, the maximum discounts were given to products between the € 30-100 range. 
    • Here’s a difference that stood out – for Electronics in the higher price range between €100 – 500, the volume of discounts dropped a bit which meant Amazon gave moderate discounts on high-end electronics. But the trend flipped for Fashion as luxury fashion items were made to look more attractive with higher discounts.

    Monitoring stock availability during key sales days is critical

    Brands need to have the right stock availability, especially during sale events, because more customers shop online during sales. What’s worse, non-availability of products may drive customers to competitors that are stocking the same product.  Out-of-stock situations lead to missed opportunities & lost sales! Let’s take a look at our data and see how Amazon planned product availability across categories on Prime Day. 

    Availability Analysis across Categories on Prime Day
    Availability Analysis across Categories on Prime Day
    • Amazon was betting big on 2 categories – Electronics & Home. This meant they needed to keep a keen eye on availability in these categories, especially since they forecasted the highest sales to be generated here.
      … it was no surprise that the Furniture category had almost 100% availability during Prime Day! Electronics too had a high availability at 94% during the event.
    • Generally, our data showed that availability across multiple categories we tracked seemed robust and above 80% in more cases. Only Beauty & Grocery had 79% availability.

    Conclusion

    Prime Day sales reached an estimated 12 billion U.S. dollars worldwide, 9.8% higher than last year, making it the most successful shopping event in Amazon’s history. If you’re a brand selling on Amazon or a retailer trying to compete with Amazon, reach out to us at DataWeave to know how we can help!

  • The challenges in scaling a ‘House of Brands’

    The challenges in scaling a ‘House of Brands’

    Let’s start with the basics – what is a ‘House of Brands.’

    House of Brands is a portfolio management strategy that defines how a family of brands owned by one parent company, each independent of one another and each with its own audience, marketing, look & feel operate in harmony with each other. 

    Advantages of a House of Brands Strategy

    • The Profit Playbook: The playbook generated by the success of one brand can be leveraged to scale other brands.
    • Economies of Scale: Cost across Marketing, Supply chain, Advertising, and Operations gets shared across multiple brands helping optimize costs.
    • Market Coverage: Multiple products enable brands to cover multiple market niches and audiences while maintaining unique messaging for each niche. 
    • Future-Proofing: By hedging bets across multiple brands, it cushions the parent company against changes in customer preferences and trends. 

    … for these reasons and more, it’s no surprise that every digital-first consumer brand today aspires to leverage a portfolio strategy to become a House of Brands.

    More and more companies are slowly adopting this strategy

    • In the US the brands like P&G, Newell, and Unilever which found early success in the online space are quickly acquiring more brands and betting on the “House of Brands” strategy to scale.
    • In India, Unicorn D2C start-ups like MamaEarth, Good Glamm Group, Sugar Cosmetics, Rebel, Boat, and Lenskart to name a few, are already knee-deep into this strategy as their brand portfolio keeps growing.
    • And then there are brand roll-ups like Thrasio, Perch, HeyDay in the USA, Branded, Hero in the UK and Mensa, and GlobalBees in India which started as a House of Brands from the get-go.

    More Brands. More Data. More need for Monitoring!

    You cannot improve what you cannot measure! In order to scale these brands, the first thing needed is DATA. Data across all digital platforms – data on social media performance, customer engagement, eCommerce sales, product stock availability, pricing, reviews, and customer sentiment to name a few. This data will unlock huge value for brands and it gives them a sense of what’s working and what needs to be improved in order to increase sales & scale. 

    All brands need to track this information – but here’s a challenge unique to a House of Brands – it is the sheer volume & scale of data needed across multiple brands across multiple digital platforms! For example, a House of Brands with let’s say 10+ brands, each brand with 50 SKUs, selling on 10 eCommerce platforms is the equivalent of managing 10 retail shops with 500 SKUs! 

    Let’s look at some of the questions the analytics, marketing, and brand management teams at House Of Brands would ask. And the data they would need almost on a daily basis for every single brand. 

    • What is the search ranking for all of our SKUs across each and every single eCommerce store it is available on? How does this benchmark to the closest competitor? And are competitors using aggressive advertising strategies to outperform & overshadow our SKUs?
    • Are competitors offering discounts? Are those discounts higher than what we’re offering leading customers to purchase their products instead of ours?
    • Are my products & SKUs available and not out of stock across every single marketplace and online store?
    • Are positive ratings & reviews driving my customers to purchase my product? Or do our competitors have a better customer perception than my brand does?
    • Are Amazon and other marketplaces displaying my product content correctly so customers have enough information to make an informed purchase decision?

    … if the sheer scale across multiple brands was not a big enough challenge when this data needs to be tracked hyper-locally for each brand, it becomes anyone’s worst data nightmare!

    Need Data? Lots of it? No problem!

    To get ample data, across key KPIs brands need to invest in a Digital Shelf Solution. However, traditional Digital Shelf Solutions were built for brands that got a majority of their revenue from in-store sales and only a part of their revenue was being generated online. 

    That’s where DataWeave is different. DataWeave’s AI-Powered Digital Shelf Solutions was built with Digital Native brands in mind. 

    What KPIs do we help House of Brands track?

    • Keyword Search Ranking: Track & improve your search rankings for priority keywords. Boost product visibility and sales
    Keyword Analysis
    Keyword Analysis
    • Content: Optimize your brand’s product content to drive up conversions
    Content Quality Analysis
    Content Quality Analysis
    Availability Analysis
    Availability Analysis

    The following metrics are available to view in one single dashboard, across multiple online stores and multiple geographies making it so easy to get a consolidated view of the health of the entire portfolio of products! What’s more, we’ve created a dashboard with multiple views – brand-wise, function-wise & even hierarchy-wise. This means a brand manager can see all KPIs specific for only the brand they manage, while the marketing team can look at keyword search rankings across all brands and the leadership team can see a brand-level daily scorecard for a quick health check. And that’s not all! Our dashboard highlights insights that can be “actioned asap” to make it easier to understand what critical tweaks and changes can help improve sales. Lastly, as a House of Brands adds more Brands & SKUs to its portfolio, our solution has the full flexibility to add and delete SKUs on the go!

    If you are a House of Brand and wish to explore how some of the problems you face daily can be solved – please email: contact@dataweave.com.

    Brand Roll-Ups and House of Brands are always scouting for new brands to acquire. DataWeave has a unique product to help you track a category daily, highlighting brands that show exceptional KPIs across – Ranking, Reviews, Ratings, Bestseller ranks, Sales Estimates, etc. Read more about how VC’s & Brand Rolls up are using Data for faster Acquisitions. 

  • How short term Stockouts on Amazon can have a long-term impact on your eCommerce business

    How short term Stockouts on Amazon can have a long-term impact on your eCommerce business

    It’s common knowledge that upward of 70% of Amazon customers never scroll past the first page of search results. And that the first 3 products garner 64% of business generated. This is why it is critical for brands and businesses to make sure they rank well on Amazon. A good search ranking helps customers find your product with ease. And findability is fundamental! Having a better ranking is also a driver of the “flywheel effect” at online retailers. According to this effect, products that sell more tend to rank better in search results, and products that rank well in search results tend to sell more.

    Negative impact on Sales Ranking due to Stockouts

    If you want to stay on top of search rankings on Amazon, one of the things you need to keep an eye out for is your product stock availability. It’s not the ideal customer experience to have to click on a product listing only to find out it’s currently out of stock. This is why Amazon will not rank products at the top if they’re not available & customers cannot buy them immediately. Not only does this lead to a lost sale for a brand, to make things worse, but customers also end up buying a competitor’s product instead. 

    We were tracking product availability on Amazon for one of our customers in the CPG space. We tracked availability for products across varying ranks & looked at how going out of stock impacted their search rankings.

    Product Availability
    Product Availability

    Impact on products with a Search Rank between 1 to 10:

    • Our data showed that when products that ranked between 1-10 went out of stock for just 1 day, their rank fell by over 28%. After 3+ days of being out of stock, their rank fell by 83% and after being out of stock for over 10 days their rank fell by close to 150%! 
    • This clearly illustrates that when the longer top-ranking products are out of stock, the greater the impact on search rank and product discoverability.

    Impact on products with a Search Rank between 10 to 20:

    • The impact of being out of stock on products that ranked lower, i.e. between 10 to 20 was much lower. After being stocked out for 1 day, the ranking fell 17% compared to the 28% dip for products in the top 10 ranks. 
    • Incremental change was minimal, too. After 3+ days of being OOS, search rank dropped by 22% and by 53% after 10+ days v/s close to 150% for higher-ranked products.

    Impact on products with a Search Rank between 20 to 30:

    • These products had the least impact but there was an impact nonetheless. 
    • After being OOS for 5+ days, search ranking fell by close to 8% and to close to 30% after 10 days of product unavailability.

    Avoiding Stockouts with better Inventory Management

    Customers can buy your product only when it is available. Failing to provide products at the right time will lead to losing sales to your competitors. If your products become unavailable, you’ll notice a drop in customers’ overall satisfaction and shopping experience too in addition to a lost sales rank on Amazon. In fact, your reputation and sales will take a beating long term in case of consistent product unavailability. Moreover, once the product is back in stock, the climb back to the top ranking is a slow and not-so-easy process. This is why brands need to maximize conversions by tracking product availability on a constant basis.

    Conclusion

    Stockout is a critical issue that has a significant impact on sales, brand image, and customer loyalty. Items ranking higher on eCommerce platforms take the biggest hit when they get out of stock. Brands can recapture their search share after restocking their inventory. 

    Want to maximize sales by reducing latency periods between stock replenishment? Reach out to our Digital Shelf Experts to know how!