Tag: availability

  • Competitive Pricing and Availability Trends of South Africa’s Leading Retailers and Brands in 2023

    Competitive Pricing and Availability Trends of South Africa’s Leading Retailers and Brands in 2023

    South Africa’s eCommerce market is primed for robust growth in 2023 and beyond, despite the short-term impact of COVID19 over the last few years. According to Statista, the country’s eCommerce market size is $7.2 billion in 2023, with an expected CAGR of 12.5% till 2027. South Africa’s user penetration is already as high as 49.4% and is only set to grow. In essence, there is a massive opportunity for retailers to capitalize on. 

    For retailers, capturing the lowest priced spot among competitors is often the most certain way to attract and convert online shoppers. Ensuring their products are priced competitively on a consistent basis is key to gaining and maintaining market share in this booming market. This requires South Africa’s online retailers to track and compare the pricing of their products relative to their competitors on an ongoing basis. 

    For brands, ensuring their pricing and discounting strategies are aligned to market trends are key to gaining market share. In addition, on the backdrop of supply chain challenges globally in the recent past, brands need to ensure high stock availability rates to capitalize on rising consumer demand. In addition, as brands conceptualize and implement a cohesive eCommerce strategy, price parity across all online channels becomes increasingly important. 

    In this report, we leveraged DataWeave’s proprietary data aggregation and analysis platform to focus our analysis on leading South African retailers and brands and their eCommerce performance across several key dimensions.  

    Our Research Methodology

    Retailers tracked: Takealot, ShopRite, Pick n Pay, Leroy Merlin  
    Number of SKUs: 40,000+
    Number of categories: 190+
    A few key categories highlighted: Bath, Food, Home, Spirits
    Timeline of analysis: Oct 2022 to March 2023

    Key metrics reported:

    • Price Increase Opportunity: When a retailer can increase the price of its product by a certain amount while continuing to stay the lowest priced among competitors. This directly helps boost margins.
    • Price Decrease Opportunity: When a retailer must decrease the price of its product by a certain amount to gain the lowest price position. This helps gain more sales. 
    • Action Rate: The share of price improvement opportunities (either price increase or price decrease) actually acted on by the retailer within 15 days of the opportunity presenting itself. For example, an action rate of 25% would mean that for every 100 price improvement opportunities identified, the retailer acted on 25 of them within 15 days. 

    Competitive Pricing Actions of Retailers

    Retailers often have dramatically varying approaches to responding to their competitors’ pricing actions. Also, it is not sufficient merely to react but also to react fast. The following chart displays the average action rates for price increase and decrease opportunities, and also breaks down the reported pricing actions into ones acted on within 5 days, 6-10 days, or 11-15 days of the opportunity presenting itself.  

    Takealot clearly has a strong competitive pricing engine, using which the retailer is able to act on more than half (51%) of price increase opportunities (thereby gaining margin), and over a third (36%) of price decrease opportunities. However,  it can do better in acting on many of them faster. Only 52% of the opportunities are acted on within 5 days, while the rest take up to 15 days.

    Average Action Rate and Velocity of Pricing Actions of Retailers

    ShopRite and Pick n Pay each have a healthy action rate of 23% for price increase opportunities, but only 9% and 5% respectively on price decrease opportunities. This displays a relatively inconsistent effort in gaining price leadership. ShopRite follows a similar distribution of pricing action velocity as Takealot, albeit for fewer price improvement actions. In comparison to ShopRite, Pick n Pay (which has a similar level of pricing action levels) acts much faster, with 64% of price improvement opportunities acted on within 5 days. 

    Leroy Merlin acted on only 9% and 6% of its price increase and decrease opportunities, respectively. However, in terms of its velocity of pricing actions, it is far ahead than the rest, with 90% of its pricing actions done within 5 days. This, however, would matter little without strong action rates to begin with. So, Leroy Merlin has a massive opportunity to boost its competitive pricing tracking and operations. 

    Average Action Rate of Retailers, Oct 2022 to Mar 2023 | Price Leadership of Retailers, Nov 2023 to March 2023

    Based on the chart above, over the last 6 months, it is clear that Takealot has maintained its price leadership throughout the period, driven by consistently aggressive action rates on price improvement opportunities. 

    Certain nuanced trends do emerge when month-on-month variances are observed on both action rates and price leadership rates across the analyzed retailers. For example, Takealot’s actions rates have been marginally declining, which has resulted in price leadership rates also declining from 14% in November 2022 to 10% in March 2023.

    Also, when ShopRite started getting more active in its action rates early in 2023, we observed an uptick in its price leadership positions. Leroy Merlin’s low action rates, coupled with low magnitudes of price changes has resulted in an average of only 2% of its products being the lowest priced relative to its competitors. 

    Pricing and Availability of Leading Brands

    In the following section, we report on the average discounts, price parity levels, and the stock availability of the top 5 brands (in terms of number of SKUs) in each of four key product categories: Bath, Food, Home, and Spirits. 

    Bath

    Nivea and Protex have on average been offering high discounts in the last 6 months, peaking around the holiday season in December 2022 and January 2023. 

    What’s more, these two brands have the highest share of their own products carrying discounts (10% and 9% respectively). Sanex has been conservative in both the average discounts offered as well as its share of discounted products. 

    Though Nivea has been offering attractive discounts, its stock availability has been low on average. However, it has been improving in the past few months, starting as low as 70% in October 2022 to reaching around 90% in March 2023. Dettol, too, has faced issues with its availability while showing some improvement in the recent past. All of the other leading brands in this category display healthy stock availability levels of above 90%.

    Food

    Kellogg’s and Rhodes have been offering the highest discounts in the food category, especially around the holiday season. They also lead in the share of discounted products (14% and 7% respectively).  

    Typical to the Food category, most other leading brands have offered lesser discounts on a smaller share of their products. 

    In addition to offering attractive pricing, Kellogg’s seems to also have its supply chain operations in control, with almost a consistent stock availability of 100%. Most other brands struggled towards the end of 2022 and have been improving ever since. Nestle, in particular, was challenged with an availability of only 70% in October 2022, but has not improved it to 90% in March 2023. 

    Home

    The Home category displays the highest variance in discount ranges among its leading brands compared to the other categories highlighted in this report. Brands like LocknLock and Legend have been offering discounts in the range of 25% to 35% on a share of more than a third of each of their products.

    On the other hand, ADDIS and Prestige have been offering discounts in the range of 0% to 5%, on a very small range of their products (<5%). 

    In categories like Home, maintaining a consistent brand perception among consumers is essential to boost brand value and loyalty. If there is a large disparity in the prices of the products of a brand across multiple eCommerce websites, then it negatively affects how consumers perceive the brand.  

    Here, the average price disparity (or variance) for LocknLock is only 10%, compared to almost 30% or more for other brands like Eetrite, Prestige, and ADDIS. Essentially, the brands discounting the most are also the ones with the lowest pricing disparity, which indicates a well thought-out, data-driven approach to eCommerce pricing and discounting – one that values both sales conversion as well as brand reputation. 

    Prestige and Eetrite have been struggling with their supply chain operations, with the availability of Prestige dipping to as low as 55% in December 2022. Legend’s stock availability was strong towards the end of 2022 but has been steadily declining in 2023 so far. LocknLock and ADDIS display healthy stock availability levels of 95% and above.

    Spirits

    The average discounts of almost all leading Spirits brands peaked during Christmas, with Tanqueray, Jameson, and Glenlivet offering up to 30% discounts in this period. 

    Since then, the discounts of most brands have been oscillating within the 5% to 20% range. The percentage of discounted products for all leading brands are around 20%, with the exception of Smirnoff. 

    Similar to the Home category, brand perception is vital to the Spirits category as well. However, here we see almost a consistent level of pricing disparity among leading brands, varying between 18% and 25%. Brands looking to build a “premium” perception among consumers, such as Glenlivet and Tanqueray, might do well to ensure better pricing parity across their eCommerce channels. 

    A few Spirits brands saw a dip in stock availability in December 2022, likely due to increasing demand during the Christmas season. For example, Jameson’s availability dipped to below 80% in this period. It has since improved to reach an availability level of above 90%. Johnnie Walker, too, has shown a significant improvement in its stock availability, moving from 80% in October 2022 to 95%+ in March 2023. 

    For more details on the state of South Africa’s eCommerce landscape as well as similar insights for other retailers and brands in the region, talk to us today

  • Baby Formula Shortage Continues Alongside National Price Increases – June 2022

    Baby Formula Shortage Continues Alongside National Price Increases – June 2022

    As the baby formula shortage continues, retailers and brands are working quickly to meet evolving consumer demand, considering supply chain driven headwinds, a baby formula recall, and inflationary-driven impacts. The DataWeave analytics team has actively tracked marketplace changes, alongside reports from the FDA, for the baby formula category at a state-level, and has shared the latest snapshot of product availability through June 7th, 2022, below.

    Average Baby Formula Product Availability by State - June 2022
    Average Baby Formula Product Availability by State – June 2022

    While the U.S. has reached an average of 84% baby formula availability the first week of June 2022, given recent news headlines related to the baby formula shortage, and tracking out of stock encounters by state, we see a continued decline in availability throughout the Midwest versus product availability levels seen in May 2022.

    Wisconsin, Michigan, Illinois, Indiana, Ohio, and Kentucky all show average availability for baby formula to be less than 50%, with Wisconsin being impacted the most at less than 18% average availability. While Texas shows an average availability improvement of 3.5% from the first two weeks of May 2022 to the first week of June 2022 as noted in the below chart, availability is also very low overall at less than 60%.

    Average Change in Baby Formula Product Availability by State: May-June 2022
    Average Change in Baby Formula Product Availability by State – May 2022 to June 2022

    Outside of the Midwest and Texas, the other states for consumers to be cautious in are California, Virginia, and South Carolina as their month-over-month average change in availability also declined 4%, 12.6% and 8.2% respectively. Below is a snapshot of where the baby formula availability average started as of May 1st through the 15th, 2022.

    Average Baby Formula Product Availability by State - May 2022
    Average Baby Formula Product Availability by State – May 2022

    Baby Formula Product Availability Changes – March 2021 through May 2022

    At an aggregated level overall, the availability for baby formula was relatively stable across all retailers considered within our analysis from March 2021 through September 2021, but has been on a steady decline ever since, starting at 81.7% availability in September and ending at 53.8% availability in May 2022 as noted in the below chart.

    Monthly Average Availability for Baby Formula Across Major Retailer Websites
    Monthly Average Availability for Baby Formula Across Major Retailer Websites

    Looking at baby formula availability at a retail level, we saw yet again not all availability challenges were alike, by month or retailer. Costco.com lead the other retailers within our analysis for greatest average availability from March 2021 through May 2022, but had one of the lowest availability percentages at 62.7% in May 2021, and dropped to the lowest availability of the group in May 2022 at 37.5%.

    Average Availability for Baby Formula Across Major Retailer Websites
    Average Availability for Baby Formula Across Major Retailer Websites

    Baby Formula Prices Increase as Availability Changes

    While unnecessary price gouging is prohibited, price increases are still happening at a slow and steady rate across all the accounts included within our Pricing Intelligence analysis given external market factors outside of baby formula recall related stockout scenarios.

    Kroger.com experienced the greatest average price increases overall, with the peak being in May 2022 at a 19% increase, 8% higher than other retailers on average, versus prices seen in March 2021 for the same baby formula products. The most significant price hike occurred on Kroger.com from December 2021 to January 2022. Other retailers like H-E-B, Target and Wegman’s have had minimal price changes from March 2021 through May 2022. 

    Average Price Inflation for Baby Formula, Indexed to March 2021
    Average Price Inflation for Baby Formula, Indexed to March 2021

    Address the Baby Formula Shortage With eCommerce Intelligence

    As the market continues to evolve and baby formula supply works its way to catching back up to demand, our team will continue providing critical pricing, merchandising, and competitive insights at scale, to enable retailers and brands to develop data-driven growth strategies that directly influence their eCommerce performance, accelerate revenue growth and drive profitability.

    Be sure to reach out to our Retail Analytics experts for access to more details regarding the above analysis, or for more information on our Commerce Intelligence and Digital Shelf solutions, and let us know what other category insights you’d be interested in seeing this year.

  • How Brands Can Outperform Rivals With Next-Gen Digital Shelf Analytics

    How Brands Can Outperform Rivals With Next-Gen Digital Shelf Analytics

    As eCommerce grows in complexity, brands need new ways to grow sales and market share. Right now, brands face urgent market pressures like out-of-stocks, an influx of new competition and rising inflation, all of which erode profitability. As online marketplaces mature, more brands need to make daily changes to their digital marketing strategies in response to these market pressures, shifts in demand, and competitive trends.

    eMarketer forecasts 2021 U.S. eCommerce will rise nearly 18% year-over-year (vs. 6.3% for brick-and-mortar), led by apparel and accessories, furniture, food and beverage, and health and personal care. The eCommerce industry is also undergoing fundamental changes with newer entities emerging and traditional business models evolving to adapt to the changed environment. For example, sales for delivery intermediaries such as Doordash, Instacart, Shipt, and Uber have gone from $8.8 billion in 2019 to an estimated $35.3 billion by the end of 2021. Similarly, many brands have established or are building out a Direct to Consumer (D2C) model so they can fully own and control their customer’s experiences.

    In response, DataWeave has launched the next generation of our Digital Shelf Analytics suite to help brands across retail categories directly address today’s costly market risks to drive eCommerce growth and gain a competitive advantage.

    Our new enhancements help brands improve online search rank visibility and quantify the impact of digital investments – especially in time for the busy holiday season.”  
    ~ Karthik Bettadapura, CEO and co-founder, DataWeave

    The latest product enhancements provide brands access to tailored dashboard views that track KPI achievements and trigger actionable alerts to improve online search rank visibility, protect product availability and optimize share of search 24/7. Dataweave’s Digital Shelf Analytics platform works seamlessly across all forms of eCommerce platforms and models – marketplaces, D2C websites and delivery intermediaries.

    Dashboard for Multiple Functions

    While all brands share a common objective of increasing sales and market share, their internal teams are often challenged to communicate and collaborate, given differing needs for competitive and performance data across varying job functions. As a result, teams face pressure to quickly grasp market trends and identify what’s holding their brands back.

    In response, DataWeave now offers executive-level and customized scorecard views, tailored to each user’s job function, with the ability to measure and assess marketplace changes across a growing list of online retail channels for metrics that matter most to each user. This enhancement enables data democratization and internal alignment to support goal achievement, such as boosting share of category and content effectiveness. The KPIs show aggregated trends, plus granular reasons that help to explain why and where brands can improve.

    Brands gain versatile insights serving users from executives to analysts and brand and customer managers.

    Prioritized, Actionable Insights

    As brands digitize more of their eCommerce and digital marketing processes, they accumulate an abundance of data to analyze to uncover actionable insights. This deluge of data makes it a challenge for brands to know exactly where to begin, create a strategy and determine the right KPIs to set to measure goal accomplishment.

    DataWeave’s Digital Shelf Analytics tool enables brands to effectively build a competitive online growth strategy. To boost online discoverability (Share of Search), brands can define their own product taxonomies across billions of data points aggregated across thousands of retailer websites. They can also create customized KPIs that track progress toward goal accomplishment, with the added capability of seeing recommended courses of action to take via email alerts when brands need to adjust their eCommerce plans for agility.

    “Brands need an integrated view of how to improve their discoverability
    and share of search by considering all touchpoints in the digital commerce ecosystem.”

    ~ Karthik Bettadapura, CEO and co-founder, DataWeave

    Of vital importance, amid today’s global supply chain challenges, brands gain detailed analysis on product inventory and availability, as well as specific insights and alerts that prompt them to solve out-of-stocks faster, which Deloitte reports is a growing concern of consumers (75% are worried about out-of-stocks) this holiday season.

    User and system generated alerts provide clarity to actionable steps to improving eCommerce effectiveness.
    You also have visibility to store-level product availability, and are alerted to recurring out-of-stock experiences.

    Scalable Insights – From Bird’s Eye to Granular Views

    DataWeave’s Digital Shelf Analytics allows brands to achieve data accuracy at scale, including reliable insights from a top-down and bottom-up perspective. For example, you can see a granular view of one SKUs product content alongside availability, or you can monitor a group of SKUs, say your best selling ones, at a higher level view with the ability to drill down into more detail.

    Brands can access flexible insights, ranging from strategic overviews to finer details explaining performance results.

    Many brands struggle with an inability to scale from a hyper-local eCommerce strategy to a global strategy. Most tools available on the market solve for one or the other, addressing opportunities at either a store-level basis or top-down basis – but not both.

    According to research by Boston Consulting Group and Google, advanced analytics and AI can drive more than 10% of sales growth for consumer packaged goods (CPG) companies, of which 5% comes directly from marketing. With DataWeave’s advanced analytics, AI and scalable insights, brands can set and follow global strategies while executing changes at a hyper-local level, using root-cause analysis to drill deeper into problems to find out why they are occurring.

    As more brands embrace eCommerce and many retailers localize their online assortment strategies, the need for analytical flexibility and granular visibility to insights becomes increasingly important. Google reports that search terms “near me” and “where to buy” have increased by more than 200% among mobile users in the last few years, as consumers seek to buy online locally.

    e-Retailers are now fine-tuning merchandising and promotional strategies at a hyper-local level based on differences seen in consumer’s localized search preferences, and DataWeave’s Digital Shelf Analytics solution provides brands visibility to retailer execution changes in near real-time.

    Competitive Benchmarking

    Brand leaders cannot make sound decisions without considering external factors in the competitive landscape, including rival brands’ pricing, promotion, content, availability, ratings and reviews, and retailer assortment. Dataweave’s Digital Shelf Analytics solution allows you to monitor share of search, search rankings and compare content (assessing attributes like number of images, presence of video, image resolution, etc.) across all competitors, which helps brands make more informed marketing decisions.

    Brands are also provided visibility into competitive insights at a granular level, allowing them to make actionable changes to their strategies to stay ahead of competitors’ moves. A new module called ‘Sales and Share’ now enables brands to benchmark sales performance alongside rivals’ and measure market share changes over time to evaluate and improve competitive positioning.

    Monitor competitive activity, spot emerging threats and immediately see how your performance compares to all rivals’, targeting ways to outmaneuver the competition.

    Sales & Market Share Estimates Correlated with Digital Shelf KPIs

    In a brick-and-mortar world, brands often use point of sale (POS) based measurement solutions from third party providers, such as Nielsen, to estimate market share. In the digital world, it is extremely difficult to get such estimates given the number of ways online orders are fulfilled by retailers and obtained by consumers. Dataweave’s Digital Shelf Analytics solution now provides sales and market share estimates via customer defined taxonomy, for large retailers like Amazon. Competitive sales and market share estimates can also be obtained at a SKU level so brands can easily benchmark their performance results.

    Additionally, sales and market share data can also be correlated with digital shelf KPIs. This gives an easy way for brands to check the effect of changes made to attributes, such as content and/or product availability, and how the changes impact sales and market share. Similarly, brands can see how modified search efforts, both organic and sponsored, correspond to changes in sales and market share estimates.

    Take Your Digital Shelf Growth to the Next Level

    The importance of accessing flexible, actionable insights and responding in real-time is growing exponentially as online is poised to account for an increasing proportion of brands’ total sales. With 24/7 digital shelf accessibility among consumers comes 24/7 visibility and the responsibility for brands to address sales and digital marketing opportunities in real-time to attract and serve online shoppers around the clock.

    Brands are turning to data analytics to address these new business opportunities, enhance customer satisfaction and loyalty, drive growth and gain a competitive advantage. Companies that adopt data-driven marketing strategies are six times more likely to be profitable year-over-year, and DataWeave is here to help your organization adopt these practices. To capitalize on the global online shopping boom, brands must invest in a digital shelf analytics solution now to effectively build their growth strategies and track measurable KPIs.

    DataWeave’s next-gen Digital Shelf Analytics enhancements now further a brand’s ability to monitor, analyze, and determine systems that enable faster and smarter decision-making and sales performance optimization. The results delight consumers by helping them find products they’re searching for, which boosts brand trust.

    Connect with us to learn how we can scale with your brand’s analytical needs. No project or region is too big or small, and we can start where you want and scale up to help you stay agile and competitive.