Tag: Digitally Native Vertical Brands

  • From Data to Dollars: How Digital Shelf Analytics Drives Tangible Business Impact and ROI for Brands

    From Data to Dollars: How Digital Shelf Analytics Drives Tangible Business Impact and ROI for Brands

    For consumer brands, the digital marketplace presents an unparalleled landscape of opportunities for engaging with consumers and expanding their market presence. Within this dynamic environment, Digital Shelf Analytics has emerged as a crucial pillar in a brand’s eCommerce strategy. This technology provides valuable insights into a brand’s organic and paid visibility on marketplaces, content quality, pricing strategies, promotional efforts, and product availability. These insights help brands gain a comprehensive understanding of their competitive positioning and overall market performance.

    Nevertheless, many brands often grapple with the question of whether this understanding translates into tangible actions that drive real business impact and return on investment (ROI). This uncertainty stems from a lack of clarity about the direct correlation between digital shelf insights and key metrics such as enhanced sales conversions.

    Nonetheless, there is compelling evidence that when these insights are effectively harnessed and strategic actions are taken, brands can realize significant, measurable benefits.

    So, the question arises: does Digital Shelf Analytics genuinely deliver on its promises?

    At DataWeave, we’ve partnered with numerous brands to fuel their eCommerce growth through the application of digital shelf analytics. In this article, we will delve into these insights, uncovering the concrete and quantifiable results that brands can achieve through their investments in digital shelf analytics.

    Digital Shelf KPIs and Their Impact

    Digital Shelf Analytics is a robust system that analyzes specific key performance indicators (KPIs) about the digital shelf, furnishing brands with precise recommendations to not only bolster these KPIs but also to monitor the enhancements over time. The following is a brief explanation of digital shelf KPis and their expected impact areas:

    Product Availability: Ensuring Shoppers Never Hear “Out of Stock” Again

    Timely insights on the availability of products ensures brands reduce replenishment times at scale, which can significantly impact sales, creating an unbreakable link between product availability and revenue. With Digital Shelf Analytics, procurement and replenishment teams can set up notifications to promptly identify low or out-of-stock items and take swift action. This can also be done for specific ZIP codes or individual stores. In addition, availability plays a crucial role in a brand’s Share of Search and search rankings, as online marketplaces often ensure only in-stock products are shown among the top ranks.

    Share of Search: Dominating the Digital Aisles

    If a product isn’t visible, does it even exist? In fact, 70% of consumers never go beyond the first page of search results on major online marketplaces. Therefore, as a brand, the visibility of your products for relevant search keywords and their appearance on the first page can heavily determine your awareness metrics. This is where the concept of Share of Search comes into play. Think of it as securing prime shelf space in a physical store. Digital shelf insights and benchmarking with category leaders for Share of Search help ensure your products command relevant attention on the digital shelf.

    Content Quality: Crafting the Perfect Product Story

    Creating engaging product descriptions and visuals is akin to giving your products a megaphone in a crowded marketplace. By enhancing content quality, including product names, titles, descriptions, and images, brands can climb the search result rankings, leading to increased visibility and subsequently, more sales.

    Ratings and Reviews: The Power of Social Proof

    Public opinion holds immense sway. Research indicates that a single positive review can trigger a 10% surge in sales, while a multitude of favorable reviews can propel your product to a 44% higher trajectory. The correlation between ratings and sales is not surprising—each step up the rating ladder can translate to substantial revenue growth.

    While it’s reasonable to anticipate a connection between these KPIs and downstream impact metrics such as impressions, clicks, and conversions, we were driven to explore this correlation through the lens of real-world data. To do so, we meticulously monitored the digital shelf KPIs for one of our clients and analyzed the improvements in these metrics.

    It’s essential to acknowledge that not all observed impact areas can be solely attributed to enhancements in digital shelf KPIs. Still, it’s evident that a robust correlation exists. The following section presents an in-depth case study, shedding light on the results of this analysis.

    A Success Story: Real-World Impact of Digital Shelf Analytics

    Let’s dive into the journey of one of our clients – a prominent CPG brand specializing in the sale of baked goods and desserts. Through their experience, we will illustrate the transformative impact of our DataWeave Digital Shelf Analytics product suite.

    Over a period of one year, from August 2022 to July 2023, the brand leveraged several key modules of Digital Shelf Analytics for Amazon, including Share of Search, Share of Category, Availability, Ratings and Reviews, and Content Audit. Each of these digital shelf KPIs played a vital role in shaping the brand’s performance across various stages of the buyer’s journey.

    The buyer’s journey is typically delineated into three key stages:

    • Awareness: At this stage, shoppers peruse multiple product options presented on search and category listing pages, gaining an initial understanding of the available choices.
    • Consideration: Here, shoppers narrow down their selections and evaluate a handful of products, moving closer to a purchase decision.
    • Conversion: In this final stage, shoppers make their ultimate product choice and proceed to complete the purchase.

    Let’s now examine the data to understand how digital shelf KPIs helped drive tangible ROI on Amazon for the brand across the stages of the buyer journey.

    Stage 1: Raising Awareness

    Enhancing Share of Search and Share of Category can help brands boost product visibility and raise brand awareness. The following chart demonstrates the steady, incremental improvements in our client’s Share of Search and Share of Category (in the top 20 ranks of each listing page) throughout the analyzed period. These enhancements were achieved through various measures, including product sponsorship, content enhancement, price optimization, promotional initiatives, and more.

    This amplified Share of Search and Share of Category directly translates into improved product discoverability, as evident from the surge in impressions depicted in the chart below.

    Stage 2: All Things Considered

    In the consideration stage, shoppers make their product selections by clicking on items that meet their criteria, which may include factors like average rating, number of ratings, price, product title, and images. For brands, this underscores the importance of crafting meticulously detailed product content and accumulating a substantial number of ratings.

    The subsequent chart illustrates the year-long trend in both average ratings and the number of ratings, both of which have displayed steady improvement over time.

    The enhancements in the number of ratings and the average rating have a direct and positive impact on product consideration. This, in turn, has led to a noticeable year-over-year increase in page views, as indicated in the chart below.

    These improvements are likely to have also been influenced by the overall enhancement of content quality, which is detailed separately in the section below.

    Stage 3: Driving Decisions

    As buyers progress to the next stage, they reach the pivotal point of making a purchase decision. This decision is influenced by multiple factors, including product availability, content quality, and the quality of reviews, reflecting customer sentiment.

    Our client effectively harnessed our Availability insights, significantly reducing the likelihood of potential out-of-stock scenarios and enhancing replenishment rates, as highlighted in the chart below. The same chart also indicates improvements in content quality, measured by the degree to which the content on Amazon aligns with the brand’s ideal content standards.

    Below, you’ll find the year-over-year growth in conversion rates for the brand on Amazon. This metric stands as the ultimate measure of business impact, directly translating into increased revenue for brands.

    As the data uncovers, growth in key digital shelf KPIs cumulatively had a strong correlation with impressions, page views, and conversion rates.

    It is also important to note that the effect of each KPI cannot be viewed in isolation, since they are often interdependent. For example, improvement in content and availability could boost Share of Search. Accurate content could also influence more positive customer feedback. Brands need to consider optimizing digital shelf KPIs holistically to create sustained business impact.

    Impact on eCommerce Sales

    After the implementation of digital shelf analytics, the results spoke for themselves. Sales consistently outperformed the previous year’s records month after month. As shown in the chart below, the diligent application of DataWeave’s recommendations paved the way for an impressive 8.5% year-over-year increase in sales, leaving an indelible mark on the brand’s eCommerce success.

    From boosting product visibility to catapulting conversion rates, Digital Shelf Analytics serves as the key to unlocking unparalleled online success.

    While the success story detailed above does not establish a direct causation between Digital Shelf Analytics and sales revenue, there is undoubtedly a strong correlation. It’s evident that digital shelf KPIs play a pivotal role in optimizing a brand’s eCommerce performance across all stages of the buyer journey. Hence, for brands, it is vital that they collaborate with the right partner and harness digital shelf insights to fine-tune their eCommerce strategies and tactics.

    That said, the eCommerce landscape is in a constant state of flux, and there is still much to learn about how each digital shelf KPI influences brand performance in the online realm. With more data and an increasing number of brands embracing Digital Shelf Analytics, it’s only a matter of time before a direct causation is firmly established.

    Reach out to us today to know more about how your brand can leverage Digital Shelf Analytics to drive higher sales and market share in eCommerce.

  • “The Rise of Digitally Native Brands (DNVB)”

    “The Rise of Digitally Native Brands (DNVB)”

    Direct-to-Consumer (D2C), Digitally Native Vertical Brands (DNVB), and brand.com serve as
    different variations of a similar concept that has blown up in the past few years fueled by factors ranging from a surge in online shopping, stay-at-home restrictions brought about by the pandemic, and a general shift in consumer behavior.

    US D2C E-commerce sales

    D2C sales were forecasted to account for $17.75 billion of total e-commerce sales in 2020, up 24.3% from the previous year, according to eMarketer. The Middle East might have been late in joining the party but the key players from across the board including brands that sold the traditional way via wholesalers and retailers or those that use online marketplaces such as Amazon and Noon, and the new brands entering this nascent market today are all realizing the potentials of communicating with and selling to customers directly.

    The Middle East has one of the highest youth populations in the world with more than 28% of the residents aged between 14 and 29. This means that a great chunk of the population is inherently digital natives, who grew up with smartphones. These young tech-savvy consumers are more informed, are massively influenced by social media for their purchases, are more value and purpose-driven compared to the older generations, as a result of which are open to experimenting with newer brands that align with their ideas and ideologies.

    This presents an opportunity for both traditional retailers as well as nascent brands to tap into their e-commerce potential and tailor their offerings to this new cohort of customers leveraging data to understand their individual needs by connecting and engaging with their customers. And the best way to “pivot” to the ever-evolving demands would be by adopting the D2C approach.

    Some of the benefits of the D2C milieu in retail would be:

    Access to Customer Data
    Access to Customer Data

    1. Complete access to customer data

    Many retailers agree that data is the real differentiator in D2C retail. Using marketplaces like noon.com and Amazon to retail products is great because of the large customer base they have access to, but the downside is, these behemoth marketplaces own the customers and hence their data. The importance of data can’t be stressed enough, but a key use case of all that complex algorithm is that it empowers retailers to customize and personalize offerings to their customers. According to a study by InstaPage, 74% of customers feel frustrated when website content is not personalised.  Not having control or access means, they are now crippled from the ‘ability to customize’.

    2. Building direct connections with customers

    Building direct connections with customers
    Building direct connections with customers

    Trust is a strong consideration for most consumers today. According to a PWC report, 60% of consumers in the Middle East shop online with companies they feel they can trust Gaining trust has proven to be an arduous task for retailers, who now must assure security and demonstrate high levels of education and awareness of their customers, which can only happen through direct connections, personal interactions, and consistent engagement. D2C brands are much better placed to respond to consumer demand to meet their expectations and more importantly address and resolve any grievances they might have. 

    3. Increasing margins by cutting out middlemen

    Increasing margins by cutting out middlemen
    Increasing margins by cutting out middlemen

    Studies have shown that successful D2C companies have a gross margin of 50 – 85%, thanks to two components – effective customer acquisition and eliminating middlemen. Brands with their own unique value proposition, voice, channels and strategies come across as more authentic, and for the millennials and Gen Z, authenticity is the name of the game. Secondly, and perhaps more evidently, getting rid of distribution partners ends up saving costs for the company tremendously.

    Also, e-commerce eliminates the high fixed distribution costs brands used to pay retailers for shelf space and replaces it with variable costs to list on their website or an e-commerce marketplace. However, one thing to keep in mind when listing on marketplaces is that digital channels provide transparency into pricing. And customers will be comparing the prices of your products against your competitors. That’s why it’s critical for D2C brands to benchmark their pricing strategies against their rivals to drive more revenue and margins by pricing products competitively. Want to know how? Read about how DataWeave’s AI-Powered e-commerce analytics solutions can help

    4. Enables to expand presence 

    Enables to expand presence
    Enables to expand presence

    While the D2C approach is proving to be profitable, it also gives brands the flexibility to expand and enhance their presence. Nike would be a prime example of how it has aggressively expanded its presence offline and online since it announced a decade back about its Customer Direct Acceleration strategy. Over the years, Nike’s D2C sales have grown from 16% of the brand’s total revenue to 35% or $12.4 billion by the end of fiscal 2020. Undoubtedly, Nike’s e-commerce focus has been strong, but what they have also mastered is its digitally integrated concept stores that have taken in-store experience to the next level. Moreover, going the D2C way has given the brand more flexibility to build on its voice and purpose, which is reflected across all of its channels and touchpoints. As a result, Nike has been able to grow its presence in existing markets, and establish the brand in new markets by widening its e-commerce penetration and opening stores that helps build communities and serve as marketing fronts instead of merely being points of sale.

    In the Middle East too, there are some strong players, that realized the benefits of D2C and are reaping the benefits now. The most prominent of them would be Huda Beauty, founded by makeup artist turned billionaire entrepreneur Huda Kattan. Beginning as a blog in 2010, Huda Beauty has fast become the number one beauty Instagram account in the world. Huda launched her brand into Sephora in the Dubai Mall in 2013 and has since expanded the range to include a vast array of beauty products. The brand has since had several record-breaking launches globally, with products now available worldwide on hudabeauty.com as well as retailers including, Sephora, Sephora in JC Penney, Harrods, Selfridges, and Cult Beauty. Equipped with a clear value proposition and an army of loyal customers, the company continues to grow as its founder continues to deliver on the brand promise and remains connected with her customers bypassing middlemen. 

    Also read how DataWeave helped Douglas, a premium beauty retailer in Germany go D2C when the pandemic forced them to focus on their ‘Digital First’ strategy. 

    Another example would be the popular eyewear brand, Warby Parker, a company that capitalized on technology, data, and strived to bring a solution to the market. It stepped into an industry that was criticized for being expensive, entered a market that was skeptical of purchasing online, and turned the whole situation around by going D2C. They designed their own frames and sourced their own raw materials, drastically bringing down the costs that would have been passed on to end consumers. They introduced virtual try-on that delivered accurate results turning customers into loyal consumers. And today, after six separate rounds of fundraising, the company is reportedly set to launch an Initial Public Offering this year.

    The playing field in the Middle East is wide open and the appetite for brands that respect value, put people over profits, care about providing suitable, cruelty-free, and ethical products, and understand their customers is only growing. Brands with a robust infrastructure, the right technical know-how and technologies, expertise to manage data, and clear strategies are already on the right path to establishing a strong D2C platform. 

    Insights from DataWeave can help D2C brands make smart, competitive assortment, promotion, and pricing decisions amongst other things to improve the customer experience and drive e-commerce sales. Sign up for a demo with our team to know more.