Retail in the Middle East and North Africa (MENA) region is on the verge of a pivotal shift, writes Katia Kachan, general manager, Brandquad. E-commerce was already the industry’s key growth engine, increasing by a steady 25% since 2017. In 2020, the COVID-19 crisis has made online sales the most important distribution channel. The global lockdown has pushed more and more people online, with consumers purchasing via the web – not only groceries and cleaning products, but also apparel, beauty, electronics, fitness equipment and other products.
It’s time for brands and retailers to invest in e-commerce, as well as technology that allows to measure the performance of digital shelves and gain a competitive advantage in this new normal state. The most successful e-commerce businesses are the ones that harness metrics to make informed decisions. Hundreds of data points need tracking to ensure the competitiveness of an online store: sales conversion rate, website traffic, customer acquisition costs and more. However, there are some rarely analysed metrics that could significantly boost online sales.
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Making the product card appealing
The better the product presentation in an online catalogue, the higher is the likelihood that a visitor will convert into a buyer. Brandquad’s E-commerce 2020 study revealed several metrics that impact online conversion significantly. For instance, if a simple product description is enriched by at least five photos, the conversion would increase by an average of 8.5% – this life hack works better for the accessories and jewellery categories and less for sports, books and food. Moreover, presenting lifestyle photos that showcase a product in its natural environment will add another 5-7% to the conversion.
This rule applies not only to photographs. The product card must contain all the characteristics that are important for the customer. The product description should also provide answers to any practical questions that a buyer could have.
Tracking the completeness of information in product cards is an important task that directly affects online sales. However, it isn’t easy to implement at scale without automation. According to Brandquad’s survey, about 95% of companies perform these tasks manually via Excel spreadsheets. Considering the human factor, problems in such a process are inevitable: almost half (47%) of new product entries have at least one error. Besides, manual product data enrichment is very costly: with an average assortment size of 2,000 SKU, an employee would spend 92 working days (1/4th of the year) to manage product data.
Companies use Product Information Management (PIM) systems specifically designed to control and validate data entries at scale to reduce the number of data errors as well as working hours for product enrichment. Thanks to a PIM system, L’Oreal CIS decreased by 28 hours per week data governance process, while Hasbro EMEA reduced time to market of new products online by 320%. For a brand willing to scale its e-commerce and sell its products via numerous marketplaces, it is crucial to keep its product descriptions in order. A duly checked product database in a PIM system would serve as a ‘golden record’ compliant with the brand’s requirements.
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Planning the pricing strategy
One of the most valuable metrics that would ensure product competitiveness online is the price matrix – a dynamic database of the prices across all e-retailers for your products and those of your competition. Advanced analytics modules help obtain price matrices.
Why would brands need it? For example, a specific marketplace sells both your products and that of your competition. On the eve of the Eid holiday, competitors decrease prices by 15% and 20%. You can set up a 25% discount for similar products and thus, acquire more customers. Reversely, if you planned to have a 25% sales campaign, and you realise that your competition decreased its prices only by 10% and 15%, you can reduce the discount up to 20%, increasing your margins while being the most competitive in the market.
Ensuring product availability
A customer would most likely purchase a similar item from your competition if s/he sees “out of stock” on the page of your product in a marketplace. Therefore, it is crucial to track the stock inventory of every digital shelf. According to Brandquad’s E-commerce 2020 survey, marketplaces do not notify manufacturers about the out-of-stock situation immediately. Brands, thus, have to track this metric via E-commerce Intelligence (ECI) systems.
Tracking out-of-stock has additional advantages. During a promotional period, you sell at a specific discount and discover that your direct competitor’s products are out of stock, you are sure to capture all customers looking for this particular product. You could decrease the discount rate and still achieve your sales targets with higher margins.
What is the consumer’s perception?
A prompt response to consumer feedback is an essential condition to succeed at marketplaces. If a brand does not react promptly to negative comments and reviews, it could lose its competitiveness, downgrade its position in a retailer’s search engine and deteriorate its reputation.
However, keeping track of all reviews, comments and questions from customers could be a tricky task when you sell at scale. For instance, a major manufacturer of natural cosmetics for skin and hair care, faced such a problem when a marketplace set up specific deadlines for responding to customers on their website, for products to appear on top of a category search. The number of reviews of a famous brand was so large that it was impossible for the company even to find comments that required responses. Thanks to an automated ECI analytics system, the brand could not only collect all the feedback from the marketplaces in one place, but also set up an artificial intelligence (AI)-based rule that assessed whether the comments were positive or negative and required immediate action.
Managing big data at scale is a complicated and tedious job. If data analytics is carried out manually, it requires hundreds of working hours and even the integration of additional business analysts in e-commerce teams. However, brands and retailers should not be discouraged. With the help of automation tools, companies can free specialists from routine data collection operations and direct their energy to “creative” analytics that would eventually increase the conversion on sales. Brands and retailers must track as many metrics as possible – you can only control what you can measure.
By Katia Kachan, general manager, Brandquad