New tech on the block: 5 steps to drive technology adoption across the business
4 digital shelf insights you should review regularly
Brand messaging, stock availability, competitor pricing, competitor promotions
Digital shelf insights refer to the understanding we take from key retail metrics.
We can use sources of data to identify problems and opportunities, thus giving us insight into how to enhance a user’s experience. These actionable changes can link to multiple things, including the availability of stock, product content or even how your competitors are influencing the perception of your product.
For example, after reviewing a set of data relating to shopper feedback, you could learn that your product description needs to more clearly communicate how many items each pack of your product includes. This digital shelf insight can lead to an actionable change –– updating the product copy or hero imagery. Ultimately, this action can help the shopper to make more informed buying decisions.
Yet with so many metrics vying for your attention, you need to know which digital insights to focus on. Honing in on the most critical metrics helps you to quickly identify high-return activities while ensuring you don’t waste time analysing low-impact data.
In this blog, we’ll talk about four digital shelf insights we recommend continually exploring to help you optimise your digital shelf performance.
In a competitive, ecommerce landscape brand consistency is paramount. To analyse brand messaging is to ensure your brand’s proposition is evident across all products and channels. It might also mean checking whether specific lines of copy, logos and certifications are present across a given category.
Although brand messaging is inherently about your brand, this practice is anything but self-centred. Consistent, effective brand messaging helps you to remain competitive by solidifying your market position, repeatedly talking about your differentiators or by simply building a brand presence.
Aside from recognition and trophies, consistent brand messaging has a real financial benefit. Research shows that consistent presentation of a brand has increased revenue by 33 per cent.
For brands that create familiarity, trust and predictability in their offerings, the results are golden. Consider companies like Starbucks, Coca-Cola and Apple where packaging, messaging and positioning is consistent across the globe.
The number one rule of digital shelf optimisation is that brand messaging should never be overlooked.
For customers, there’s nothing more disheartening than making a purchasing decision only to be met with an “out-of-stock” message. This is the ultimate blocker at the end of the buyer’s journey.
Poor stock availability leads to buyer frustration, abandoned baskets and loyal customers who convert to competitors. Logistically, it can also lead to delisting –– at least on the likes of platforms like Amazon –– giving competitors a potential share of the basket.
Indeed out-of-stocks are more costly than losing a sale when you factor in sales loss, customer loyalty, order fulfilment and shipping costs. Needless to say, keeping track of stock availability is important.
In the ecommerce world, keeping your finger on the pulse of stock availability is crucial to ensure you can effectively control production and meet demand across multiple e-retailers. Although levels of stock might not seem to be a profound digital shelf insight, they’re important to it. If something is low in stock, it needs to be replenished. Similarly, if something is unusually high in stock, it might be time to run a promotion.
To manage this data in real-time, you’ll need accurate range reporting showing stock levels at a multi-retailer level. You’ll want this tool to be sophisticated enough to notify you when you’re almost out-of-stock, especially when selling on Amazon. Both features are available on the e.fundamentals platform for this reason.
A metric that goes hand in hand with availability is price. Unsurprisingly, this is another digital shelf analytics insight that needs close monitoring. The relationship between price and availability means such information is sometimes known as Price and Availability (P&A) data. When inventory is fixed, prices tend to be rigid. When stock fluctuates, however, so does the price.
For this reason, it’s important to keep an eye on competitor pricing to keep your pricing competitive and to take advantage of pricing opportunities. Reviewing competitor stock and pricing will allow you to spot gaps in the market where the price of a product can be temporarily increased as a result of scarcity.
Competitor pricing data can also help you to spot trends in pricing formats and pricing strategies. For example, if a product is commonly sold in multiples as a bulk buy, there could be an opportunity to develop a cheaper, larger version of the product where less packaging is required.
Similarly, if your competitor’s pricing models are tunnel-visioned and focus on undercutting each other, there could be an opportunity to introduce psychological pricing strategies that will win over a large share of the market. Subscription models, prestige pricing and free trials are all examples of pricing strategies that can disrupt a competitive market. Of course, these are long-term pricing strategies, yet this digital shelf insight can also reveal opportunities for short-term wins as well as long-term areas to invest in.
Monitoring competitor pricing is particularly important during a crisis where the strategies of both competitors and retailers are likely to adapt. For example, coronavirus is causing retailers to focus on price sensitive behaviour. As a result, price cuts are now favoured over multi buys. It’s important for brands to be aware of this behaviour to maintain margin and revenue and avoid getting involved in a competitive price race. In this way, pricing information helps brands to understand price ranging and develop mid to long-term pricing strategies that will help to protect their bottom line.
The fourth and final digital shelf insight to regularly review is competitor promotions. You’ll want to look at promotions in a few different ways, including by competitor and by retailer.
Certain e-retailers such as specific online grocers might have recurring promotions that influence buyer behaviour. Once you get to know the pattern of promotion on a given ecommerce website by reviewing category promotion data, you’ll be better equipped to respond to promotions, invest in them if necessary and forecast sales by day, week and month. Without digital shelf analytics, it’s difficult to identify promotional trends online. Digital shelf analytics allow you to view historical data across every retailer to make informed decisions about individual e-retailer strategies. This software also provides an instant snapshot of promotional activity happening across different retailers to mirror the market research you might carry out in-store.
Promotion strategies also differ according to the e-retailer. For example, Amazon often uses a price comparison strategy where multiple prices for the same product appear in a “Buy Box”. In this box, your product price might be directly pitted against a competitor’s.
Amazon also shows sale prices directly next to previous prices to increase the likelihood of purchase. For this reason, your brand’s promotion strategy may need to be tailored to each e-retailer, mimicking the actions of a given platform.
Finally, individual competitors can analyse their rival’s promotions. How do your closest competitors manage price cuts? Are promotions on their products rare, indicating rigid, luxury pricing? Or are they frequently scheduled in line with shopper behaviour like pay dates, bank holidays and seasons?
Being aware of competitor promotions across multiple e-retailers will ensure your visibility across the digital shelf. Responding quickly to competitor promotions removes the risk of lost revenue and helps to solidify your brand’s position against others in the market.
Although there are plenty of other digital shelf analytics you should review periodically, these four metrics yield the highest return, helping you to achieve volume, profit and increased category growth.
Controlling messaging, stock, pricing and promotion is also made much easier by accurate, automated software where you can see a constant stream of real-time data, without having to worry about compiling or organising it. That’s why we’ve created e.fundamentals –– a digital shelf analytics growth engine.