Does your business have retail store operations in addition to an eCommerce presence? Are you trying to increase sales in preparation for and during the holiday season? If so, read on to learn about how you can leverage technology that alerts you to hidden opportunities by leveraging channels.
If you have already setup automatic alerts for low inventories based on certain product thresholds and other exceptions like online products without images or content, then you are on the right path! If not, that is a basic level of alerting you need to start with. One of the ideas discussed here is the ability to take the alerting to the next level, by comparing sales across your different channels.
There usually are several hidden opportunities that can be uncovered by comparing sales as a %age for each product and geography for a given period. The key here is to gather sales data for a given period, broken down by geography and product (SKU). To compare apples to apples, take into account only the areas where you have a brick and mortar presence. Establish a geo fence around each area to compare in-store vs online sales, for example a set of zip codes which are served by a store. For each of these “area – SKU” combinations, compare the sales as a percentage of the total sales for each of the areas in consideration. (For this specific analysis, exclude the online sales that come from areas that are not served by stores, Also exclude online sales where the shipping and billing addresses fall into different areas, to compare apples to apples.).
Area- SKU combinations that have a significant deviation between the % of in-store and online sales, merit deep diving into the reasons. An alert should be setup to run on a regular basis to report these outliers. Some factors that could be causing these outliers are:
“Placement” : Are those products positioned prominently so customers in that area can find them easily? Did you verify the browse and search features in the eCommerce store are easy to use and returning expected results? Are the visitors from that area seeing these products prominently (above the fold) in the home and category landing pages? Note that it is possible to do this in most eCommerce platforms with the help of a script that detects the customer’s zip code based on ip address and fine tunes the products displayed for that area. Also check for any impediments in the checkout process by comparing the goal funnel in the web analytics. Are enough customers visiting the product page? Is the conversion rate comparable to the rest of the products?
“Promotions” : Are the same promotions available in both channels for this area-SKU?
“(Product ) Inventory” : Is availability (inventory) a concern for the low performing channel for this area –SKU, during this period? Proactive Inventory alerts should address this for the most part, where thresholds for each SKU should be established based on sales velocity, and time it takes to reorder supplies.
“Pricing” : is the pricing, including taxes and shipping, comparable for those area? One can setup jobs that spider the web ( comparison shopping sites ) to ensure your pricing is competitive. However be careful with these jobs and restrict it only to the outliers as your IP address might get blacklisted by these sites if you do it above a certain threshold.
“Promise” : Are these products being delivered on time to those areas as “promised”? (This is the 5th P of marketing that is overlooked in the classical “marketing mix” model, but is a key reason behind the huge success of the amazon marketplace.)
You might have already been addressing most of these manually, but the point here is to establish back end system jobs to do all this heavy lifting and sifting for you, so you can focus your valuable time on the exceptions that are actionable. These checks can be programmed into an automated daily variance report to indicate outliers which are potential trouble spots, so opportunities are not lost. In large organizations usually these channels are under entirely different departments/managements, possibly on different systems altogether. That poses another challenge to be able to get buy in from the other department and the way to get that is to ensure key stakeholders understand that this is a two way street and the retail operation can benefit as much from this data analysis as the eCommerce operation, with the bi-directional comparison. Every day you procrastinate doing this is another day of lost sales opportunities. Consider taking external help from somebody who can come in and jump start your “business exception dashboard” powered by these alerts. This needs a combination of external consultants who know what to look into and your internal IT staff who know how to integrate the data sources.
About the author: Prasad Tangirala has managed the build out of 50+ eCommerce store fronts on the amazon.com platform for leading brands such as MarthaStewart.com, Creative Labs, SONY, etc. He is very metrics oriented and loves to leverage his vast experience in multiple domains to find technical solutions for business problems, increase satisfaction for users and a better bottom-line for businesses. He welcomes your questions on automating your way to success.
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