mmi Blog » latest articles
Dec 03, 2020

How to Gain Competitive Advantage Using eCommerce Analytics

The importance of data in eCommerce cannot be overstated. It’s the difference between creating fact-based marketing strategies, and making decisions led by ‘gut feelings’. A growing number of beauty brands are using eCommerce analytics to optimise performance and revenue. But how, exactly, might these intuitive platforms be giving them the edge?

The truth is, using analytics is no longer about staying a step ahead of competitors. It’s now also about keeping up, as more and more eCommerce professionals invest in tools that save time and resources. According to McKinsey research, brands who adopt new technology now will be better placed to achieve future success. Here are some of the ways eCommerce analytics will help…

 

1. Understanding How eTailers Treat Your Products

eCommerce analytics aren’t just useful for tracking behaviours on brand.com. Applied to eTail sites, they unlock insights on how retailers and their customers are treating your products. For example, the right tool will be able to measure pricing across an array of sites, so you can quickly monitor fluctuations or promotions that may be impacting sales figures.

Pricing strategies across different eTailers can vary greatly. In beauty throughout 2019, the number of products that were promoted in department stores with a discount of 20% to 35% off increased four-fold. Meanwhile, within online fragrance stores, the majority of products had 0 to less than 10% discount, showing just how wide the gap can be from one store to the next.

Then, there’s the matter of online stock levels. At a time when COVID-19 is causing eCommerce sales to grow exponentially, keeping products on the digital shelf is more important – yet more challenging – than ever. Since the pandemic began, the number of out of stock fragrances has tripled compared to 2019, putting a spotlight on the importance of using analytics to monitor your key SKU’s stock levels. This enables reactive allocation, as well as strategic forecasting, so you can pre-empt future stock issues and redistribute product accordingly.

2. Understanding How Customers React to Your Products

When looking at the fragrance market, a surprising 50% of products are missing ratings, despite reviews having a dramatic effect on conversions. According to Spiegel Research Centre, products with reviews are 270% more likely to be bought. That number jumps to 380% for high priced products, like prestige scents.

 

By using an eCommerce review platform, you can track how your products stack up on the digital shelf, and channel learnings into actions for improvement. It may be that adjustments need to be made at a formulation or price level, but you could also find that reviews help to highlight gaps or errors in your on-site content. For example, a reviewer might express surprise at the texture of a cleanser, or confusion over how to use their new face toning tool. These are signs that product copy would benefit from some amendments.

3. Updating and Optimising Product Page Content

Speaking of content, eCommerce analytics can help you optimise your product pages; a key step that, currently, two out of five brands are failing to do. To market beauty online, it’s vital to bring makeup, skincare, hair care and fragrance to life through the screen, by way of compelling copy and images that mimic the sampling experience.

 

So, where do analytics come in? Using a Product Information Management (PIM) tool enables marketers to establish a single source of truth for each SKU, collating the very best images, videos and descriptions in one place. This helps you keep high volumes of information organised, allows you to efficiently review and optimise content, and makes it easy to distribute product details to eTailers.

 

4. Benchmarking with Your Competitors

As well as looking at your own brand’s performance, eCommerce analytics allow you to benchmark against competitors, so you can evolve your digital strategy. It can help you spot areas of improvement, and identify quick wins across various touchpoints. So what should you be benchmarking? These are the key areas for eTail:

  • Quality of content and quantity of assets
  • Pricing and promotions
  • Co-op advertising and share of voice
  • Sales performance

 

5. Guiding Product Development with Data

In the beauty world, it can be tempting to let trends steer new product development. You’re in an industry that’s built on buzz, where every day, a new lipstick or face mask or fragrance goes viral. However, while trends data can indeed pave the way to brand success, using eComm analytics is also vital to strategic innovation.

Take Charlotte Tilbury, for example. Their cult-classic Pillow Talk collection grew from a single lipstick into an extensive portfolio of eye, lip and cheek essentials. This wasn’t born from a trend, but rather the knowledge that Pillow Talk fever was catching on, opening a window of opportunity for a full-blown franchise.

Layering eComm analytics with trends data can highlight similarly lucrative possibilities, pulling together a scattering of data that highlights what’s working for your brand. This prevents new products from being developed based on blink-and-you’ll-miss-it trends. Instead, you’re able to create a 360-degree plan, to predict how beauty launches (and their price) might be received.

December 3, 2020