Using Data to Experiment and Embrace the New Path to Purchase

Using Data to Experiment and Embrace the New Path to Purchase

Bricks to Clicks: Chapter Four Summary

In our fourth post in our “Bricks to Clicks” summary series, (you can read our last post HERE) this week, we’re talking about chapter four of Content Analytics' founder and CEO David Feinleib’s book Bricks to Clicks: Why Some Brands Will Thrive in E-Commerce and Others Won't.

 

Chapter 4: Confront the New Path to Purchase

Mattel came to us looking to solve complex problems. They sell thousands of products, across numerous categories, through many different channels. By improving content health, out-of-stock rates, and buy box ownership, they saw significant improvements in their e-commerce business, including:

  • $1.6M in sales increase on Walmart.com
  • Out of stock rates reduced by nearly 30%
  • Sales performance improvement 5X better than the industry average

Owning the omnichannel relationship is how we see many popular brands become a bricks to clicks success.

 

Lessons from Big Retail

Most big retailers need assistance with inventory optimization, which is precisely where we step in. Measuring stock levels is complicated, and includes a combination of physical product, system settings, and timing. For one large retailer, we built a daily inventory data feed from their inventory system. We compared this data dump to what it said on the site about product availability, so the client knew immediately when there were key discrepancies.

The result: we helped the retailer track down more than 60,000 units of inventory per month that should have been for sale on the site. By bringing together multiple data sources, we helped improve both revenue, inventory management, and customer satisfaction.

 

Steps to Strong E-commerce Leadership

For brands in multiple verticals, we’ve seen that bricks retailers and brands waited too long to install smart and experienced e-commerce leadership. For those companies, we recommend four steps to establish leadership in online retail:

  1. Be present online
  2. Use metrics to drive rapid, continuous improvement
  3. Adopt a minimum viable product (MVP) approach
  4. Embrace the new path to purchase

 

Be Present Online

Making sure that products are being sold directly by a supplier, and not by a third party, is an important first step. Then we start optimizing, measuring overall content health, product page content, and improving the brand site with excellent imagery, product descriptions, and video.

 

Use Metrics

Heatmaps compare your performance across departments and with other brands. Cross-retailer heatmaps see where you can improve across different retailers to drive the goals and activities of sales teams. External measurement insights support different brand groups in your company. Time-based measurement tells you how well products perform in a given timeframe, and objective measurement gives an ongoing statistical analysis of best practices in the industry. We also use in-store benchmark numbers so suppliers have a historical perspective for their digital share of shelf measurements.

E-commerce sales cycles are much quicker, as we’ve discussed in previous chapters. Bricks-to-clicks suppliers have to move their measurement cycles from quarterly (or annual) to daily or weekly. These faster cycle times increase response speeds and, eventually, online customer satisfaction.

 

Adopt an MVP Approach

An MVP is a “version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort.” (Source: Start Up Lessons Learned, 2009.) For e-commerce, the MVP approach equates to acting quickly, shortening development cycles, lowering IT investment, and moving away from lengthy deployments to quick experimentation.

How? Example: one supplier we work with started out with just 15 items, which could have meaningful impact for a company that does over $30B in annual revenue. We work with companies in this mode so they can experiment in parallel across multiple lines, learning in real time, in a live environment, as we go. It doesn’t take long for them to see where they need to double down their efforts vs. pulling back.

 

Embrace new Path to Purchase

Today: nearly any sized company can sell online. Drop-ship vendor programs (DSV) have had a dramatic impact on the landscape. While the remediation works differently for DSVs and marketplaces, the impact on sellers is that they have less control over the sales cycle than in the brick-and-mortar model.

The Path to Purchase in today’s world is far more complex than in the physical world. Consumers have multiple research pathways online (reviews, social media, friends, referrals, etc.). Returns are far more common in the online world (30% online as compared to 8.89% purchased in stores).

“[E-commerce is] a sophisticated, customized path to purchase that requires long-term, ongoing engagement with shoppers.” David Feinleib, Chapter 4, Bricks to Clicks

Suppliers who learn to speak our language of online sales adopt practices to measure and optimize their brand and product presence across the long tail of all types of retailers.

 

Summary

Since the first mall opened in the mid-1950s in the U.S., retail hasn’t seen this large of a shift. This current generation of shoppers is natively digital, perpetually connected, and creating a shifting path to purchase landscape. Companies open to quick and aggressive experimentation have the best shot of maintaining, regaining, and even establishing long-term market leadership positions.

Get your copy of David Feinleib's latest book at Amazon.com.

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