For large legacy brands and manufacturers, being a vendor on e-commerce platforms is like being Alice in Wonderland. Everything is very different from how things operated in the brick-and-mortar environment. Supply chain, shopper insights, marketing, competitive tracking, product content – everything has changed. Brands need a new business operating system to succeed in this fast-moving world. When I refer to a new “business operating system,” I mean a new mindset, new skill sets and a completely new set of technology.
E-commerce is a technology first battleground and requires a data- and analytics-first approach.
Let us assume you are someone who manages your brand’s business at Amazon or Walmart as a first-party vendor. For any large national brand, it would be fair to assume that the catalog is large enough (at least a few hundred products), and annual e-commerce revenue is in the double-digit millions range and growing at roughly 50 percent year over year. In this kind of a setup, you are likely to be inundated with the “Three Vs”: Volume, Variety and Velocity of data.
There are a large number of variables at work that impact your sales. Let us take one of your top SKUs. Its sales numbers are impacted by the following factors (not an exhaustive list):
Similarly, your margins are impacted by the following factors (again, not an exhaustive list):
Now, imagine dealing with all this for each of your SKUs when any of these metrics can be constantly changing, in many cases multiple times in a day. This is what makes the e-commerce business tough to manage on a day-to-day basis. You simply cannot do it without smart, data-driven technology working for you.
Whether an individual or a team, there are often constraints on bandwidth. The trick is to focus on the right things every single day. If someone gives you a list of 100 things that need to be worked on to either grow revenue or margin, it’s hard to prioritize and pick which must be done first. It’s easy to drop the ball.
As a manager, you are most likely to ask what will move the needle most. Similarly, it is natural to ask why something happened. For example, if your share of category went down, was it due to a change in organic search rank, aggressive promotions by a competing brand, or because some of the key SKUs went out of stock? It would take an army of very skilled analysts on your team to get to this level of clarity, day after day.
What if there was a technology that tracks all of these metrics continuously, does root cause analysis, computes revenue impact and presents a prioritized set of actions and opportunities to be taken up each and every day? And what if you could convert those recommendations into tasks to be assigned to each team member for tracking purposes? Wouldn’t it make your life simpler?
That’s what Boomerang’s CommerceIQ platform does. This is no ordinary reporting or analytics solution. It’s an AI-first sales and margin optimization technology that works continuously to help you take the right actions to grow your business profitably. With more data and trends on your business, category and competitors, the software continuously becomes smarter, working on your behalf.
Identifying, prioritizing and automating actions using an AI-first technology is what you need to make the most of your e-commerce opportunity.