The Definitive Buyers Guide to ecommerce Performance Measurement Solutions

Transcription

1 The Definitive Buyers Guide to ecommerce Performance Measurement Solutions 3 Essential Elements for Selecting the Solution Provider Who s Best for You Inside You ll Learn: What to assess point by point when reviewing ecommerce performance measurement providers. How large or emerging brands and retailers can minimize risk when selecting a technology provider. Where to find a solution that integrates digital shelf analytics with the actionable data of Amazon Sales & Share. How to demonstrate the value to colleagues and provide leadership that accelerates results.

2 About the author Keith leads the continuous innovation and development of Profitero s ecommerce analytics solution for retailers and brands, helping global companies gain a deeper understanding of their online presence to optimize both online and in-store sales. For more than 10 years, Keith has been a trusted advisor to global retailers and CPG companies including Walmart, Target, Best Buy, P&G, Unilever and Coca Cola. Keith Anderson Senior Vice President, Strategy & Insights, Profitero Prior to his role at Profitero, Keith was Vice President of the Advisory practice at RetailNet Group. Keith s insights have been featured in the Financial Times and Forbes Magazine among other publications, and he is a frequent speaker at retail, technology, and media conferences. 2

3 Contents The 3 Essential Elements for Selecting the Best Provider: 4 5 Introduction ecommerce Facts & Figures at a Glance 6 9 STEP 1: Well-Defined Purpose STEP 2: Comprehensive Selection Framework Taking the Next Step Appendix References About Profitero 15 STEP 3: Clearly-Communicated Process

4 For a Complete 360 View of Your ecommerce Operation, You Need to See Your World from All the Right Angles. "If we can t see the right sets of ecommerce performance data, and gain visibility into how we re performing on the digital shelf, we re flying blind totally in the dark. Such are the sentiments of ecommerce Directors and their teams at today s forward-looking brands and retailers. In spite of the emphasis on the ecommerce channel, they often continue to use makeshift solutions, in which they base their decisions on intuition, throw interns at the issues they confront, and look narrowly at their own products alone, as opposed to referencing competitors or high-performing benchmarks. With considerable justification, these companies share a common fear: They ll be left behind by competitors who ve got superior ecommerce performance measurement capabilities and therefore gain better insights for making smarter, faster decisions. Their hope: They ll maintain and grow market share by finding the right ecommerce measurement partner and in the process, gain a complete 360 degree view into how their products are positioned and performing online, as well as how to improve that performance. Sound familiar? It should. This guide is designed precisely for companies like yours as you select an ecommerce performance measurement provider, whether you re an: Emerging brand or retailer that s now becoming a mature ecommerce player and is making your initial foray into trying an ecommerce measurement solution, OR Industry leader that s assessing the ecommerce performance measurement solution you re already using, and may be looking for an alternative solution moving forward. 4

5 ecommerce Facts & Figures at a Glance ecommerce is Exploding: Today, retail ecommerce sales are growing by 23.7% worldwide 1. According to IRI figures, that s a growth rate 4-6X greater than the total retail sector 2. Worldwide retail ecommerce reached $1.915 trillion in 2016, and is projected to top $4 trillion in Retail ecommerce spending accounted for 8.7% of all retail sales last year, and will likely account for 14.6% of total retail spend by CPG/FMCG All Other Industries Performance Measurement Can Lead to Higher Sales: With the right performance measurement solution, you ll help drive increased sales 7. The Channel is Maturing, But Not Yet Entirely Mature: In a recent Profitero benchmarking survey, 73% of respondents said they had one or more dedicated ecommerce Directors on staff, with 40% having an ecommerce Director with previous CPG experience 5. Almost half of respondents described themselves as ecommerce novices or amateurs 6. 52% CPG/FMCG - 40% Say their Company is an ecommerce Novice/Amateur 20% 21% 20% 28% 34% 13% 4% 4% 4% 0% 0% NOVICE We are just beginning to organize around ecommerce. AMATEUR We are engaging retailers in joint business planning which includes ecommerce. ADVANCED All of the above, plus dedicated ecommerce resources. EXPERT All of the above, plus clear objectives for ecommerce as a distribution & marketing/influence. LEADER All of the above, plus we believe we set the digital standard among our peers/competitors. DON T KNOW 5

6 STEP 1 Well-Defined Purpose Establish a clear vision of what you're looking for in an ecommerce performance measurement solution, with a focus on methodology. Whether you re looking for your first comprehensive ecommerce performance measurement solution or you re looking to rebound from unsatisfactory results from a previous provider there s one overriding point to keep in mind as you begin your selection process: Your needs are different than anyone else s. A data collection and analytics methodology that may be most advantageous for one company may fall short for yours. It all depends on what types of questions your organization is trying to answer, and what purpose you ve set for yourself in measuring and analyzing online performance. For example depending on how your organization is structured to sell online, you may place the highest degree of importance on consumer and marketplace insights, and the selection, management and distribution of data that results from it. For companies with this type of focus, it s vital to have a single, aggregated methodology across all retailers with absolute alignment across all data sources. The use of a behavioral panel is a case in point. It tracks a large group of households online spending to project answers to questions such as, What are the sizes of my categories across all online sales? And what is my share of these sales? Perhaps this is the preferred course of action for you. It is, after all, an optimal way to understand shopper demographics, study households over time, or get a good directional view of category size or share by brand across many retailers. However, this methodology typically does not have the accuracy levels to drill deep into specific products, brands, or categories at a single 6

7 retailer (such as Amazon) and, thus, to directly influence retailer-level actions. Then again instead of placing your emphasis on many retailers, what if you have a much more singular focus? Say, for example, you re most concerned about your sales on Amazon the largest and fastest-growing online retailer. (You re in good company, considering that actionable Amazon data is a must have for any ecommerce selling on the platform.) In that case, you ll want an ecommerce performance measurement provider that doesn t concentrate on directional, market-wide results, but instead gives you a detailed, accurate, granular and complete view of how you re performing on Amazon and how to improve. Profitero is one such provider. Of course, our goal is in this Guide is not to simply sell you on Profitero s capabilities, but to instead make you aware of all the vendor choices you have and to help you make the necessary distinctions for narrowing the field. So, take the first step, and be sure you re clear on your purpose in selecting an ecommerce measurement provider. As we focus on fit, let s return to a theme we mentioned earlier: the desire of brands and retailers to get a complete 360 degree of their ecommerce activities and performance a panoramic sweep that offers the entire picture and ensures your ecommerce decisions are backed by data and insight, rather than floated on a wisp of intuition. 7

8 Addressed by method Which Methodology is Right for Your Needs? Partially addressed Not addressed Cooperating Retailers' epos Data Retailer Direct Data (e.g. ARA, RetailLink, shipment data as a proxy) epos Hybrid (e.g. Profitero Amazon Sales & Share) Behavioral Panel (e.g. ereceipts) Digital Shelf Analytics (e.g. Profitero Digital Shelf 360) Eye & Cursor Tracking Business need Total Market Category Size, Growth, and Brand Share Retailer-Level Category Size, Growth, and Share ^ Currently unavailable for key retailers Shopper Attitudes, Demographics, and Behaviors Performance Drivers ^ Available with Profitero Digital Shelf 360, not available with other tools Data attributes Granularity Breadth Accuracy 8

9 STEP 2 Comprehensive Selection Framework Use a systematic approach to review and compare provider credentials and capabilities. Once you get an overarching idea of what type of methodology may work best for your organization, you ll want to delve into provider-specific qualifications. Needless to say, with various providers competing for your business, you may find that some of them are inclined to tell you what you want to hear. That s why, considering just how serious an investment you re making, we suggest you plan to do considerable due diligence. You need to: Expect to spend 4-6 weeks evaluating various players through a combination of discovery phone calls and demos Involve stakeholders from various functions and regions, such as ecommerce Directors, account teams, shopper marketers, category managers, and BI/IT Ask for customer references and testimonials don t hesitate to use your backchannel relationships to get insight on providers capabilities Note that the Selection Scorecard features the most important considerations only. For a fuller listing of the variables you need to take into account, you ll want to link to our Extended Consideration Framework. It includes all the factors shown in the Scorecard below, plus a listing of additional qualifications you ll want to review. Throughout the process, you may wish to use the Comprehensive Selection Framework we ve developed for brands and retailers. The core elements are organized into a Selection Scorecard that lets you focus on five critical factors (see Scorecard below). When you re reviewing providers, you may wish to assign a weighted score to each provider s answer in each category. You may also wish to add other categories that are of particular relevance to your organization. The result will be that you ll have a total score for each provider that takes all factors into account, and shows you who s best suited to meet your needs. 9

10 ecommerce Performance Measurement Solution: Selection Scorecard Can this provider help me navigate the difficult world of ecommerce? Underlying issue Specific Point of Provider Comparison Profitero Capabilities (Yes, included) Other Provider #1 Other Provider #2 ecommerce expertise Global team (US, UK, China) with ecommerce expertise Most knowledgeable. Regularly quoted by media and sought-after as speakers at industry events Ongoing insights tailored to your business Initial ecommerce assessment, monthly business reviews Syndicated research & thought leadership Regular white papers, webinars, podcasts, Insider Forums Does this provider s technology offer all the features and functionality I need? Underlying issue Specific Point of Provider Comparison Profitero Capabilities (Yes, included) Other Provider #1 Other Provider #2 Features and functionality User Interface (visuals, ease of use) Visually superior UI designed both for high-level users (like ecommerce directors) and data-heavy types (like business analysts) Digital Shelf Analytics Available retailers Mobile retailers Exception-based alerts Robust exports Customizable scorecarding Monitoring frequency Amazon Sales & Share Does the provider have it? Accuracy 1P/3P estimates Data granularity Custom categorization Digital shelf integration More than 5k retailers monitored Available Included Included Upcoming Daily Yes 99% Included Daily, ASIN-level See Extended Consideration Framework See Extended Consideration Framework

11 Can this provider grow with my company as ecommerce grows and changes (perhaps significantly)? Underlying issue Specific Point of Provider Comparison Profitero Capabilities (Yes, included) Other Provider #1 Other Provider #2 Product quality, innovation, flexibility Track record of innovation Technology model (in-house vs. outsourced) First provider to integrate Amazon Sales & Share and digital shelf analytics Technology built and innovated entirely in-house enables maximum flexibility and quality essential for ecommerce Will this provider integrate seamlessly with my other digital partners, such as offline measurement providers and content management platforms? Underlying issue Specific Point of Provider Comparison Profitero Capabilities (Yes, included) Other Provider #1 Other Provider #2 Integrations and partnerships Partnerships Integrations Strategic alliance with Nielsen Any Digital Asset Management platform; Nielsen hierarchies for categorization Will setup be flexible to meet my needs AND quick enough to start adding value? Underlying issue Specific Point of Provider Comparison Profitero Capabilities (Yes, included) Other Provider #1 Other Provider #2 Ease of setup and onboarding Customization Deeply customizable to fit your business (content fields, search keywords, categories, etc.) There s always a trade-off between customization and timeto-deployment; choose Length of setup Granular retail monitoring (stores, substores, regions, mobile, etc.) 4-12 weeks Can monitor any combination of mobile platforms, regions, stores, or sub-stores/ platforms a provider that offers the best balance. Immediate value-add Training Insider Forums, access to all published research Onboarding trainings & biweekly customer-wide training deep dives Account management & support Dedicated account manager & support team

12 Key Consideration #1: How Integrated is this Solution? One thing you want to consider when selecting a provider is how well-connected their data sets are to enable the kind of analysis you want to do. For example, it is substantially more valuable to have a provider who can integrate digital shelf metrics with sales and share metrics because you can now more easily analyze which performance factors are driving the most ROI. The same goes with offline and online integration. Almost every manufacturer that sells products online, also sells products offline (via traditional retail stores). If the data sets you are getting to measure these two distinct parts of your business are structured differently, then you have to spend a lot more time manually trying to reconcile them. And in the end, the data will never perfectly match up. One big challenge manufacturers face when integrating offline and online data is the difference in category structure. For example, Amazon has a very different category structure. So if you were to compare your unique sales data for a given category on Amazon against a category defined, let s say, by Nielsen, it would be like comparing apples and zucchinis. So in evaluating providers, it s important to ask yourself, Are they good data integrators? Either within their own app or via connectivity with outside partners, will they allow you to quickly and painlessly bring data sets together for deeper insights? Weak Integration Good Integration Very Strong Integration ONLINE ONLINE ONLINE PERFORMANCE MEASUREMENT Stand-alone Digital Shelf analytics solution Stand-alone Sales & Share solution SALES MEASUREMENT PERFORMANCE MEASUREMENT Integrated Digital Shelf analytics and Sales & Share solution SALES MEASUREMENT PERFORMANCE MEASUREMENT Digital Shelf analytics and integrated online / offline view of Sales & Share SALES MEASUREMENT OFFLINE OFFLINE OFFLINE 12

13 Key Consideration #2: How Accurate is this Solution? Data Accuracy: When The Right Fit is Transformed from Preference to Necessity When you re seeking the provider who s best matched with your organization s requirements, you ll want to keep two points about data accuracy in mind. First, if you do a side-byside comparison among vendors, you ll find that Profitero has robust category universes that lead to more accurate share estimates. It s a consideration that s absolutely vital, because if your category universe is incomplete, your shares will be misstated. And secondly, rather than accepting this claim of bigger category universes as a blanket statement, take a look at these figures that compare Profitero s number of products in each category versus a leading competitor. This is, of course, just one example of a side-by-side comparison. But it is indicative of an important guideline you ll want to make part of your vendor selection process namely, that in order to find the ecommerce performance measurement provider who s right for your company, you ll need to put a strong emphasis how the providers themselves perform. Comparison of Number of Products in Each Category 800% 700% +717% The Difference in Products Monitored by Profitero vs Competitors (measured as %) 600% 500% 400% 300% +323% +362% 200% 100% 0 +31% +157% +173% +79% +133% +26% -28% A B C D E F G H I J 13

14 CPGs don t need their data to get any bigger, they need it to get smarter. Actionable insights into the nitty gritty of how various ecommerce sites work and how CPGs can grow a profitable business, SKU by endless aisle SKU, will determine tomorrow s winners. Patrick Miller Co-founder, Flywheel

15 STEP 3 Clearly Communicated Process Formulate an implementation and usage plan and communicate it ahead of time. As you complete the selection process, you need to lay the foundation within your organization for all the work your provider will be doing. There are several distinct steps you ll want to take to make the transition as seamless as possible. It s important to not only plan and execute these steps, but to clearly communicate in advance your intent to do so so your colleagues know ahead of time what path they and your entire ecommerce operation will be taking. In particular, you ll want to give colleagues a heads-up that there will always be a trade-off between customization and time-to-deployment. With a quick-and-easy off-the-shelf solution, it will take your company less time to get up and running, but you ll receive far less business value than what you d receive with a rich, customizable solution that might take 4 to 12 weeks to implement. It better to know ahead of time that the fast fix will rarely meet a leading brand s or retailer s needs. (For example, why spend your valuable time mining massive datasets for nuggets when instead you could use a single interface that caters to multiple use cases, and offers you flexible reports that generate actionable insights?) The net effect of this proactive communication will be that you ll build support and consensus from all corners of your organization (including the corner office), and give everyone a clear, surprise-free view of the road ahead. Here s what you ll want to propose, then do: 15

16 1 Involve Key Stakeholders From Day One Given the power and flexibility of the various platforms, they re best deployed to a wide audience, as opposed to being restricted to one or two core team members. Let your colleagues know there will be broad participation among them, and that you ll be involving the account teams, category managers, shopper marketers, etc., as needed. To ensure maximum relevancy, have your provider customize scorecards, dashboards, and alerts based on team members roles and responsibilities according to which retailers, brands, categories and regions they run. Optimizing ecommerce Channel Performance Involve Key Stakeholders Initial Assessment 2 Prioritized Action Plan Start With An Initial Assessment Without a foundational review of where you are vs. industry benchmarks, it s hard to know where to start. Put a stake in the ground with an initial assessment, then proceed. It s important to take a holistic view of your performance and position online, as opposed to focusing on any single area. Granted, it may seem like a particular area such as pricing or product content is your most urgent priority, but until you ve done the assessment, you can t be sure. In effect, you don t know what you don t know. Continuous Improvement Align Key Performance Indicators & Action Steps Lean on Analysts' Expertise 16

17 3 Build a Prioritized Action Plan Based on Potential Impact Focus first on your largest markets, retailers, categories, brands, and products. Do a 6-10 week sprint to fix critical issues like persistent out-of-stocks, 4 missing product images, and problem search or category rankings. Transition to a Cadence of Continuous Improvement Once a baseline is established, focus on continuously measuring performance and benchmarking high-performing competitors, calibrating goals and targets, and taking action to improve results. Then repeat. Getting the ecommerce basics right is key for our brands integrity and essential for visibility and conversion. Profitero provides us with clear status on defined KPI s and drives actionable insights on how to improve performance. Beiersdorf Establish a regular cadence (weekly/monthly/quarterly) of communication with your analysts to review performance and coursecorrect where necessary. 17

18 5 Align Key Performance Indicators and Action Steps with Retailers By using insight and analytics to drive results for and with retailers, you re leveraging one of the highest-value applications of this capability. As in offline retail, the collaboration between retailer and supplier is 6 enriched by strategic review and sharing of data. Lean On Analysts Expertise The best providers will make experienced analysts available not only to help you understand the data, but to focus on what it means and what to do. Establish a two-way communication flow in which you share your goals and objectives with analysts and ask them for their input and feedback. Quite simply, view them as an extension of your team. We re still scraping the surface of what we can accomplish by leveraging the insights Profitero delivers. While we continue to build the team and pursue our multi-year vision, we re finding new ways to integrate Profitero into our daily routines. Califia Farms 18

19 Taking the Next Step Helpful Resources: Analyst Firms, including: Brick Meets Click, emarketer, Forrester Research, IDC, IGD, Kantar Retail, Planet Retail / RetailNetGroup, RSR Research. Consultants, including: Accenture, IdeoClick, Coogan Partners, Flywheel Digital, Compass Marketing, Catapult Ecommerce. Peer groups, including: CPG SuperGroup! On LinkedIn, RetailNet Group, Catapult Ecommerce, and Kantar Retail, Senior executives and managers working with manufacturers, distributors, wholesalers and brokers connect with retailers and suppliers to build their businesses. It s good to have an impartial resource to rely on as you contemplate investing in a performance measurement solution. Whether you re turning to a consultant, industry expert or internal resource, you ll want to get objective advice and counsel as you seek answers, information and guidance during the selection process. You may also wish to tap into the knowledge base of the providers themselves. And while, by definition, these providers may not be able to offer you the impartiality of a consultant, they can give you frank and revealing insights that only an in the trenches ecommerce player can offer. We invite you to contact us for guidance and advice. We have a long history of innovation in ecommerce performance measurement and currently collect online data on more than 450 million products spanning more than 50 markets giving us a comprehensive view of global ecommerce. Schedule a time to speak with one of our industry experts at Other Resources: CPG Trends, trade associations. 19

20 Appendix Digital Shelf Development Drives Increased Sales to Higher Sales ecommerce analytics are proven to have a considerable impact on your business. For example, moving from page two to page one in search results can double your ecommerce sales. Search Position Ratings & Reviews IMPROVE: IMPACT: IMPROVE: IMPACT: Gain Pg 1 Position for High-Frequency Keywords +34% - 101% Sales Lift Per Product > 0 Reviews +60% Sales Lift Increase Ranking on Page 1 +33% - 159% Sales Lift Per Product > 2.5 Star Rating +22% - 124% Sales Lift Product Content Availability (OOS) IMPROVE: IMPACT: IMPROVE: IMPACT: Add Imagery and Increase Image Quality Add Video to Key Pages +5% - 50% Conversion Improvement High-Velocity SKUs Maintain on-shelf Availability $100k or more Recovery 20

21 References 1. emarketer, Worldwide Retail Ecommerce Sales Will Reach $1.915 Trillion This Year 2. BCG, IRI and Google 3. emarketer, Worldwide Retail Ecommerce Sales Will Reach $1.915 Trillion This Year 4. emarketer, Worldwide Retail Ecommerce Sales Will Reach $1.915 Trillion This Year 5. Profitero Industry Survey 6. Profitero Industry Survey 7. Profitero ecommerce Analytics for Amazon.com 21

22 About Profitero Profitero monitors what shoppers see and buy online, actively tracking more than 450 million products across 5,000 online stores in more than 50 ecommerce markets, including China, US, UK, Japan, Germany and France. Real-time ecommerce analytics, insights and strategic recommendations pinpoint how to improve daily performance across your sales channels. Our proprietary digital monitoring technology is uniquely combined with sales data, ensuring that you maintain or increase market share, and is trusted by the world s leading brands and retailers including Barilla, L Oreal, General Mills, Edgewell, Waitrose, and Beiersdorf. For more information, sales@profitero.com or visit For additional guidance, contact Profitero today at: Tel US: Tel UK: sales@profitero.com Better Performance Through ecommerce Analytics