It may seem simple to say, but you should be using your sales data to make better decisions.
Many mid-market companies don’t capitalize on the wealth of information that ERP data can provide. Data on customer preferences, seasonal trends, buying patterns, and more can help inform decisions around website merchandising and email sends that will improve conversion rates.
I’m sure you have strong feelings for which products perform well seasonally, or which products new customers are likely to purchase first — but why not compound that knowledge with historical data?
There’s always something new to learn.
Here are some key product attributes that our clients use to push products across their digital channels.
Why “Gateway” Products Matter
A simple place to start: look at what we call “gateway products” — the products most commonly purchased by a new customer.
Depending on your product lines, you may or may not have a good idea of what these products are for your brand. Identifying them gives you good ammunition for a potential email Welcome Series, but they can also teach you about why users are interacting with your brand.
Which products draw their attention first? Are they low-margin products, or are you profiting from these purchases? Are customers purchasing the least expensive products or is your brand reputation driving them to make higher-end purchases? Reading these signals from your new customers can help you find more of them
Up-sells and Cross-sells
At Tadpull, we like to measure cross-sells and up-sells for an easy product recommendation system.
These are products across categories and within the same category that are purchased together. Measuring these combinations can help inform merchandising, or provide insight into which products are complementary.
In the above screenshot, we can see these in action. Now we have a list of gear that customers who have purchased this jacket in the past have also been interested in. With Tadpull’s software, you can also download lists of customers who have bought either this product or its complementary products.
Having the opportunity to recommend complementary products on a personal basis is extremely powerful with segmented email sends. When a customer buys a product, based on other customers’ behaviour we’ll know they’re statistically likely to buy a complementary one, and an automated email send might just drive them to make that valuable second purchase.
Plus — if you’re a retailer — we can take this analysis a step even further to find which brands are most often purchased together. Some customers are brand loyal and won’t stray away from the familiar, but some are looking for deals or high-quality reviews.
Are your customers brand loyal? Or are they buying across your offering?
It’s definitely worth finding out.
We also like to keep track of products that are trending up in sales.
It isn’t always easy to eyeball these new bestsellers, but tracking them can help merchants find early signals for buying-patterns or new market opportunities.
If products are increasing in sales organically, this can be a great opportunity to run paid ads or launch a new email campaign for that product.
Alternatively, this could be a sign of new customers — one of our clients recently saw a huge spike in mask sales after a great referral. With so many new customers, we were able to send out segmented emails to these customers, welcoming them to the brand and showing off some of our common gateway products.
Everyone has sales, but sometimes they’re not very well thought out.
What some line managers see as a good discount might not be the right move.
One metric we track for products is their “discount rate”, or what percentage of their sales are on discount. There are some underlying variables to consider, but overall, this helps our clients determine whether or not they really need to include that product in a sale.
Things to consider:
- Are products only moving while on sale?
- Which products are most likely purchased with promo codes?
- Are products in or out of season?
Unless cash generation is the main concern, it can be better to hold some inventory that will sell at the full price down the line.
On the other hand, all retailers have some products in their offering that only sell on a discount. Sometimes it’s important to keep loss leaders if they bundle with other products or introduce a customer to the brand — getting a new customer that will be valuable in the long run is always a great deal.
With that in mind, it’s clear that tracking discount rates can help lead you to more efficient selling and inventory purchasing.
On a similar note, we can’t stress enough the importance of keeping an eye on margins.
This isn’t just the cost of the product either - we like to consider all inputs:
1 - (Avg. Price * (Product Cost + Shipping Cost + Customer Acquisition Cost))
While they won’t like to admit it, many retailers only have a general idea of what their average margins are. And before they know it, their line managers are discounting products below cost for no reason, or the PPC manager that thinks they’re getting a good return is actually losing money.
Staying profitable in eCommerce is difficult and it is sometimes painful to dissect why your net profit isn’t as high as you thought it would be.
It’s always better to take the dive into diagnosing problems on a very detailed level by looking at which products and channels you are losing money on.
If you’re questioning where your profit margin has gone at the end of the year, or are struggling to make merchandising and advertising decisions, we’d encourage you to follow the trends of your best customers.
In a world where eCommerce growth is soaring, why wouldn’t you want to go the extra mile to optimize your website and ad campaigns?
At Tadpull, we let the data drive our decisions — and we think you should too.
One of our clients recently tested out using gateway products in an email sent to subscribers who hadn’t yet purchased. This email saw a 33% increase in click rates and an 18% increase in conversion rate, all attributed to thoughtfully adding one product to an email.