An Arms Race of Ecommerce Information Is Coming

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Consumer brands and large retailers are creating data-driven infrastructures and workflows that could impact the entire e-commerce industry, according to a performance analysis firm.

Online retail sales grew 27.6% globally in 2020 from 2019, reaching an estimated $ 4.28 trillion, according to eMarketer. Latin American e-commerce sales rose 36.7% in 2020 and North American online sales rose 31.8% as both regions overtook the rest of the world in terms of e-commerce expansion.

The explosive growth of the industry and the shop closings associated with the pandemic forced many companies to shift their attention to online sales.

Data-centric culture

“Many big brands – especially stationary brands – have built a very data-centric culture. They had a lot of data from Nielsen and IRI [a research firm]”Said Mike Black, chief marketing officer at Profitero, an e-commerce analytics platform.

As the pandemic forced changes in retail, some of the big brands Black described had been relatively lagging behind when it came to e-commerce infrastructure and data collection. That changed quickly.

“What we’re seeing now is that a lot of big brands are like [The Procter & Gamble Company] and Unilever invest in sophisticated analytics to win in e-commerce. We are seeing ecommerce teams and data analytics teams grow at a massive rate as they see the great opportunity, ”said Black, who co-operated with Halee Patel Newton, VP of Ecommerce for Califia Farms, during a live interview for CommerceCo from Practical Ecommerce spoke on May 27, 2021.

Large companies that invest in data have the potential to change the “competitive context” of the industry, according to Black, who said survey data shows brands that use performance analytics tend to outperform their overall industry category by as much as 70%, however that’s only about 20% of all brands use such analyzes.

competition

Perhaps relatively small brands and retailers – some digital native vertical brands called challenger brands that sell through traditional retail stores, and even small retail chains – don’t have the budget for performance analysis or the staff to deploy them appropriately.

If so, it could lead to an e-commerce data or analytics arms race where businesses can gain a significant advantage by having the means to use data more effectively. Or as Black put it: “You can unlock value and create growth compared to your competitors at an above-average rate.”

California’s Newton experienced just this kind of benefit.

For many brands during the pandemic, Newton said, “The mandate was to move into e-commerce, whether or not you were profitable. For us this meant many new ones [competitors], and many [of those competitors] will advertise. We had to take a step back and find out where we could be competitive. “

opportunity

Califia Farms products did well online. But in 2020 everyone was too. Newton wanted to understand how her company was doing compared to her competition. She wanted to make sure that Califia Farms was getting at least its share of the growth. She wanted business intelligence that would help her seize opportunities despite increasing competition. Fortunately, she had this data.

Most Califia Farms products are chilled milk made from nuts. But the company also has several products that are “shelf stable” – they don’t need to be refrigerated and are therefore well suited for e-commerce.

With the help of performance analysis, Newton was able to determine an increasing demand for shelf-stable milk and creamer.

“The search term that just came up in March [2020] was ‘stable milk’. Everyone wanted it, ”Newton said.

“When we saw this search term growing in popularity on Google or Amazon, we thought, ‘No other brand is investing in this now. Let us try it. Let’s see what happens when we optimize our content. Let’s see what happens if we focus on that particular term, ‘”Newton said.

Lag milk represented an opportunity for Califia Farms, but the company could have missed it without data on which terms are trending on Google and Amazon.

Califia Farms had immediate results and increased sales of these long-lasting products as a direct result of understanding what potential customers are like in that moment.

Despite being a small brand alongside its competitors, Califia Farms has been able to use data to gain an advantage in a niche product category.

The main takeaway from Newton and Black is that online sellers should expect competition to increase as more businesses focus on e-commerce, and sellers should expect data to be a major battleground.

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