4 Ways Market Share Benchmarking Can Boost Your eCommerce Strategy

Ways Market Share Benchmarking Can Boost Your eCommerce Strategy

Successful eCommerce strategy is based on data — but you can’t just rely on your own data when making decisions. To truly optimize your eCommerce market share potential, marketplaces must understand both their own performance and that of their competitors.

In this light, market share benchmarking becomes crucial for delivering meaningful insights that  guide and enhance your overall strategy so you can build a stronger eCommerce brand.

  1. Understand Historical and Category Performance

Two vital areas of market share benchmarking are historical and category benchmarks. Historical benchmarks look at your own historical performance. For example, how do sales for a particular product line compare to how they sold at this time last year? On the other hand, category benchmarks look at the entire market, and compare your results to the market as a whole.

Performance benchmarks can vary significantly based on product category. For example, while the online shopping conversion rate for luxury handbags is a mere 0.6%, haircare products have a 3.5% conversion rate. Ideally, your own conversion rates should be similar to (or better than) category benchmarks for competitors in your niche.

Market share benchmarking can also help you evaluate your total eCommerce market share, and how it has changed over time. Losing market share to a competitor is a clear indicator that something is amiss with your own product lineup or marketing — or that a new competitor is making an even more appealing offer to potential customers.

Such data can help you optimize your own site, whether that be through improving the quality of product listings or removing declining products that are no longer turning a profit.

  1. Gain Insights Into Consumer Platform Preferences

When looking to expand and sell your product categories through new retailers, understanding where consumers want to shop — and which platforms have the best conversion rates — can help you make better informed expansion decisions.

Market share benchmarking can help you achieve this by identifying brand share changes across multiple marketplaces, so you can more easily identify which categories and SKUs are performing well and which are on the decline.

Geolocation data can lead to even more detailed eCommerce strategy insights. Gaining a regional understanding of shoppers and their behaviors can ensure more targeted decision making when trying to work with a regional marketplace or focus marketing efforts on consumers in a particular geographic location.

By conducting this level of analysis in advance, you can avoid wasting time and money by trying to expand to low-converting marketplaces.

  1. Identify Needed Product Assortment Changes

Which items are your best-sellers? Which are the best sellers on competing marketplaces? How does pricing impact sales? How have these trends changed over time?

Digging deep into this market share benchmarking data can provide valuable insights into changes you may need to make with your own product assortment. For example, you could be losing market share to a competing brand because your own product listing isn’t fully optimized for SEO. Or, other competitors are able to offer lower prices than what you currently offer.

Of course, these insights can go beyond looking at market share for individual items. They can also help you with assortment planning for your entire marketplace. For example, if a competing marketplace has gained significant market share after introducing a new product category, it may be worth considering adding best-selling items from that same category to your own store. 

Frequent market share benchmarking is key to your organization’s ability to respond quickly and effectively to changing trends fueled by customer preferences and competitor actions.

  1. Adapt Marketing

Yes, market share benchmarking can also offer insights into the effectiveness of your marketing strategies. Linking historical market share data with your marketing campaigns can help you better gauge a particular campaign’s effect on web traffic levels and conversions.

Using this data can help you dig deeper into the reasons why a particular marketing campaign worked (or didn’t work) at enhancing your market share. Perhaps it was the type of messaging the campaign used, or a specific promotional offer. Market share growth could even be linked to the method you used to target customers, such as email, paid search ads, or social media ads.

By using market share benchmarking to correlate sales outcomes with ad campaigns, you can fine-tune future campaigns so they continue to focus on the elements that drove sales with previous marketing efforts. This will allow you to continue to grow your market share with messaging that is better tailored to the target audience for each product category.

Improve Your Market Share Benchmarking With Cluster

Quality data can make all the difference in achieving marketplace success — and Cluster can help. With a full range of data-driven solutions for marketplaces, Cluster can help eCommerce businesses and marketplaces better track and understand drivers of market share, and how they change over time.

By using market share benchmarking to fine-tune your eCommerce strategy, you will be better positioned to implement effective changes with your product lineup that drive sales and boost your digital reputation.

11 Common eCommerce Product Catalog Management Mistakes You Should Avoid At All Costs

Common eCommerce Product Catalog Management Mistakes You Should Avoid At All Costs

eCommerce catalog management is one of the most important aspects of any digital marketplace. Without quality product catalog management, your customers will have a much harder time finding the products they’re looking for — and so will search engines.

You would hardly be alone in making eCommerce product catalog management mistakes that hurt your bottom line. In fact, it is estimated that of the 12 to 24 million eCommerce sites on the web, fewer than one million make over $1,000 per year.

By overcoming the following common online catalog management mistakes, you can help your marketplace stand out and start generating meaningful revenue.

11 Common eCommerce Product Catalog Mistakes to Avoid

  1. Confusing Navigation

If your online catalog makes it hard for site visitors to find what they’re looking for, it’s not doing its job. Too many menu navigation options can make your site harder to browse, and customers will be more likely to leave in frustration. Instead, use a concise navigation bar with fewer visuals. Making the top-level category collapsible will help keep navigation menus from looking cluttered once users go into secondary categories.

  1. Inaccurate Product Tagging

Product tagging has a direct impact on the discoverability of your products. Proper tagging ensures that what shows up in search results will match what the customer typed. On the other hand, inaccurate tagging can cause many catalogs to remain completely undiscovered. This often occurs when you rely on manual tagging for large catalog sizes. Automated tagging will eliminate such errors and simplify product catalog optimization.

  1. Delayed Product Onboarding

Just like manual tagging can make some products undiscoverable, manually digitizing and creating metadata for new products can result in a lengthy process to get a new catalog item to market. Once again, automated tagging provides a more flexible and agile process so that new items can be made available to customers in as little time as possible. The ability to be “first to market” with a popular new item can provide a major advantage over the competition.

  1. Inaccurate, Non-Persuasive Product Descriptions

The average eCommerce return rate is 20.8% — and quite often, inaccurate product descriptions are to blame. Compelling images and helpful, descriptive product descriptions make it easier for buyers to decide if an item is relevant and useful to them. This information should be accurate, though still persuasively written to get customers to buy. Quality information and pictures will boost sales and reduce returns.

  1. No Real-Time Market Visibility

Without real-time visibility into your own data — or the market as a whole — it can be difficult to manage inventory, forecast sales, or identify new items that should be added to your eCommerce catalog. Using product catalog API tools that gather real-time data from across the web will provide accurate insights that help you make smarter eCommerce catalog management decisions. Quality product performance data helps you allocate resources properly to keep operational costs down while also improving sales.

  1. Poor Inventory Tracking

Without automated tracking systems, it can become nearly impossible to accurately track eCommerce inventory across thousands of products. Without inventory alerts, it becomes all too easy for items to slip through the cracks. Inventory tracking and monitoring tools are crucial to prevent supply chain inefficiencies that could lead to shipping delays or popular items being out of stock for extended periods of time. 

  1. Inadequate SEO

If your product listings aren’t optimized for SEO, they likely won’t appear in Google Search — which 49% of shoppers use to find new products. Relevant keywords must be used in title tags, meta descriptions, product descriptions, headers, and even the URL. Tags should be as specific as possible, highlighting the product brand and other differentiating features a consumer might type in for their search.

  1. Outdated Lists

A core aspect of product catalog management is ensuring that catalog lists are fully up to date at all times. Customers don’t want to add an item to their shopping cart, only to discover it is out of stock when they go to check out. Updated product lists help customers know if an item is in stock, coming soon, or on back order. Integrating with ERP software can enable automatic updates based on inventory levels to provide accurate information so that customers don’t experience any unpleasant surprises when trying to complete a purchase.

  1. Not Accounting For Channel Differences

As we’ve written previously, eCommerce sellers must account for differences between sales channels like Amazon, eBay, Instagram, and so on. Each channel displays product details differently — even something as simple as one channel using “M” and another using “medium” for clothing sizes can impact whether a listing is displayed properly. Tailoring lists for each sales channel you use will facilitate smoother product updates and better performance with potential customers.

  1. Irrelevant Product Recommendations

Amazon has made upselling and cross-selling of related products the norm for online shoppers. But if your marketplace recommends irrelevant products, you’ll have a hard time maximizing your sales potential. Upselling and cross-selling is most successful when recommendations are based on a user’s browsing history or what other customers have purchased along with an item. It can also be more effective when customers are only given a few options that are well-reviewed or top sellers.

  1. No Competitor Pricing Analysis

eCommerce prices are constantly changing. With so much competition, you must be fully aware of what others are charging for items that are similar (or the same) as what you sell through your marketplace. Gathering pricing data from across the web will help you set competitive prices that drive sales while still enabling you to turn a profit. This data could also be used to help you time sales and promotional events based on competitor activities.

Make Product Catalog Optimization a Priority

While these eCommerce catalog management mistakes can significantly hurt your marketplace, leaning into product catalog optimization can give you a major advantage over the competition.

Cluster’s Catalog Enhancement solution can help. With quality data, you can clean and enhance your canonical catalog, increasing revenue as you get the right listings in front of the right shoppers at the right time. With a wide host of solutions for eCommerce marketplaces, Cluster helps you shift your focus to winning the basket. Book a meeting today to learn how we can help improve your product catalog data.

The State of Social Commerce in 2022 — What You Need to Know

The State of Social Commerce in 2022 — What You Need to Know

eCommerce brands and marketplaces that ignore the potential of social commerce do so at their own peril. While social commerce currently represents only a small portion of total eCommerce sales, rapid sales growth in this area presents a prime opportunity for online sellers who understand these platforms and their users.

In this report, we’ll break down some key trends that are affecting the social commerce marketplace in 2022, and how eCommerce sellers can understand and use these trends to maximize their online sales potential.

Sales Growth Outpacing the Number of Buyers

According to Statista, global social commerce sales are expected to reach $992 billion in 2022. While this is certainly impressive in its own right, it pales in comparison to what is projected to happen in the next few years, with estimates expecting social commerce sales to reach $2.9 trillion by 2026.

Much of the social commerce sales growth can be attributed to the increased buying power of younger generations, who are more likely to use social media to complete purchases in the first place. For example, a 2021 survey found that while 55.5% of social network users aged 18-24 had made a purchase using social channels, only 34.3% of individuals aged 65+ had done so.

As the buying power of these younger generations increases, it is expected that the total number of purchases made using social channels — and the total amount of spending — will increase dramatically, even as the total number of buyers grows at a relatively slower pace.

For example, research from Insider Intelligence reports that social commerce sales per buyer have grown to $518 in 2022, a 26.9% increase over the year before. By 2025, that per-buyer total is expected to reach $938.

As these numbers illustrate, eCommerce businesses and marketplaces with product catalogs that focus on social media platforms have the potential to significantly increase their total value per customer in the years ahead.

Facebook and Instagram Continue To Post Strong Results

Facebook has long been the dominant social media platform — and when it comes to social commerce, that isn’t likely to change anytime soon. According to Insider Intelligence, roughly 63.5 million social commerce buyers in the United States make purchases on Facebook in 2022, with that number expected to steadily grow to 69.4 million by 2025. 

Instagram, which is also owned by Facebook’s parent company Meta, also remains a major player in social commerce, with 41 million buyers in the United States as of 2022. Instagram is expected to have 47.5 million social commerce buyers in the U.S. by 2025. 

Buyers have become increasingly comfortable with discovering, researching, and buying products through these platforms. A Facebook survey reveals that 62% of people say they “become more interested in a brand or product” after seeing it in a Story. In addition, Instagram’s internal data reveals that 90% of its users follow at least one business, while 70% of surveyed users say they either “like or don’t mind ads when watching video on Instagram.”

Even for brands that aren’t using the platforms directly for social commerce, there is a significant opportunity for building relationships with customers and enhancing awareness of their product catalog.

The Rise of TikTok

TikTok is no longer new, but its significant growth in the social commerce space is certainly worth noting in 2022. According to the previously cited Insider Intelligence report, while only 3.5 million Americans used TikTok for social commerce in 2020, that number soared to 23.7 million in 2022, putting the video-focused platform ahead of Pinterest for the first time.

Not surprisingly, TikTok is also expected to continue to have the fastest growth rate among social commerce channels, reaching 37.8 million buyers by 2025. 

While TikTok’s numbers may trail behind Facebook and Instagram, its shopper behaviors are especially noteworthy. TikTok has the highest percentage of social media shoppers who say they buy products on it “all the time,” at 20.6%. Community trends like #TikTokMadeMeBuyIt also result in 67% of TikTok users saying the platform “inspired them to shop even when they weren’t looking to do so.”

Current Challenges

These types of numbers could make it seem like everything in the world of social commerce is going perfectly — but recent developments show that these leading social media channels are currently reworking their approach to improve their own financial situations.

As Digiday reports, Facebook is poised to cut its live commerce shopping feature. Instagram has already taken down its affiliate commerce program. And TikTok is adjusting its own commerce options with the introduction of three new ad formats, while also abandoning plans for social commerce expansion.

This pivot away from commerce and toward advertising is being influenced by several factors, including Apple’s changes to iOS 14, clunky shopping experiences, and ongoing economic turmoil.

One of the biggest challenges, however, is a lack of buy-in from marketplaces that are yet to recognize and uniformly adopt social selling strategies that will deliver the greatest impact. As Sarah Penny, content & research director at Influencer Intelligence explained in the Digiday article, “Some think of it as purchasing everything in-app, some consider it as live streaming with an influencer selling products, while others believe social commerce is having shoppable tags on their content. When we can’t fully define what we mean by it because it’s so new, it shows there’s real nuance within the industry that needs to enable all brands to catch up to be able to provide that uniformity.”

In other words, it’s up to brands and marketplaces to determine what social commerce should look like for their target audience, and then deliver on those expectations.

Are You Ready to Sell On Social?

Social media is ever-present in the lives of consumers — and eCommerce businesses and marketplaces need to take advantage. Your ability to present your product catalog in an attractive manner that makes it easy for customers to make purchases can make all the difference in turning social into a viable channel for growth.

Cluster can ensure you are presenting the right mix of products to your target audience. With accurate cross-channel data collected from digital POS data, Cluster can help you optimize your product assortment and identify assortment gaps so you can present relevant, high-demand products. By continually pleasing shoppers on social and other channels, you can ensure that they’ll buy from you again and again. 
Book a meeting today to learn more about how quality data can help you sell more on social and other channels.

Assortment Optimization: Why It Is Important For Your eCommerce Business

Assortment Optimization

When it comes to maximizing the potential revenue of your eCommerce business, few things can be more valuable than assortment optimization. The right mix of products can make all the difference in helping control your business costs, while also maintaining your appeal with customers.

Sound assortment planning is especially valuable in today’s environment, when supply chain issues continue to disrupt operations for many products and industries across the globe.

Here’s a closer look at how product assortment optimization can help your eCommerce business or marketplace thrive — and how today’s technology makes assortment planning easier than ever.

What Is Assortment Optimization?

In its most basic sense, product assortment optimization is the process in which an eCommerce business or marketplace decides which products it should offer to shoppers. This mix of goods is strategically selected based on customer preferences to maximize the store’s revenue.

Finding the optimal assortment generally focuses on two main types of products: fast-moving goods that sell at higher quantities but deliver a lower profit margin per item sold (like clothing), and higher-end goods that sell slower but have a higher profit margin (such as electronics). 

Successful eCommerce marketplaces generally build their merchandise assortment strategy with these two broad types of products in mind, as this ensures the most consistent flow of revenue from their customer base.

Why You Should Use Assortment Gap Analysis

While assortment optimization may sound easy, the reality is far different. It is all too easy to develop an inadequate product mix that doesn’t offer enough variety to keep customers engaged. In some cases, a lack of alternative products can result in lost sales if an item goes out of stock due to supply chain issues or other factors. For other products, SKUs that are too similar to each other can ultimately cannibalize sales.

A recent analysis by Pimcy determined that while product failure rates aren’t the staggering 95% reported by some sources, at least 40% of new product launches could be considered a failure. In their analysis, they also noted that “a distinction in failure rates can be made across the various types of innovation: incremental innovation, more innovative development, and radical innovation. […] The failure rate increases the more innovative the solution is. However, on the upside, there also is the potential for a bigger return.”

Whether the product is something completely new or simply an improved version of a product that is already on the market, there is never a guarantee that it will be a success. This is especially true in the competitive world of eCommerce, where new marketplaces often struggle to thrive against more established competition.

Despite these sobering statistics, customers are often interested in trying something new, particularly in product categories like clothing or jewelry. Part of what keeps them coming back to an eCommerce business is the promise that it will have something new for them to try — be it a new T-shirt design, improved backpacking gear, or something else entirely.

Because of this, assortment optimization is an ongoing process. It can’t be a “one and done” activity. Customer preferences, supply chain factors, the introduction of new products and the discontinuation of old products means the product mix may be constantly changing. An assortment gap analysis must be performed regularly to ensure your business is introducing new products that will connect with customers — and removing products that are no longer making a profit.

Why the Time Is Now For Better Assortment Planning

With more competition thanks to the rising popularity of digital shopping, eCommerce businesses and marketplaces must prioritize assortment optimization like never before. Understanding which items are missing from your catalogs can make all the difference — and fortunately, this process no longer needs to be left to guesswork.

Running an assortment gap analysis helps your business determine best-selling products or categories from reputable sellers that should be added to the online store. Data-driven, AI-enabled tools use web scraping and other data retrieval methods to gather information on billions of products across multiple channels. 

eCommerce stores that use these solutions can download information on a relevant product category, retrieve GTINs for best-selling items and obtain product lists by seller. By running this assortment gap analysis, an eCommerce marketplace can ask its current sellers to onboard new items that have a proven record of successful sales on other channels. If this isn’t an option, an eCommerce marketplace could attempt to onboard new sellers who offer the desired products.

With quality information readily available through a data-driven assortment gap analysis, it has never been easier to access and utilize this data. Such information is crucial for staying ahead of your competitors — many of whom are using similar resources for their own assortment optimization efforts.

The Benefits of Assortment Optimization

A sound assortment optimization strategy offers several tangible benefits for eCommerce businesses. An assortment gap analysis can help your business understand the eCommerce landscape as a whole — including customer preferences and competitor behaviors. 

With this data, eCommerce businesses can do more than identify new options that can be added to their marketplace. They will be able to identify which mix of products will create a good blend of high-volume and high-profit sales that appeal to their target audience. They will also be better able to identify product lines that are declining in popularity and potentially reducing their profit margins.

This allows marketplaces to create a collaborative relationship with their sellers that focuses on creating win-win solutions. After all, by utilizing shopper insights and providing data-based product onboarding recommendations, marketplaces and sellers can increase their sales success. This creates an atmosphere of transparency and accountability that sees all parties involved better able to optimize their product lineup and take ownership of their results.

Collecting these insights in real time can also lead to more agile and flexible decision making. Quickly identifying trends can help your business mitigate supply chain concerns by adapting its product line based on seasonal changes or other trends. Rapidly pivoting your product assortment ensures you can always offer relevant items at any time of year.

By providing products that shoppers actually want, your eCommerce business can become the go-to online resource for your target audience. 

Strengthen Your Merchandise Assortment Strategy With Cluster

If you’re ready to strengthen your assortment planning processes, Cluster can help. Our Optimal Assortment services are designed to help both marketplaces and brands identify category gaps by assessing product data across channels. With full visibility across the entire eCommerce landscape, you can gain the insights you need to boost sales by presenting relevant, high-demand items to your customers. 

As you use assortment optimization to continually present shoppers with trending, best-selling products from trusted sellers, you will be able to accelerate sustainable growth that builds your reputation and keeps customers coming back time and time again.
With Cluster on your side, lasting marketplace success is closer than you think!

The Ultimate Guide To eCommerce Product Catalog Management

The Ultimate Guide To eCommerce Product Catalog Management

eCommerce has become more lucrative than ever, with total US sales reaching a record-breaking $960.1 billion in 2021. However, this doesn’t mean that every eCommerce marketplace is automatically set up for success. In fact, the highly competitive nature of digital marketplaces means that many sellers struggle to make any impact whatsoever.

This is where eCommerce product catalog management comes in. Quality eCommerce product catalog data can make or break your business by providing customers with crucial information to help you build a brand that appeals to your target audience.

What is eCommerce Catalog Management?

In the simplest terms, your catalog is the full range of products that you offer on your storefront. eCommerce catalog management is the process of ensuring that you have accurate pricing and product information available for each item in your store or marketplace.

This information can be highly detailed. For example, product descriptions can include color options, sizes, dimensions, materials, price and other unique attributes that help a customer make his or her buying decision. The eCommerce product catalog must also be presented in an SEO-friendly manner to improve site rankings, while also being easy to navigate on your own web page.

Why is Catalog Management Important in eCommerce?

Regardless of whether a customer is shopping in a physical store or online, they value convenience. In fact, research from the National Retail Federation found that 52% of shoppers say at least half of their purchasing decisions are influenced by convenience. And, 97% will back out of an inconvenient purchase.

eCommerce product catalog management helps you deliver the convenience that can make all the difference in enticing customers to make that initial purchase — and continue to buy from you in the future.

A quality eCommerce product catalog delivers convenience by offering the right type of information to help customers make a purchase with confidence. Quality information can also reduce the likelihood of customers being dissatisfied and returning their purchases.

By streamlining the purchasing decision, you make your eCommerce store easier to use and foster brand loyalty. 

3 Common eCommerce Product Catalog Management Mistakes You Should Avoid

Quality eCommerce product catalog management can be more difficult than you might expect. The following issues can result in lost sales and a poor customer experience:

Not Accounting For Different Sales Platforms

Your merchants likely sell across a wide variety of channels, such as Amazon, Instagram, eBay, and more. However, not accounting for differences between these sales platforms can create pitfalls. Different channels may require different sets of product information. They may also display product details in a different manner.

Your eCommerce product catalog data must be consistent across multiple sales channels so that customers always receive accurate information. Otherwise, you run the risk of creating an inconsistent experience, which will make it harder to build customer loyalty. This could also make some platforms fail to deliver adequate sales.

Not Adapting Catalogs For Different Audiences

Many sellers target multiple audiences, who require different sets of information. For example, a store like Home Depot will sell materials to both DIY homeowners and contractors. While a homeowner may only need to buy a few pieces of lumber, a contractor would likely look to buy lumber in bulk.

Failure to display the right information to the right consumer can cause major navigation issues that make it harder to make a buying decision. Inventory technology can help you display the right details to the right audience.

Inaccurate Product Categorization

Poor product categorization can undermine your online marketplace’s dynamic search and sorting abilities. If customers can’t easily search for and find a product, they will quickly abandon your store. Inaccurate categorization can also make it difficult to track SKUs and manage inventory.

3 Tips for Efficient eCommerce Product Catalog Management

Your eCommerce product catalog data can become a key differentiating factor that helps drive sales and customer loyalty. Here are some tips for more efficient catalog management:

Use Your Data to Upsell and Cross-Sell

eCommerce catalog data can be used to suggest related or alternate products when a customer is looking at an item on your site. This can be a great way to upsell and increase the value of an order, or to help customers find what they’re looking for if the current product isn’t a perfect fit. Amazon has previously attributed 35% of its sales to this practice.

Track Demand With SKUs

eCommerce product catalog data can also aid merchants’ SKU management. Tracking inventory using SKU numbers will help merchants identify when items need to be reordered. It can help them identify seasonal trends in demand, as well as when they should allocate more or less stock to a particular product. Automating reorder points can ensure that merchants never run out of stock, so that a marketplace is always ready to fulfill customer orders.

Use the Right Data Provider

The right data provider can make all the difference in effectively managing your product catalog. Cluster will help you keep all your cross-channel data in one centralized location. With real-time updates and complete visibility into your inventory, you can accurately track and manage product data. 

This will help you standardize your catalog management process and break down information silos so you can have more trust in your backend data and be better equipped for winning more customers.

Make the Most of Your eCommerce Product Catalog Management 

Quality eCommerce catalog data will make all the difference in helping your company drive revenue and improve the customer experience. With Cluster for Catalog Enhancement, you can have confidence that you are getting the data you need to put the right products in front of the right customers at the right time.
With data drawn from over one billion products, 23 million brands, and 85 thousand digital POS data providers, you will have the robust (and accurate) information you need to succeed. Additional marketplace services, such as price and demand benchmarking, can further help you increase your competitive edge and drive revenue. Book a meeting today to learn how we can help enhance your eCommerce product catalog data.