You’ll likely know that brands face fierce competition online today. Hence, it’s crucial to optimize eCommerce strategies. But how can you do this effectively?
COVID-19 has driven many consumers towards online shopping, some for the first time. Understanding shoppers’ behaviours online can provide useful answers about how to meet their needs. Based on our experience across multiple eCommerce studies we’ve conducted, here are best practices for how brands can adapt their assortment, pricing and promotion strategies, to stay competitive online.
1. Assortment
When it comes to assortment it’s important to consider:
Why are consumers shopping online and what specific products are they looking for?
Identify why consumers are shopping in a specific online store. Do they prefer one-stop shopping? Are they looking for the lowest price or trying to find a good selection? Maybe they’re simply trying to educate themselves about the product? Do they find shopping online more convenient or, due to COVID, safer? It’s essential to know the answers to these questions to tailor online assortments for consumers’ needs.
Provide larger packaging options: Bigger packs, multipacks & bundles
Online shopping offers the convenience of home delivery and makes it easier for consumers to purchase larger packages and bundles. For brands, selling bigger packs is very interesting because consumers have to use their products for a longer period of time.
Broaden the assortment of products offered
Many consumers prefer online shopping because of the wider selection of products available. For example, they can find more innovative, niche and premium products. It’s easier for brands to offer a large selection through online channels than through “bricks & mortar” stores because there is no limitation in “shelf space” and less of a concern in achieving high rotation. A combination of these factors gives brands the chance to broaden the products they offer online – as long as it’s relevant to their offering.
2. Price
Understanding eCommerce search habits – such as sorting/filtering – helps understand consumers’ “willingness to pay” online.
First, it’s important to understand these behaviours specific to your category. In complex categories, consumers filter more. In simpler categories, they hardly use any filters (even when there are many SKUs). Of the filters applied, brand is the most popular. Surprisingly, many consumers don’t filter or sort on price.
Filtering/sorting products affects their position on the results page. Online, where shoppers can’t see the whole store, it’s vital to be at the top of the page to have the best chance of being found.
On some sites, consumers can filter by reviews as well. Good reviews can usually command a better price. This is a question well worth investigating further for your own category.
3. Promotions
Different online promotions may have different effects. Therefore, it’s important to define eCommerce promotion’s objectives. Some examples are:
- Promotions can help move products to the top of a search page. Presence on the special offers page gives similar visibility. Bear in mind, that depth of a promotion is not as important as getting your promotion to the top of the page. For example, when you are considering a 10% or 20% price promotion, both will get you to the top of the search page. The 20% price promo will probably lead to somewhat more consumers but will cost you more money as well. In general, we see that higher price promotions are not worth the money.
- Online shopping is often more “habitual” than offline shopping, and habitual behaviours are hard to disrupt. eCommerce tools like marking ‘favourites’ or online shopping lists reinforce this habitual behaviour. A brand’s challenge is to interrupt the pattern and encourage product/brand switching or impulse buying. Promotions will help with this.
- Online promotions also allow brands to offer targeted promotions to individuals. Promotions can be tailored and designed with offers specifically for lapsed or non-buyers: it’s easier to identify these shoppers online than it would be in a physical store, although data and good retailer relationships are key.
Research methods
So, what are the best research methods for assortment, price and promotion optimisation? First, it’s important to analyse available sales data to better understand consumer preferences and reactions. Next, contextual testing and mimicking the digital shopping experience are both highly important. Resultantly, a mobile-first research platform is a good starting point. Even better, is the option to replicate the shopping experience on online retailer sites. Best of all is a data fusion approach, combining the analysis of sales data together with mimicking digital shopping experiences for more accurate forecasting.
Key takeaways for researchers
- When researching strategic assortment, pricing and promotional decisions, it’s important to understand the nuances specific to categories and retailers.
- Contextual testing and mimicking the digital shopping experience as closely as possible will give you the best insights into actual consumer behaviour.
