Ecommerce Business Analytics: Turn data into action

This insightful article by Lina Kassem, Director of eCommerce Strategy at PiWheel, sheds light on the most important data points to track for an eCommerce business.

Data has an authoritative voice when it comes to your business, and in healthy organisations, the data does a lot of the talking. But data isn’t all that big on the doing. You won’t find data rolling up its sleeves to plan the next steps or execute a strategy. It needs you for that. To know what to do with your data, you must draw it into dialogue. Ask the right questions, and the data will give you the right answer.

The Hypothetical

Congratulations! The numbers are in, and sales of your protein bar saw 25% growth this year. The boss gave you a high five in the hallway, and you’re about to take ownership of the eCommerce channel for two more brands in the portfolio.

But those impressive sales, important as they are, don’t tell the full story.

What if the whole protein bar category grew 35% this year, and as your sales decelerated in Q4, the category’s total sales were picking up the pace? What if your top competitor’s market share ticked up another 8%? What if the new start-up on the block jumped to a 25% share of the category’s organic search traffic and your overall paid and organic search traffic slipped 10%?

Depending on what else is happening in the world that surrounds your brand, 25% sales growth may or may not be cause for wholehearted cheer. Applying a little forest-for-the-trees wisdom, your tree can add a few inches, but unless you’re growing taller and faster than your neighbours, your slice of the sunlight is still shrinking.

Fear not! You’ve got some powerful allies who can help you assess the situation and give you the tools you need to grow. Let’s figure this out.

For every business that aspires to grow, there is always a gap between reality and aspiration. (That’s where we come in.)

Somewhere in the funnel, something could be running more smoothly. Somewhere in the marketing budget, a dollar (or thousands) could be reallocated to improve returns. Somewhere in the content, an old keyword needs a fresh take.

No matter what challenge you’re pondering as an eCommerce leader —“Why am I growing slower than my category?” or “How do I grow my brand’s share of voice?” or “What’s the real cost of FBA?” —stepping back for some perspective is the right step forward. Looking at all issues in isolation will leave you addressing a symptom and not the intersecting factors and forces at cause.

Once you have the lay of the land and a clearer idea of how you’re positioned, you can figure out how to proceed.

And that requires a thorough, open-minded interrogation of the data.

For professionals who have built successful careers knowing, this phase of the conversation is uncomfortable. The premise has to be: something is happening to my business; there is a gap between how things stand and how we want them to be; and I’m not yet sure why, which means I don’t yet know what to do about it.

It can be a frustrating moment, but when you have the tools, you need to find the answers you seek, it’s also exhilarating. As an eCommerce channel owner, you can and should have access to logically organized data that corresponds to every step in the funnel, and by interrogating each KPI, you can construct the most rational explanation for why things are the way they are.

Let’s revisit the example from the beginning. Our brand wants to dig into why its protein bar sales were weak on a relative basis, even though they saw solid absolute growth. They evaluate KPIs and competitors through the funnel and discover some stand-out activity. Here’s what the data has to say:

-        X-BAR’s sales are growing fast and have outpaced ours in Q4, gobbling up a sizable share of the category’s total growth. The first thing you might check are the sources of organic traffic for your category. You can see exactly which keywords shoppers are using in search. Millions of keywords contain the word “protein,” and you now see that a rapidly increasing volume of keyword phrases include the branded term “X-BAR.”

-        From this organic traffic analysis, you can tell the “X-BAR” name is gaining top-of-mind awareness. But Simple Bar, the biggest competitor with the highest market share this quarter, still ranks highest in organic traffic. Your brand ranks third.

What else might the data uncover?

-        Looking at all the paid search traffic by brand, you can see Simple Bar gets the relative majority of the share and has the highest ad-attributed sales. You can also see the driving factor: they’re by far the highest spender in the category. But X-BAR, whose organic traffic and sales have surged, also spiked their ad spend late in Q3. Your ad spend ranks third, and your paid traffic ranks second. (Smart keyword bidding –nice work). You then dig into the specifics of which keywords are generating traffic every week. (Among the thousands of keywords searched in major categories, most advertisers are bidding on roughly 200 and not even scratching the surface of customer intent.)

-        You look at the keywords Simple Bar is winning; they’re driving ad clicks off their own branded keywords, but they’re also targeting your branded keywords, along with high-volume keywords like “protein,” “organic,” and “Whole 30.” Simple Bar is competing on those top unbranded keywords and driving traffic off several farther down the long tail. This useful window into competitors’ paid search strategy –and how much they’re spending to execute –will help you craft a winning rebuttal.

You know “what.” You’ve seen “why.” It’s time to ask, “what now?”

Based on this clear-eyed assessment of the good, the bad, and the context, it’s time to figure out what to do about it. This will be highly dependent on your business goals. Though these objectives are not mutually exclusive, it can be helpful to establish consensus about whether you are primarily focused on relative growth (e.g., you’re a challenger brand or new entrant to the category and need to aggressively win customers and grow share) or primarily focused on efficiency (e.g., you’re relatively established in your category, have high brand awareness, and need to focus on driving incremental conversions with every dollar you spend).

In the case of our Protein Bar Business, it compares Simple Bar and X-Bar’s strategy to it’s own, knowing the charter is to achieve strong relative growth, and finds some low-hanging fruit.

1. Tune paid search campaigns to defend branded keywords

2. Increase spend on high-volume unbranded keywords that correspond to popular product attributes

3. Add spend to long-tail keywords that aren’t yet on competitors’ radar

4. Refresh product page content with high-volume keywords to increase organic search rank

Once you develop a tight set of recommendations based on your challenges and objectives, it’s time to prioritise.

To determine the savviest order of operations, you’ll need to use what you’ve learned about your relative performance at the category level to contextualise cost-benefit analyses on the range of actions you’re considering at the ASIN level.

If your through-funnel analysis still yields some murkiness about the right next moves, start at the bottom, and work your way up.

Begin with what you “own” (like pricing and content), move on to what you can efficiently operate (like promotions and paid search), and then turn your focus to the higher-touch, higher-investment opportunities at the top of the funnel (like display advertising).

And stay nimble. Your conversation with the data is ongoing, and new revelations will likely entail incremental shifts in thinking and tactics along the way. But that’s the best way to stay ahead in an industry that changes every day. Treat your conversation with your data less like a weekly check-in with the boss and more like a constant repartee with the fun colleague who sits next to you.

Few things are more powerful in today’s business environment than being able to say,

This isn’t what I’m saying.

This is what the data is saying.

And the data says the smartest things when it’s being asked the right questions.

Turn on those interrogation lights (don’t really do that —a soft yellow desk lamp is fine), sit down with your PiWheel software, and start a conversation with your data.

And if you have questions along the way that the data isn’t answering, we’ll be here to help.

About PiWheel:

PiWheel is an eCommerce intelligence and consultancy company based in Dubai and founded by a group of Amazon veterans. We enable FMCG and CE eCommerce brands in India with data tech tools and services to increase profitability and market share. Our technology also covers marketplaces in the Middle East and SEA regions and activates data, automates execution, and optimizes eCommerce marketing performance complemented by our eCommerce consultancy services which grant brands access to the highest level of eCommerce expertise to scale and convert more shoppers with improved content, advertising, and operations.

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