Assortment Intelligence – The Immense Business Benefits for an Ecommerce Company
The use of the internet has brought every person on the planet closer. Naturally, it has also become a ripe ground where the business concerns of the world come to acquire their prospective clients. However, having a presence only does not suffice anymore. The notion of providing the best quality, both in products and services, remains unchanged. The number of online shops has reached 7.9 million globally. So, to keep your place in the competition, you have to update and improve your online website constantly.
Customers now have almost unlimited options in the choice of an online shop. So, unless the company attracts the customer's attention and maintains it, they will leave within 45 seconds of that visit. You will lose that customer and the ranking in Google index, as the time spent by the customer on your web page, or "dwell time", factors in the ranking algorithm.
In war, knowing what artillery the enemy has is winning half the battle. In a similar context, if you could know about the products or services your competitors are offering beforehand, or which of their products or services are being favored by the customers – you could include it in your business webpage and increase your sales. Assortment planning analytics can make it possible.
In e-commerce jargon, assortment intelligence refers to a set of tools and software used by online retailers to track the inventory and supply. The software enables the retailer to view, compare, and analyze the differences between stock by utilizing data mining, image recognition, and artificial intelligence. This tool helps to identify the most-selling product(s) the competitor has on their inventory and helps to decide whether they should add those in theirs too.
These digital tools can also help determine the optimally selling products and the most influential stock amounts for a business. This data can help to design scalable assortment planning in retail and can increase the final revenue.
It is common practice for shops to extract data on the customer's preference and stock products sold the most and discontinue those that don't. Assortment intelligence takes it further by providing information on the customer-favored product that your competitor has in their stocks. So, why would you go to such great lengths? Let us consider two scenarios:
You visit an online shop and search for a product, and each time it shows, "the product is unavailable." When you contact the website and ask why, or the next time of availability, there is no answer. Would you stop revisiting those shops, right?
So, it becomes clear that due to unresponsive or ineffective supply chain communication or insufficient market data – websites can lose sales, face inefficient operation, and cause frustration in the shoppers. Moreover, without the market knowledge, you will overstock another product – which may lead to waste. So, Assortment planning is vital for stocking.
Let us consider a scenario where you are looking for a bag of 'Cool Ranch Doritos'. You could go and grab it from a supermarket anywhere in the world. However, outside the USA and especially in Europe, you cannot – as the product is called 'Cool American Doritos'.
Similar situations occur for assortment in marketing websites, as different suppliers use diverse methods to classify their products. When the product data is non-standardized, it becomes hard to compare them with each other. The most effective software assortment algorithm maps all the scattered data and creates a category tree for categorization and comparison. With assortment planning tools, it is possible to offer improved customer engagement and optimized product selection.
Different business sectors utilize the advantages provided by a comprehensive assortment of intelligence tools – which may include other brands of footwear, electronics, jewelry, furniture, clothing, baby products, appliances, accessories, household goods, tools, handbags, and books, among others. The assortment criteria can be diverse – like, colors, shapes, sizes, variants and other specifications. In short, assortment intelligence software assists in achieving the following objectives:
The tools determine the most popular product, and the store can stock it. This approach reduces the acquisition cost for new customers and retains the previous customers also.
The diversity of customers and businesses is utilized through this program to increase penetration into different customer segments. Consequently, the company can acquire new customers from another element, and new business can start.
The software provides statistically viable data about the products to stock or keeps data discontinued. This information reduces the planning, operation, and inventory management costs.
Nowadays, retailers are slowly inclining away from a generic one-size-fits-all assortment model and a customized and dynamic data-driven approach. This shift requires the retailers to perform assortment benchmarking, followed by assortment planning throughout the year. The depth of benchmarking determine the extent and time of new product acquisition.
The main principle acting behind an assortment planning project is to provide the customer what they are looking for and that too at just the precise time. For that, proper assortment planning is essential. You will need to make sure about certain factors to act on assortment intelligence successfully, as listed below:
Analytics over in-house data
Experience of the concerned employee
Periodical tracking of assortment changes on the competitor's website
According to the tracking data from the competitor's website, changing the product mix by adjusting features like brands, color, variants, and pricing.
If you are unsure of how to acquire or use Assortment Intelligence software, you can always enlist the help of proficient companies for that purpose.
Experienced help will provide you with the following benefits for your company:
Stocking the things your competitor does too will create a competitive market; it will also lessen the dedicated customer pool of the contender company.
If you know the well-performing products of the competitor, it will help you acquire and make appropriate replacements ready in less time. Optimizing the buying and stocking of products will reduce the planning and inventory costs.
Having the opponent's assortment data handy will enable the retailer to balance the collection and inventory facet while maximizing sales.
Retailers will be able to make more effective decisions about their assortment as well as the competitors.
Established businesses can detect changes around the product mix and make quick judgments, giving them an edge over their business rivals.
Assortment intelligence can identify the areas needing professional assistance, focus, and assist in taking the necessary actions at the correct time while continuing to improve the bottom line.
One can use the software to provide critical additional services, other than calculating the stock situation and the inventory of the businesses' competitors. Some of its applications can be listed as follows:
The tools can also provide information about products that are not on the competitors' inventory and sought by the customers. Finding these products and adding them to your company list will give you an edge over your competitor.
You should find out the unique products/brands that only you are offering and decide on their proper pricing. Maybe the products need to be priced a little higher, increasing revenue and improved product acquisition.
You must compare and analyze the product assortment through different magnitudes or their combinations. The benchmarking can be overall, or you can individually go through the category, brand, and feature level.
Measure and map the discount distribution trend across brands and sources of the competitor. Determine the optimum value of the discounted products, find the most effective one, and apply it to your products.
Understand the spread of assortment over price ranges. Should you consider an extensive range of prices or a short one? It would be best to consider this factor before making a conscious decision and then go for product placement.
Use the intelligent filters extensively and study in depth about the different demands of the diverse competitors. You may have to scrutinize according to very stringent parameters – ranging from the brand, sets of products, size, color, variants and other features.
A company that uses assortment intelligence data can make informed decisions about the variety, quality and designs of certain products – which the customers want to buy. They can also categorize and correct gaps in the current catalogue according to the assortment data, which help to improve their conversion rate.
With the correct product assortment tool, you can control the online product merchandising trend and sell the right products to the exact buyers at the right time. You have to calculate the most appropriate amount of inventory to satisfy the customers' demands and not fall short on stock maintenance.
You can consult a working and skilled team of e-commerce analytics professionals like Wersel Data-Hub. We will track your competitor's brands, past trends, and inventory movement to suggest the best products to sell. It will also help you in maintaining the most optimum inventory levels and let your business zoom past competition.