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“Universally, we found that most brands are really looking for competitive benchmarks. Market share is one of those metrics that is especially critical if you're coming out of the pandemic ...
So, the thing that really ranked true was just this need for market share data and understanding both ‘what is the size of the prize’ and ‘how are we doing relative to competitors?’”— Mike Black, Chief Marketing Officer, Profitero
How do you know if your brand is winning the digital shelf?
For most organizations, the answer isn’t simple because there’s no universal standard for measuring digital shelf performance.
Nearly every brand is using key performance indicator (KPI) metrics in different ways to gauge their progress.
To provide more clarity for brands around how they can measure success on the digital shelf, the Digital Shelf Institute (DSI) partnered with Profitero, a leading ecommerce analytics platform, and the DSI community to create “The DSI Member’s Framework for Digital Shelf Performance.”
Four leading ecommerce executives — Molly Schonthal of the Digital Commerce Institute, Mike Black of Profitero, Wayne Duan of Constellation Brands, and Dean McElwee of Stanley Black + Decker — discussed this topic in a recent webinar, "The DSI & Profitero Present: A Guide to Digital Shelf KPI and Benchmark Measurement," which is also available as an episode of the "Unpacking the Digital Shelf" podcast.
The executives shared their perspectives on how brands can advance their digital shelf maturity, assess KPI metrics, accurately measure their ecommerce efforts, and make the right digital investments. Here are some key takeaways from their conversation.
Today, as shoppers move from online to offline, it’s critical for brands to look at their total market share — not just fair share — and holistically understand their overall performance.
Currently, ecommerce leaders are largely relying on data from disparate sources, such as:
Black, Profitero’s chief marketing officer, found that in talking to DSI community members, “the thing that really ranked true was just this need for market share data and understanding both ‘what is the size of the prize’ and ‘how are we doing relative to competitors?’”
Black adds that the pandemic has made digital shelf measurement even more challenging because many brands experienced rapid, inorganic growth during this period.
This is a major reason why brands need a more holistic digital shelf measurement strategy, so they can separate inorganic growth and better gauge whether the investments they’re making are actually paying off.
Competitive benchmarks can help brands better understand how they fare against others in their category.
Brands should ask themselves:
“The DSI Member’s Framework for Digital Shelf Performance” found several factors shape success on the digital shelf.
Products with high out-of-stock rates often appear lower in search results for many retailers’ sites and require higher ad investment to get back on top.
“When you're out of stock on average for two or more days on Amazon and Walmart, it can take you six to seven days to get back on search,” Black says.
Ecommerce leaders trying to build the case for supply chain changes can use metrics like this to show the relationship between ecommerce sales and search investment.
Content completeness and accuracy are table stakes for brands today, as incomplete content harms discovery and conversions. Brands need to focus on using the right terms and keywords, especially at the individual retailer level. They also need to view accuracy not just from the perspective of their own brand, but their category as a whole.
“Look at the lift impact of actually getting your content to category benchmark. Even just matching best practices for a number of videos, images, and A+ content can have lift,” Black says.
Pricing is the top driver of conversions. Many retailers are constantly matching prices online.
Brands need to stay on top of this to ensure their products are priced above the minimum promoted price. At the same time, brands also need to pay close attention to their promotions and continuously improve their return on investment (ROI).
Drops in average selling prices for some SKUs could indicate an issue with either a brand’s promotional or distribution strategy.
Tracking price and promotion metrics can help brands gain insight into:
Ratings and reviews are critical to fueling and monitoring online and offline performance. Many algorithms consider the number of reviews when returning relevance and popularity rankings, which influences sales performance.
Consumers are turning to Walmart, Amazon, and other online marketplaces to research products before they ever purchase them.
Most consumers don’t even visit a brand’s website, so it’s critical for brands to track their reviews as part of their digital shelf strategy, says Duan, vice president of ecommerce and digital commerce at Constellation Brands.
Increasing the velocity of reviews, as well as understanding the sentiment of consumer reviews, can better position brands to win on the digital shelf.
One of the biggest struggles for brands that want to grow their market share on the digital shelf is deciding which investments to make.
“Sometimes that gets into conversations about attribution, which gets sticky real fast,” Black says. “So, the real question is, ‘How do we focus?’ ‘How do we know where we're investing most?’ ‘What metrics should we use?’”
To start, Duan says it’s crucial for ecommerce leaders to engage their finance teams and ensure their brand’s ecommerce investment is proportional to its ecommerce sales.
“How much the Walmart team gets or the Kroger team gets in their investment shopper funds or trade funds should be how much you invest in ecommerce, just as a baseline base case,” he says. “I know some of you may be eye rolling and saying, ‘duh,’ but a lot of finance folks may not get that because they throw it into marketing and other pieces. From there, you should think about any type of fixed cost leverage that you can get — digital shelf insights — and all those pieces that you will be building off of.”
For example, any metrics that show a higher customer lifetime value for online customers than those that primarily shop in-store could help your team get greater investment.
Brands also struggle to understand what portion of their sales are digitally influenced, even though they may not directly happen online, says McElwee, director of international ecommerce strategy, global tools, and storage at Stanley Black + Decker.
Brands need to assemble all this data across retailer touch points to the best of their ability, and use data from their loyalty programs to track in-store and online sales to get a better picture of their digital shelf performance.
However, McElwee warns that brands should “steer clear of trying to attribute this to too many areas. You're trying to attract consumers for your business, whether they shop online or offline, and you're trying to work out the best way to do that. That should really be the focus.”
Duan says “not all retailer data is created equal.” Amazon, Walmart, and Instacart data is often more valuable for brands than data from tier-two or tier-three retailers.
To that point, Black says brands may place more value on relationships with retailers that offer full attribution across online and offline channels and provide loyalty data to drive better targeting.
“Who can come to the table with those added insights will probably get a disproportionate amount of your focus,” Black says.
Brands need to assess whether they’re showing up as the top search choice when consumers search for their company.
To evaluate this, brands can measure the percentage share of page one and top spots their products own on branded terms across both sponsored and organic placements.
They also can set a KPI target to be five for five in the top five search rankings and 80% or better for page-one rankings. They then can measure and track their brand level by retailer on a daily basis using an analytics and ecommerce insights platform.
“Search has a very, very long tail, so focus on the most important keyword that lines up to the jump ball that most consumers are going to be looking for in your category … then prioritize your key SKUs, because not all of your SKUs can win … With the key SKUs, you want to make sure you're aligning them to get that metric of percentage of share of page one, or the top five spots.” — Wayne Duan, Vice President of Ecommerce and Digital Commerce, Constellation Brands
Every retailer has different content requirements, but that doesn’t mean brands should employ a spray-and-pray approach.
Instead, Duan says, brands should focus on meeting the requirements of the retailers that matter most to them and their bottom line. However, he adds that most retailers’ content requirements may only vary by 10–15%, so “the easiest approach is just to have good solid content. That's going to work 80, 85% of the time,” Duan says.
“Make sure you're working with your partners, whether it's technology or individuals that syndicate out to the different retailers and then triage accordingly. What are the retailers that are most important, where the extra 10 or 15% could achieve an impactful outcome from a business standpoint?”
McElwee says similar to how all retailers aren’t created equal, “not all SKUs are created equal.”
“I’ve seen a lot of teams saying, ‘Yeah, I need to improve the content on all 5,000 SKUs that I have.’ Well, a 10% lift in a SKU, which is a thousand dollars a year or a thousand dollars a month, is not really going to matter to your overall sales,” McElwee says. “You don't take views to the bank. You take sales to the bank, so focus on those top SKUs. Improving that content drives more conversion and drives more sales.”
Digital shelf measurement will continue to evolve, but brands can stay ahead of it by focusing on channel economics, search and product content optimization, and the key levers they can pull to increase their share of voice online and with key retailers.
This likely will require more collaboration and centralization, along with enabling technologies like ecommerce insight solutions and commerce experience management platforms. With all these tools at their disposal, brands will better position themselves not just to win on the digital shelf — but to thrive on it, too.
Listen to the full podcast episode to learn how to shape your digital shelf measurement strategy.
