Business Problem:
Over the last decade e-commerce has been revolutionising physical retail trade and Covid-19 has accelerated the digital revolution. Trust has been the ongoing barrier to e-commerce adoption and most of the e-retailers utilised Covid 19 as a catalyst to Infuse trust and credibility into e-commerce. However, globally most of the economies observed a declining trend in e-commerce sales post pandemic. One of the most critical challenges of the e-commerce design today is to maintain trust with customers throughout the customer purchase decision journey. The digital shelf describes how the brand is positioned on e-commerce channel and it is this digital shelf levers which engages and build trust with the customer throughout their decision-making Journey. One of the largest food brand of a CPG/F&B market leaders with UK operations was losing online market share as they were unable to understand the relationship between digital shelf levers and market share, in addition pricing and promotion was a battlefield and they wanted to come up with a cost-effective analytic framework to quantify the efforts made in digital shelf optimization.
Background:
Disrupting the digital media clutter and bringing the customer from the consideration phase to the moment of purchase on their decision journey is a challenging task. Digital Shelf Optimization has a key role to play here.The Digital Shelf levers includes availability, content accuracy, ratings and reviews, search key word rank and placement of brand page and also different types of market activation.
The customer decision journey.
Source: McKinsey
E-retailers also stepped up to the challenge and have tried their best to maintain trust with the customer across their purchase decision journey through various features like easy payments; better search key word rank; detailed product description; quality content; better product reviews; integrated shipping solution etc. However, there is ambiguity in evaluating and estimating which of these digital shelf aspects to what extent drove sales and market share.
The array of traditional ecommerce analytics solutions which includes MMM/Customer Segmentation/Sentiment Analysis/Price Intelligence/Assortment Intelligence does not give enough business insights to retailers about the contribution of digital shelf levers to Market Share/Sales. AI is one of the major trends observed in the E-commerce Industry to address these issues and challenges.
CatmanAi Solution
CatmanAi is a comprehensive AI Solution with a best-in-class Oracle Cloud Infrastructure provided to clients as Software as a Service.
CatmanAi’s proven analytic techniques along with cutting edge technology provides a simple interface to businesses with Historic Context, Model Insights, Simulator and Optimiser to clients. CatmanAi has built six Catboost Machine Learning models for beans category for 6 retailers ( Tesco / Morrison / Asda / Sainsbury's / Waitrose / Ocado) for a popular FMCG food brand in UK. What if scenarios were created to generate sales response curves. Model successfully established a clear relationship between digital shelf levers and market share/sales.
Snapshot of the Key Model Recommendations and Findings for the Food Brand for Asda Retailer.
Optimising the search key word of the FMCG Brand alone predicted an incremental uplift in sales by 3% to Asda Brand Portfolio Unit Sales.
For premium and niche SKU’s an incremental sales uplift of 4.9% of Unit Sales to Asda Brand Portfolio Baseline was predicted by improving the product reviews.
A potential sales loss of 5.1% to Asda Baseline was predicted if the price of FMCG Brand portfolio products increased by 5%; it was also predicted that if the competition increases price by 5% Asda portfolio brand sales would increase by 10.5%.In addition what if scenarios were created for best price mix.
Simulator also provided insights about the Macroeconomic indicators and its impact on sales and market share.
Conclusion:
Project successfully developed and implemented CatmanAi solution for Popular FMCG Food brand for six ecommerce retailers across UK. CatmanAi not only provided actionable business insights about Digital Shelf Optimization, but the simulator also helped client generate various what-if-scenarios and response curves for sales and chose their future.
References:
Comments