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2014-07-21 10:55

Comparative analysis in e-commerce

Mateusz Gordon, Gemius e-commerce expert

Market research and data are the basic tool in the marketers’ hands. Without them it is impossible to analyse the market position, plan advertising budgets, or build development strategies. However, the challenge is to get access to data from the whole market, which is a must in comparative analysis. This is the way to obtain the actual picture of the market position and to draw conclusions effectively.

How to get the data about the competition?

How many e-customers do I have, and how many users visit my online store in general? What is my conversion rate? How many orders and at what value have I processed? Every e-shop owner regularly verifies his or her business and they ask themselves if their effectiveness is growing. It is the context that is necessary to assess the status quo and correct choice of any rectification measures. Most often used is the historical background, against which effectiveness indicators are compared with their past results. Also the seasonal character of some branches is taken into account, as in many industries monthly performance may differ greatly, and the economic factors have a potential influence on business. Unfortunately, even with such comprehensive approach to analysing your company’s results, you still have no basic correlative knowledge on your competitor’s standing. Only with consideration of the competitive background and the accompanying comparative analysis can you thoroughly understand a market in question and define which areas are factually in need of attention.

This is of course where a basic question arises: how do I get the data about my competition? One could refer to industry related reports, economic intelligence, studies conducted on other markets. Yet all these sources will provide fractional information of often low quality, which stems from the declarative nature of the collected data.

Challenge for markets

Access to such data and analytical tools may then be a crucial issue for business development. Widely available information, in form of reports and studies published by the industry may prove insufficient. The conclusions they offer are frequently incomplete and based on declarative research. Which is certainly not enough to conduct a reliable comparative analysis.

A truly effective solution is moderated exchange. The model is based on the idea that all players on a market make their data available to others, according to a pre-arranged scheme. The moderator here will be a research company who is not directly involved in the market and takes care of protecting the shared information, guards the quality requirements and standards. What is more, the same moderator provides identical tools to all participants, so that they can browse and analyse the gathered data. In other words – tap into the outcomes of the whole project.

Actual vs. desired

Global markets are varied in terms of the quality of data analysis, depending on the market segment or industry. In some, a mature approach is adapted, where competitors agree to share information, usually through a third party (moderator, research company, industry association, etc.), thus obtaining a panorama of the entire segment, a view of the trends and market position of particular players. In other cases, players act on their own, struggling for access to much limited data and try to draw conclusions from fragmentary information. Sometimes this is the effect of the inability to work side by side, of the anxiety about sensitive information leakage, or of the challenge that a building a reliable research tool poses. A tool that would utilize Big Data, gather information and conduct comparative analysis.

Good practice

Among these diverse conditions, FMCG is an industry branch that deserves a special mention. It is here that competitive producers are given access to accurate data concerning the entire market of interest. Sales figures are made available an include the quantities of marketed products (sell-in) and the actual sales results (sell-out). Moreover, the accuracy of this data comes down to units by packaging type (SKU, stock keeping unit) and trade items (end buyer sales points). This gives the producers a set of complete and reliable data for all the market, about their own and others’ position, and a vast store of information and guidelines concerning the effectiveness of their marketing activities or the potential for more efficient management of stock.

Despite the fact that online may be seen as exceptionally competitive environment, a consensus was possible even among internet publishers. Drawing their income mainly from advertisers (sometimes from subscriptions for paid content as well), they managed to agree on a common standard of website traffic measurement. In Poland, the research project is known as Megapanel PBI/Gemius and it measures such indicators as the number of users, amount of time spent on a website, number of page views and many others, with consideration the socio-demographic profiles of users. It allows the advertisers to plan their online marketing activities and mitigates the risk of unfair publisher practices. The data also provides a picture of the marketing potential of particular websites.

There are markets which credit their effectiveness to the transparency ensured through legal regulations, such as the financial or automotive ones. In the car industry, vehicle sales statistics have been compiled for many years based on producers’ declarations, but also on data from the compulsory car registration procedure.

Chance for e-commerce

The above examples warrant a conclusion about the advantages brought by transparency and openness of data benefiting all: players on particular segments or industries and their business partners. If the internet is the perfect ground for gathering and analysing data, as the online publishers example shows, could similar standards be implemented in e-commerce, a branch holding such a huge potential? Due to its growth dynamics, reaching several dozen per cent annually, the Polish online retail market has grown out of its infancy and is now storming into maturity.

The market participants are facing an alternative: either keep up with the times and briskly react to trends, or fall out of the race almost in a blink of an eye. When making the decision, a consideration of the chances benchmarking offers may prove worthwhile. On a market such as Poland is, i.e. still largely unmeasured, a deeper knowledge translates into greater marketing expenses, and consequently – accelerated development.

gemiusShopMonitor – practical solution

In spite of the organisational issues mentioned above, the demand – along with the increase in e-commerce value – is growing. This forces the market players and potential research moderators to seek consensus, but perhaps even more to implement effective  technological solutions. Such that will handle the enormous amounts of data and efficient comparative analysis.

A globally unique solution is gemiusShopMonitor, which on top of typical web analytics data, considers the specificity of particular branches (so that client companies may receive reports adapter to their needs). It provides historical analysis of trends and of traffic sources (broken down into search engines, direct traffic, campaigns, catalogues, adWords, social media, websites).

The research tool has become part of: Shoper, ClickShop, Magento, Presta Shop, osCommerce and IAI-Shop platforms that serve as the software for online stores in Poland. Thanks to this solution, with just a few clicks, a shop may enrol in the research and check its position against aggregated competition data. Further development of the project and inclusion of other bands is not only a way to ensure constant growth of the data inventory – hence precision of comparative analysis data and conclusions, but also a method of gaining knowledge about the whole market, which is now only described with approximate assumptions.

The growing need for wide, but also accurate market data is an irreversible trend. Positive examples from some industries testify to the effectiveness of benchmarking. Market players translate this knowledge into marketing plans and strategies. It is hard to resist the impression that such branches as e-commerce may serve as a natural environment for accurate analysis of the market information delivered. Both due to their accessibility and the needs of the boosting online trade.

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Type of Content

guide

Industry

FMCG, Trade

Author:

Mateusz Gordon

Gemius e-commerce expert

Gemius e-commerce expert with extensive knowledge on behaviors, needs and interests of online customers. He specializes in methods of fostering e-commerce businesses, by choosing best strategies and delivering suitable tools to implement them.

At Gemius, as International e-Business Segment Director, he is responsible for creating and developing sales strategies for the e-commerce segment; he also coordinates the works on the development of gemiusShopMonitor, a tool used for measurement of the e-stores market. 

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