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The Digital Conundrum: How to Remain Profitable on the Digital Shelf

The Digital Conundrum: How to Remain Profitable on the Digital Shelf

How do other brands nurture their e-commerce business, creating share growth and profitability while defending against an increasingly aggressive competitive landscape? We sat down with e-commerce and data analytics leaders from multiple CPG companies to discuss this question and best practice recommendations for practitioners and operators across the CPG landscape. 

 

Achieving profitability in Brick and Mortar is well-established, although not without its own set of challenges. However, you know that the recipe for success on the digital shelf is both harder to achieve due to increased competition, and that the requirements to win can change literally overnight for you.

 

You have various levers you can use to make changes to your digital business, but it can start to seem overwhelming due to the sheer number of actions you could take – and those actions may even differ between each retailer.

 

To add further complication, today’s retail environment creates increasing pressure for you and your team in a number of areas:

  • Competitive pricing moves from retailers that take away control of your pricing power
  • Cost of goods due to rising transportation costs, raw materials, etc. requiring more frequent or larger price increases
  • 3P Amazon sellers are looking to steal your customers using some well-proven tactics, which if implemented successfully, affect your profitability and loyalty
  • Supply chain complications that challenge your ability to service your current and future customers
  • Amazon is (at the time of writing), adding an additional 5% surcharge for US Sellers related to transportation costs (source)

We see brands that do not have a robust approach towards managing their digital business experience issues such as:

  • Loss of price management and price compliance, resulting in eroded profits
  • Competitive price gaps increasing, leading to competitive steal and lost sales
  • Out of Stock and stock issues that create opportunity for 3P and competition to eat your lunch, resulting in lost sales and profits
  • Falling out of the premium tier search results (share of search), effectively rendering your items invisible and ripe for others to win
  • Eroded sales due to loss of the “buy box” to 3P sellers

However, winners take a different approach and the outcomes they achieve are driven by leveraging analytic applications that are built to mitigate these threats. In doing so they are able to:

  • Create the optimal price-pack architecture that compliments your brick & mortar offering and keeps tabs on the competition and price gaps
  • Defend against 3P sellers but managing price compliance across all their digital outlets
  • Proactively respond to potential stock issues through automated alerts
  • Ensure they are both discoverable and appear in the premier tier search results to win the click & purchase

It’s easier said that done – but it has and can be done! We work with today’s winners who leverage our platform to deliver the insights into their business that leads to tangible results, aimed at protecting your brand status, customer loyalty and organizational profitability. Typical outcomes are proactive price management, strong product availability and optimal visibility. They leverage our price, promotion and assortment analytics, as well as our “share of shelf” insights to make a difference to their business.

 

At Bungee Tech, we strive to foster a diverse set of backgrounds across different cultures as well as industries including retail/CPG. Our shared experiences and knowledge lead to solutions designed to deliver value to your business every day. Take the next step in your digital journey by connecting with our experts.

https://bungeetech.com/brands/

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