Fast growing businesses often overlook a crucial task - keeping track of influential metrics and performance indicators. Many of our eCommerce merchants agree that effective benchmarking against competitors and monitoring performance indicators is the best way to identify areas of focus that would make the most impact.
The key strength of bigger players
The Christmas holiday season is the most important time of the year for retail, especially for the likes of Amazon, eBay and Alibaba. In 2013, Amazon had a record 426 items sold per second during the days leading to Christmas, requiring more in-depth business intelligence than normal.
In addition, they have complete visibility of customer behaviour and buying patterns and can effectively predict what customers will do next, compare sales across their stores and benchmark their sales capabilities of a particular product. With all this intelligence, it's no surprise that they are so far ahead of the competition.
However, it’s not enough to just have access to data, the key is knowing what to do with it. This is where itembase comes in, collecting bits and pieces of data throughout the industry and transforming it into powerful business intelligence, which we try to make available to retailers of any size.
Facing the merchant survival dilemma of using Big Data
Big Data is a major topic of discussion and a driver of success for many businesses in today's eCommerce environment. However, companies are still hesitant about adopting this technology due to the question of data protection and the fear of revealing intelligence to outsiders.
However, we believe that the benefits of using Big Data outweighs the downsides, because it has helped many businesses realize their potential by understanding their place in the industry. This is because most stores will not fully understand performance success factors, especially if they only have their own sales for reference.
Although businesses are concerned about privacy issues in using benchmarking tools, the truth is that their data is already public if they work with a major shop platform such as Amazon, eBay or Rakuten, etc. These platforms track and use merchant transaction data for their own benefit. So the question is: why do they get this data, but not everyone else? In the end, the question shouldn’t be whether to accept Big Data, but how to maximize it. And very few online stores understand that.
Our thoughts & our approach
When itembase began in 2011, we had a real lack of structure, forcing us to make impulsive decisions in a hectic environment - just like any other young business.
Still, no matter how tedious it was or how late the night went, we made sure that we always reviewed the day's performance. That way we always had a detailed report by the following morning, at the end of the week, and most importantly, at the end of the month.
But reporting and tracking our key metrics was not the only thing we did. We couldn't be oblivious about our competitors. How well do their sales teams perform? How well do their landing pages convert? Competition is not a bad thing, in fact, acknowledging their practices can be very useful for your business. Why reinvent the wheel? Get business intelligence!
How do we help merchants take advantage?
Based on this idea we created the world's largest network of eCommerce merchants - powering a robust benchmarking tool. Our mission is to bridge the gap between Big Data leaders such as Amazon and all other merchants - allowing everyone to have the same benchmarking capabilities. We provide merchants with powerful information, allowing them to compare with direct competitors, in a number of KPIs, some highlights include:
- average number of transactions
- average products per order
- average order value
- customer satisfaction
- return customer rates
These are a few examples of what we can provide our merchants. There are many other KPIs that businesses should pay attention to in order to make their processes more efficient.
Due to the size of our network, we can create a benchmark group of similar businesses for every merchant. We assign merchants to this group based on a variety of factors, including product categories, sales figures and marketing scores, so to reflect the most relevant competition. Of course, since data protection is a top priority for us as a Berlin-based company, all information is encrypted and anonymised in accordance with German privacy regulations.
What makes itembase and our approach different from other business intelligence tools, is that our mission is not only to make this information accessible - but more importantly, to make sure it is put to good use and makes a difference to businesses around the world. But don't take our word for it - try it yourself!
Over de auteur
Stefan founded his first company at age 19 in Denmark, while studying law. He built his eCommerce company to €10m in revenue, sold it and completed his degree. After running several eCommerce start-ups, he founded a Social Network in 2006 which scaled to 12 million users in 23 countries. In 2010, Stefan moved to Berlin and founded itembase.com (now SF based). His experience with purchasing behavior relative to eCommerce, digital profiles from social networking, and a privacy-focused law degree have given Stefan insights into providing consumers the right information at the right time. Follow Stefan on Twitter and LinkedIn.