Talent scouts can spot a budding genius, the next sporting superstar, musical prodigy or supermodel. They spend hours and hours plying their trade, watching, observing, noting. They rely on gut instinct as well. They’re looking for the signs and behaviours of those destined to become great, and in so doing they unlock the key to fabulous fames and fortune for the future role models and heroes.
In the ecommerce world, success can be a result of the retailer’s well-developed hunch that something is going to take the markets by storm. It’s more likely, however, to be by virtue of hard work and research into what is selling well elsewhere, from other sellers, in other regions or in new and developing markets. For your own business though, the success is rooted in past performance, and an analysis of what’s happening so that you can see trends, anticipate issues and plan your business decisions accordingly.
Having accurate data
Two factors are central to being able to report on and analyse your sales performance. The first is the accuracy of the data itself. Most systems and software applications are only as good as the underlying data. In a dynamic business involving high volumes, that data is in a constant state of change, so the more up-to-date your data, the more accurate is your window on what’s happening. The second is how the data is structured so that it is surfaced in formats and reports that are meaningful and relevant to you. You want to be able to slice and dice your data in a number of ways, and well-structured data and flexible reporting allow you to do that, whereas poorly structured data and rigid reports do not.
Reporting and analysis is also one of those areas that suffers from a reality gap. By this we mean that in theory we all embrace the idea of analysing performance regularly to inform our performance and our buying and selling decisions. In practice, we have a business to run, and we get sucked into the day-to-day grind, so our analysis tends to be reactive, sporadic and infrequent. We also experience a difference between the data we’d like to see and the data we can actually extract and report on. This is the gap, and it can be a frustrating gap to bridge.
It’s important to be able to measure the key indicators of sales growth in your business, because if you can’t measure it, you can’t manage it. You don’t know if you’re doing well and growing, or whether your growth has plateaued, or even declined. It’s hard to measure how much we’d pay for reliable, fast answers to important questions. How much is each product selling? What are the best sellers? What are the poor sellers? How fast are the items selling? What are the prevailing trends? How fast will I run out of each item? Bearing in mind how long it takes for a fresh supply to come in, when do I need to re-order? How many do I need to re-order, and for which variations?
Sometimes it seems the important questions are endless. What’s happening across the different channels and regions? How do the best sellers and poor sellers distribute across my various suppliers? How profitable is each product? What are my average order values and attachment rates? Are they trending up or down? What’s happening seasonally? What happened seasonally last year so I can be better prepared this time?
If you’d like to learn more about reporting and analysis, come back to for the second part of our blog tomorrow, or visit our reporting and analysis for ecommerce growth page