E-commerce channels like Amazon have been game-changers for consumer electronics brand manufacturers, thanks to their enablement of the promotion and distribution of products directly to consumers at scale.
However, competition from unauthorized third-party (3P) sellers can turn these channels into major sources of revenue leakage and channel conflicts, while the complexities of coordinating online advertising with consumer shopping behavior can lead to wasted advertising spend.
The real-time challenges associated with e-commerce need real-time response. Enter E-commerce Channel Optimization, a new approach that combines data analytics, machine learning and automation to tune e-commerce algorithms to your advantage. In this blog post, we present three ways consumer electronics brands use E-commerce Channel Optimization to identify and resolve common problems in retail media and win at the moment of purchase.
1. Identifying 3P Listings and Duplicates
As the fourth most popular product category on Amazon in terms of unique product purchases, according to SimilarWeb, consumer electronics is ripe for exploitation by unauthorized and rogue 3P sellers wanting to take a sizable bite out of your brand’s revenue pie.
One common tactic sees 3P sellers procure products from unofficial channels and sell these products at below the minimum advertised price, resulting in the 3P seller winning the Buy Box and the 1P seller losing revenue.
Another tactic involves 3P listings of deprecated or end-of-life products, going against brand guidelines and damaging the brand’s reputation. 3P sellers have also been known to list counterfeit or knock-off products, again resulting in brand dilution, negative brand perception and loss of 1P revenue.
Automated solution: It is nearly impossible to identify these violators without doing deep category scanning and using sophisticated ML-based models for accurate identification. Once the identification is done, then cases can be submitted for resolution with Amazon. AI-based software, like the CommerceIQ platform, tracks 3P listings and duplicates and sends tickets to the e-retailer for resolution, translating into significant time-savings but more importantly, more revenue being recaptured.
2. Removing 3P Variants
In a similar problem to the one above, there has been a growing trend on e-commerce where unauthorized sellers add 3P variants (e.g., additional sizes or colors) to product detail pages (PDPs). When this occurs, your brand may do all the heavy lifting of getting the consumer to the product page (for example, advertising and promotions campaigns), only for the consumer to potentially choose one of the 3P variants instead of your own. This can lead to unknown amounts of revenue leakage, not to mention brand confusion and waste of advertising spend.
Certain types of consumer electronics products are known for having many potential variants, putting brands operating in this space at particularly high risk of unauthorized 3P variants. For example, one model of LED smart TV may have multiple operating systems (e.g., Android, Roku) and multiple screen sizes (e.g. 40”, 43”, 50”) leading to potentially dozens of different combinations which unauthorized third parties can exploit to capture valuable real estate on your brand’s PDPs.
Automated solution: A complete E-Commerce Channel Optimization platform performs rapid detection of 3P variants and files automated workflows to Amazon and other ecommerce channels to have these variations removed. Once removed, third-party sellers tend to try their luck over and over again. An automated solution keeps working to track and eliminate 3P variants on a daily basis, eventually wearing down third-party sellers and forcing them to search for easier prey.
3. Optimizing Ad Spend
In the real-time world of e-commerce, your advertising should take into account demand for different products at different times of the day, week, or year. If a certain product sees high demand on Saturdays then it makes sense to increase your bids for the associated keywords on Saturdays and/or reduce bids on other days of the week.
Optimizing your ad spend also means taking advantage of competitor weakness – or what’s known as competitor conquesting. For example, if you notice that a competitor is out of stock on a popular product, you can go on the attack by placing a product in the “sponsored products related to this item” at the bottom of the PDP.
Automated solution: An E-Commerce Channel Optimization solution collects thousands of market signals and data points to create a single source of truth. Then, it automatically optimizes advertising spend across high-margin products at the given time and capitalizes on competitive brands that are out of stock.
CommerceIQ’s E-commerce Channel Optimization employs data analytics, machine learning and automation to remove 3P variants and duplicates, optimize ad spend, and perform numerous other actions to help your consumer electronics brand win at e-commerce.
For more information on E-Commerce Channel Optimization for consumer electronics, download our guide for consumer electronics brands or contact us.