More than 10m iPhone 6 devices were sold during the opening weekend. This is record breaking, even for an ecommerce giant like Apple.
Carrying a wide assortment of products and knowing your competitors’ inventory can keep you from falling behind in the ecommerce industry.
With numerous retailers carrying millions of items, it is almost too large to wrap your head around.
Since the market is so crowded with other retailers, you need to make sure that the assortment of products you carry is optimized to compete with other businesses. This is possible by keeping track of other retailers’ SKUs to know how your assortment compares.
Think of yourself as a spy searching to find out information, without the fear of an espionage charge.
If a competitor is selling a product that you do not carry, you can be at a huge disadvantage. Consumers often make their way to different websites, and may find a better selection of items elsewhere. No online retailer wants that.
How to improve assortment
Give your website the inventory touch up it needs to become a one stop shop for consumers.
Many retailers struggle with providing accurate inventory amounts to the customer as part of the shopping experience, so give yourself the opportunity to stick out.
This touch up can be accomplished by monitoring competitor inventory and learning how you stack up. Having the right products is the first step to ecommerce success and pricing them well is the second.
In addition, gaining insight into competitor inventory management behavior can help online retailers identify areas for improvement.
What shipping and cart abandonment have to do with it
A retailer that has the products consumers want in stock has a better chance of winning the sale. Buying from one retailer is much more simple than checking out on multiple websites and having to deal with all of those potential shipping costs.
Stats from a recent UPS study show that 58% of customers have added extra items to their shopping basket in order to qualify for free delivery. Give them the option to do that, and they won’t have a reason to abandon their cart to visit another website.
Cart abandonment is a valid concern when it comes to assortment. When consumers don’t find everything they want or are faced with unanticipated fees, many completely abandon their cart mid-transaction. For example, 63% of consumers will abandon their carts due to steep shipping fees.
Pairing a good assortment with free shipping (if it makes sense for your business) can prevent cart abandonment and increase the average order amount.
The customer will have no reason to leave your website, and will appreciate the added convenience offered to them.
Why assortment matters
A wider assortment can make you stand out from your competitors. Knowing that you’re the only retailer with a certain item can put you at a significant advantage.
You can increase the price of the item (as much as demand allows), and maximize your profit. If your store is the only option, the consumer will have no choice but to purchase the item from you.
Performing a gap analysis will show you where you currently are in terms of inventory, and where you need to improve in order to successfully compete. If you see another retailer with a selection of items that could be useful to you, that’s a sign to reconsider your inventory.
Think of the inventory comparisons like a Venn diagram. Each circle represents you and other sellers in your market. Within these circles you have parts that overlap and parts that are unique. Knowing where you stand in relation to your competitors is crucial to your sales and success.
How the iPhone 6 fits in
Take the iPhone 6, for example. The phone’s demand is through the roof, but the supply is extremely limited.
The smartphones are selling at prices in the thousands on websites like eBay and Amazon right now, despite the more reasonable price listed on Apple’s website and in stores. That is because the lucky few who are able to get their hands on one know how high the demand is.
Consumers are willing to pay top dollar to get their hands on it easily, instead of waiting in line for several hours for their turn to swipe their credit card or several weeks for it to arrive by mail.
By understanding competitor inventories and their prices, online retailers can charge accordingly. Businesses need to have the capability to compare stock and pricing with competitors, to have the full picture that shoppers have access to.
Match competitors’ prices, but set a floor price. This way you can avoid a price war, keep up with other businesses, and stay profitable around the clock.
Understanding other inventories is going to be worth your time and effort, and it will provide you with a representation of where you stand in terms of pricing and assortment.
Aside from product assortment, can you think of any other ways a retailer can stay ahead of the competition?
Contributing writers: Brian Smyth and Angelica Valentine