Already on a meteoric trajectory before the pandemic, the ecommerce advertising space is growing faster than any other marketing channel.
For brands, the opportunity is there.
The budget is primed.
But the data is not.
In traditional retail, data is decades ahead of where it is for ecommerce. Established data powerhouses deliver terabytes of information to retail analysts to number crunch and extract the necessary insights to power product development, market strategy, and operations.
Online, it’s still a bit of the wild west. Ecommerce marketing teams are learning as they go, testing theories, and validating hunches by cobbling together retail analytics from different sources. Sometimes, it’s hard to even know what questions to ask, let alone find the answer. Where are the connections? By pulling here, does it affect things over there? What impacts ad pricing and performance? How can an ecommerce marketer best drive ROI?
In this ongoing series, we will explore the new data intelligence driving online retail and ecommerce advertising.
Is there a correlation between ecommerce advertising conversion rates and delivery/shipping times?
Shipping speed and product availability have always impacted online shopping. It’s no secret that Amazon has invested billions in its logistics infrastructure to become a leading partner for consumers to get online orders delivered quickly—and has reaped the rewards for being the best at solving that puzzle.
“A real friction point for consumers is not just the time it takes to get there but the time they have to spend to receive an item,” said Brie Carere, executive vice president and chief marketing and communications officer at FedEx in a 2020 eMarketer report on Frictionless Commerce, “Reliability is now table stakes. Fast shipping is absolutely table stakes.”
Driven by Amazon, shipping times across the ecommerce landscape have been declining for years. That was until March 2020, as the global pandemic forced online retailers to delay shipping times to create space for essential items.
Kenshoo Ecommerce client Spin Master is a leading global children’s entertainment company with innovative toy lines, entertainment properties, and digital games and toys. Its brands include Gund, Etch A Sketch, PAW Patrol, and more. As COVID sent the world into lockdown in March 2020, and Amazon delayed shipping on non-essential items, the Kenshoo team in partnership with Spin Master experienced a dip in its Amazon Advertising conversion rates compared to the previous week. They needed to find a way of shifting advertising spend to maintain conversion rates on available items.
The assumption was that the products impacted by the inflated estimated shipping times were dragging down performance. This may have likely been caused when consumers clicked those ads but didn’t order once they landed on the Amazon product pages because they saw that it would take a while to receive their items.
The team wanted to find a way of preventing spending on products with extended shipping times in order to turn the conversion rate around, but unfortunately, the data on which products were affected wasn’t available from Amazon. They had to turn to another source.
Working with ecommerce intelligence partner, DataWeave, the Kenshoo team developed a process to automatically track the estimated shipping times for Spin Master’s catalog of products by aggregating publicly available data from Amazon.com. This solution checks up-to-date shipping timelines on every product the brand sells on Amazon continuously throughout the week.
Armed with this valuable data, the marketing team diverted the Amazon Advertising budget to only drive traffic to products estimated to arrive within a seven-day delivery window. Anything beyond seven days was paused.
The team’s hypothesis paid off and in the week following the new strategy, conversion rates rose sharply again. Shipping times do correlate to ecommerce advertising success.
Retail analytics and the future of ecommerce
The above case study highlights an example of how Amazon’s shipping times and fulfillment experience impact the success of Amazon advertising investment—a correlation of datasets that until now, hasn’t been actionable in a scaled way.
Retail Analytics is a necessary input for driving maximum advertising impact and understanding its effect on THE holistic business. These data are fast becoming the necessary foundation for advertising management as ecommerce retailers and advertising channels become more diverse and shopper experiences shift in bigger ways to the online space. As this channel grows and evolves, ecommerce advertisers will need to identify gaps in their datasets and find ways to get the valuable information they need.
Not only is Kenshoo Ecommerce the leading ad technology solution for managing, automating, and optimizing your ecommerce programs—such as Amazon Advertising and Walmart Media Group—but we are also striving to become an industry leader in data intelligence, allowing for fast action from data-rich insights and holistic business measurement to really ensure your investment is making an incremental impact.
Reach out today to schedule a free, brief demo of Kenshoo Ecommerce to see all of the innovative features and powerful data and insights it has to offer.
In addition, get a demo of DataWeave’s AI-powered Ecommerce Intelligence platform that offers unique insights for digital shelf optimization and brand protection.
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