Category growth plan using 4Q analysis of conversion rate and page views
2*2 performance matrix
Hello Fellow category leaders 👋,
It has been a years gap ⏰ since the last post but here it is :)
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Now on to the post,
The biggest challenge for any category leader is to sustain category growth MoM, WoW and achieve category goals. How to leverage data to find opportunities and double-down on them? Conversion and click through rate - These are 2 very important category levers for any e-commerce category managers and this post is about how do you structurally analyze these 2 levers for your category using 4Q Analysis approach and what actions to be taken based on which quadrant your category/brand/SKUs lies.
Let’s start with few definition -
Conversion rate (CVR) - In the context of e-commerce, conversion rate is the ratio of no. of users who has completed the purchase transaction and the no. of users who has visited product display page and has seen the product (unique view).
If you plot conversion and traffic of your product portfolio on 2*2 performance metric o, you will be able to segment your products into four quadrants based on their PDP views and conversion rates and you can devise strategies based on the category.
High conversion, high traffic - This is the best performing quadrant. High visibility, and sales. You have to sustain the performance of this quarter.
High PDP Views, Low Conversions: Product in this quarter, even though are getting traffic, yet conversion rate is poor. These are some of the actions that you should be taking to improve conversion rate -
Improve Product description (Title, Image, call to action, specification, reviews and rating)
Pricing - It might be the case that customers are coming to the page, but they are finding better prices somewhere else, hence low conversion.
Out of stock situation
Low PDP views, high conversion - If product fall into this Q, it means that customers are interested in the product, but more traffic is to be generated. Require higher visibility via merchandising, SEO, performance marketing, or other marketing properties.
Low PDP, Low conversion - Product falling under this Q require re-evaluation. These products might not be what customers are looking for. Or it requires both visibility (Promotion during sale time, placement etc.) + Product listing + Price. You might have to think about markdown/discontinue such products.
You can do this analysis for -1/ Category, Sub-category level
2/ Brands/Vendor
3/ SKU level (You can do it for your tail SKUs if you need to do SKU rationalization)
Case study -
In my last stint, I have performed this analysis to understand what sub-category under electronics category requires what strategy.
This is how the database looks -
4Q analysis for above database.
This shows that -
a. For category - TV speakers and soundbar, low conversion. Need to check price competitiveness, listing quality, product images etc. Action - PDP optimization (page view optimization)
b. For category like security and surveillance camera, average traffic still poor conversion. Action - CRO
p.s. - Since the analysis is done quite early-stage post launch on the platform, no category in high traffic, high conversion quarter.
Targeted actions based on 4Q analysis can help you to structurally identify opportunities and growth area. It’s a powerful tool so use wisely :)
Ciao, till next time 😃 :)
P.S. - If you are looking to collab or cross-promotional activity for your new venture, we should connect. We have crossed ~2000 users and would love to understand how we can contribute in your growth journey.
Take care,
Neetu
LinkedIn _ https://www.linkedin.com/in/neetu-barmecha/