The eCommerce Product Life Cycle
Let’s talk a bit about product life cycle management for your online store.
From the moment you add a product to your store, it has a ‘life cycle.’ For high-performing products, it looks a little something like this:
Like in brick and mortar stores, managing product life cycles is crucial for maximizing net profit in eCommerce.
To ensure this, eCommerce retailers should always know what stage each product is at in real-time.
This allows for efficient product management which is vital in order to boost store ROI. You’ll be able to:
- Improve conversion rates constantly
- Optimize marketing promotions to ensure they’re on point
- Increase product exposure
- Optimize price
- Optimize inventory
The different parameters mentioned above are interconnected and affect each other tremendously.
Here are a couple of examples:
- Sales are affected by exposure, conversion rate, and inventory.
- Exposure is affected by marketing promotions and online store position.
Therefore, it is crucial to consider all parameters while analyzing your products’ performance, and then make the right decisions to boost sales.
Here are three major decisions to make on a routine basis that will help eCommerce brands boost conversion rates, improve margin, and reduce non-moving stock.
1. How to Optimize Product Sorting and Collections
The way you sort your products on collection pages is essential to creating a flow in your store and increasing exposure.
In a nutshell: You want to always have the right product at the right place at the right time (with available stock) to make a sale.
Additionally, you will want to sort products using a balanced model of which products convert the best and have the highest margins, and which ones need more exposure to sell non-moving stock.
2. Running the Right Promotions at the Right Time
Deciding on the best time to put a product on a discount or sale promotion is one of the best ways to improve margin in the long run and to reduce non-moving stock.
Doing this allows you to sell low-performing products with non-moving stock at smaller discounts now, rather than at a massive discount at the end of season.
3. Optimizing Advanced Merchandising
Knowing which products to promote on-site and on marketing ads is a decision that directly impacts marketing ROI and site conversion rate. To do this, you should consider the product’s performance on marketing channels and in store.
It is also an excellent way to get more exposure to good converting products with too much stock.
Managing products’ life cycles as part of your daily routine will allow you to create a healthy flow in your store and find the balance between selling more and using your inventory wisely and efficiently.