Product life cycle in e-Commerce
Let’s talk a bit about product life cycle management in your online store.
Just like in brick and mortal stores, in e-Commerce, managing your product life cycle is crucial for maximizing your net profit.
From the moment you add a product to your store it has a ‘life cycle’. On a high level, it’s something like this:
New Arrivals -> promotion -> optimization (ads, images, etc) -> restock (if performance is good) -> liquidation (discount or sale promotions) -> remove from store.
You should always know at which stage each product is. Managing your products and constantly improve their conversion rate, marketing promotions, exposure, price, inventory and more is highly important in order to boost store ROI.
The different parameters mentioned above are well connected 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 position in store
It is crucial to consider all parameters while analyzing your products’ performance and making decisions.
Here are 3 main decisions to make on a routine basis that will help you to boost conversion rate, improve margin and reduce non-moving stock:
Sorting products on collection pages is one of the most important things and ways to create a flow in your store. You want to always have the right product at the right place at the right time (with available stock).
Sort it by a balanced model of which products convert the best, have the highest margin and which ones need more exposure to sell non-moving stock.
Put a product on discount/sale promotion at the right time is one of the best ways to improve margin in the long run and to reduce non-moving stock.
Doing this would allow you to sell low performing products with non-moving stock in smaller discounts now, rather than a huge discount at the end of season or such.
Which products to promote on site and on marketing ads is a decision that directly impacts marketing ROI and site conversion rate. You should consider the product’s performance on marketing channels and in store. It is also a good way to get more exposure to good converting products with too much stock.
Managing products’ life cycle as part of your daily routine will allow you to create a healthy flow in your store and always balance between selling more and using your inventory wisely and efficiently.