Competing effectively in online retail requires a thorough understanding of the 6Ps eCommerce Intelligence™ Framework. Brands everywhere are leveraging the 6Ps – Product, Placement, Price, Promotion, Perfect Page and Performance – to refine their ecommerce strategy, drive sales, and grow their audience.

In the Ecommerce Everywhere series, Clavis Insight looks at a vertical slice of online retail, using the example of a specific brand leveraging key metrics to improve their performance within a specified retail environment. By focusing on the direct correlation between key levers and sales outcomes, we hope to reveal how brands can use the 6Ps to succeed in ecommerce, everywhere.  

Laptop brands are in a period of transition. Ecommerce has long been a major sales channel, but for many brands it has only recently become more important than traditional retail. Brick-and-mortar consumer electronics stores are experiencing little or no growth (if not going out of business entirely) while online sales flourish – in the laptops market, virtually all growth is taking place online. Today, we're going to focus on three leading brands and how their performance in key metrics – Search (Performance), Ratings and Reviews (Perfect Page), and Availability (Product) – has affected their sales outcomes on Amazon in the UK and Germany.

Product

Brands

Countries

Retailers

Metrics

Laptops

HP
Lenovo
Apple

UK
Germany

Amazon.co.uk
Amazon.de

Search
Ratings & Reviews
Availability

 

Search & Sales Ranking

"Amazon's search results pages are heavily influenced by sales rank – but that's not the only thing they take into account."

Search and sales rank are extremely important for visibility, traffic and conversion. The mistake many brands make is to assume that they are one in the same. For example, one might expect that the bestselling laptop would be the first laptop to appear when someone types "Laptops" in Amazon's search bar – but that's not always the case. When we pulled our data, the top search result was the Lenovo IdeaPad 120S-11IAP 11.6-Inch HD Notebook, even though the Lenovo IdeaPad 320-15IKBRN 15.6-Inch HD Notebook ranked higher in sales.

Let's compare the two products. Lenovo's 120 line of laptops is more compact and affordable than their 320 line, so it's an appropriate choice for a broad audience that is cost conscious and that values portability over power. The 320 line is physically larger, more powerful, and more than double the price, therefore appealing to a narrower audience that requires more specialized graphics and processing capabilities.

It's true that Amazon's search results pages are heavily influenced by sales rank – but that's not the only thing they take into account. Since the 320 is the better seller, if all else was equal it would appear higher in search, but Lenovo could have influenced this outcome in numerous ways:

  • The brand has included a detailed "From the Manufacturer" section on the page for the 120 but not for the 320.
  • Though the average rating is lower for the 120, customer engagement is higher with more total customer reviews and more answered questions.
  • The 120 has more product variants than the 320. These are just some examples of the many levers brands can pull to influence search rank. 

It makes sense for Lenovo to optimize the search performance of the 120. For an affordable product suitable for a broad audience, high visibility for general search terms can have a major impact on conversion. It's the online equivalent of window shopping: a consumer who types in "Laptops" on Amazon probably doesn't have specialized requirements, they're just looking for a simple, reliable and affordable option they can pick up off the shelf. On the other hand, consumers who are prepared to spend several hundred dollars aren't "window shopping", they've probably done extensive research ahead of time and are likely to use more specific search terms such as brand names, model numbers or specific components. This is why optimizing search on high ticket items doesn't return the same boost to conversion as lower-cost items enjoy.

Reviews Count!

"How is a 3P seller beating HP at selling its own product, even though they're selling it at a higher price? The answer is reviews."

HP's most successful laptop on Amazon Germany is the HP 15-bs025ng Notebook. HP sells more of this item than the top items from both Lenovo and Apple. So why does it appear as #17 in search results? Surprisingly, the #1 laptop in search (which is also the bestseller), is a variant of HP's top-performing HP 15 Notebook, but being sold by a third party seller called Shinobee.

More than half of the results on the first page of search are HP products – so they're doing something right – but how is a 3P seller beating HP at selling its own product, even though they're selling it at a higher price? The answer is reviews. Shinobee's HP 15 Notebook page has 464 reviews with an average rating of 4.2, while HP's page has only 22 reviews and an average rating of 3.4.

Luckily, there's a way for brands to combat 3P sellers, and a major opportunity for HP on Amazon.de. Amazon allows first party sellers to merge product variants together under a single details page, including 3P ASINs, so HP has the option to request that Amazon categorize Shinobee within the "Other Sellers" section of the brand's main HP 15 Notebook details page. This would have numerous benefits:

  • The ratings and reviews for every variant would be collected in one place, meaning Shinobee's 450+ reviews and higher average rating would be applied to HP's items.
  • The parent ASIN would essentially take over the search and sales rank of the merged item, gaining the Amazon's Choice tag for "laptops" and appearing at (or near) the top of search results. 
  • By owning the parent ASIN, HP would have full control over the product details and page content.
  • The brand would control the buy box, converting 3P sales into 1P sales and allowing HP to keep more of the profit margin instead of sharing it with a third party.

What about Apple and Google?

"Even the most successful items can lose a lot of visibility and a lot of sales if brands can't keep them in stock."

When we pulled our data for this article, we discovered that Apple's products are regularly out of stock on Amazon. When high ranking items go out of stock they lose sales, and when they remain out of stock their sales rank starts to fall. In the UK, most of Apple's top-performing iPads saw their sales rank fall dramatically during the last 90 days as a result of stocking out, including Apple's #1 item, the iPad 9.7" 32GB, which saw its search rank fall by 72%.

This could explain why MacBooks perform relatively poorly on Amazon despite being so popular with consumers. In Germany, the top MacBook ranks as #25 in laptops. In the UK, the top MacBook is #3, but at the time of writing is only available from third party sellers and does not appear on the first page of search results for the term "laptops".

MacBook remains a popular search term on Amazon (currently in the UK a banner ad for Google Chromebook appears under that term) and the user ratings for these items are extremely high (the bestsellers are 4.8 in the UK and 4.9 in Germany). This shows how even the most successful items can lose a lot of visibility and a lot of sales if brands can't keep them in stock.

In today's ecommerce marketplace, brands can't afford to overlook any piece of the puzzle. The 6Ps are a checklist for brands and missing any one of them signals untapped sales potential. Product – making sure that retailers always have your stock on hand to sell – is fairly straightforward. Placement – where your product sits on the "digital shelf" – is a bit more complicated. And Perfect Page – including ratings and reviews – can be improved upon indefinitely. We've only scratched the surface of three of the 6Ps in this article, but each of them is a critical component (and increasingly so) of winning in online retail, not just for laptops but for brand manufacturers everywhere.   

About Clavis Insight

Clavis Insight is a global leader in online channel insights for product manufacturers, and a principal innovator at the forefront of the eCommerce analytics revolution. The company has developed a powerful framework - 6Ps eCommerce Intelligence™ - for organizing and prioritizing eCommerce analytics and actions to drive online channel success for brands. Global manufacturers use their daily eCommerce analytics and insights to drive sales in their categories online, to optimize content for brand equity enhancement, protection and product information compliance, and to deliver consistent, unified reporting on online retailer brand presence and performance.

For more information on Clavis Insight 6Ps eCommerce Intelligence™ visit www.clavisinsight.com. www.clavisinsight.com

by Danny Silverman
CMO

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