Digital native brands — driving growth across multiple online channels
“There are decades where nothing happens; and there are weeks where decades happen” — Vladimir Ilyich Lenin
E-com folks will definitely agree with Lenin on this front, that e-com adoption has seen unprecedented gains during these COVID months. With peak festive season coming up and much attention around the #atmanirbhar theme, a flurry of local brands are looking to sell online. As Flipkart and Amazon gear up for their annual mega sale events, penning down some thoughts on scaling a brand across multiple online channels. This article may be useful to any early stage brand selling (or thinking about it) across multiple online channels and are beyond the obvious dashboard metrics. These are drawn mainly from several conversations with brands and sellers on what to keep an eye on early on (before your budgets permit you to hire experts)!
#1: In-App traffic flow and conversion rates — Each platform’s traffic/user flow behaves differently and is aligned to the platform’s revenue objectives and not necessarily your brand’s objectives. Gaining insights into the flow of traffic from home page (not landing pages) and further into category and product pages until checkout helps brands decide on paid inserts, PLAs, and even assortments and pricing better. Where is the most engagement and subsequent conversion happening? For eg: during a peak annual sale event, most customers will begin their journey by clicking on the home page, main square banner. The sort order that is thereafter presented to them becomes critical for conversions and consequently understanding if you stand a chance to feature in it. No point paying for that home page brand logo if the traffic won't reach there. And no point discounting your brand at 75% when 60% will also get you the same visibility.
#2 — Do you want to be a seller clocking GMV or a brand creating value?It was a question I often asked founders from my time at Myntra running the Brand Accelerator Program as we helped them navigate this journey. There is no denying that these events drive massive volumes (typically 4–6x a normal day) even for small sellers. But if a majority of your revenue is from these platforms during events, are you actually building a brand? We used to cautiously note that brands that have clocked crores in GMV had little to no recall when we spoke to customers. Reason being, customers only discovered these products during sale events or in the default sort order and the purchase was based on sort order resulting from generic searches rather than brand name lead searches. Eg: Searching for “Aks Kurta” v/s searching for “Kurta” and having the default sort served to you. Discoverability and brand building are hard (I tend more towards impossible) to achieve on multi-brand sites.
So, if you can’t beat them, learn from them , because there is a lot that can be applied to your monobrand site too —
#1 — Invest in brand campaigns from day 1 — as tempting as it is to see revenue growth during these events and invest your money on marketing on these platforms, separate, off platform campaigns driving the ethos of your brand need to be seeded early in your brand building journey. Use your mono-brand website to communicate your customer value proposition via brand stories and run frequent brand (and not events and deals) campaigns to further embed your brand narrative in customer’s minds. Don’t take it too far though, read more here.
#2 — Default Sort Order — Platform sort orders are closely guarded secrets and as an external brand, you have no influence over them. While you cannot control sort orders of platforms, for your own website, learning which default sort order produces the highest click-through and conversion rates down the funnel is something you can do easily and effectively through A/B testing. What is the default sort order that customers see when they visit your store and how often are you changing that logic (applied together with filters) and trying different combinations until sell-throughs improve? Customers behave differently when entering a site on an event day (sales, discounts, deals being primary motivation) and on a BAU or Business As Usual day. This means your app needs frequent home screen refreshes to showcase and highlight the right products basis your inventory sell-through plans. Simplifying discovery of your targeted list of SKUs is of paramount importance. As much as it is an endless aisle, what you show is what you sell!
#3 — Top of Mind Awareness: Speak to your customers, directly and repeatedly — Considering that your product is reaching customers online, via multiple platforms, it's important to frequently hear from them directly on your brand and the circumstances under which the purchase was made. Specifically, when selling across multiple channels or in multi-brand environments (like Myntra, Flipkart, Amazon) it's important to understand what is the top of mind recall for your brand vis-a-vis a peer set and whether customers can recall your brand when presented with others. What are their reasons to believe and buy your brand — discount, price, festive season, new collections, designs? If you go too far though, read here!
#4 — Focus on building best sellers— Over time, as best sellers emerge from your product portfolio, avoid discounting them. They (should) make the brand money and ensure they are never out of stock. You'd be surprised that best sellers can have long life spans even in categories like fashion (with certain SKUs selling for >3 years and having strong organic visibility). While brands and platforms pride themselves in making available an assortment of millions of products, when it comes to sales, the pareto applies here too and your top 10–15% of SKUs will be generating 80% of your revenue. Keeping track of daily rate of sale (RoS) and speed to reach threshold/benchmark RoS at SKU level, helps you understand performance of new SKUs and which one you must kill/replenish (SKU visibility remaining equal ofcourse). Fast fashion is not only about continuously introducing new styles but also building depth (to reap scale efficiency) in best selling SKUs and killing the ones that don’t sell, so that your total SKU count and consequently working capital needs are in check.
#5 — Collaborate with ecosystem partners early on — While I’m still absorbing the Slack-Cole Haan partnership news of this week, there have been plenty of ecosystem collaborations (Red-Bull & GoPro is my favorite) that have worked brilliantly for brands. Don’t compete on all fronts, collaborate actively too especially when entering new markets or launching new products. Use partners to test and explore, before expanding and investing your own capital. Identify other brands across product categories that you share an audience and customer archetype with and partner for reach. You’d be surprised with how open and collaborative the FMCG and Retail behemoths are in partnering with emerging brands in adjoining spaces.
#6 — Focus on reducing cost of returns not return rate — With burgeoning adoption of e-com post COVID, returns have also spiked and reaching upto 35–40% levels in many categories. Allowing returns is key to customer experience and adoption and therefore focus on lowering cost of returns rather than the return rate itself. On the customer experience side — incentivise customers to accept credits rather than back to source refunds, proactively refund pricing differences across platforms, sniff out multiple size additions into cart, enable exchange, benchmark your size charts and improve your product description to match best in category brands. Segment customers basis return rates and differentiate policies for the repeat returners. On the supply chain side, return to restocking TAT is of paramount importance. That’s 35% of your inventory lying across the supply chain, non-live, so focus on faster return pick-up to restocking TATs to minimise non-live inventory.
These are a random list of top of mind pointers instigated by all the Amazon and Flipkart ads hitting my screen on sales! Thank you for giving your time in reading my post. If you find this interesting, reach out on Linkedin or drop an email and happy to share a virtual coffee with founders starting out on a brand building journey whether for a product or service.
