STATE OF ECOMMERCE IN THE US- November 2015

WHAT IS INTELLIGENCE NODE’S INDEX SERIES?

Intelligence Node’s INdex series tracks the retail price change of a basket of products spread across online retailers using our real-time retail analytics software.

The INdex covers the top 1000+ leading e-commerce retailers and is continuously monitored by proprietary market-monitoring algorithms. Intelligence Node’s INdex algorithm processes approximately 750mm products daily and are taken from real-time, live data. All benchmark indexes are tracked real time, however, updates will be published in our monthly State of Ecommerce newsletter. The goal of our INdex series is to put online retail price movements in the context of macroeconomic factors thus enabling retailers to understand how these macroeconomic factors influence their day-to-day retail pricing strategies.

 

Overview for November 2015

number_of_items_changed

 

The chart above shows the percent average number of items that have seen stock increases and decreases. It shows an aggregate view of the SKU positioning for the top five categories present in retail. The month of November saw continued emergence from the global market instability, although we did not experience the same net increase as last month. In fact, the market decreased significantly by comparison with an overall net impact of -4.2%, primarily driven by food. This month we see fashion venturing into the negative side of the chart as compared to the previous two months as we approach the key holiday season.

Average Pricing and Discount

Average_Price

 

This chart reflects the percent average price changes over the month of November. Here we see an aggregate view of the pricing for the top five categories in retail. The overall impact is an increase of 3.2% with food overtaking fashion in the race for highest price inflation. Similar to last month, electronics is the only category exhibiting a price decrease. Overall, the magnitude of change has doubled across the board when compared to last month indicating significant change.

Average Pricing and Discount

 

Average_Discount

In the above graph, we see the percent average discount movement over the past month across an aggregate view of the top five categories in retail. Significant online Discounts are primarily responsible for attracting traffic to ecommerce stores.

November appears to be another typical pre-holiday month, with an overall increase of 3.2%. As expected, the usual seasonal inflation in the cost of foods has driven this category well beyond the fashion index.

Considering that the on-site discount in food is increasing and overall pricing in the category is decreasing, we note a somewhat predictable effect. New items are being introduced and priced significantly higher allowing for big headline discounts during the shopping season although the overall impact is an increase in average pricing. As a result, the consumer feels they are reaping big discounts while in reality they are actually being charged more.

Trending

Trending_Categories

 

The graph above illustrates the top 5 trending categories during the month of November, just prior to the holiday season. The Food and grocery category has contracted considerably over the past month while fashion continues to plunge ahead. Notable is the ground recovered by the Home decor category that was deep in negative territory last month.

Insights by Player

Amazon_vs_Walmart

As with last month, Walmart continues its aggressive stance in lowering pricing across the board while Amazon raises pricing in all but one category. The only area where the two companies appear to be competing is in the electronics category where both companies are running neck and neck on their discounting strategies.

 (Note: Send us a note via social media if you are interested in seeing comparisons between other companies and we’ll include them in future analysis)

Conclusion

As we predicted last month, the expected price inflation followed by heavy discounting has begun as we entered the holiday shopping season following Thanksgiving.

As always, careful product selection and well timed discounting strategies are going to make the difference between the winners and the losers because as usual, margins will be razor thin. Companies that invest in retail analytics software will position themselves well to conduct real-time market analysis through the creation of graphs and charts such as the ones in this article to highlight elements that they view as critical.

 Intelligence Node can provide highly targeted insights – including SKU based analytics – to help you monitor your competition in real time. Request a free demo and learn how to harness the true power of analytics to drive business success.