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State of Ecommerce in the USA – September 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 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.

The INdex in Brief

Recent turbulence in global markets has lead to a great amount of uncertainty in the pricing of Crude Oil, Commodities, and financial markets.  These global factors strongly affect the direction of consumer spending and the resulting price of retail goods on the high street and online.

This month, the INdex has turned down into negative territory and is at a level of -3.4%. This value has been exacerbated by several seasonal, industry specific, global and macroeconomic factors which we will now explore further.

The shrinking of commodity prices has had a clear impact on this month’s INdex and should not be ignored. However, there is one key seasonal factor that tipped the scales in the United States – Labor Day weekend.

Inflation Indicators (Aug. – Sept. 2015)


Labor Day is the last weekend of summer for many in the US and as such, Fashion, Home & Decor retailers liquidate summer stock to make way for fall lines to be fully stocked. With this liquidation comes heavy discounting that leads to a downturn of the INdex price into negative territory.


Being able to monitor these discounting levels in real-time, is critical for retailers to be able to quickly liquidate stock. IntelligenceNode’s software allows retailers to quickly benchmark themselves against other key competitors and make pricing adjustments in-line with current market trends.


When looking at Fashion discounting alone, it is clear that there is a wide variance in price discounting with a large proportion of products (25% of all discounts) that are heavily discounted – at a rate above 30%. This large variance in discounting means that you must have accurate market data in order to make key discounting decisions. By taking a detailed view on market discounting, a fashion retailer is able to accurately discount certain product lines and maximize their bottom line when running loss-leading pricing strategies.


INdex Category Trends


It is normal for a standard category in the agile online marketplace to see an increase in the number of products in rise by around 3-6%. However, this month, we have one category in particular that has bucked this trend – electronics – which is up ~15%. August and September is the time of the year when retailers start stocking their electronics category in preparation for the holiday season. What we are currently seeing in this increase is those retailers who are in the first stages of ramping up their seasonal product catalogues. We anticipate that discounting strategies will start to follow through next month to help stimulate sales and drive the dynamics of this category.


As an online retailer who is carrying an inventory largely fueled by electronics, it is critical to understand which products your competitors are pushing in preparation for the coming busy holiday season. This is the time when retailers are a/b testing what sells and what does not. By actively monitoring the market dynamics around you and watching which items are trending with other competitors, you are taking an intelligent approach to optimizing your product catalogue.


 As we have observed, we are in a critical time of the year where key pricing-down strategies must be carefully thought through. In order to make the most of your working capital and maximize profits, you must optimize your sales price with market trends. This is only possible with careful product selection and accurate discounting.


Looking forward, we can see that careful initial product selection is the real key to success. If you have already made an accurate assessment of upcoming trends, you will be able to optimize your product catalogue in advance and minimize end of season discounting. In the case of electronics, retailers are currently testing market response to assess product selection. By arming yourself with the correct retail analytics software you can monitor active trends in order to streamline your product catalogue.


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