Ongoing research – the Index throughout the year (IRUK 2016)
As promised, IRUK is developing from a once-a-year ranking to a series of monthly updated indices, focused on areas of performance. Ian Jindal outlines the work we’re doing with Knowledge Partners in 2016 to create actionable insight to the RetailCraft of the Top500
When we launched the IRUK 500 in 2015 we intended it both as a ranking of the performance of the UK’s leading cross-channel and ecommerce retailers, and an aid to the professionals who drive our industry. Access to live, objective, current and commercial information is vital to understand and benchmark performance as well as adding ideas for growth, and so it’s a pleasure to highlight two indices we’ve created for 2016. Retailers are keen to know how prices compare in the market, and so we’ve created the InternetRetailingWiser Dynamic Pricing Index. In parallel, the InternetRetailing OneHydra Retail Visibility Index measures the visibility of a retailer’s digital footprint.The InternetRetailing-OneHydra Retail Visibility Index
A rising tide floats all boats, and so professionals wonder whether their growth is more or less than the market, or even whether it’s satisfying the existing customer interest. We wanted to look at how our Top500 retailers compete when it comes to visibility in search, and we’ve partnered with OneHydra to undertake this research.
For our Top500 retailers we set the question: what share of relevant search do the retailers gain, giving us an index of retailers’ ‘visibility’ to customers?
Working with OneHydra, we examined every URL of the Top500 and determined the keywords bringing traffic to the site, and evaluated these against the 15m-keyword data bank of those which rank on the first and second page in natural search. Stripping out brand terms, we have a view on how visible a retailer is for relevant concepts and queries (where the customer has not included their brand name as a preference). For each of the keywords we extract the search Volume information to understand the total search traffic, and then calculate the retailer’s reach (propensity to be seen) and share of relevant traffic. This gives us a ranking of the visibility of a retailer in the customer’s mind and in time can be correlated to retailer growth.
This proprietary reach metric, developed by OneHydra, is analogous to Impression Share in paid search, and takes into account that ranking top for a keyword with 1,000 searches a month is not as beneficial as ranking fifth for a keyword with 100,000 searches a month. This weighting, or ‘Reach percentage’ gives a ranking based upon the number of consumers reached, not just the ranking.
We will be publishing the ranking each month, and we will analyse the leaders, the sectors and the factors involved in gaining and maintaining visibility, outranking competitors and securing the sales potential.
Visit OneHydra at: http://www.onehydra.comThe InternetRetailing-Wiser Dynamic Retail Price Index
While being visible and found is important to start a sales process, the price of our products is a determining factor in gaining both the visit and the sale. While some of the retail brands are able to control prices, for many retailers price competition is vital. How can we know, however, whether our prices are competitive? How can we be sure that we are flexing prices sufficiently responsively to remain continually competitive, while also not discounting more than the market requires?
For this information we’ve partnered with Wiser to create the Dynamic Pricing Index.
For our Top500, we have taken c100 of the retailers’ best-selling products and compared the prices on their own sites with the same or equivalent products on Amazon.co.uk. The data collection takes into account price reductions and the results are expressed as a percentage. “100%” indicates that the retailer’s price is the same as Amazon, 50% means a retailer selling at half Amazon’s price, and 200% means double Amazon’s price.
This initial pass is the price difference at a given point in time. It is through continuous measurement and tracked that we will be able to construct a picture of how dynamic is a retailer’s pricing.
Our first pass has shown index values from 37% (a major sale) through 172% (structurally more expensive than Amazon). However, these results are but a starting point. Along with Wiser we will be extended the frequency and extent of the measurements and introducing a ‘vertical’ or sector view – to ensure that the comparisons and insights are as relevant and actionable as can be.
Visit wiser at: http://www.wiser.com
Our thanks to both Wiser and OneHydra for working with us to create these extensive and interesting data sets. For both of these indices, we will be releasing fresh information and trends on a monthly basis, supplemented by discursive webinars to delve into the issues and opportunities raised.
In addition, we are correlating the results with other data sources on traffic, response times and service, to get a rounded view of retailers’ sustained performance – RetailCraft.
For us, 2016 is the year in which we work to being the IRUK index to life as a performanc-monitoring tool – a vital step towards our vision of developing predictive metrics based in commercial performance.
Should you have any questions, suggestions or ideas for data that would help you in your business you can reach us at [email protected]
We will be pleased to see how we can make these indices as relevant as possible to RetailCraft and the practice of the best.