Market Intelligence Strategy

Many players in the e-commerce organisation of a company are confronted with a wealth of data and information on a daily basis and would like to have a structured concept to gain more market transparency and make better decisions. For a long time now, the focus of key figures has not only been on sales performance, but also on the development of visibility, social share, SEA, SEO, search rankings and customer sentiment – and this is only a small selection of possible key figures in e-commerce. Ideally, this data is not only collected for one’s own brands and products, but also from competitors.

Figure 1: Abundance of information and data in e-commerce

Although comprehensive data collection and a structured data concept are highly relevant for successful e-commerce management, the maturity level of many companies in this respect is still very low. It is often unclear which data should be collected, how it should be obtained and how well-founded decisions can be made with it.

A market intelligence strategy addresses all of these challenges. With regard to external market information, a comprehensive market intelligence strategy comprises the following three components:

• Demand Intelligence: The aim of Demand Intelligence is to determine the market potential on online distribution channels and within product segments. In essence, it is about evaluating the attractiveness of a market. If the respective company is already active in a segment, its own market shares can be determined and compared with competitors. By screening a market, product gaps can be identified that can be filled with one’s own portfolio, and customers’ willingness to pay can also be derived.
• Pricing Intelligence: The focus of Pricing Intelligence is on observing price developments. One application is the identification of price deviations in comparison to the recommended prices of own products at distribution partners. Strategic measures can also be derived from historical price observations. Price monitoring can be carried out for both own and competitor products.
• Competitor Intelligence: Competitor Intelligence focuses on collecting and analysing information in order to anticipate competitive activities and gain insights into current and future market dynamics. Product innovations are to be discovered and product functions compared with those of competitor products. The insights gained flow into product management, among other things. Competitor Intelligence is also responsible for determining customer sentiments and market trends from ratings and reviews of online shops and online marketplaces, for example.

With regard to data procurement, especially for external information, there are now numerous Saas solutions to choose from, but the company’s own developments are also conceivable.

Figure 2: Selection of some market intelligence tools by segment

The abundance of different tools makes the complexity of a mature market intelligence strategy clear. Ideally, a market intelligence strategy is carried out in symbiosis with a business intelligence strategy. While market intelligence is responsible for procuring the necessary data sources, business intelligence pursues the goal of visualising the data in a company’s performance management system using key performance indicator frameworks. If a company does not yet have any Business Intelligence systems, this requires the initial set-up.

The implementation of a Market & Business Intelligence strategy takes place in four phases. In the first step, the data requirements must be determined. Use cases in the company, from which the information needs can be derived, provide orientation. If the e-commerce team is interested in the content quality of products, for example, the product title, the images and bullet points on the product detail page are elements that must be collected. Once all data requirements are available, the question of suitable tools for collection arises. The market now offers a wealth of Saas tools and enterprise solutions in all market intelligence areas, but in-house developments are also an option. In the case of external data sources, the conditions must be evaluated and the data subscriptions determined.

At this point, the transition to the area of Business Intelligence follows. Interfaces between the performance management system and internal and external data sources are set up as well as processes for data cleansing, for example. Since assessing raw data is very cumbersome, a concept with key performance indicators should be developed that serves the needs of different areas and hierarchies in e-commerce. The development of dashboards in Microsoft Power BI, for example, is recommended. Initial experience should be gained with the development and evaluation of pilot dashboards before the entire key figure framework is implemented. In this way, a business intelligence system can be built up in iterative phases that significantly improves the entire e-commerce management.

Figure 3: Steps to implement a Market & Business Intelligence strategy

With many years of experience in e-commerce projects, FOSTEC & Company supports companies in developing a market and business intelligence strategy.