Analysis: Online stores have losses of up to 30% because they promote the wrong products

Online stores lose the chance to increase their income by up to 30% monthly, and in over 70% of cases online advertising budgets are incorrectly allocated, in the absence of a precise analysis of products performance, shows an analysis carried out by TRUDA, a Romanian machine learning business capable of analysing online performance in real time to promote the bestselling products in the ecommerce industry.

In general, on average, 9% of the total products in an online store generate high revenue or high profit relative to the traffic generated by them, being considered HERO or business tractor products, according to a TRUDA analysis of 1.5 million products in 80 stores in the fields of footwear, fashion accessories, food&bio, home and garden, childcare, books, furniture and make-up.

Although the tendency of brands is to promote through Google Ads almost all the products in the portfolio, implicitly products that do not bring sales, the reality shows that only a small part of the products generate income. We recommend online stores to focus their attention and marketing budgets on the performing products to be able to increase sales and therefore profit, but also to reduce advertising costs. Online businesses must analyse the products they sell, and with the right tools, the results brought by them can be correctly analysed”, says Cătălin Macovei, founder of TRUDA and specialist with 10 years of expertise in digital marketing.

Once the best performing products in an online store are identified, they can be promoted more effectively to customers, thus achieving an increase of up to 30% in the conversion rate and up to 50% in the number of orders. At the same time, by promoting high-performance products, a reduction in marketing costs by at least 20% will be achieved, according to TRUDA data.

To be able to identify the performing products, they are labeled by category – performing products, trending products, non-performing products, price range. In 2022, online stores allocated budgets of 5.7 million euros for advertising in Google Ads, of which HERO (performing) products consumed only 12.3%. The cost per transaction was 17.5 lei, 47% cheaper than the products without any label, and the products labelled as non-performing consumed only 7% of the total advertising cost.

For 2023, TRUDA representatives recommend that online stores find a balance between promoting products to existing customers and potential customers and identify products that are very good and those that drag the business down. As trends, the CPC (cost per click) will continue to increase, and the most purchased products will continue to be those in the 1-100 lei price category, in this case 92% of orders are placed on the day when users have entered the site.

bestsellingbusinessCPCDigital marketingecommerceGoogle Adsmachine learningonlineonline storesprofuctsTRUDA
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