The Power of Product Insights
At 4XDigital, we partner with a wide range of eCommerce brands. While these brands might vary in size, product categories, age, and sometimes even their growth goals - one thing they all have in common - they all deeply appreciate the product insights we deliver in our tool.
In this article, we will discuss why product insights are important, especially for small and medium-sized brands (SMBs), and how 4XDigital leverages AI to provide insights that help our customers make more informed decisions for their business.
In this article, we will discuss why product insights are important, especially for small and medium-sized brands (SMBs), and how 4XDigital leverages AI to provide insights that help our customers make more informed decisions for their business.
What are product insights and why are they valuable?
Product insights are all about understanding how your product is performing. These insights are actionable pieces of information that can aid you in making decisions for your business. A basic example is knowing which are your top performing products - a very helpful insight.
For any business, knowing how their products are perceived, what makes them successful, and who is buying them is important. But for SMBs, this knowledge is even more critical. Product innovation is often the key to standing out and staying competitive against larger brands. SMBs often operate with tighter margins and fewer resources. This means that every product decision—whether it’s launching a new item, adjusting a price, or discontinuing a product line—carries significant weight.
Here are four key areas where product insights are invaluable:
For any business, knowing how their products are perceived, what makes them successful, and who is buying them is important. But for SMBs, this knowledge is even more critical. Product innovation is often the key to standing out and staying competitive against larger brands. SMBs often operate with tighter margins and fewer resources. This means that every product decision—whether it’s launching a new item, adjusting a price, or discontinuing a product line—carries significant weight.
Here are four key areas where product insights are invaluable:
1. New Product Development
Understanding what your customers like-or don't like-about your products helps you develop new product lines that are more likely to succeed. It's not just about knowing which colors or styles are working well but also tapping into the emotional side - how your product makes your customers feel.
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2. Pricing Strategies
Pricing your product appropriately is key to maximizing sales while building a brand and maintaining a healthy margin. Insights into how different pricing strategies impact sales can help you find that sweet spot.
3. Marketing
SMBs typically have smaller marketing budgets, so every marketing dollar counts. Product insights allow you to tailor your marketing messages to highlight the features or benefits that resonate most with your target audience, thus making your marketing more efficient.
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4. Inventory Management
This one is straightforward. Knowing which products are in high demand and when enables you to stock appropriately thus preventing overstocking or understocking, both of which can be costly.
Types of product insights
In this next section, let's review some key product insights that are important to capture and monitor.
Engagement
Understanding how your audience is interacting with your products helps to assess product appeal. How often your products are viewed, clicked on, or added to wish list, indicates how relevant your products are to your audience. Learning if certain products are often added to the cart together or purchased in quick succession could help uncover bundling opportunities.
Sales
Knowing which of your products are selling well, which time of the year, and what makes them top performers is incredibly important. But it's not just about the final purchase; understanding the steps leading up to a sale is equally important. Metrics such as add-to-cart and checkout initiated provide signals on your shoppers' purchase intent. If you have products with a wide price range, knowing the price range that sells the most and is the most profitable is helpful for future product development.
Customer
As an eCommerce brand, you might have a vast product catalog, with different products attracting different customer segments. Understanding which products resonate with which customer is critical to building the right customer journey from discovery to purchase. Also, different customers react to different triggers such as discounts, limited time offers, exclusive products - a deeper understanding of what motivates your customers across various segments helps you deploy the right triggers for the right products.
Channel
Your shoppers interact with your brand across various channels (online store, mobile app, marketplace). A deeper understanding of your products' performance across each channel is critical to optimizing your channels well.
While each of these insights are helpful on their own, the real power lies in combining these insights and holistically understanding your products across different areas.
Running Digital Ads to Gain Product Insights
Digital advertising provides a treasure trove of data that, when analyzed effectively, can provide invaluable product insights. Let's breakdown how advertising metrics can help with gathering the insights we discussed in the previous section.
Understanding Engagement with Ad Metrics
To understand engagement with your products, you can start by analyzing the number of clicks your ads receive and your click-through-rate (CTR) calculated as clicks divided by impressions. These metrics are a signal if your target audience is connecting with your products. You should compare these metrics to industry benchmarks based on product category / region / customer segment - this will give you context for your performance. Monitoring these metrics on a regular basis helps you understand how they are trending. There are few other metrics you should monitor to gauge engagement - bounce rate defined as the percentage of users who visit your product page and leave without taking any action, page views defined as the number of product pages viewed, and average time spent on your product page.
Using Ad Metrics to Measure Sales
The key metrics to measuring sales through ads are the number of purchases your ads drive, your conversion rate calculated as purchases divided by clicks, and your return on ad spend (ROAS). These metrics show you which products are your top performers when it comes to driving revenue. One of the key things to measure here is your conversion funnel - this is where you combine your advertising metrics with your store metrics to understand your funnel from sessions, product page views, add-to-carts, begin-checkouts and purchases. Measuring and understanding drop offs between each step in the funnel helps you optimize your funnel. A few other metrics that can help with sales insights include customer ratings / reviews, product page load time, and a sudden shift in demand.
Using Ad Metrics to Gather Customer Insights
To gain customer insights focus on metrics such as conversion rate, customer acquisition cost (CAC), average order value (AOV), and customer lifetime value (LTV) across different segments. Also, you should evaluate your conversion funnel by customer segments - this can help you understand if there are specific customer segments who are not moving along the funnel.
Uncovering Channel Insights with Ad Metrics
Tracking and monitoring your clicks, CPC, conversion rates, ROAS and other metrics we discussed across various ad channels helps you understand how to allocate your ad budget across each of those channels.
How 4XDigital uses AI for Product Insights
At 4XDigital, we recognize that SMBs often struggle to make sense of the vast amount of data available from digital ad campaigns. That is why we've made it a priority to leverage technology to synthesize the data and turn it into actionable insights. Here is an example that illustrates how 4XDigital analyzes various metrics across ad channels to provide meaningful insights to our customers.
Example: Informing the online store design
Scenario: An eCommerce brand offering eco-friendly personal care products runs various ads across multiple ad channels; each featuring various products from their catalog.
Metrics analyzed
- Click-through-rate (CTR): Our tool analyzed the CTR for various products to see which ones attracted the most attention.
- Time spent on page: We looked at how much time shoppers spent on different product pages to gauge engagement levels.
- Customer segment analysis: Our solution then combined customer segment insights with product engagement insights.
Product Insight
Our tool found that some products, despite their high CTR, had lower engagement indicating that while those products pulled the shoppers in, they didn't hold shoppers' attention. By analyzing other products with higher page views and longer time spent on their pages, our tool identified products with high engagement. By integrating customer segment data with these insights, our solution pinpointed products that had a higher probability of engaging the brand's target audience.
Result
With this insight, the brand revamped their store design to feature products with a higher probability of engagement on their home page, above the fold on collection page, and highlighted them on their social media. As a result, the brand experienced a 78% increase in product page views, and a 7% increase in purchases within 14 days of implementing the changes.
At 4XDigital, we are committed to driving sustainable growth for our customers, and one of the ways we do that is by providing them with meaningful, actionable insights. It's just one of the tools in our toolbox.
