How to Use Ecommerce Data to Innovate on Product Development

Dan Moss

December 17, 2020

Data analytics is the secret sauce powering almost every successful industry in the world. Everything from what you see on social media to the headlines you click on to the fact that you’re here reading this blog is determined and shaped by data, and data has become an especially important tool in ecommerce.

Ecommerce data helps your brand determine everything from ad spend to your organic search rankings, but that’s just the beginning of what it can do. Data can not only help you market your product, it can also lead to radical innovation that makes your products more attractive and functional for your customers.

The old way vs. the new way of innovating on product development

Back in the days of yesteryear, product development was a process that largely hinged on gut instinct. If developers and brand leaders felt like a tweak on a product would lead to more sales, they’d tweak it. Lacking the infrastructure and information to measure how that innovation might land, they might stumble onto a smash hit or a total lemon.

While intuition still has an important role to play in product development today, the rise of digitalized data has given brands unprecedented access to the minds of consumers—we know their buying habits, what they Google search, and what kinds of advertising gets them to click, for starters—and empirical evidence that not only mitigates innovation-associated risk but can be leveraged at every point of a product’s conception, design, and distribution to help a brand thrive.

How data can inform product development

Using data analytics, a brand can parse the landscape of a product category into understandable pieces that offer valuable product solutions for their customers. Data can tell you which products are trending and when they’re trending. It can tell you what consumers are saying about a particular product, for example, what they dislike about it, what they love about it, or what they wish it did differently. Data scraped from customer reviews can give you valuable feedback on your product’s design and functionality, and pricing and search data can show you if a certain category is too competitive for your brand to enter, or if you stand a chance there.

Ultimately, data can provide your brand with next steps to make your products work better for your customers. Brand leaders who are effectively using it to innovate their products are positioning themselves as market leaders in the ecommerce space.

Case Study: Hydro Flask and Chill

Hydro Flask is one of the hottest brands in the food and beverage industry, and it has been for several years. On its own, Hydro Flask is pretty innovative—it’s popular precisely because of the design of its products. Hydro Flask water bottles are built with TempShield insulation and double vacuum construction that keeps drinks cool for almost 24 hours, which makes them great portable products for hiking and spending time outside in warmer weather. The brand has also recently evolved its product lineup to include insulated food transport containers, like totes, food jars, and lunch boxes.

Product designers and developers across the country have paid close attention to Hydro Flask’s popularity, manufacturing their own Hydro Flask accessories—like silicone boots, stickers, and spout caps—to piggyback off the brand’s success and compete in the space. One of those developers is Pattern’s Product Development Head Dan Moss.

Moss and his team of developers wanted to know which kinds of products were trending in the water bottle category on ecommerce and how they could capitalize on it. Using data analytics, they found that Hydro Flask handles were seeing lots of chatter. In response, they conducted data analysis on the positive and negative reviews of each Hydro Flask handle on Amazon. With this data, Moss’s team could determine what problems customers had with these handles and how Pattern could offer an innovative solution. What they found was enlightening.

Customers who bought Hydro Flask water bottle handles on Amazon often felt like the pricing was too high. It was difficult for some of them to physically pull these handles off of their bottles, and they were disappointed they couldn’t interchange them. Some customers felt like their handle looked cheap and gimmicky.

Based on that feedback (as well as the analytics showing Pattern could compete on price), the Pattern product development team went to work creating a new product that wouldn’t have the same issues as its predecessors. Product engineers created multiple iterations of a handle concept. Finally, they landed on Chill, a comfortable, stylish, and reversible nylon strap with a unique push ring clip system that fits most wide-mouth water bottles and rests below the rung for easy attachment and detachment.

Chill Handle Example of Product Development for Ecommerce | Pattern

Chill handles have been on Amazon since about August, and thus far, they’re being received really well by customers, with 150 reviews and an average rating of 4.6 out of 5 stars. The Chill handle has also been selected as an Amazon’s Choice product and is expected to continue doing well for Pattern.

Chill is just one example of how data analytics can point out existing issues with a product and help brand leaders connect the dots to find exciting solutions for their customers. Backed by data, your brand can build a product that’s more efficient, more innovative, more functional, and an overall better quality. And by improving the quality of your product, you create a domino effect that can lead to a better customer service experience for shoppers and ultimately, more sales.

Using Ecommerce Data for Product Development Example | Pattern

Using Pattern's data to inform product development

Ecommerce data can only be helpful for your brand if you have the right tools to access and leverage it. That’s where Pattern comes in. Pattern gives brands expansive access to data analytics and machine learning tools they can use to grow their business in the ecommerce space. We use data to break down what’s working for your brand and what areas need a bit more work, including your product listings, designs, and brand control.

Product development is an especially exciting area to navigate with Pattern as your partner. Pattern recently acquired Enlisted Design, a powerful branding agency that allows us to marry data analytics with design to help brands craft a powerful product and data strategy.

In an interview with Silicon Slopes Magazine, Beau Oyler, CEO of Enlisted Design, described the potential a partnership between Enlisted and Pattern has for brands.

“Throughout my career, I’ve launched numerous award-winning brands and products that can be found at MoMA, Apple stores, Target, Whole Foods, and Best Buy,” Oyler said. “But as I focus on launching new products, I know that ecommerce will be the best way to reach tomorrow’s consumers. The Pattern platform brings real-time market data to the design process, targeting exactly what consumers are looking for. This has never been done before to this degree. Enlisted interprets that data to create next-level design, and together we win for our partners, and they win at ecommerce.”

To learn more about how Pattern and Enlisted Design can help you grow your ecommerce business and innovate your product line, contact us using the form below.

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Improve Your Amazon Advertising Strategy With One Simple Metric: True RoAS
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Improve Your Amazon Advertising Strategy With One Simple Metric: True RoAS

The purpose of advertising on Amazon is simple: increase traffic and conversions. But the approach to get those conversions is not always so simple. Your Amazon advertising strategy is based on current ad data and performance results such as your return on ad spend (RoAS). 

At a minimum, your RoAS number tells you how well you’re maximizing your ad spend. The problem is the RoAS you’re getting from Amazon or an advertising agency isn’t always accurate. 

As a top 3P seller on Amazon, Pattern helps brands improve their Amazon advertising strategy and results by providing them with one simple metric: true RoAS.

Understanding True RoAS

To understand why true RoAS is helpful to brands, you need to understand how Amazon and other agencies calculate and present your RoAS.

The key to growing your brand and maximizing your ad spend is to drive incremental traffic, rather than cannibalizing what has already taken place. For example, if you are selling probiotics, and paying for sponsored ads to win the keyword “probiotics for women”, but also organically ranked in the top results with the same keyword, that’s cannibalization. The RoAS score you would receive from Amazon includes that level of cannibalism, which inflates the number, causing you to pay more on ad spend. The best ads drive incremental growth instead of cannibalizing organic sales. 

At Pattern, we’ve created the acceleration software to make sure brands are getting their “true RoAS”. Pattern’s patented tool applies artificial intelligence to advertising to maximize incremental growth or true return on investment. 

Our software helps brands optimize their efforts by providing live and updated information on where your brand is not organically ranking, and what you should be paying for. If your ranking improves in one area, the ad spend will automatically decrease for those words or phrases until the software detects a drop in ranking, signaling that your ad spend should go up again. This dynamic monitoring of ad spend will help you maximize incremental growth and improve your RoAS.

Improve Your Amazon Ad Strategy with Pattern

Knowing your true RoAS is key to improving your Amazon performance. Advertising agencies and marketplace account managers often give you an inaccurate RoAS ratio or value, which only incentivizes you to spend more on advertising, ultimately increasing revenue for the agencies and/or marketplaces.

At Pattern, a 3P partner on Amazon and other marketplaces, we view our brands just as that: a partnership. When you win, we win. You succeed on Amazon by maximizing your ad spend and we have the data and resources to help you do just that. Accurate, transparent data and reporting will help improve your advertising strategy to drive more traffic to and conversions on your products. 

Ready to finally get your true RoAS? Contact us.   

Slowing Inflation is Music to Consumers’ Ears
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Slowing Inflation is Music to Consumers’ Ears

**Instrument Pricing Changes Tune Amid Record Inflation** Compared to 2022, consumers should expect to pay more for musical instruments, but the rate of inflation shows signs of slowing. **The backstory:** America’s most popular musical instruments saw a notable price increase in 2022 compared to 2021, but the rate of inflation eased in Q4 ’22. **Why it matters:** Slowing inflation within this product category could indicate economic pressures like increased demand, rising labor costs, and supply chain disruptions are easing across the consumer landscape. **What we’re seeing:** The average cost of musical instruments increased 7.5% from 2021 – 2022; however, when analyzing individual increases year over year, some instruments saw price increases as high as 21%. <iframe title="YOY Price Change for Instruments — 2022 vs. 2021" aria-label="Bar Chart" id="datawrapper-chart-02Lwk" src="https://datawrapper.dwcdn.net/02Lwk/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="379" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * Trombones experienced a 21.73% increase compared to 2021 * Trumpets +20.08% * Flutes +18.6% * Recorders +16.13% * Saxophones +13.63% * Clarinets +10.55% * Drums +5.41% * Ukuleles +5.17% **However:** Inflation among these same instruments was significantly less in Q4 ’22 compared to Q4 ’21. In some cases, prices decreased from Q4 ’21 – Q4 ‘22: <iframe title="Price Change for Instruments — Q4 2022 vs. Q4 2021" aria-label="Bar Chart" id="datawrapper-chart-6X6GZ" src="https://datawrapper.dwcdn.net/6X6GZ/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="379" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * Trombones +11.23% * Flutes +10.41% * Saxophones +5.94% * Clarinets +5.59% * Trumpets +3.10% * Recorders +2.85% * Drums -2.59% * Ukuleles -8.46% **Moreover:** Certain instruments saw inflation reverse in 2022. On average, prices for melodicas, guitars, and violas saw their prices decrease by 4.41%, 3.19%, and 0.97%, respectively. <iframe title="YOY Price Change for Instruments — 2022 vs. 2021" aria-label="Bar Chart" id="datawrapper-chart-0Tefk" src="https://datawrapper.dwcdn.net/0Tefk/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="259" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> **Diving Deeper:** Inflation was more significant when comparing Q4 ’21 to Q4 ’20 than when comparing Q4 ’22 to Q4 ’21, indicating a slowing down of price increases for consumers. <iframe title="YOY Q4 Price Change for Instruments — 2020 – 2022" aria-label="Stacked Bars" id="datawrapper-chart-p6iqt" src="https://datawrapper.dwcdn.net/p6iqt/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="206" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * In Q4 ’21, average prices for all instruments were up 8.89% compared to Q4 ’20. * When comparing Q4 ’22 to Q4 ’21, the average price for all instruments only increased by 2.65%. **The takeaway:** While consumers should expect to pay higher prices for instruments this year, overall inflation impact within this product category appears to be slowing down. With National Ukulele Day coming up on February 2, now is a great time for ecommerce brands to take advantage of slowing economic worries and reach new consumers. * Want Pattern’s data science team to power your brand with consumer insights like these? Contact us to [request more information](https://pattern.com/contact-us/) today.

Slowing Inflation? What Musical Instrument Pricing Tells Us
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Slowing Inflation? What Musical Instrument Pricing Tells Us

It’s safe to say consumers and brands alike are eager for a change to the pattern of rising inflation, steadily increasing in many ecommerce categories . Pattern’s internal team’s data scientists analysis of instrument pricing shows a glimmer of hope that inflation may be slowing, which would be great news for brands selling online.

At Pattern, we’re interested in and monitoring trends and news related to pricing since price is a key factor in a brand’s profitability (as explained in the Ecommerce Equation). When brands are able to optimize their price, conversions, and traffic, they can optimize their profitability. And profitability leads to better allocation of resources, better brand control, and gives leaders the ability to expand their presence to new markets worldwide.

YoY Instrument Pricing Increased at a Slower Pace

When analyzing the pricing changes of instruments from 2021 to 2022, our teams found that prices increased, but at a slower rate than from 2020 to 2021.

As shown below, the year over year Q4 changes show quite a lower rate of increase.

Inflation Improvements Raise Profitability

Because inflation impacts online shopping behaviors, lower inflation can lead to better overall profitability for brands. This idea, of course, is nuanced, but Pattern’s Ecommerce Equation can help illustrate the general principle.

When inflation rises, consumers change their spending habits. Shoppers spend more time researching products, forego premium, higher-priced brands, and buy more in bulk. Brands tend to see a loss of loyalty as they’re forced to raise prices.

Price is a key variable in the Ecommerce Equation: price x conversion x traffic = profitability. As inflation lowers, brands can expect better performance in all of these areas—more traffic as spending habits return to normal, higher conversion from returning customers, and price that better fits consumer demand. As inflation lowers and these variables stabilize, brands will see profitability increase.

Raise Your Profitability with Pattern

As an ecommerce accelerator, Pattern is obsessed with gathering data that helps our brand partners succeed. We’ve created best-in-class technology, models, and analytics to understand changes on the horizon and inform our decisions. With an incredible team of data obsessed Pattern employees, we see what makes the difference in truly great ecommerce performance and apply those learnings for brand partners. 

Ready to improve your profitability? Contact us here.