Understanding customers and customer purchase journeys and behaviour is critical. The explosion of the craft coffee market, the potential economic downturn and the sheer competitiveness of the category only highlight the importance of data-driven decision-making.
According to Adroit Market Research the global speciality coffee market was worth $36B in 2018 and will grow to a staggering $84B by 2025. A major contributing factor is the growth of eCommerce and Amazon with food and drink already their fastest growing category and coffee the most popular product. Estimates suggest coffee sales on Amazon are growing at over 40% annually.
If you are a coffee seller on Amazon, improving customer analytics and gaining an advantage over your competitors should be a top priority in 2020. Understanding who your most loyal customers are, their pattern of purchases and how that is changing over time is game changing. Analysing where and when your products are being bought and who your products are being compared to can drive your media, product and wider business decisions, setting you apart from your competition.
As a coffee seller, Amazon Marketplace Web Services (MWS) is crucial to automating your Amazon Seller Central Account. It provides customer level transaction data that you can access via Seller Central, but via an automated way that third party software can make sense of via its Application Programming Interface (API). With this information, these customized tools can address a wide range of use cases that Seller Central doesn’t currently provide for, such as customizable dashboards allowing you to monitor your key sales metrics and their impact on a variety of advertising key performance indicators (KPIs). Ad sales, total sales, average order value and number of orders by both category and ASIN are vital to driving the success of your coffee business.
In addition to your standard sales metrics here’s our list of the top 7 underused metrics that can be game changing for your business and set you apart from your competitors.
1. Sales by Geography
Analytics solutions will help find high performing cities/regions and replicate successful marketing tactics. They will also identify constant under-performers to adjust your strategy. Understanding your sales by region is also invaluable data to inform your display campaigns via Amazon’s Demand Side Platform (DSP), digital and wider media marketing. For example, helping you assess the impact of your outdoor campaign or find areas where you should upweight your targeted Amazon DSP, Google or Facebook spend. Crucially, for these three, one is able to apply geo-targeting as part of the campaign targeting options, unlike in Amazon’s PPC products.
Key sales metrics by geo
2. The Customer Journey
The purchase funnel is a journey and you can leverage analytics solutions to better understand your customer’s shopping behavior. Analysing your customers Amazon baskets can help identify key information to give you a competitive edge. Knowing what else is in your customers baskets can help your media performance through ASIN targeting and drive your wider business through cross marketing opportunities, product development intelligence and bundling opportunities. Knowing what products your customers bought after viewing or alongside yours gives you a true picture of who your competitors are and valuable ASIN targeting intelligence for your PPC campaigns.
Finally knowing which products are bought together can give you that all important data when choosing bundling opportunities. Analytics software can give you that view, which is key to boosting your AOV. With Amazon now rolling out virtual bundling where they take care of the physical bundling in their warehouses on your behalf, bundling ASINs has just become a lot more viable.
ASINs frequently bought together
3. Follow-Up Purchases
A very successful strategy to find out customer preferences is to offer an assortment of flavours on a promotion and then track what the most common follow up purchase is. For instance, clearly different levels of acidity or strength or just flavours, and you know the most popular follow purchase is medium strength Arabica, it may well be worth prioritising this flavour in terms of SEO and advertising budgets.
Understanding the purchase journey
4. Repeat Purchase Behaviour
Any coffee brands with their own DTC website will be closely monitoring their customer lifetime value (CLV) as one of their most important sales metrics. Using advanced analytics software you can not only calculate and monitor it on Amazon but also tie it into your own DTC website. Quantifying your CLV is game changing and gives you a strategic advantage over your competition. Knowing which products lead to higher value product sales in the future allows you to better understand your customer acquisition costs (CAC) and adjust your breakeven ACoS and potentially adjust marketing spend to focus on higher CLV products.
Repeat purchase versus new-to-brand
Knowing a particular customer persona is a repeat purchaser means you could send them targeted offers and coupons to keep them coming back. However, if their purchase frequency is slowly decreasing it will likely lead to an eventual stop. By recognizing this subtle trend, your marketing can kick in to get those customers back on board and prevent a loss of revenue.
Advanced software can give coffee sellers a view of CLV over time through cohort analysis. Understand how your Q2 2020 customers compare to Q2 2019. Do they spend more and are they more profitable? Are your repeat customers trending up or down?
The timing of purchases is another key metric that can give coffee brands a competitive advantage. Knowing how often your customers are purchasing your products will help you understand how they are using and buying them. Are they sharing with the family, do they wait until they finish their recommended daily dosage before purchasing and do they buy more frequently as they become more loyal? This can have huge implications for your remarketing and retargeting.
Time between repeat purchases
Finally understanding how your customers move between categories is another way to gain that crucial advantage. Software can help make sense of the purchase data and tell you what is the mostly popular gateway product, what products should be bundled together and where you should be allocating your budget. Put simply if you know that coffee product A is the most popular first purchase and leads to the purchase of higher value products then you should immediately allocate more budget to it.
5. ASIN Prioritisation
Coffee sellers with a large number of ASINs can quickly become overwhelmed with their Amazon portfolio. How do you know which ASINs to prioritize and what actions to take with different products and lines? Using analytics software it is possible to compare key metrics at an ASIN level and measure both their current performance and the opportunity. If your best selling ASIN has a high conversion rate and operates in a large total addressable market (TAM - the market assuming everyone who comes to your listing converts) then you should take defensive action for example, bid on your ASIN. However if you know one of your ASINs has a low conversion rate but there is a sizable TAM then this is primed for action - improve the listing to increase the conversion rate as you are leaving a huge number of sales on the table!
ASIN portfolio analysis
6. Sales by date, day and hour
For any coffee seller, wasting money is incredibly damaging. Analytics software can help identify when your customers are buying your product by day of month, day or week and even by hour. This intelligence can help you align your marketing with purchase habits. If you know your products are mostly likely to be bought from 20:00 to 22:00 then you should adjust your ppc activity accordingly. Most of your competitors will have spent their daily budgets by then giving you the opportunity to win conversions when cpcs are cheaper. It is crucial to work with bid management software that offers you dayparting to take advantage of this. Similarly if you know your customers are more likely to purchase your products on certain days you can adjust your spend to meet demand.
Sales by time of day
7. Demographic data
It is vital to understand the ages and profile of your customers so you can better target them in the future. Demographic data helps drive targeting across display through the Amazon DSP and wider digital channels, for example across Google, Facebook etc (unfortunately Amazon does not provide demo targeting on PPC yet). The metrics can also help your offline media for example TV, radio and OOH.
Having the right data and insights is vital for customer analytics. But it’s not enough on its own. Analytics tools are needed to combine data across channels, touch points and systems along the customer journey. With the right toolset, you will be able to build customer profiles and understand how to best provide for your customer personas. But to execute at scale, you will also need to look for the right skills, software, and the right way of working to become really customer-focused.
Now, more than ever, coffee brands need to connect with customers and find an edge in an increasingly competitive market. Understanding customer data and working with a suitable software provider is key.