SKU-Level Analysis: The Key to Your Online Store’s Profitability
Figuring out how to stand out and become profitable in a saturated market is tricky. Getting the right products in front of your customers online is a big part of that, but how do you do that most effectively?
It’s all about getting visibility over both your marketing data but also your operational data, and looking at your product performance at SKU-level. Seeing how your Google Shopping ads are performing is the key to your online store’s profitability. This article will explore how and provide some tips on making the most out of SKU-level analysis.
What is SKU-level analysis?
Before we get started, let’s get to the core of what stock-keeping units (SKUs) really are. Simply put, an SKU is a scannable barcode normally printed on product labels. The code contains the product details, price and manufacturer. This means retailers can automatically track inventory and discover which products need reordering. They also provide imperative sales data.
Retailers usually use SKUs simply to track movement of inventory, but intelligent SKU-level analysis can transform retail profitability. It’s just about knowing how to interpret the data in the best ways.
Why is SKU-level analysis important?
Collating and interpreting data from your SKUs can uncover critical information about ad spending and allow you to upgrade your profitability by adjusting accordingly. It’s understandable, though, that retailers don’t often use SKU data to the best of their advantage due to it being difficult to collect and analyse data manually. In fact, the majority of retailers don’t go into this level of granularity and only assess their product marketing performance at campaign level, meaning there might be several issues with individual products in campaigns that they have limited visibility of.
Some advanced retailers have managed to collate their data at SKU level. However, it has proven a significantly arduous task that becomes increasingly difficult to replicate, automate and maintain manually due to a lack of resources.
The question, then, is how can you execute effective SKU data analysis?
How to gain SKU-level data
The secret to SKU success is investing in a unique platform like Upp. A solution like this will automate the hard part of gaining SKU-level data so you can ensure your ad spend is being channelled into the right places. It will pull the necessary details from your Google Ads and Google Merchant Feed to give you a clear idea of how your campaigns are performing. However, this is just the tip of the iceberg with a tool like Upp.
An automated platform will pull all costs across the entire retail ecosystem — that’s both variable and fixed. As a result, you’ll have a true and complete picture of your SKU level performance without having to use up precious resources like employee time.
Upp provides clarity over gathered data but also equips you with insights that you wouldn’t get by manually analysing the data. Upp executes the whole process for you.
How using SKU-level data improves profitability
Having SKU-level margin performance provided by an automated platform makes all the difference to profitability. You can have a better understanding of how each of your products are performing and more importantly, you can understand what you need to do to improve your performance whilst still achieving revenue and profit goals.
Upp places ad spend in the right products, which increases visibility, revenue and profitability. Your ad spend will consistently be utilised, whether that’s adjusting overspending or underspending. Let’s take a look at this in action.
If you have a best-selling product but it has small or even no visibility on Google Shopping, Upp will boost the marketing spend on this particular product to ensure that it’s visible to potential customers. That way, you can be confident that your attractive product will be viewed by more shoppers and bring in more sales as a result. Alternatively, if you have a product with high marketing spend yet low stock or is underperforming, Upp will pause the marketing spend to ensure there is no wasted spend in each campaign.
A platform like this will also take it one step further by aligning product performance with your overall business revenue and profitability goals. It gathers information around business goals, and then automatically targets your spend by prioritising specific products or lines..
Become more competitive
In an especially difficult retail climate, it’s critical that you elevate your business in every area possible. A solution like Upp will transform your online presence and increase your revenue and profits by gathering, analysing and acting on that all-important SKU-level data.
Accessing and intelligently analysing SKU-level data will help you optimise your marketing strategies. Ultimately, this will hugely influence your ability to get ahead in such a competitive online retail market.
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