Market Insights

When your best-selling products run out of stock Amazon is waiting to fill demand

by | Posted on May 18, 2020

Late last year, during the final days of the peak holiday shopping season, a major US electronics retailer and Amazon were both selling AMD’s most advanced processor: the AMD Ryzen™ 9 3900X. Within hours of the retailer running out of stock, Amazon was able to quickly identify and exploit the void left by its competitor. They raised the product’s price and earned almost $2M over the 12 days that followed, until the retailer finally managed to restock.

How does Amazon keep winning? Real-time inventory tracking

Amazon is a supergiant using cutting-edge technology to track most competing eCommerce sites in order to compare categories and SKUs. Using real-time inventory tracking, Amazon adjusts its selling tactics to boost margins, as the AMD example demonstrates. More and more retailers are realizing that without this crucial data, they cannot compete intelligently and will continue losing out to their competitors.

Insights on pricing, discoverability, inventory, product attributes or description, to name a few, can be a challenge to identify without a dedicated system that offers actionable insights. The use of advanced machine learning models help retailers quickly recognize their lowest hanging fruits, identify fast changes in the market, and adjust their sales strategy on a daily basis. With retail and eCommerce margins as tight as they are, actionable insights on SKU inventory level changes for products carried by the competition are essential.

A quickly changing landscape

Let’s take another more recent example which took place while much of the world remains under quarantine. Nerves are frayed and not surprisingly, with more people at home, residential coffee consumption is rising. One of the most popular coffee makers currently on the market is the Keurig 2.0 K200 Brewing System, sold by both Walmart and Amazon.

As shown in the following dashboard, Walmart ran out of stock in the middle of April, and Amazon immediately raised its price by over $50 USD (a 25% increase). This is yet another example of how real-time inventory tracking allows Amazon to identify a competitor’s weak spot, and take advantage of the situation in order to improve margins.

The recent coronavirus outbreak has and will continue to reshape many aspects of our lives, including our purchasing habits. Due to new social distancing rules, eCommerce is critical to the consumers’ ability to buy without leaving home. For a retailer to act and adapt quickly in a highly competitive and fast changing world, digital shelf intelligence is vital.

Market Beyond provides mass merchants and retailers the ability to identify crucial gaps in their eCommerce offering and sales execution, allowing retails to make intelligent merchandising decisions with up-to-date competitive insights in order to drive profitable growth.

Retailers seeking AI based digital shelf intelligence turn to Market Beyond to inform their merchandising decision-making processes, while optimizing sales and driving a competitive assortment strategy to grow their online business.

 

 

 

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