E-Commerce companies known to collect data about consumers visiting, quitting, purchasing habits through their website. It is a common practice among marketplaces. The data offers illuminating information about consumer habits: why do they come online for, what they browse, what they like, dislike and end up buying.
One of the top online fashion retailers, Jabong has so far complied data from about 7.9 million shoppers who bought items on its website. One would think that is a goldmine of information, but Jabong has tended to pay scant attention. That changed about three months ago.
On April 1, the government’s Department of Industrial Policy and Promotion (DIPP) banned discounts by online marketplaces. Online platforms could no longer use cash to subsidize products or offer deep discounts.
The centrepiece of ecommerce operations has always been attractive discounts, but even before the DIPP order, these companies have been pressing ahead with new strategies to coax customers into buying from their websites.
Sanjeev Mohanty, CEO - Jabong, said on the issue, "We will now focus on selling the top 25 options of shorts from top 30 brands which would have 750 options, instead of peppering the site with 100 options from top 300 brands and have consumers filter and hunt through 3,000-5,000 options of shorts."
Jabong has since reduced the number of brands available online to around 1,500 from 2,500. The number of genuine shoppers — who actually buy, has risen, says the CEO. Conversion rate, a measure of the number of people who buy something from every 100 visitors, has jumped from 1.7% to 2.12%.
"Discounts would have eventually come down, but the DIPP order has accelerated shift to better management. Companies are using the opportunity to build better, profitable marketplaces," says Vijay Shekhar Sharma, founder, Paytm.
This was inevitable. Deep discounts were bleeding these companies and investors were clamoring for profits. Fortunately for ecommerce companies, many shoppers are not so adamant about discounts but just the shopaholics.