Why Bestsellers List doesn’t work in the best interest of a retailer

Building a successful online business for retail requires a lot of data analysis. On the product variant and SKU side, you need to track the performance of all your products. Which ones sell more than others, which ones end up in the shopping cart more often than other ones, which have high inventory, and so on. 

Identifying which products sell the best, which do not sell seems an intuitive strategy to be used in all promotional and product visibility areas on your online store. It’s easy to track bestsellers in both e-commerce frameworks like Shopify or Magento or Analytics portals like Google Analytics. In Google Analytics bestsellers can be found under Product Performance reports in the Ecommerce section.

Many retailers and marketers use bestsellers for promotional and product sorting options on the website. As bestsellers usually get preferential treatment in visibility and promotion, there are drastic problems in this approach.  If bestsellers occupy the top position on the website and category pages, they get more real estate and visibility compared to other products. Due to the high visibility, they continue getting more purchases despite other products that have better buying propensity being in the portfolio. This usually happens due to position bias on e-commerce platforms. 

As per a study on Google Click-Through Rates, which is a measure of clicks to impressions or sessions, users interact with top 3 listings more than thrice as much compared to listings from 4 to 6 positions. A simple UX and buying behavior is for users to click more on products listed on the top and the left within each row. So a bestseller product, if placed in the third row will receive much less interaction than it would do if placed in the first row. However, as retailers keep on pushing more bestsellers, they never explore other products that have a higher potential for sales than their current chartbusters. This leads to an overall loss of sales or an opportunity loss to the retailer. 

The second inherent problem with relying on bestsellers is stock-outs on few products and dead inventory on others. As bestsellers restrict sales on a select list of products, retailers end up with dead stock on the majority of remaining SKUs. The inability to sell non-moving inventory adds to huge logistics issues and creates dead stock. 

Thirdly relying on a static list of products, does not offer user-level personalization that can enhance the user experience of returning users on the portal. Neither does such a technique customize the experience based on user cohorts. Personalization and marketing automation techniques offer drastic improvements in conversion rates compared to websites that have similar experiences across all users.  

To overcome these problems, it is suggested to use sophisticated merchandising techniques rather than rely on just bestsellers or any static ordering. We at Deepflux, have developed an AI merchandising engine which considers factors like product add-to-cart rate, freshness, inventory, and visibility index amongst others to come up with a sorting index. This sort enabled across retailers has shown up to 150% improvement in conversion rates and helps in the movement of slow-moving products. Get in touch with us at contact@deepflux.io to sign up for a free trial of the solution.