Online stores have losses of up to 30% because they promote the wrong products

Online stores lose the chance to increase their income by up to 30% monthly, and in over 70% of cases of online advertising, budgets are incorrectly allocated, in the absence of a precise analysis of products performance, shows an analysis carried out by TRUDA, the first Romanian machine learning business capable of analyzing online performance in real-time to promote the bestselling products in the e-commerce industry.

In general, on average, 9% of the total products in an online store generate high revenue or high profit relative to the traffic generated by them, being considered HERO or business tractor products, according to a TRUDA analysis of 1.5 million products in 80 stores in the fields of footwear, fashion accessories, food&bio, home and garden, childcare, books, furniture, and make-up.

“Although brands tend to promote through Google Ads almost all the products in the portfolio, implicitly products that do not bring sales, the reality shows that only a small part of the products generate income. We recommend online stores focus their attention and marketing budgets on the performing products to be able to increase sales and therefore profit, but also to reduce advertising costs. Online businesses must analyze the products they sell, and with the right tools, the results brought by them can be correctly analyzed”, says Cătălin Macovei, founder of TRUDA and specialist with 10 years of expertise in digital marketing.

Once the best-performing products in an online store are identified, they can be promoted more effectively to customers, thus achieving an increase of up to 30% in the conversion rate and up to 50% in the number of orders. At the same time, by promoting high-performance products, a reduction in marketing costs by at least 20% will be achieved, according to TRUDA data.

“Through TRUDA, which is a unique technology on the Romanian market, we analyze each product separately to understand why it is bought, why it brings income or why it is not of interest to customers and, subsequently, we match the performing products with the ideal buyer. Thus, we help online stores to grow their business and optimize their costs”, adds Cătălin Macovei, founder of TRUDA.

To be able to identify the performing products, they are labeled by category – performing products, trending products, non-performing products, and price range. In 2022, online stores allocated budgets of 5.7 million euros for advertising in Google Ads, of which HERO (performing) products consumed only 12.3%. The cost per transaction was 17.5 lei, 47% cheaper than the products without any label, and the products labeled as non-performing consumed only 7% of the total advertising cost.

For 2023, TRUDA representatives recommend that online stores find a balance between promoting products to existing customers and potential customers and identifying products that are very good and those that drag the business down. As trends, the CPC (cost per click) will continue to increase, and the most purchased products will continue to be those in the 1-100 lei price category, in this case 92% of orders are placed on the day when users have entered the site.

How the TRUDA technology works

The platform connects via API to Google Analytics, Google Ads, Google Merchant Center, Facebook Ads or other platforms. Connection takes place in 20-30 minutes, and downloads information about the marketing costs associated with each product and the results achieved by them. TRUDA then runs complex algorithms to determine the importance of each product in the entire ecosystem.

Based on machine learning, TRUDA analyses products and the income generated by them, labels them according to relevant criteria for each individual business (income, quantity, product price, trends, sales speed, toxic products and tractor products – HERO) and suggests marketing campaigns. Thus, having identified the products that only generate costs, without bringing sales (and can remove them from campaigns), online stores can promote only those products that bring income and can make marketing costs more efficient.

The implementation of the TRUDA system for online stores is carried out by the TRUDA team, consisting of 5 digital marketing specialists. The cost of implementation, analysis and specialised consulting services starts from 350 euros, and customised services are also offered according to the needs of each online store. Marketing campaigns are carried out by the entrepreneur, marketing agency or marketing specialist, who still has control.

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