By Practicology | UK Consultants

Benchmarking is a well-established practice for retailers and brands to assess their product ranges and pricing against the competition. But, when it comes to benchmarking customer experience or ecommerce excellence, what are the drivers and how do you go about it?

The main reason to invest in ecommerce benchmarking is for the value derived from the decisions you can take once you answer the three key questions we outline below:

  • How is my business performing against consumer expectations?
  • How are my competitors performing against consumer expectations?
  • What is best practice in the market?

We work with retailers to benchmark themselves against their direct competitors and wider market, and FMCGs and CPGs who want to benchmark the digital performance of their retail partners.

Simple benchmarking criteria can include conversion rates, website features or email marketing effectiveness. At a more advanced level, we recommend mapping real customer journeys and benchmarking more complicated omnichannel propositions against those journeys, including online and in-store experiences.

For a retailer, this should lead to informed decisions about where to invest in its digital proposition; prioritising developments that can positively impact its customer experience and/or deliver against the retailer's broader strategy.

In addition, increasingly FMCGs and other brand owners want to understand the digital performance and customer experience offered by the retailers who sell their products. For them, the decisions to make are around who their key retail partners should be, how can they better support those partners, and also how should they differentiate their digital direct-to-consumer propositions.

How is my business performing?

Benchmarking is an opportunity to understand your business' strengths and weaknesses – not from your own internal understanding, but from your customers’ point of view, including:

  • What are the key pain points for your customers? 
  • What isn’t working?
  • What are you doing that’s above expectation? 

Based on our own experience conducting retailer benchmarking studies - such as for Google - no business ever scores 100% across all aspects.

The value of benchmarking comes from identifying the areas that are relevant to you and leveraging this insight to focus resources on improving the areas that are significant to your target consumers.

How are my competitors performing?

Insights into your own business give you part of the picture, but they become more valuable when you have something to compare them to.  Benchmarking gives you a view of what your competitors are doing, and how well they are doing it, such as:

  • Who has adopted new trends in the market?
  • Where are they adding value in customer journeys?
  • What are they doing better than your business in the areas that matter to you?

Competitor analysis will allow you to spot the brands that are poised to succeed, and those that are falling behind on meeting consumer expectations.

Benchmarking can be used as a competitive assessment for market entry, it can help prioritise business cases, and even identify potential partners for your business. 

A benchmarking study can also be focussed internally; comparing the brands in your portfolio, how your retail partners are marketing and selling your products, or the differences between your flagship stores and smaller outlets.

One brand-owner client, Aaron Sullivan, Director, Ecommerce & Direct-to-Consumer Marketing EMEA at Vans explains: 

“Practicology helped us build an Omnichannel Framework to objectively measure our progress internally and benchmark our performance against key competitors. This enabled us to prioritise and plan our roadmap for an area that is becoming increasingly important to the success of our Direct-to-Consumer business.”

What is the best practice in the market?

The final output from a benchmarking project is to reveal the examples of best practice employed throughout the market and answer these two questions:

  • What does great look like?
  • What should we invest in to stand out from our competitors?

With the rise of online marketplaces, and particularly Amazon, retailers must differentiate through their customer experience, going beyond delivering the baseline proposition that we would expect all retailers to deliver.

The shopping experience must be remarkable and memorable. Benchmarking for best practice examples can provide the inspiration for you to create something better than the norm, and ultimately delight the end consumer.

Brands that sell through third-party retail channels must also answer these questions, although in their case they will be asking which sales channels and retail partners to invest in. We see brands now tiering their retail partners off the back of such exercises, based on the retailers' digital sophistication and performance.

Our Google omnichannel CX review project benchmarked 145 retailers from across seven countries, with the aim of highlighting leading best practice examples of how retailers are supporting their mobile consumers. You can download an executive summary here

Retailers and brands who sell online can also sign up to be part of our monthly European Ecommerce Benchmarking study. You can find more details here of how to apply to be part of that ongoing research.

If you would like to find out more about our client projects or believe your business could benefit from carrying out a benchmarking study, contact the authors of the piece, Jonathan Kleiman and Peter Boldt-Christmas at hello@practicology.com.

Related Blog Posts

Why you should investigate Latin American ecommerce opportunities
Why you should investigate Latin American ecommerce opportunities

Brazil, Mexico and Argentina are all markets with strong ecommerce gro…

Three key questions private equity investors should ask their retail portfolio companies
Three key questions private equity investors should ask their retail portfolio companies

Private equity businesses wanting to drive EBITDA should ask their ret…

Six steps for growing a consumer goods brand online
Six steps for growing a consumer goods brand online

Six steps for growing a consumer goods brand online