State of the Art Product Segmentation - An eCommerce Research Project with Cooperation Partner Fachhochschule Wedel
The Fachhochschule Wedel University of Applied Sciences, located in the Hamburg metropolitan area, has stood for interdisciplinary, practical and international studies for more than 70 years. The university values the combination of practice and theory. To give students the opportunity to solve real problems and industry challenges, the Fachhochschule cooperates with about 200 partners from industry and economics – and minubo has been a partner since 2017.
minubo recently supervised the eCommerce Master’s project and final theses of students Theresa Besekow, Julia Marie Allers und Sascha Tobias Kasper. The aim of the research project was the identification of relevant use cases and their standardization for the conceptual implementation of a prototype for a state of the art product segmentation tool.
Customer segmentation has become a standard tool in marketing and is a key success factor. In contrast, the analytical consideration of product data is less well received, although the information provides comparably important information about market performance and also allows the analysis of individual products and product groups. One reason for the increasing importance of product analysis is the evolution of buying behavior, which is increasingly changing to a hybrid form.
This makes it increasingly important for eCommerce companies to be able to serve their customers' needs with a well-thought-out product portfolio. In cooperation with the Fachhochschule, minubo put out a tender for a research project - with the intention of identifying the requirements for successful product segmentation and gaining deep insights in this area. The three students of the eCommerce degree program took up this tender and made it the basis of their six-month Master’s project.
Data collection was based on a qualitative method, for which a total of seven eCommerce companies were asked about the status quo of product data analysis as well as their wishes and objectives. The guidelines for the expert interviews were based on the previously developed theoretical foundations. The partially implemented, as well as potential future, use cases of the companies were evaluated and prioritized on the basis of different criteria. As interview partners, targeted users from different companies (5 minubo customers) were approached with different business models to determine the actual needs of a product segmentation tool in eCommerce. Next, this information was evaluated in terms of the conceptual implementation of a prototype tool.
The Most Important Findings
The results of the study show that an automated sales and returns analysis based on product data is of particular relevance to retailers and therefore offers great added value. Especially for the best possible orientation of the retailer‘s product range, the analysis of the products is in focus next to the analysis of the specific customer group of the shop.
A detailed evaluation of relevant key figures such as sales, sales volume, returns quota and various margin considerations is therefore crucial for the company's success. Since the required database usually exists already in all companies, a corresponding analysis tool could be implemented relatively easily. In a second step, automating this reporting would help companies identify and respond proactively to significant revenue declines or unusually high returns rates.
Based on these findings, the concept of a prototype of the new product segmentation tool was developed, in which two aspects in particular were taken into consideration: According to the study, user-friendliness and clarity are decisive factors for the simple and efficient use of the tool. In addition, it is important for users to be able to divide and export results, spreadsheets, dashboards etc. to be able to feed them into presentations and/or meetings.
"Cooperation with universities and technical colleges and the resulting knowledge gained from project work or theses provide us with special added value because they are relevant topics and current challenges facing the industry," says Matthias Kovarik, Key Account Manager at minubo. The concept developed by the students as part of the Master’s project is being used for the further development of minubo, especially in the context of product analysis and segmentation.
This blog post is based on the results of the Master’s project "State of the Art Product Segmentation in E-Commerce" by Theresa Besekow, Julia Marie Allers und Sascha Tobias Kasper.
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