Sit Down with Christine Russo as she hosts a key technology provider in the ever-evolving ways Gen AI will help retailers and brands.

Eric Best, CEO of SoundCommerce, explains the challenges of measuring order profitability due to dispersed data sources. In his experience with Richer Poorer, he found that while they could measure site traffic, conversion rates, and ad campaign performance, they struggled to answer basic questions about profitability after converting a shopper. This issue drove the creation of SoundCommerce to address the industry problem with a commercial product.

Eric describes the complexity of calculating profitability by accounting for various costs: the cost of goods sold, acquisition discounts, digital marketing expenses, and variable costs like storage, fulfillment, and shipping. With data scattered across different systems, such as digital marketing platforms and parcel carriers, it becomes difficult to consolidate and analyze this information effectively. Brands may use systems like NetSuite ERP to integrate data, but more detailed calculations, like customer lifetime value, require tracking shopper identity and purchase history over time.

Understanding order profitability offers a clearer picture of business performance compared to customer lifetime value. Eric points out that repeatability in customer behavior indicates successful customer service. However, many businesses fail to identify why some customers are not loyal, potentially due to pricing or return issues. Comprehensive data analysis of orders, including hidden costs like returns processed through different platforms, provides retailers with crucial insights for making informed decisions and improving overall profitability.

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