The work of the product selection stage is to select and give value to products. After the products are put on the shelves, in order to maximize the value of the products and realize revenue, the support of a scientific product operation system is needed. When opening a new store, you first need to preset product stratification and demonstrate product competitiveness in various ways. After being put on the market and obtaining some traffic, the store products will present a real stratification pattern, and merchants need to optimize them by evaluating the actual situation of the products to achieve the best effect of product operation.
The first step in scientifically managing products is to analyze the product structure from the overall perspective of the store. In practice, product structure stratification is affected by many factors such as product exposure, conversion, sales volume, sales, profit margin, and even the demand attributes satisfied by the product itself. It is the final result and objective fact of product operation. Generally speaking, from the perspective of traffic conversion, store products can be divided into traffic models, hot models, profit models, and image models. The product structure can also be analyzed from the perspective of growth. Analyzing product structure from multiple angles can provide more decision-making basis for product operation. Here we only introduce the product structure stratification from the perspective of traffic conversion.
(I) Traffic models
Traffic models refer to products that can bring traffic to stores and store products. Traffic products can attract buyers to click on the product details page or visit the store. They are usually sold with other products on the website. Traffic products are generally priced lower and are not the main source of profit. They do not make a profit or make little profit. Traffic products have a discount space of 30%~50% and are used to sign up for platform activities. When choosing traffic products, customer coverage must be considered. Generally, they are products that are acceptable to most customers in the target customer group.
(II) Hot products
Hot products are products with high traffic, high exposure, and high order volume in the store. Hot products can increase the overall exposure of the store, improve the store’s conversion ability and ranking, increase the overall weight of the store, and can attract traffic to other products in the store. The number and quality of the store’s hot products determine the overall sales and profits of the store.
(III) Profit products
Profit products are the main profitable products. The profit margin of profit products is determined by the seller’s valuation of the expected profit margin of the product, so profit products should also account for the highest proportion of actual sales. Profit products usually correspond to a specific niche group in the target customer group. The early selection of profit models requires higher data mining requirements. We should accurately analyze the preferences of niche groups and analyze the styles, design styles, price ranges, product selling points and other factors that are suitable for them. In terms of promotion, profit models need to be promoted to the crowd in a more accurate way. We also need a small amount of targeted data for testing before promotion, or conduct product research through pre-sales and other methods to achieve lightweight supply chain.
(IV) Image models
Image models are products that can enhance the brand image and increase consumers’ sense of value. They are generally high-quality, high-profile, and high-priced niche products. The number of image products is related to the niche groups in the target customer group. Image models generally account for a very small part of product sales.
Based on the above analysis, in the initial stage of the store, we can preset the product structure positioning according to the product characteristics, and then use the profit margin to reflect this product structure positioning, and pay attention to the proportion of the four types of products in the store.