Nielsen will sign a strategic cooperation and data sharing agreement with e-commerce heavyweight JD.com.
Based on the agreement, both sides officially launched an innovative big data product -- Online Pricing Optimizer (OPO). This product will help brands evaluate their pricing on the JD platform and optimize their promotion, and assist them in customizing year-round promotions and designing plans for certain e-commerce festivals. In this way, brands can increase their sales and profit margins on the JD platform.
OPO can help brands better understand the online consumers, such as what product they compare with before making a shopping decision; the proportion of different promotions in the overall discount; the impact of each discounts on consumer shopping decisions. Based on in-depth analysis of pricing and discounts, OPO can give reasonable suggestions for long-term and short-term pricing promotions.
“Nielsen is a global leader in retail data research. The company has gained rich experience in pricing and promotion based on multi-channel retail data, as it has conducted relevant research in the world including China for more than ten years,” Andy Zhao, president of Nielsen China, said.
“OPO is designed based on Nielsen's traditional pricing and analysis product. It also combines individual order data provided by JD platform. By creating OPO, Nielsen pioneered the way that using consumer order data to provide pricing and promotion analysis for brand owners,” he said.
Nielsen’s analytical consulting department and JD’s business development and cloud platform units developed OPO. It leverages the order and browsing data generated by more than 300 million active online consumers on JD, as well as Nielsen’s monitoring data on omni-channel retail.
OPO can analyze all the factors influencing consumer decision-making at different level of the pricing and promotion strategies. It can restore consumers’ shopping decisions, find the key factors that drive sales through pricing and promotion, give professional suggestions that can be executed, thus enhance the brands’ promotional efficiency on JD platform.
As smart phones have been popularized, digital lifestyles gradually penetrated new retail channels come to the surface, e-commerce have almost finish educating Chinese consumers. More and more consumers are getting used to online shopping, while the shopping channels are also surging.
Nielsen research shows that Chinese consumers have been increasingly sensitive to pricing in recent years. Product pricing influences not only brand owners’ profit margin, but also the possibility for them to open a market and activate the needs of the target population.
Under the help of JD cloud platform’s fast data processing capability, Nielsen fully integrates its global expertise in pricing and promotion techniques. Nielsen brings together data, algorithm and business experience, in bid to give truly feasible, verifiable products and advices to brand owners.
“China’s retail industry is competitive in 2018, when many companies with poor management closed down. Growth models driven by the online clicks and investment have gradually failed. After going through the process, we realize the importance of precision marketing,” Andy said.
"For either online or offline retail industry, the most fundamental law is to respect and understand consumers. Chinese consumers are having more diverse demand, getting more sensitive to pricing and more complex in decision-making process. By using scientific data tools, band owners can see a pattern, and come up with strategies that serve consumers and realize long-term healthy growth," he said.
Through trial projects, Nielsen found various pricing and promotion factors affect consumers' shopping. Those factors include the original price, order-specific discount, price-break discount, price of other products that consumers have browsed, price of the last purchase and other factors that help shape the price of the product. OPO’s unique features are to operate based on data generated from individual orders, and to analyze the driving forces of different shopping decisions.
Andy said: "E-commerce pricing and promotion products available on the market often use store-level data as the basis for analysis, which is limited by the third party’s data collection technology and the relations with e-commerce platforms. But this attempt ignores the fact that behind online stores, customers are changing extremely fast.”
“Nielsen found the accuracy of e-commerce analysis and predictions made based on store-level data stands at only about 25 percent. In contrast, the forecast accuracy by Nielsen’s OPO, which using data on individual order level, can exceed 75 percent. This is a huge breakthrough," he added.
Yan Weipeng, Vice-president of JD said: "Retail has no boundary, neither the development of retail industry. Win-win cooperation will always be the trend of retail sector. JD is very pleased to work with Nielsen and brand owners to find out growth engines, promote GMV growth among JD and brand owners, and create a multi-win situation.”
“Our partnership with Nielsen has a long history. Whether it is MTA (Multi Touch Attribution) or OPO, the Nielsen team's professionalism made a profound impression on us. We believe OPO will bring tremendous value to JD and the entire industry."