To measure Action Impact, DynamicAction first observes actions that have occurred.
For example, period over period, has the Average Selling Price, SKU Availability or the percentage of Product Views relative to category peers changed?
If yes, DynamicAction logs the observance and then estimates the effect of those changes on an item’s profitability and sales.
To quantify the estimated impact of these actions, DynamicAction runs through a series of algorithms to identify actions that were winners or losers.
If we decrease the average selling price of an item, did we increase efficiency (product profit/view or sales/view)? If we increase availability for an item, did we increase efficiency? If we shift exposure from one item to another, did we shift views away from below average efficiency items to above average efficiency ones?
Generally speaking, if the answer to the above questions is “yes” then we are observing winning actions.
Action Impact: Price
- DynamicAction logs price actions when the Average Selling Price for an item has changed period over period by at least 3 %. (A price change might be the result of a markdown action, a price increase, or initiation or removal of a promotion).
- Generally, the goal of a price drop is to increase selling velocity and thus efficiency. If a promotion is removed or a price increased, the hope is that action can be done while stabilizing conversion.
Action Impact: Availability
- Availability actions are observed when SKU Availability changes without a corresponding change in price (either through replenishment or selling through key sizes, colors, materials, etc) by at least 3%.
- Generally, the goal of an increase in SKU Availability is to increase selling velocity and thus efficiency.
Action Impact: Exposure
- Exposure actions are observed when DynamicAction identifies that the relative percentage of category product views has shifted by at least 3% (the default threshold).
- For example, if a specific item received 5% of the product views within its category hierarchy last week and then received 5.2% of the product views this week, it would be logged by DynamicAction since that represents a 4% change.
- Generally, the goal of relative category exposure shifts should be to increase the percentage of views to above average efficiency items and decrease the percentage of views to below average efficiency items.
- This can be accomplished through boost & bury actions, search results changes, product recommendation zone modifications, external marketing changes and more