IRP Technology Delivers what the eCommerce Industry is Missing
Mckinsey recently highlighted eCommerce is by far the largest technical sector - and the report confirms what we all know - the industry has a net profitability problem. McKinsey predicts a 2% to 5% net margin on a $14 Trillion+ industry.
The problem in eCommerce has never been sales - it has ALWAYS been profits. Read any Merchant's financial accounts and you will see the problem from SME upwards. Merchants are not even hitting 2 to 5% net profit margin - up to 80% are making a loss.
The eCommerce industry has been plagued by one final UNSOLVED technical problem that undermines profitability. Merchants have no visibility on how much net profit they make on each individual unit they sell. After a decade of RnD - IRP has solved this data problem in realtime and this has major implications.
IRP has achieved Net Profit Tracking to Unit Level
Why is Net Profit Visibility so Problematic to solve?
It’s highly problematic to solve because there are privacy issues combined with lots of complex data to capture. The crux of the problem is down to accurately capturing and allocating Traffic Spend. This makes the calculation and visibility of net Profit per Unit - after all costs are deducted - very complex to solve.
Other costs are known - but Traffic Spend is a highly variable cost that must be accurately measured and attributed to each individual click. Other eCommerce platforms have sidestepped this problem entirely because they know it is a technical nightmare. Yet without it - Unit Net Profit can never be known.
In the GDPR, post-cookie world - third party analytics will NOT work. The merchant’s eCommerce platform is the ONLY technology capable of seeing and tracking all data first party - including costs, clicks, sessions, orders, products and traffic spend. Within the platform is the ONE opportunity to accurately process the data and solve the last critical ecommerce problem of “net profit at the unit level”.
IRP is the only platform that has solved the Net Profit problem.
IRP is the only platform to SOLVE the Net Profit Problem
How Does IRP Net Profit Technology Work?
IRP has spent over £30 million on RnD to solve Unit Net Profit by accurately tracking all the above first party data and costs - tracking all clicks and the highly variable traffic spend - and then accurately allocating these to every sku - revealing overall and individual Net Profit.
Complexity peaks as constantly varying traffic costs makes accurate per-unit attribution a serious technical challenge. IRP brought all the pieces of the Net profit puzzle together first party in realtime… Sales, Gross Profit, the financial innovation of eGross (Gross Profit after Traffic Spend), Fixed Overheads and Costs of sales - leading to Net Profit. A Decade of RnD has worked out how to accurately capture the cost of all clicks and all events - meaning that IRP can now accurately show Net Profit on every unit sold or not sold.
This realtime information is invaluable to Merchants - it can be the difference between scaling profitably OR being out of business.
Net Profit is ‘REALITY ERA’ of eCommerce
Conclusion
What use is IRP’s technical breakthrough? Use the technology and you will understand immediately!
The implications run very deep but in a nutshell - when it comes to buying and selling, IRP Merchants now have complete visibility into which products are making or losing them money. With 6-9% of stock generating 50% of sales - knowing which stock is profitable is paramount to success. Buy more of the stock that sells, sell in the right channels, keep channels efficient, move on dead stock and sell profitably. Make money and don’t lose money - scale your business.
Net Profit Per Unit is on early release and will be available to all Merchants from version IRP 9.6 onwards.
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