The company runs a large online auction platform and shopping website that connects buyers and sellers in over 190 countries. Their website has millions of sellers with 1.9 billion global listings and over 132 million active buyers.
THE CHALLENGE
The company’s sellers had two options for shipping orders to international markets – either through its own logistics partner or through the company’s worldwide shipping program. Most B2C sellers relied on their own logistics partners.
In 2022, the company introduced a new international shipping program for the US market which reduced international shipping costs, increased buyer confidence, and simplified the buying experience, as customers directly dealt with the company for any issues. Given that 59% of their global revenue was from international orders, the company wanted to expand this new international shipping program into European markets.
The company needed a data partner to help in the implementation of this new program for the UK and Germany markets. The partner would need to help the company prioritize the seller onboarding as well as the supply chain processes to handle the increased volumes by analyzing the current exports and sellers. In addition, the partner was also expected to predict the additional revenue which can be achieved with a phased rollout of the international shipping program, define the corresponding monthly growth rate of the program, etc.
THE SOLUTION
The team of data analysts from Prescience Decision Solutions analyzed the company’s current volume of sales exports from the UK and Germany markets, to understand the differences in the sellers’ demographics and behaviour. While the sellers in the UK market used both self-exports and the company’s shipping program, the sellers in the German market only used self-exports.
The analysis of the migration to the new international shipping program was split into two groups:
- Group 1 – Items which are currently being exported,
- Group 2 – All other items which can be exported in the future.
For Group 1, the solution considered the current country-wise volume of exported items and defined a phased ramp-up model for moving the existing sellers onto the new international shipping program. For the Germany market, the solution identified a staggered plan for migrating from only self-export shipping to a combination of self-export shipping and the new international shipping program.
For Group 2, the solution considered several additional factors such as cannibalization of overall sales when a set of new items are made available to global customers etc. This required the solution to define a separate phased ramp-up model for the expected incremental sales with the migration to the new international shipping program.
The end-to-end solution allowed the company’s users to get their planned ramp-up models for migrating sellers over the next 3 years and provided them with predictions of the expected monthly incrementality in revenue. It also allowed users to input the targeted monthly incrementality in revenue and get the required ramp-up model for onboarding sellers onto the new international shipping program.
THE IMPACT
With the new solution developed by Prescience, the company’s users can now clearly outline a detailed roadmap for onboarding of sellers from the existing shipping models onto the new international shipping program for the UK and Germany markets. This solution also empowers the company to scale up its processes and logistics to accommodate the gradual transition to the new shipping model. Furthermore, the company has the ability to compare the real-world performance against the predicted incremental revenue and ramp up in migrated sellers, on a monthly basis, thereby taking corrective action when necessary.
