As the VP of Global Research Solution at Similarweb, I find myself in the most exhilarating role imaginable. I work with the most granular digital data in the world, interpreting it and transforming it into insights about market dynamics, company strategies, and consumer behavior. This provides endless learning opportunities about marketing and business strategies, particularly in turbulent times. Partnering with the most digitally savvy companies - from the US investor sector to big tech firms - is incredibly inspiring. Today, I'd like to share a few insights with you. These are inspired by how the most advanced companies use our data and by the lessons we've learned from the bankruptcy of omnichannel giant Bed Bath & Beyond, as well as the spectacular success of the Chinese disruptor SHEIN.

What are data signals?

Digital data signals encompass customers' digital behavior, including browsing patterns, app usage, searches, purchases, and interactions with specific website sections. Advertisers' paid media investments and their impact on website visits and purchases are also significant signals. At Similarweb, we collect and analyze these signals to provide businesses with actionable insights for decision-making and strategy optimization.

Source: Similarweb

Despite a modest 3% decline in demand for home furnishing during the COVID pandemic, the impact on businesses like Bed Bath & Beyond (BBBY) was more severe. Converted visits for BBBY plummeted by 11%, reflecting customers' cautious spending due to financial struggles. However, this decline varied significantly across companies, with BBBY experiencing a substantial 26% drop while Kohl's only saw a 4% decline.

Analyzing BBBY's digital signals provides insights into the reasons behind their poor performance. The company suffered from weak brand strength, low investments in paid media during crucial periods, inefficient monetization strategies, and low app adoption. These factors collectively contributed to their downward trend. Similar data analysis also revealed a YoY decline in other metrics, which aligns with the company's financial announcement showing a significant drop in omnichannel sales.

Although digital sales constituted only 27% of BBBY's total sales, the poor digital performance and ineffective marketing strategy exposed the company's overall vulnerability. Ultimately, BBBY filed for bankruptcy in April, highlighting the critical importance of digital success even for traditionally established companies.

Winners and their DNA: SHEIN's success story

SHEIN, a Chinese fashion disruptor, has significantly impacted the global fashion market, evident in the US. It's the number one app in the Fashion & Apparel category in the US, reaching 9% of Americans. It's also the second-largest website in the US fashion category by website traffic, growing faster than the category average. SHEIN is not just popular among Gen Z but also among people aged 35-54.

Source: Similarweb

SHEIN's revenue projections are expected to more than double to nearly $60 billion by 2025. That would exceed the combined annual sales of retail giants H&M and Zara.

The digital-only marketing strategy of the online fast fashion retailer, SHEIN, surpasses any other market player in terms of scale and investments across all media channels. Notably, their focus on influencer marketing through social media has played a significant role in establishing a robust brand presence. Despite not having physical stores, SHEIN boasts the highest branded search volume among all fashion brands in the US, surpassing competitors like Gap, Zara, and even H&M.

SHEIN's heavy investments in various channels consistently yield impressive returns on investment (ROI), ensuring the company does not burn through cash. Regardless of the specific channel being analyzed, SHEIN consistently demonstrates the best monetization efficiency in the industry.

The company also has a low return rate compared to other players. This is a common problem in the industry impacting profitability. For example, Asos just reported 6% of customers are impacting profitability by £100M. When we observe our data, we see Asos has had between 8% and 15% of visits to the return section while SHEIN has it under 3%.

Anticipating disruption and best product fit: FOUND's strategic approach

FOUND has built a simple solution that caters to the needs of the self-employed. It's the 6th fastest-growing financial services company in the US in 2022, with over 100K customers using their mobile app and a website growth rate of +216% YoY.

Source: Similarweb

The success of FOUND can be attributed to its targeted keywords, which focus on SMB banking. These keywords have over 300,000 searches each quarter in the US and show seasonality correlated with significant layoffs and tax season. Moreover, the audience size of SMB banking increased by +37% over the last two years. By adopting this strategic, data-driven marketing approach, the FOUND has effectively carved out its niche as an SMB bank.

Closing thoughts 

In conclusion, digital data signals provide valuable insights to help businesses optimize their marketing strategies, anticipate disruption, and find the best product fit. By leveraging these data signals, businesses can navigate digital transformation and achieve success in today's digital age with a data-driven marketing strategy.

About the author: Marta guides product strategy with the goal of revolutionizing market research using more granular and relevant data. Marta previously worked as Chief Growth Officer at Gemius, leading business and growth strategy for 7 years, and also spent over 10 years as an entrepreneur running an SMB in the digital media sector.

About Similarweb: Similarweb is your gateway to unlocking a complete understanding of the digital world. Our platform, trusted by many Fortune 500 companies, allows you to explore virtually any website, app, and industry worldwide. With our powerful tools and insights, you can gain an advantage and confidently navigate the digital landscape. Similarweb provides you with the resources to make informed business decisions and thrive in your market.

Richard Robinson, AVP UK & Northern Europe, Similarweb will be speaking on the Hexagon Stage, at MAD//Fest, at 4:05 pm on 5 July.