As against the popular belief, online marketplaces like Amazon or eBay do not have an overwhelming advantage when it comes to the purchases made online. The Connected Shoppers Report by Salesforce shows that the buyers’ choices are complex. While Online Marketplaces top in Share of wallet (SOW), the retailers who have a presence in online space are not far behind. The Salesforce study covering 10,000 global shoppers reveals.
What is Wallet Share (SOW)?
Firstly, Share of wallet (SOW) is a Marketing metric used to identify the customer’s spending on a type of product or service offered by companies. In order for an e-commerce seller/site to increase wallet share, the average spending of people on products has to rise. Simultaneously, the visits to their online stores also have to rise. In short, patronage and loyalty are vital in increasing wallet share.
What Report Says?
The report shows that 86% of shoppers prefer a combination of retailers, brands and online marketplaces to make their purchases. Around 47% of the customers in the online space buy products on online market places like Amazon, eBay, and Etsy, as per Connected Shoppers Report. A total of 26% of people would prefer to buy products from the retailers’ website, hinting that brick-and-click also works. Around 18 percent of the customers, most people who believe that the official website of the brands ensures quality shop from the brand websites. The need for diverse on-site assets and price war with online marketplaces is a challenge to brick-and-click.
Who Wins the Retail Industry Battle for Wallet Share?
No matter where they shop, almost 66% of consumers expect a consistent experience in the platform they engage with. Whether it be online space or retail, 68% of buyers believe it is important for stakeholders to understand their preferences. Buyers believer that competitive pricing, best return policies, and after-sales service are important. While virtual experience offers more options, 71% of people still shop from the brick-and-mortar store. Here they get to personally inspect the products. Omnichannel Marketing which involves the use of digital channels such as social media and mobile phones boost the prospects of physical retailers.
How BI Helps Brick and Mortar Businesses to Adapt
Online purchases get 75 percent repeat buys the brick-and-mortar stores get only 25 percent. Business Intelligence software like the Salesforce Einstein, can help retail stores to adapt to the modern-day needs by analyzing data.
Helps in Designing Stores and Optimizing Products: The stores can be designed or redesigned based on the customer ‘dwell time’ in each section of a retail store. AI uses Computer Vision to gather data. The algorithms can also quickly identify the products that attract the least customer attention and give replacement suggestions. While this can be done in a conventional method in an enterprise setup, BI ensures quicker ROI.
Assist in Staff Deployment: They can help stores deploy staffers in a pattern that will best influence the decision of buyers. Samsung has retail analysis software that can capture and analyze customers’ data in a store.
Personalized Shopping Experience: The primary advantage of brick and mortar businesses have over online shopping is the person- to- person interaction. Business Intelligence can help retailers make the best use of it. The BI can help analyze customer’s buying pattern and preferred products. Thus BI will help Salesmen give suggestions on new offerings similar to the suggestions that online stores have to offer.
Retail Stores Are Not Dying Either
Salesforce, in a previous report, revealed that around 85 percent of the people prefer to buy from retail stores. While the retail store business rises by only 2.2 percent, e-commerce was booming at 15 percent. However, retail stores are increasingly failing to achieve their revenue targets, hinting at a flow of consumers into online space.
Yet another survey held last year found out that 92 percent of Americans used e-commerce site. Around 70 percent of Americans had bought something or the other from Amazon. And 40 percent of them shop from the site at least once a month.