Retail Data Reveals Increase in Free Shipping to Drive Customer Experience
The DynamicAction Retail Index: Spring 2019 highlights an 8% increase in free shipping as North American retailers focus on improving customer lifetime profitability
Redwood City, California: DynamicAction, the leading retail analytics guidance system, has launched its Retail Index: Spring 2019 data, providing insights into the retail industry and the emerging trends shaping customer experience.
The research analyzed more than $12.4 billion of online global consumer transactions between January 1st and April 15th 2019. A rising trend to focus on customer lifetime profitability is reflected in the findings and the 8% increase in free shipping highlights a shift in retailers’ strategies to emphasize customer experience to remain competitive. However, while retailers continue to drive conversion from first to second time buyers, it is those shoppers that make between six to 10 purchases who represent the biggest profit opportunity.
The findings show that despite marketing spend increasing 25% compared to the same time last year, new customer acquisition decreased by 11%. In addition, while the amount of inventory not being viewed by shoppers has decreased by 12% – suggesting retailers understand which items their customers are searching for – overall customer profitability continues to decrease (down by 4% year to date).
“To stay relevant and protect profit margins, it is imperative for retailers to act at pace, constantly strive to understand the most addictive product combinations to encourage full-price sell-through, and feverishly deploy strategies offering services such as free or expedited shipping to its profitable and highly desirable customer set,” said John Squire, CEO & co-founder, DynamicAction. “Forward-thinking retailers realize that to provide a differentiated retail experience, they need to push further down the path of digital transformation to keep their most valuable consumers. Industry giant Amazon is providing a masterclass in harnessing rich behavioral data to reach consumers at the moment of purchase desire with a value proposition and financial structure that is stunning the industry.”
Further findings reveal that SKU availability has increased by 14%, meaning shoppers are more likely to be satisfied with the size, color and style selection of the products they seek, resulting in a decrease in inventory not sold of 67%, compared to the same time last year. This highlights a move by North American retailers to promote more often and offer deeper discounts to deplete inventory levels.
Find out more about the DynamicAction Retail Index and view past results here.
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About Retail Index: Spring 2019
The DynamicAction Retail Index: Spring 2019 is an analysis of more than $12.4B (approx. £9.4B) in online global consumer transactions January 1, 2019 – April 15, 2019. The transactions analyzed account for more than $5.3B (approx. £4B) in North America and $7.1B (approx. £5.4B) in Europe. The DynamicAction Retail Index analyzes consumer transactions in the general merchandise, home goods and apparel categories. It does not include grocery, nor does it include Amazon transactions.
About DynamicAction
DynamicAction is a retail analytics guidance system that leverages cloud software and a proven success program to catalyze the new customer-first operating mindset in retail.
DynamicAction empowers retailers with a clear path to navigate their transformational journeys with AI-powered metrics. It enables faster, better decisions to deliver profit, analytics and visualizations for immediate insights, prioritized opportunities and prescribed actions to take online and in-store.
Forward thinking retailers across the globe, including Cole Haan, Wehkamp, Jack Wills, Heine and Farfetch rely on DynamicAction’s advanced analytics and retail-built practices to holistically run more efficient organizations and formulate laser target strategies to uncover their most profitable customers.
Forrester Research recently recommended DynamicAction as the key prescriptive analytics technology to replace predictive analytics in retail, and the National Retail Federation named DynamicAction the 2017 Digital Commerce Startup of the Year for its ability to "significantly improve or radically alter how retailing is done."
