New technologies save ‘shoppers with intent’ from the black hole of retail, says Rick Brar, retail sector lead at Talend.
From a survey designed to shed light on a tough business challenge, Talend’s latest UK poll gives some fascinating insight into consumer behaviour. When it comes to online retail therapy, many of us like to get the buzz of shopping – but without the bill at the end.
Our survey showed that 58% of consumers use their online baskets as part of the browsing process. In other words, many of us like to see what it feels like to buy a Rolex or a Ferrari (yes it is possible – a Renzo Ferrari was bought online in 2002 for $1 million), but without actually going all the way.
Of course, within that 58% there will be a spectrum of intentions – those that are merely ‘window shopping’ and others with the objective to buy at some stage. Others might be making a ‘wish list’ or simply calculating costs to assess what they can afford.
The real issue is the discovery that in total, four out of ten UK online shoppers abandon their shopping baskets 50% of the time, representing hundreds of billions of pounds lost in revenue. Some 42% said it was always their intention to buy the goods they select but only a mere 4% go on to actually purchase.
So, that leaves 38% who are falling into a black hole of retail. Yet they represent a golden opportunity to drive increased sales for retailers who can capitalise on their intentions by personalising offers, providing relevant recommendations that encourage cross or up-selling and incentivising the sale by offering flexible delivery options or details of competitor pricing, for example.
As if to prove this point, an encouraging 90% of those polled said they would either complete a purchase or return to an abandoned basked if they were offered free delivery of those goods. 85% said they would do so if they were offered a real-time discount or bundled offer on their purchases.
It’s clear that retailers need to look at how they use technology and consider the effectiveness of their websites in turning these dawdlers into purchasers. The enhanced insight offered by real-time analytics can make this difference by enabling immediate discounts or complementary offers at the point of sale to drive that deal through.
The key here are the words ‘real-time’. Today’s retailers are increasingly aware that every second of delay increases the chances of a lost sale. Yet there’s a misconception that only the largest of retailers are able to invest in the technology and data scientists and other specialists needed to respond at this lightning speed. And even if they do, real-time analysis is often claimed, but so rarely achieved without exceptional expertise and expense.
But there’s been remarkable progress in this area, and technology that simplifies and accelerates the complex analysis, is emerging. It also makes the split second reaction both affordable and quick to develop – so that it’s available to any size of retailer. With so many big names such as Marks and Spencer reporting drops in sales, this is a shining example of how an agile and canny ‘challenger’ can jump in and gain market share.
In our role as consumers, we need to hold onto our shopping carts and watch the developments unfold. It’s likely that more of us will join the ‘happy few’; the currently small percentage of shoppers who stop browsing and actually go on to buy.