Retailers, Be Mindful of These Eye-Opening Statistics on Comparative & Predictive Shopping
As the ecommerce landscape grows and evolves, trends emerge that can greatly benefit the online retailers who are paying attention. These e-tailers can then utilize technology and other tools to capture and keep customers. In particular, two trends that have gained popularity over the past few years are comparative and predictive shopping, both of which are driven by actionable data. Both are also influencing the market, and the benefits for online sellers are numerous.
This guide breaks down the definitions of comparative and predictive shopping, how they appear in ecommerce today and how online retailers can reap the rewards. The short version: It’s wise to be mindful of these eye-opening statistics about these trends. Keep reading to learn more.
Ecommerce: A $4.8 Trillion Industry
Ecommerce has been gaining steam for decades, but did you know the latest projections estimate the industry to be worth $4.8 trillion by next year? That spending can be attributed to the 1.8 billion people worldwide who shop online per year, including 96% of Americans who have bought something from the internet. Consumers across the generations do at least some of their shopping through a screen, especially in 2020.
The outbreak of COVID-19 has pushed many brick-and-mortar retailers into the ecommerce space in order to keep their operations afloat. As a result, there has been extensive growth in a short time period, which can give consumers the advantage because they get more choices in businesses to support.
What Is Comparative Shopping?
If you remember the heyday of the department store circular, you’re probably familiar with comparative shopping. The mini-catalogs distributed by businesses would advertise (often big ticket) items at a lower price than what their competitors sold them for, which would hopefully attract customers who looked at all the circulars side-by-side.
Now that pricing information is readily available on ecommerce sellers’ websites, sending it out via physical mail is nearly obsolete. Instead, consumers simply visit the sites—research shows that 63% of all shopping begins online—and compare prices to see who offers the best value. This is done ahead of the actual shopping and typically is the practice of someone who’s eyeing an expensive item sold by many retailers.
Nearly 80% of Consumers Are “Bargain Hunters”
According to research from Ask Your Target Market, 79% of consumers consider themselves to be bargain hunters and will actively seek the lowest price of items before buying them. Additionally, 78% said they like to compare prices from different stores before committing to a purchase. This shows that a majority of people who engage in comparative shopping as part of their bargain hunting strategy. Just 4% of shoppers said they “never” do it.
Comparative shopping is made easier by the sites and tools that assist at least 15% of consumers looking to see multiple stores’ pricing information at once. Of those using the tools, 60% have been satisfied with them, and 40% plan to use them in the next year. Online retailers, therefore, have an opportunity to grab the attention of these shoppers by leveraging these sites and tools.
How Retailers Can Benefit
The simple answer for how to capture all the bargain hunters online is to offer the lowest prices all the time, but that is not always feasible, especially for small businesses. However, it’s entirely possible to offer digital coupons or promo codes and take a short-term loss for long-term gain. More than two-thirds (68% to be exact) of consumers say that digital coupons generate brand awareness and build loyalty, which means greater sales volume and more repeat customers for your online store.
You can also go mobile. Roughly half of consumers shop on their mobile devices, which means you’ll have an advantage if your site is mobile-friendly. Even better, if you have an app, your customers can easily buy through it instead of comparative shopping because the former is more familiar and is the automatic choice.
What Is Predictive Shopping?
Predictive shopping is another trend that has been on the rise as AI becomes more sophisticated. In its most optimal form, predictive shopping describes a retailer gathering purchase data—what, how much and how often—and having those orders automatically fulfilled based on the customer’s shopping history. Though this exact definition isn’t yet in practice, predictive shopping is alive and well in the current landscape.
How Predictive Shopping Looks Right Now
Amazon isn’t the only company that offers subscriptions of its regularly used products like diapers, toilet paper and more, but it is certainly the largest. The “Subscribe & Save” program lets members purchase items at a discount if they opt in to have those items delivered on a set schedule. This gives Amazon yet another set of data that it can use to make strides in predictive shopping in the future.
Other retailers are also taking a slice of the predictive shopping pie. Several businesses have launched subscription-style purchase options, and others will manually reach out to customers when they anticipate a product is running low. There are options, but the key is to hook the consumer on a purchase cycle so they will find it inconvenient to buy elsewhere and will be less motivated to comparison shop.
How Retailers Can Benefit
While consumers benefit from the convenience of predictive shopping, retailers also benefit because they can establish real relationships with their customers who feel seen by the businesses that “know” their schedules. You’ll also get a better idea of who’s buying what and how often, which gives you better data for personalized shopping recommendations.
Did you know that 75% of consumers are more likely to buy from a retailer that recognizes them by name, recommends options based on past purchases, or knows their purchase history? This same information will result in better target promotion for paid advertising.
Finally, ecommerce sellers benefit because they get greater insight into their inventory demand. Having customers purchasing at regular intervals lets you adjust pricing to remain competitive but maximize profit, and it gives you a better idea of how much stock to keep on hand.
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