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Study: Retailers shift delivery priorities

Retailers are modifying their delivery strategies, with mixed results.

According to DynamicAction Retail Index: Spring 2019, which analyzes more than $12.4 billion of online global consumer transactions from January to April 2019, an 8% increase in free shipping highlights a shift in retailers’ strategies to emphasize customer experience to remain competitive.

Despite this growth in free shipping, as well as 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%, which DynamicAction analysis suggests means retailers understand which items their customers are searching for, overall customer profitability has decreased 4% year-to-date.

Furthermore, while retailers continue to drive conversion from first to second-time buyers, DynamicAction analysis has determined that shoppers making between six to 10 purchases represent the biggest profit opportunity.

Other notable findings reveal that SKU availability has increased by 14%, which DynamicAction says indicates shoppers are more likely to be satisfied with the size, color and style selection of the products they seeking. There has been a corresponding year-over-year decrease in inventory not sold of 67%, which DynamicAction says highlights a move by North American retailers to promote more often and offer deeper discounts to deplete inventory levels.

“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 and 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.”
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