Data from the latest Salesforce Shopping Index reveals that 2023 was a mixed bag for digital commerce.
Global online sales fell two percent year-on-year, but the Middle East and Africa (MEA) saw strong growth in digital commerce at 21 percent year-on-year.
Salesforce advises retailers and brands to focus on keeping existing customers loyal rather than on the increasingly costly acquisition of new customers.
In 2022, consumer loyalty shifted. As prices rose, shoppers chose brands based on product pricing and the value of promotions rather than product availability and fulfilment convenience. Globally, as economic conditions deteriorated, consumers became more price sensitive. They reported that the number one reason they switched brands in 2022 was better pricing.
Additionally, consumers did a lot more research before making a purchase. While online traffic volume grew, online sales and online order volume continued to decline. Why? Consumers went comparison shopping online.
In Q1, global online traffic rose by six percent from a year earlier. That marks five straight quarters of traffic growth despite five consecutive quarters of declining online order volume.
When they do buy online, shopping carts are smaller: The number of units sold per transaction decreased by six percent worldwide.
This means every visit to a brand or retail website is becoming less profitable, looking at total online sales divided by total visits. As such, retailers need to develop marketing strategies that utilise intelligent audience segmentation, personalisation and messaging.
The good news is that existing customers are more willing to stick with their preferred brands and retailers if the price is right. The share of online orders coming from repeat buyers in the first quarter rose by three percent over the first quarter of 2022 and 16 percent over the same time period in 2021.
To capitalise on this, leading retailers are pivoting to rewarding loyal customers rather than battling to find new ones.
Salesforce research shows experiences are just as important to consumers as products that retailers sell.
Retailers can start by understanding their loyal shoppers, activating customer data to build personalised experiences and delivering a frictionless, high-value shopping journey.
Building loyalty doesn’t end after the sale is complete. The most critical moment in determining long-term customer loyalty is when consumers reach out to their customer service centres.
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