Marketplaces and brands put pressure on bricks and mortar retailers, finds Salesforce

Product differentiation offered by brands and the convenience afforded through marketplaces are squeezing retailers into a smaller competitive advantage, although shoppers still turn there for strong customer service. That’s one of the key findings of Salesforce’s Shopper First Retailing report, released today.

Despite purchase power shifting to digital channels, the store continues to be an indispensable part of the customer journey, Salesforce found.

Forty-six percent of shoppers prefer to make a purchase in a physical store, compared to 35% for laptops and 18% from smartphones. This preference toward purchasing in stores is true across all age groups, even young shoppers, with 58% of Gen Z shoppers (those aged 18-24) preferring the physical store shopping experience.

However, marketplaces and brands are placing increased pressure on retail stores, the study showed.

When consumers were asked, “You’re making a purchase through a brand, retailer, or marketplace. If the price is the same everywhere, why do you choose each channel?” Consumers chose the brand itself and marketplaces over retailers, only selecting retailers as their preferred option for customer service. Marketplaces and brands beat retailers in every other consumer preference category: product quality, product innovation, product uniqueness, price, product variety, product availability and inspiration.

“Retailers are being squeezed—by marketplaces on one side and innovative brands on the other. Competing on service is a mandate,” stressed Rick Kenney, head of consumer insights, Salesforce

Other key findings from the report include:

Shoppers care about stores being updated and refreshed with new products:

  • 69% of shoppers expect to see new merchandise when visiting a site or store

Retailers need to create unique, non-commoditised products and compete at the speed of today’s shopper

Be where the shopper is:

  • 87% of shoppers begin their hunt in digital channels – up from 71% last year
  • 60% of shoppers now start their shopping journey on mobile
  • 71% of shoppers also use their mobile in-store to make purchases and review products

Develop a frictionless experience that’s accessible to shoppers, where they need you to be

Have meaning and value with personal connections:

  • 64% of shoppers agree or strongly agree that retailers don’t truly know them
  • 38% of all digital revenue is influenced by personalisation

Retailers must strengthen the relationship with their customers through stronger values-driven connections, and recognise shoppers with personalisation and loyalty initiatives

Download the Shopper First Retail report here