Ecommerce Analytics by Phillips Judah

Author:Phillips, Judah
Language: eng
Format: epub
Publisher: Pearson Education Limited (US titles)
Published: 2016-03-03T16:00:00+00:00

Determining Share of Wallet

A share-of-wallet analysis is used to estimate what percentage of a customer’s money is being spent on your ecommerce site compared to those of your competitors. It can be a helpful analysis for ecommerce sites that are highly competitive or that offer a selection of products that complement each other. For example, if a customer is buying a table, you may also want to sell him chairs, a tablecloth, plates, and so on. Another way to think of it is that a customer may spend $1,000 a year on clothes. He spends this across three ecommerce sites, but only $100 on your site. That means you have 10% share of wallet, and an opportunity to earn that other 90% of $900, correct? Sort of. Unfortunately, R. Y. Du (University of Georgia), W. A. Kamakura (Duke University), and C. F. Mela (Duke University) have shown that “there is no correlation between the volume of sales a customer has with your company, and the volume of sales they have with your competitors.”

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