3rd Annual Shopper Experience Study: Enabling Retail without Boundaries
RIS News/Cognizant June 1, 2012
Retail Goes Personal: How to Create the Stores Shoppers Want
Our 2012 Shopper Experience study offers new insights into customers and how retailers can reshape their strategies to provide personalized in-store experiences that will keep shoppers coming back.
The truth is shoppers like to shop in stores. Despite the growth of e-commerce, shoppers still need and often enjoy the in-store experience. But they want shopping experiences to be attentive and efficient. To meet that challenge, retailers need to reshape their approach to selling and to traditional store concepts.
"Showrooming" is the number-one risk facing retailers today, and the third annual RIS/Cognizant Shopper Experience study reveals consumers' suggestion for how stores can avoid it: Shoppers overwhelmingly desire personalized in-store experiences. By capitalizing on shoppers' interests, retailers gain the opportunity to close sales that might otherwise go to online sites.
Shoppers' prescriptions for retail change percolate throughout the results of the April 2012 study. We surveyed 2,100 shoppers from North America and 1,750 in the United Kingdom, Australia, China and Hong Kong. We focused on gaining insights into their likes, dislikes and preferences based on gender, age, income and type of shopping.
The survey underscores that one retail execution strategy does not fit all customers. Shoppers' technology preferences and their criteria for positive store experiences vary dramatically by gender, age, income and product type. More than ever, retailers must carefully define their target customers before investing their technology dollars.
Where we see unanimity, however, is in shoppers' assertiveness. Armed with unprecedented amounts of information and the tools to access data at any moment, shoppers are poised to buy – and they want retailers to be ready for them. They expect retailers to get it right on store fundamentals -- product assortment, product information, price, efficiency, and service –- and they are annoyed when they do not. The basics are especially important to older shoppers.
To shoppers, stores sell products and answers. In response, retailers need to begin viewing themselves as providers of solutions, not just products. This expansion will result in a more complex business model potentially encompassing services, third-party partnerships, and other elements not part of traditional retailing. But the evolution is critical for stores to remain relevant to shoppers, and it's an endeavor that they must undertake.
The 2012 survey findings reinforce the fact that shoppers continue to make the majority of purchases in retail stores. Online shopping ranks a distant second. Even further behind, although close to each other in volume, are call centers, mobile, tablets, and kiosks.
Stores still reign, but it's never been more critical for retailers to recognize that integrating digital opportunities into the shopping experience is important to all shoppers, and especially to the coveted young and affluent segments.
Here are five key takeaways that retailers can use to refine their strategies and create thriving retail stores that generate profitable bottom lines.
Five Key Takeaways from the Survey
1. It's all about price: Competitive pricing and promotions still hold the greatest sway with shoppers, exerting the most influence on purchase decisions across all demographic segments, including the wealthiest. Shoppers' sharp eye on price makes showrooming the number-one risk facing retailers today, and it demands a solution for transparent and consistent pricing and promotions across channels as well as a more informed and empowered workforce.
But price isn't the only factor for shoppers, and the other influences they report point to important opportunities for retailers. Not surprisingly, the Internet's influence on purchasing decisions is on the rise while TV's is declining. But both lag behind in-store signage and product packaging when it comes to influencing shoppers. Social media's power continues to grow but is not predominant.
2. Exceptional in-store execution is the cost of entry to shoppers' wallets: Four out of five purchases are still made in bricks-and-mortar stores. To keep shoppers coming back, retailers need to put a fresh spin on the in-store experience, recasting stores as places for discovery and interaction with products, where associates can assist in the decision-making process and shoppers enjoy instant gratification.
Each year since 2010, our shopper study has underscored consumers' expectations that stores master the basics of retail execution: robust product assortments; effectively merchandised stores; clear information about products, prices and promotions; knowledgeable associates willing to provide assistance; and efficient checkout.
What's more, shoppers anticipate similar proficiency in retail fundamentals from online stores. Shoppers identify the top four influences on cyber-shopping as return handling, competitive price and promotions, product selection, and fast checkout.
Sales associates continue to play a pivotal role. When unable to find what they want in stores, most shoppers say they are inclined to first ask store associates for help. That desire to connect with associates is good news for retailers because it presents a touch point for deepening customer relationships.
The second most prominent response, however, is to buy the product elsewhere. This situation presents a large risk of lost sales that could be partially mitigated through better integration of online and in-store experiences. Men, younger shoppers, and high-income shoppers are among the small but growing percentage of customers who report turning to their mobile devices the most often when unable to locate goods.
3. Ease and efficiency are keys to making shoppers happy during checkout: Unlike their Internet counterparts who often appreciate subtle, suggestive selling as they near checkout, store shoppers want to proceed through checkout quickly and smoothly. No fuss, and especially no cross-selling. They prefer attentive associates who are focused on the task at hand and do not attempt to gather information or sell additional products. 4. To differentiate, reach beyond the basics: Today's shoppers have high expectations. Specialized store treatment based on loyalty status is the top request in our survey. Interestingly, personalized experiences carry more weight with in-store shoppers than with their online counterparts.
Shoppers want personalized, attentive in-store experiences, and the more affluent and younger shoppers expect retailers to seamlessly integrate personalization across channels. Because few retailers offer this tier of service, this finding points to a huge opportunity for fast movers. Shoppers want tailored experiences with boundaries, however. They are resistant to divulging information they deem to be personal in exchange for more personalized experiences. Instead, they prefer retailers use more neutral sources such as their own loyalty programs.
5. Shoppers' expectations vary when it comes to specialty vs. consumable products: Increased options and focus on experience is more important to shoppers of specialty products than to those buying consumables. Consumers are more inclined to do research and comparison-shop for specialty products. Inconsistent experiences across channels irritate them, and stores that won't match competitors' prices are especially bothersome to younger and more affluent customers. On the other hand, the greatest influence on purchases of consumables? Printed materials, information on product packaging, shelf signs and interactive product displays.