2012 shopper experience study presentation for post


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  • For the last three years Cognizant and RIS have partnered to conduct an annual shopper experience study. After hearing the CIO of the year nominations last night many of you are either channeling your shoppers or you have see previous years’ studies. We think you’ll be please with how we have evolved this years’ study. For those of you who are seeing the study for the first time, I think you’ll find some nuggets that you’ll discover a resource that you’ll refer back to many times and from which you’ll glean some useful nuggets. While many studies focus on retailers and what’s important to them, few channel the voice of the customer. Through the 2012 Shopper Experience study, you’ll get insight into what are your customers and potential customers like and dislikes and how are they responding to all the buzz around multichannel. This year we surveyed shoppers from around the world including the U.S. and Canada, U.K., Australia, China and Hong Kong. We selected respondents to reflect the typical mix of shopper.
  • It’s not news to anyone that there are a million and one things that drive and motivate a shopper to buy. Are they doing their weekly grocery shopping from a list or are they buying a new outfit for a party? Shoppers preferences vary not only by what they are shopping for but also based on their world view. Men and women have different shopping preferences as do shoppers by age group, income group and geography. But there are some similarities across shopper segments that retailers can use to devise their shopper experiences to appeal to the shopper segments they serve.
  • Because every consumer wants something different and every retailer has a unique value proposition how to become a retailer without boundaries varies. However, it’s universally true that the borders between bricks-and-mortar, digital, and mobile retailing are no longer relevant – in fact, they are counterproductive. Retail without boundaries is the next evolution of multichannel and omnichannel. It’s about being entirely channel agnostic because in the end, the channel doesn’t matter. The shopper does.
  • The industry at large has been talking about eCommerce, Multichannel, omnichannel, mobile, social media, and so on. We are hyper focused on the evolving digital experiences. Although eCommerce continues to grow at a faster pace than stores and digital experiences are infiltrating physical shopping experiences, shoppers stilllike to shop in stores. Yet, “Showrooming” is the number one risk facing retailers today. Although few retail brands are probably materially effected today by shoppers browsing at their stores and then purchasing online through a smart phone, tablet or PC, the threat is real and growing. Every single customer that walks out a retailers’ door and buys on Amazon is a loss and needs to be taken seriously. The threat ofshowroomingis illustrated by the fact that finding competitive prices and promotions and the right product selection are the top two factors influencing in-store purchases today. If the shopper doesn’t find what she wants at the right price when she wants it, she has a million options at her fingertips—no longer will she settle for good enough. The key to winning with shoppers today is to enable “Retail without Boundaries”.
  • We asked the question: “How much do you dislike each of the following when shopping in a store for products?” <Q3>As you can see from the close alignment from the red and blue bars, there is high alignment in this intolerance between Specialty and Consumables – any differences are fairly small and easily explainableThere is a high degree of predictability in this intolerance from year to year and even survey to survey: out of stocks, lack of signage, and difficulty in finding the product remain Shoppers’ biggest gripesSome additional facts: Women are much more sensitive to in-store issues than are menOrder online/pickup in store still not as important as other factors, but gaining in importance from 2011 to 2012 – particularly for younger shoppersPersonal access to associates is particularly important to older shoppers
  • That intolerance for inconsistency extends to your online environment.We asked the question “How much do you dislike each of the following experiences when shopping online?” <Q15>Leading gripes align with in-store frustrations: a lack of signage to the shopper “The product information you need is not available”“Purchase price not communicated clearly or early enough”We noted that multi-channel integration capabilities are weighted unequallyChannel price variations are seen as highly frustratingLack of buy online/return to store also seen as highly frustratingLack of buy online/pickup in stores fares slightly better, but has been increasing over timeSome additional facts:There were actually relatively small differences by gender, generational, and income levels – most shoppers feel the same frustrations
  • No matter who you are, price matters. Every demographic segment wants value. Shoppers may spell value differently, but they want the best product, at the right price and with a juicy promotion if they can get it. It’s about declaring victory. Being in the right location used to be terrific insulation against the competition. If a customer walked into your store, chances were pretty good that if she had the intent to buy, she would do so. Showrooming is changing the game on the quest for value—the boundaries are moving and customers are in control now more than ever. The fact that customers can stand in your stores and touch, feel, smell, and taste your products and then go and buy it elsewhere is will drive retailers to the lowest price—which is what shoppers want. Beyond price though, shoppers want the right product, exceptional customer service and differentiated experiences.
  • The role of store associates range from cashier to trusted advisor depending upon the store and the shopper. Today’s shopper is complex…some want efficient no frills service, others want to serve themselves, and still others are seeking top notch high-touch service. Unfortunately, shoppers have been disappointed in the quality of service they receive so often that associates have become the least preferred resource to help shoppers with purchase decisions. If a shopper can’t find what they’re looking for about half the time they’ll ask an associate, but the other half of the time the sale is simply lost—a full 25% go to your competitor. If something goes wrong many shoppers will never let you know. This is particularly a risk for shoppers age 18-33. The good news is that if a customer has an issue and decides to report it, they will most likely approach an associate. On the other hand, a growing number will look to commiserate with their friends on Facebook or another social networking site.Store associates need to be equipped to handle a wide assortment of customer service needs in an environment where shoppers are armed with state-of-the-art consumer technology, some of which is supplied by the competition. You can see more details about how important store associates are to your brand and shoppers perceptions on the “Store Associates Are A Retailer’s Brand Ambassador…For Better or Worse” poster.
  • While mobile and tablets are still emerging, men appear to be adopting them faster than women; however, women tend to rely more on social media.
  • As human beings we all crave recognition—we want to feel special and appreciated. Retailers’ ability to recognize shoppers online and through marketing campaigns and provide them with personalized experiences has improved dramatically in recent years. Shoppers generally like getting product recommendations, receiving coupons that target their specific interests, and having their information saved for easy check-out. Yet, in-store shopping experiences remain largely impersonal. Shoppers want more...They ranked “Personalized in-store experiences” as the most desired feature.But, they’re guarded with the information they are willing to share. Shoppers’ willingness to share information they deem personal received some of the lowest marks across our entire survey. Shopper are willing, however, to share identifying information that retailers can use to earn the trust of their shoppers by collecting reasonable information and using it well. The cool vs. creepy equation is a balance that needs to be struck between providing value and earning trust.
  • With the rapid pace of change in the retail space, primarily driven by shopper demands and ever-changing consumer technologies, it has become essential for retailers to move quickly and experiment with new experiences. Where a retailer might historically have demanded a fully rationalized business case before deploying resources, today they are struggling just to keep up. So much so, that the lines are blurring between investing simply to keep up with the competition versus intentionally investing based on the unique needs of shoppers. While quickly seizing the opportunities at hand is essential, every retailer is different and the right places to experiment are dictated by the shopper segments being served. For example, different shopper segments gravitate to different sources for research based on the intent of their shopping trip. While shopping for consumables shoppers generally look to traditional resources like product packaging and store signs. When they’re shopping for specialty products, they gravitate to the Internet. Although digital resources emerge as a preference, the least used resources are retailers mobile and tablet apps. I would argue that’s because, by and large, retailers have not built app experiences that are customized to their shopper…they’re keeping up with the Jones. Social media is all the rage with loads of positive and negative press. Are shoppers using social media to make purchases? No, not really. Do they expect their favorite retailer to engage with them on social media? Absolutely! But not for selling. They want promotions and fun, interactive experiences. Are their purchase decisions being influences by social media? Not at the same level as other influencers, but the influence is growing, and if APAC is an indicator of where North America is going, it will become one of the most important influencers of purchase decisions. It begs the question, how should your brand be manifested on social media?An area that requires significant investment but lacks the sizzle of some of the other shopper experience solutions is product information and digital asset management. It’s a cross functional, tricky problem to solve, but poor quality information is the leading dissatisfierfor online shoppers. Yet, if retailers can cleanse their online data and extend it for use in stores, they’ll be two steps ahead. This is one where you might not know what the Jones’ are doing, but if they’re investing and you’re not, there will be ripple effects.
  • 2012 shopper experience study presentation for post

    1. 1. 2012 Shopper Study Overview Retail Without Boundaries©2012, Cognizant
    2. 2. Study Summary| ©2012, Cognizant
    3. 3. Our third annual, 2012 Shopper Experience Studyrespondents reflect the typical mix of retail shoppers 4,000 Shoppers Around the World Respondent Geography Respondent Income Group US Low Income Canada UK Middle Australia Income Hong Kong High Income China Respondent Age Group Respondent Gender 18-33 34-45 Male 46-64 Female 65 and over On-line survey conducted April 12 – April 22, 2012 | ©2012, Cognizant
    4. 4. Retailers must devise their shopper experiencestrategies based on the shoppers they serve ONE size does NOT fit all | ©2012, Cognizant3
    5. 5. Retail without Boundaries is about knockingdown the walls. | ©2012, Cognizant
    6. 6. Shoppers love to shop anytime, anywhere andthrough any channel, but especially at stores 4 out of 5puchases occur in stores andthe most influential factors are: #1 Price #2 Product “Showrooming” (browsing in a store and then purchasing online through a smart phone, tablet or PC) is the number one risk facing retailers today. The key to winning with shoppers today is to enable “Retail without Boundaries”. | ©2012, Cognizant5
    7. 7. Shoppers have high expectations for in-storeexecution “How much do you dislike each of the following when shopping in a store for products?” Some of the highest scores across the study are related to how much customers dislike when stores fall short on execution. | ©2012, Cognizant
    8. 8. Sales in digital channels are growing— variedby category—and influencing in-store sales. “What percentage of your annual purchases for each of the following types of goods do you make through the following channels?” Although the lion share of sales still take place in stores, retailers must create digital experiences that both support in-store purchases as well as digital commerce. | ©2012, Cognizant
    9. 9. Higher income shoppers are most inclined touse digital channels % of Purchases by Channel % of Purchases by Channel Split by Type of100% Product for High Income Shoppers80% 70% 60%60% 50% 40%40% 30%20% 20% 10% 0% 0% Lower Income Middle Income Higher Income In-Store Online Mobile Other In-Store Online Mobile Other The highest income shoppers They are most likely to use are more likely to use digital digital channels for the channels purchase of specialty products | ©2012, Cognizant 8
    10. 10. The basics for creating digital experiences thatshoppers want are similar to stores “How much do you dislike each of the following experiences when shopping online?” Cannont return the product to a store 3.8 Payment method you like is not available 3.6 Too many steps or too much information is required to 3.7 check out The shipping options you prefer are not available 3.3 No order online and pick-up in store 3.1 Online price or promotions/discounts are different from 3.8 whats available in-store Purchase price not communicated clearly or early enough 4.0 Ability to compare different products is not available 3.4 The product information you need is not available 4.0 You cant find the product you want using the websites 3.9 search engine navigation 1 2 3 4 5 Shoppers increasingly expect online and in-store experiences to be consistent. | ©2012, Cognizant
    11. 11. Key Shopper Study Themes10 | ©2012, Cognizant
    12. 12. There are four themes essential to becoming aretailer without boundaries Showrooming can be a retailer’s “frenemy” Store Are you associates are keeping up Retail a retailer’s with the Jones or Without brand Boundaries ambassador… investing in for better or the future? worse How personal can you get without being creepy? | ©2012, Cognizant11
    13. 13. Show-With the right shopper strategy roomingshowrooming can become your Jones’? Retail without Boundari Associat es“frenemy” es Personal ization Differentiated Experiences Customer Service Product, Price, Pro motion Location12 | ©2012, Cognizant
    14. 14. Factors that influence purchase decisions areconsistent across segments and channels The top five influencers Rank Order of in-store purchase Competitive price, promos, etc. 1 decisions are Right product selection 2 unanimously agreed Customer Service (quality/access) 3 Fast, easy check-out 4 upon by all shopper Compelling loyalty program 5 segments: Online shoppers value the same retail fundamentals. However, they rank return processing higher (#3) and compelling loyalty programs lower (#8). | ©2012, Cognizant13
    15. 15. How purchase decisions are being influencedis changing and varies based on product type “In a typical month, how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)?” TV is continuing to lose ground Significant differences between specialty and consumables for traditional resources Specialty product Mobile and tablet purchases are are still nascent more influenced by digital experiences | ©2012, Cognizant
    16. 16. The best way to stop showrooming is to giveshoppers what they want. The two essential elements to combat the risk of showrooming is to match prices and provide exceptional customer service. 29% 35% Of shoppers want store Of shoppers want store associates to associates to match prices have better customer service skills Equipping store associates with mobile technologies is the second line of defense. 14% Of shoppers want store 10% Of shoppers want store associates to associates to be more have real-time access to product available in the aisles information, inventory and ordering | ©2012, Cognizant15
    17. 17. Experimenting with new shopper experienceswill endear shoppers and differentiate retailers “For the product category(s) shown below, how important it is for you that your favorite stores work with the following types of partners to provide you with better experiences, more products, or more specials/promotions?” 2.1 Product Comparison Smartphone App 2.5 2.0 Geo Location 2.3 2.7 Member Discount Female 2.8 Male 2.5 Group Buying / Deals 2.7 2.2 Social Networking/Media 2.3 1 2 3 4 5 Surprisingly, men are more interested in some of the newer mobile and social retail experiences. Shoppers are most interested in member discounts (e.g. Beyond the Rack and Ideeli) closely followed by group buying sites (e.g. Groupon and Living Social). These trends are consistent with 2011. | ©2012, Cognizant16
    18. 18. Store associates are a retailer’s Show- roomingbrand ambassador… Jones’? Retail without Boundari Associat esfor better or worse es Personal ization Help with purchase decisions Help find product “Go to” person for issues17 | ©2012, Cognizant
    19. 19. Shoppers rely predominantly on traditional resourcesto help with purchase decisions, excluding storeassociates Resources Used to Help with Purchase Decisions Digital Resources Store Associates Store Signs Product Packaging Word-of-Mouth Traditional Advertising Store associates is the only traditional 11% resource that 19% ranks very low 10% across all segments as a 13% preferred resource 22% to help with 25% purchase decisions. Age 65 and Age 18-33 Age 34-45 Age 46-64 13 9% 7% over % 9% 9% 5% 18 19 22 8% % 10 % % 16 % 12 20% 18 23 9% 23 % % 7% 27% 25 % 28 % 30 % % % % 33% | ©2012, Cognizant18
    20. 20. When shoppers can’t find what they want,most likely they’ll look elsewhere At first glance, it’s affirming that nearly 50% of shoppers ask for help when they can’t What do you do when you find what they’re looking for…on the cant find what you want? other hand more than 25% buy the product elsewhere--13% of 18- 33 year olds use their Leave the store and mobile phones to do so. look for the same product elsewhere 9% Leave the store and Ask an associate to help look for the same product during a you locate the right item future visit 20% Ask an associate to 65 and over 49% help you locate the right item 46-64 6% Purchase an alternative item 5% available in that store 34-45 11% Use your mobile 18-33 phone to identify the product elsewhere 0% 20% 40% 60% 80% | ©2012, Cognizant19
    21. 21. When shoppers have a problem, retailersmight never know about it. “When you have a problem while shopping in a store (e.g. product availability, poor customer service, out of stocks, etc.) indicate whether you are unlikely to report it.” 65 and over 11% 46-64 10% Younger shoppers are unlikely to report store issues 34-45 13% 18-33 21% 0% 5% 10% 15% 20% 25% | ©2012, Cognizant20
    22. 22. When shoppers do seek help, nothing beats alive person. In-store associates are “When you need assistance while shopping, how likely are you to the most likely use the following customer service options?” resource for shoppers to seek when they need help. Younger Call customer service shoppers especially are # increasingly gravitating 4.00 toward digital channels 3.50 (e.g. social media, mobile text and 3.00 Go to in-store Social media page chat) for help 2.50 customer service desk 2.00 1.50 1.00 18-33 0.50 34-45 - 46-64Mobile text message Online chat 65 and over Mobile chat Video chat | ©2012, Cognizant21
    23. 23. Show- roomingHow personal can you get Retail withoutwithout being creepy? Associat Jones’? Boundari es es Personal ization #1 Personalized Resistant to in-store - Versus - sharing personal experiences information22 | ©2012, Cognizant
    24. 24. Personalization is a proven tactic to increaseshopper engagement. Personalized in-store experiences (e.g. promotions, #1 offers, preferences customized based on past purchases or status etc.) was ranked the most desired feature by shoppers in North America | ©2012, Cognizant23
    25. 25. Above all, shoppers want to be recognized anduniquely appreciated while in stores. “When shopping for specialty products, how much would each of the following techniques to personalize your shopping experience influence your shopping choices, if available?” - 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 Special treatment in the store based on loyalty 3.44 Offers delivered in a store that are personalized 3.17 Acknowledgement of status as a highly valued customer 3.15 while in the store Website recommendations based on other products you 2.91 searched for E-mails with personalized messages 2.88 Website recommendations based on products others have 2.76 searched for Personal greeting in the store 2.72 Offers delivered via a mobile phone that are personalized 2.26 The top three personalization techniques that will influence shoppers’ choices are about enhancing the in-store experience. | ©2012, Cognizant24
    26. 26. Shoppers are skeptical about sharinginformation “How willing are you to share the following information with stores in order to have a more personalized shopping experience?” 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 Information tracked by loyalty number 2.89 Name, address, e-mail for website account 2.69 E-mail collected at point of sale 2.60 Phone number collected at point of sale 2.26 Have cookies placed on your computer to allow Shoppers are 1.86 especially resistant tracking to sharing Locations you are at tracked using geo location information when 1.83 service on your phone it is tied to their personal property Information tracked by credit card number 1.82 Although shoppers want personal experiences, they have boundaries around how much information they’re willing to share in exchange for those experiences. Highest income shoppers are most willing to share information where as older shoppers are least likely. | ©2012, Cognizant25
    27. 27. Show- roomingAre you keeping up with the Jonesor investing in the future? Retail Jones’? without Associat Boundari es es Personal Retailer mobile and ization In APAC social tablet apps are the media is a leading least favored influencer of resources purchase decisions Everyone LOVES Facebook Digital assets as an enterprise resource is the next frontier26 | ©2012, Cognizant
    28. 28. Shoppers go to digital resources first whenshopping for specialty products. Rank order of resources used to make purchase decisions for specialty products Retailers’ investments in 1st mobile phone and tablet Other Internet searches and websites Store’s website 2nd apps aren’t paying Print materials 3rd Information provided on product packaging 4th off…yet. Television 5th Shelf signs or interactive product displays 6th Friends and family 7th Store associates 8th Social media 9th Store’s website Store’s mobile smartphone app 10th 3.0 Store’s tablet 11th 2.5 2.0 1.5 1.0 Other Internet 0.5 Store’s mobile Consumables searches and - smartphone websites app Specialty Retailer mobile and Store’s tablet tablet apps are the least favored resources | ©2012, Cognizant27
    29. 29. Many digital trends are moving east to west--APAC has become an indicator of where to invest 5 4.5 4 3.5 Although North American 3 Shopper’s social influence lags 2.5 2 China APAC, there’s every evidence that 1.5 1 Hong Kong the influence of social will only 0.5 0 grow in North America. North America Comments Other Australia about the customers’ product on online ratings U.K. social media and reviews sites (e.g. Facebook) 54.5 43.5 3 China2.5 Mobile payment ranks dead last by Hong Kong a large margin for shoppers in 21.5 North America North America, yet shoppers in 1 APAC are ready. Australia0.5 0 U.K. Pay Pal and Bill Digital Wallet Me Later via a Personal Mobile Device | ©2012, Cognizant 28
    30. 30. Leveraging digital assets in stores is the nextfrontier Although cross channel integration and interactive experiences are not yet demanded by shoppers, customers will respond to them—especially those who are ages 18-45. 3.6 3.5 3.4 3.3 3.2 3.1 3 2.9 All Shoppers 2.8 2.7 Shoppers Age 18-34 Interactive Consistent experiences (e.g. experiences and digital kiosks or information on signs, interactive websites, on mobile product displays) devices and in the store Unclear Information 1 Cannot Find Product 2 Poor quality information is the leading dissatisfier for Undesirabel Policies 3 online shoppers. If retailers can cleanse their online Difficult to Purchase 4 data and extend it for use in stores, they’ll be two Lack Cross Channel Integration 5 steps ahead Lack advanced Web Features 6 | ©2012, Cognizant29
    31. 31. Shoppers expect retailers to extend their brandsthrough social media, especially FacebookIt is important for shoppers’ favorite stores to have a presence on socialnetworking sites to provide better experiences, more products, andspecials/promotions Other 2.9 3.0 Facebook is the only MySpace 2.8 technology driven 2.8 3.4 retail experience Blogs 3.4 where shoppers age Specialty Pinterest 3.1 65 and over 3.1 Consumables expressed a strong Twitter 3.2 interest 3.2 Facebook 4.1 4.2 1 2 3 4 5 Shoppers want to engage with their favorite brands via social media, not shop on social site. Rank Order Exclusive promotions/sales 1 New products sneak peak 2 Feedback on products 3 Customer Service 4 Fun, interactive experiences 5 Social responsibility 6 Make a purchase 7 | ©2012, Cognizant30
    32. 32. Thank You Please contact Rachel Cosby at rachel.cosby@cognizant.com to request a customized briefing of the Shopper Study results or a copy of the detailed global shopper research results.31 | ©2012, Cognizant
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