2012 shopper study


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2012 shopper study

  1. 1. T h i r d A n n u a l Inside 2012 SHOPPER 6 Research: Sharpen the Message 9 Shop: Align Bricks & Clicks EXPERIENCE STUDY A S u p p l e m e n t t o R I S N E W S Ma g a z i n e 14 Transact: Make It Easy 17 Post-Sale: Build Shopper Profiles Enabling Retail Without BOUNDARIES ® x x C O G N I Z A N T S H O P P E R E Xperience S T U D Y JUNE 2012Cog_ShopperStudy_0612.indd 1 5/23/12 12:40 PM
  2. 2. T h i r d A n n u a l 2012 SHOPPER EXPERIENCE STUDY www.risnews.com EDITor’s NOTE Group Editor-in-Chief Joe Skorupa jskorupa@edgellmail.com Executive Editor Adam Blair ablair@edgellmail.com Associate Editor Winning an Unfair Game Nicole Giannopoulos ngiannopoulos@edgellmail.com Chief Analyst Steven Skinner, Cognizant steven.skinner@cognizant.com PUBLISHER The term “Moneyball” quickly became a buzzword after the David Weinand 904.374.8590 dweinand@edgellmail.com book and subsequent movie became huge successes. The term SALES stands for using the power of analytics to improve outcomes, even Associate Publisher Catherine J. Marder in something as unpredictable as baseball. 603.672.2796 cmarder@edgellmail.com But the subtitle of the book, although lesser known, is equally Account Executive Ashley Oswald compelling: “The art of winning an unfair game.” Winning, of 904.372.4017 aoswald@edgellmail.com course, is on every retailer’s mind and all too often it feels unfair Account Executive Lisa Wallace because the pace of change is so fast and competition so fierce. 904.217.3489 lwallace@edgellmail.com The only way to win in retail is to align strategy with (or stay ahead of) the pace of Assistant to the Publisher Jen Johnson jjohnson@edgellmail.com change, and the only way to do this is to make targeted investment decisions using market-based analytics, especially research that comes directly from shoppers. Online VP of Online Media And this is exactly what is featured in the third Robert Keenan rkeenan@edgellmail.com annual RIS/Cognizant Shopper Experience Study. Web Development Manager Scott Ernst sernst@edgellmail.com Chief analyst for the study is Steven Skinner, vice True, sustainable president of Cognizant’s retail, hospitality and Director of Lead Generation Jason Ward jward@edgellmail.com consumer goods practice, and he has involved a success comes from top-notch team of analysts (including the editors Online Event Producer Karen Carvelli 973.644.4009 kcarvelli@edgellmail.com executing smart of RIS) to identify key takeaways from 2,122 shoppers in the U.S. and Canada. strategies based on A large portion of the research appears in MARKETING/EVENTS/CIrculation Director, Event Planning Pat Benkner pbenkner@edgellmail.com analytical findings the following pages, but not all. The full scope Director, Event Content of the research not only includes many more John Hall jhall@edgellmail.com and insights, charts and breakouts, but also includes in-depth Circulation Manager Jeffrey Zabe jzabe@edgellmail.com especially those analysis of such global markets as China, Hong ART/production Kong, Australia and the United Kingdom. that come directly The best way to use this study is to combine Creative Director Colette Magliaro cmagliaro@edgellmail.com from shoppers. insights with other RIS reports and close the gap Art Director Lauren Cloos lcloos@edgellmail.com that exists between bottom-up (consumer based) Senior Production Manager Pat Wisser pwisser@edgellmail.com and top-down (technology focused) research. If Subscriptions 978.671.0449 you want to find out more details about the North Reprints: edgellreprints@parsintl.com 212.221.9595 American market, which is reported here, or about other global markets that are CORPORATE not reported, either contact me at jskorupa@edgellmail.com, or visit the Cognizant CEO/Chairman website at www.cognizant.com. Gabriele A. Edgell gedgell@edgellmail.com True, sustainable success comes from executing smart, data-driven decisions President Gerald. C. Ryerson gryerson@edgellmail.com in both baseball and retail. “Moneyball” calls this an art, but smart retailers know Vice President it is a science. John Chiego jchiego@edgellmail.com CORPORATE Office Edgell Communications 4 Middlebury Blvd, Randolph, NJ 07869 973.607.1300 FAX: 973.607.1395 Member TECHNOLOGY GROUP Joe Skorupa Printed in the USA Group Editor-in-Chief Member w w w.e d g e llco mmu n icat io n s .co m 2 R I S / C O G N I Z A N T S H O P P E R E X P erience S T U D Y JUNE 2012Cog_ShopperStudy_0612.indd 2 5/23/12 12:40 PM
  3. 3. T h i r d A n n u a l 2012 SHOPPER EXPERIENCE STUDY METHODOLOGY Study Methodology: Who Responded T FIGURE 1 his year’s shopper preference study surveyed 2,122 shoppers Gender in the U.S. and Canada via an online survey conducted in April 2012. Following the precedent 30% established in the two previous Male surveys, the respondent pool is designed 70% to be a close match to a shopper Female profile that most closely resembles the customers of the average retailer, in terms of gender, age and household income before taxes. For gender breakdown, the respondent pool was 70% female and 30% male, FIGURE 2 a deliberate overweighting that makes sense for most retailers. The bias toward Age Group female shoppers is reflective of numerous industry studies showing that 70% of 20% buying decisions are either made by 65+ 30% females or are influenced by them. (See (Emerging Elders) 18-33 (Gen Y) Figure 1.) The age category breakdown is 29% 20% intended to represent the average shopper 46-64 profile in the overall marketplace today. (Baby Boomers) 34-45 ( Gen X) The age group breakdown is as follows: Gen Y (ages 18-33), 30%; Gen X (ages 34- 45), 20%; Baby Boomers (46-64), 29%; Emerging Elders (65 or older), 20%. FIGURE 3 A similar effort was made to ensure that Income the respondent pool’s income categories 7% mirrored that of the shopping public. The N/A breakdown for annual household income 15% before taxes was as follows: 5% Under $25,000 l Under $25,000: 15% Over $150,000 l $25,000 to $74,000: 50% l $75,000 to $149,000: 23% 23% l More than $150,000: 5% $75,000 - $149,000 The remaining 7% of respondents 50% $25,000 - $74,000 preferred not to provide their household income data. n JUNE 2012 R I S / C O G N I Z A N T S H O P P E R E X P erience S T U D Y 3Cog_ShopperStudy_0612.indd 3 5/23/12 12:40 PM
  4. 4. T h i r d A n n u a l 2012 SHOPPER EXPERIENCE STUDY EXECUTIVE SUMMARY Retail Gets Personal: How to Create the Stores Shoppers Want The 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. To shoppers, stores sell products and answers. In response, Despite the growth of e-commerce, shoppers still need and often retailers need to begin viewing themselves as providers of enjoy the in-store experience. But they want shopping experiences to solutions, not just products. This expansion will result in a more be attentive and efficient. To meet that challenge, retailers need to complex business model, potentially encompassing services, reshape their approach to selling and to traditional store concepts. third-party partnerships, and other elements not part of traditional “Showrooming” is the number-one risk facing retailers today, retailing. But the evolution is critical for stores to remain relevant and the third annual RIS/Cognizant Shopper Experience study to shoppers, and it’s an endeavor that they must undertake. reveals consumers’ suggestions for how stores can avoid it: The 2012 survey findings reinforce the fact that shoppers shoppers overwhelmingly desire personalized in-store experiences. continue to make the majority of purchases in retail stores. Online By capitalizing on shoppers’ interests, retailers gain the opportunity shopping ranks a distant second. Even further behind, although to close sales that might otherwise go to online sites. close to each other in volume, are call centers, mobile, tablets, Shoppers’ prescriptions for retail change percolate throughout and kiosks. the results of the April 2012 study. We surveyed 2,100 shoppers Stores still reign, but it’s never been more critical for retailers to from North America and 1,750 in the United Kingdom, Australia, recognize that integrating digital opportunities into the shopping China and Hong Kong. We focused on gaining insights into their experience is important to all shoppers, and especially to the likes, dislikes and preferences based on gender, age, income and coveted young and affluent segments. type of shopping. Here are five key takeaways that retailers can use to refine The survey underscores that one retail execution strategy their strategies and create thriving retail stores that generate does not fit all customers. Shoppers’ technology preferences and profitable bottom lines. their criteria for positive store experiences vary dramatically by 1 gender, age, income and product type. More than ever, retailers It’s all about price: Competitive pricing and promotions must carefully define their target customers before investing their still hold the greatest sway with shoppers, exerting the most technology dollars. influence on purchase decisions across all demographic Where we see unanimity, however, is in shoppers’ assertiveness. segments, including the wealthiest. Shoppers’ sharp eye on price Armed with unprecedented amounts of information and the tools makes showrooming the number-one risk facing retailers today, to access data at any moment, shoppers are poised to buy – and and it demands a solution for transparent and consistent pricing they want retailers to be ready for them. They expect retailers to and promotions across channels as well as a more informed and get it right on store fundamentals – product assortment, product empowered workforce. information, price, efficiency, and service – and they are annoyed But price isn’t the only factor for shoppers, and the other when they do not. The basics are especially important to older influences they report point to important opportunities for shoppers. retailers. Not surprisingly, the Internet’s influence on purchasing 4 R I S / C O G N I Z A N T S H O P P E R E X P erienc E S T U D Y JUNE 2012Cog_ShopperStudy_0612.indd 4 5/23/12 12:40 PM
  5. 5. By Steven Skinner decisions is on the rise while TV’s is declining. But both lag customers who report turning to their mobile devices most often behind in-store signage and product packaging when it comes to when unable to locate goods. influencing shoppers. Social media’s power continues to grow but 3 is not predominant. Ease and efficiency are keys to making shoppers happy during checkout: Unlike their Internet counterparts, who often appreciate subtle, suggestive selling as they Shoppers want personalized, near checkout, store shoppers want to proceed through checkout attentive in-store quickly and smoothly. No fuss, and especially no cross-selling. They prefer attentive associates who are focused on the task at experiences, and the more hand and do not attempt to gather information or sell additional affluent and younger shoppers products. 4 expect retailers to seamlessly To differentiate, reach beyond the basics: Today’s integrate personalization shoppers have high expectations. Specialized store treatment based on loyalty status is the top request in our across channels. survey. Interestingly, personalized experiences carry more weight with in-store shoppers than with their online counterparts. Shoppers want personalized, attentive in-store experiences, 2 Exceptional in-store execution is the cost of entry and the more affluent and younger shoppers expect retailers to to shoppers’ wallets: Four out of five purchases are still seamlessly integrate personalization across channels. Because made in bricks-and-mortar stores. To keep shoppers coming few retailers offer this tier of service, this finding points to a huge back, retailers need to put a fresh spin on the in-store experience, opportunity for fast movers. Shoppers want tailored experiences recasting stores as places for discovery and interaction with – but with boundaries. They are resistant to divulging information products, where associates can assist in the decision-making they deem to be personal in exchange for more personalized process and shoppers enjoy instant gratification. experiences. Instead, they prefer that retailers use more neutral Each year since 2010, our shopper study has underscored sources such as their own loyalty programs. consumers’ expectations that stores master the basics of retail 5 execution: robust product assortments; effectively merchandised Shoppers’ expectations vary when it comes to stores; clear information about products, prices and promotions; specialty vs. consumable products: Increased options knowledgeable associates willing to provide assistance; and and focus on experience is more important to shoppers of efficient checkout. specialty products than to those buying consumables. Consumers What’s more, shoppers anticipate similar proficiency in retail are more inclined to do research and comparison-shop for specialty fundamentals from online stores. Shoppers identify the top four products. Inconsistent experiences across channels irritate them, influences on cyber-shopping as returns handling; competitive and stores that won’t match competitors’ prices are especially price and promotions; product selection; and fast checkout. bothersome to younger and more affluent customers. On the Sales associates continue to play a pivotal role. When unable to other hand, the greatest influence on purchases of consumables? find what they want in stores, most shoppers say they are inclined Printed materials, information on product packaging, shelf signs to first ask store associates for help. That desire to connect and interactive product displays. with associates is good news for retailers because it presents a touchpoint for deepening customer relationships. The second most prominent response, however, is to buy the Steven Skinner is vice president of Cognizant’s product elsewhere. This situation presents a large risk of lost sales retail, hospitality and consumer goods practice, that could be partially mitigated through better integration of and this study’s principal research analyst. online and in-store experiences. Men, younger shoppers, and high- income shoppers are among the small but growing percentage of JUNE 2012 R I S / C O G N I Z A N T S H O P P E R E X P erience S T U D Y 5Cog_ShopperStudy_0612.indd 5 5/23/12 12:40 PM
  6. 6. T h i r d A n n u a l 2012 SHOPPER EXPERIENCE STUDY RESEARCH Sharpen the Message Retailers should use all the tools at their disposal to convey product information but prioritize efforts on the top methods that shoppers prefer R etailers spend a lot of time de- Each stage offers retailers the opportunity Price and Convenience veloping strategies to influence to deploy services and touchpoints that, if When we asked shoppers to name the fac- the shopper’s path to purchase, executed smartly, can exert a measure of tors that most influenced their online pur- a four-stage scenario that execu- influence over purchasing. chase decisions we found that price is the tives use to shape business mod- The research stage is the first step on top preference. On a rating scale of one to els. The four stages, which are covered in the journey. It occurs when the shopper five, where one stands for least influence detail throughout this report, are: research, begins the process of satisfying a want or and five for most influence, the option la- shop, transact and post-sale. a need. During the research stage shop- beled “competitive price, markdowns, dis- Viewing the shopper journey this way pers gather information either formally counts and promotions” scored a 4.3 rating enables retailers to devise tactics and as- or ad hoc by searching online, reading and topped the list. (Figure 1.) So, sharp sign technologies that help them deliver printed content, or talking to friends and pricing is a key retail element in the initial what shoppers want when they want them. family. stage of the shopper journey. FIGURE 1 Which factors most influence your online purchase decisions? (1 = least influence, 5 = most influence) Price is the significant factor Competitive price, markdowns, influencing online 4.3 shopping discounts and promotions Right product selection 4.2 Ease of returning products 3.9 Fast, easy, checkout 3.9 Shoppers Ease of accessing customer service 3.7 expect an easy returns process Consistent experiences and information online, on mobile devices and in the store 3.4 Other customers’ online ratings and reviews 3.4 Compelling loyalty program 3.3 Personalized experiences 3.0 6 R I S / C O G N I Z A N T S H O P P E R E Xperience S T U D Y JUNE 2012Cog_ShopperStudy_0612.indd 6 5/23/12 12:40 PM
  7. 7. By Joe Skorupa By Joe Skorupa #1 Right product selection ties with competitive pricing at top of list for influencing #2 Ease of returns is the second highest rated factor influencing online decisions online decisions >2 Times per month shoppers use store website to help make informed >3 Times per month 18-33 year olds use non-store websites and searches to make decisions informed decisions <1 Times per month shoppers use store tablet or mobile apps to help 35 . Times per month shoppers use print materials for consumables make informed purchase decisions RESEARCH versus 2.4 for specialty This is not exactly breaking news, but it Sources of Information than when they shop for consumables. is important to place in context. Price sen- When we asked shoppers to tell us their They are store website searches, other sitivity does not mean retailers should join preferences for gathering information prior online searches, and social media. When in a race to the bottom. What it means is to making a purchase we split the ques- shopping for consumables shoppers have that while it is necessary to be responsive to tion into two shopping categories: specialty three different sources of information they competitive pricing it is not enough to simply and consumables. Specialty included such rate higher than when they shop for spe- set low prices across the board. A smarter products as clothing, electronics, house- cialty items. They are product packaging, plan is to strategically add new elements to wares and office supplies. Consumables print materials and shelf signs or interac- shopping experiences that can be a hedge included groceries, health and beauty, and tive displays, the traditional methods that against training shoppers to wait for deep household supplies. (Figure 2.) scored highest when the two categories discounts. Some of these elements include When looking at the combined results were combined. featuring exclusive products, special ser- (as opposed to splitting into the specialty The takeaway is that if a retailer is in vices, convenience, limited-time offers, and and consumable categories), we find the top the consumables segment, then retailers personalized shopping experiences sources of information chosen by shoppers should prioritize investments in traditional The second big takeaway from the top are product packaging, print materials, and sources of information because they are online influencers question is that shop- shelf signs or interactive product displays. At likely to deliver the best return. However, for pers prefer quick and easy services. Among first glance this is pretty basic stuff. specialty retailers investing in online and the top rated factors on the list are ease of However, when we split the responses social media are more aligned with shop- returning products, fast and easy checkout, into the product categories we see clear per preferences. and ease of accessing customer service. preferences emerge. When shopping for One big takeaway that has appeared Convenience is just as important to shop- specialty products shoppers have three consistently over the last three years of this pers as low prices. sources of information they rate higher study is the low rating given by shoppers JUNE 2012 R I S / C O G N I Z A N T S H O P P E R e x perience S T U D Y 7Cog_ShopperStudy_0612.indd 7 5/23/12 12:40 PM
  8. 8. T h i r d A n n u a l 2012 SHOPPER EXPERIENCE STUDY RESEARCH to mobile apps. Although it is still early in the research stage, but it is a mistake The clear message is that shoppers in the game for mobile commerce, it is to think they follow a path to purchase in want retailers to create a fully synchro- worth noting that the low rating given by a linear way. In fact, it is a non-linear jour- nized, consistent, multi-channel experi- shoppers has not shown signs of growth ney with new entry points emerging every ence that delivers great prices and great over a multi-year period. An inescapable day. Some shoppers might begin and end convenience. They also want it all to op- conclusion is that mobile apps, despite their path to purchase in just a few clicks erate seamlessly and invisibly behind the their ultimate potential, have not yet bro- or they might go in and out of a half doz- curtain. ken through as a significant resource for en touchpoints, including physical stores, And who can blame them? They are shoppers who are moving down the path multiple times. Some might do all of their smart shoppers using all the smart new to purchase. clicking and searching in social media lo- tools at their disposal. Welcome to the Shoppers always begin their journey cations or members-only websites. new normal. n FIGURE 2 What resources do you use to make informed purchase decisions? (1 = least used, 5 = most used) 2.2 Television 2.3 Shelf signs or interactive 2.0 product displays 3.3 Information provided 2.3 Specialty on product packaging 4.2 Consumables Print materials 2.4 3.5 1.4 Social media 1.3 Friends and family 2.0 1.4 Store associates 1.3 Mobile apps are Other Internet searches 2.6 and websites not a significant 2.1 part of shopping research Store’s tablet 0.6 Store’s mobile 0.7 smartphone app 0.6 Store’s website 2.4 2.0 8 R I S / C O G N I Z A N T S H O P P E R e x perience S T U D Y JUNE 2012Cog_ShopperStudy_0612.indd 8 5/23/12 12:40 PM
  9. 9. T h i r d A n n u a l 2012 SHOPPER EXPERIENCE STUDY SHOP By Joe Skorupa Bricks and Clicks The store remains the heart of retailing, but it needs to evolve to continue being relevant to today’s shoppers A t an advanced phase in the path otherwise known as a sales associate. figure comes from the U.S. Department of to purchase, the shopper wants This means going to a physical store. Commerce, which says that 95% of retail to get closer to the product, to Even in the age of Amazon and digital sales come through the brick-and-mortar see it, feel it, compare it side by commerce, the numbers bear out that channel. side with similar products, and shoppers do the vast amount of their The numbers from the shopper maybe ask questions to an on-site expert, purchasing in stores. One widely reported preference study show just how critical FIGURE 1 How much do these factors influence your in-store purchases? (1 = least influence, 5 = most influence) Visibility and accessibility of product 3.6 Social media is Compelling loyalty program 3.2 the lowest rated 3.3 influencer Ease of returning products 4.0 3.5 Comments on 2.6 social media sites 2.3 Other customers’ online 3.3 ratings and reviews 2.7 Specialty 3.9 Consumables Quality of customer service 3.7 3.7 Fast, easy checkout 3.9 Competitive price, 4.4 promos, etc. 4.2 Competitive Right product selection 4.1 pricing, promos are still powerful purchasing influencers JUNE 2012 R I S / C O G N I Z A N T S H O P P E R E Xperience S T U D Y 9Cog_ShopperStudy_0612.indd 9 5/23/12 12:40 PM
  10. 10. T h i r d A n n u a l 2012 SHOPPER EXPERIENCE STUDY SHOP the physical store is to consumers, but purchase decisions we found the top Pricing strategy has always played a it is worth noting that while there are item is competitive pricing, a theme that critical role in retail, but findings throughout strengths that retailers can build on appears throughout the study. Retailers this study indicate shoppers consider there are also elements of the store that have always been rigorous when setting pricing to be so decisive that it has taken shoppers dislike and require remediation. the initial price and subsequent mark- on increasing urgency. down prices, but this task is more Other top-rated factors that influence Store Influence Factors important now than ever. (Figure 1.) purchase decisions in stores include right Smart retailers use all the weapons in This is true for two reasons: 1. Price product selection, fast and easy checkout, their arsenals to convert stores into a elasticity has become more rigid thanks quality of customer service, and visibility dynamic shopping experience. But are to the length and depth of the recent and accessibility of product. they focusing on the right elements to recession; and 2. With price transparency When we break out findings about store appeal to todays’ shoppers? just a click away, retailers are feeling the influences when shopping for consumables When we asked shoppers to tell us pinch on margins as discounters drive and shopping for specialty products, we which factors influence their in-store prices down. find that several factors differ by product FIGURE 2 Which of the following experiences do you dislike most when shopping in a store? (1 = dislike least, 5 = dislike most) Payment method you 3.7 like is not available 3.6 Store associates not 4.0 easily accessible 3.9 No order online, 3.1 pickup in store 2.8 Specialty Store doesn’t match Consumables competitors’ prices 3.7 In-store, online and mobile 3.7 experiences are inconsistent 3.5 Prices/promos/discounts 4.1 are not clearly marked A better selection of products 3.3 In-store is available online 3.1 execution is The product you want still most 4.2 is out of stock important to shoppers Difficulty finding 4.0 the product you want 4.1 1 0 R I S / C O G N I Z A N T S H O P P E R E Xperi E N C E S T U D Y JUNE 2012Cog_ShopperStudy_0612.indd 10 5/23/12 12:40 PM
  11. 11. 49% Will ask an associate to locate the right item when it can’t #2 Ease of returns is the second highest rated factor influencing online decisions be found 2X Twice as many in 18-33 and 34-45 age groups want better product knowledge #9 Social media comments ranked last of all factors influencing enabled by technology than 46-65 store purchases for all shoppers and 65+ 35% Of shoppers would most like to see improved customer service skills #1 Social media comments ranked first among the 18-33 and 34-45 age groups among store associates SHOP category. The biggest delta occurs in the is more distinctive than all the rest. This be considered simple things with simple influence of online ratings and reviews. group rates the following in-store influence fixes, but they will kill store performance Shoppers for specialty products care factors sharply higher than the other every time. (Figure 2.) significantly more about ratings and income groups: visibility and accessibility One interesting gender finding is that reviews than shoppers for consumables. of product, compelling loyalty program, female shoppers across the board have Another significant delta occurs in ease of ease of returning products, comments a higher sense of dislike to every item on returning products: shoppers for specialty on social media sites, online ratings and the list compared to males. Why? Or more products care far more about returning reviews, and quality of customer service. to the point, why ask why? Females are products than shoppers for consumables. A professional football coach after the largest purchasers or influencers of As expected, differences also emerge a big loss was asked what he thought purchased items on the planet, and if they when we examine store influences by age about his team’s execution? He replied, are unhappy about something, then it is a groups. Ages 45 and younger care far “I am all for it.” The point is, if you don’t clear sign it needs to be fixed. more about online ratings and reviews get execution right, everything else is than older age groups. The same is true irrelevant, in football and in retailing. Stores as Websites for comments found on social media sites. The top three dislikes when shopping One way for retailers to respond to the When we break out findings by in a store amplify this point and are: the digital revolution is to begin thinking income we find a few interesting deltas product is out of stock, prices and promos about stores as websites, if not literally of difference. It turns out the group with are not clearly marked, and there is then in new ways that support and enable household income greater than $150,000 difficulty in finding the product. These may the shopper’s love for using consumer JUNE 2012 R I S / C O G N I Z A N T S H O P P E R e x perience S T U D Y 1 1Cog_ShopperStudy_0612.indd 11 5/23/12 12:40 PM
  12. 12. T h i r d A n n u a l 2012 SHOPPER EXPERIENCE STUDY SHOP electronics as a lifestyle choice. should be at the top of your to-do list. as personalization preferences, customer When we asked shoppers to tell us No study of consumer preferences services, managing out of stocks and how important it is for stores to work would be complete without examining onine shopper dislikes. Here are some key with digital partners, a hybrid approach the influence of social networks in the takeaways in these areas: sometimes called click and mortar, we shopping process, and the big finding here • The top method chosen to personalize found that member discounts and group is that Facebook is the clear preference. the in-store shopping experience is to buying are the top two options that It leads the pack by a wide margin over deliver special treatment on loyalty. provide a better shopping experience. MySpace, Pinterest, blogs and Twitter. • Shoppers younger than age 45 When we break out this question Male shoppers tend to be more show a preference for digital methods of into demographic groups we find an enthusiastic about social network sites personalizing the shopping experience, interesting pattern emerges that links in general, while females are more while older shoppers do not care as much female shoppers, people less than 45 discriminating and clearly prefer Facebook. for online personalization and instead years old and high income shoppers When we break out this finding we see prefer it to be store-based. with household incomes greater than those between 35 and 45 years of age • High income shoppers want a $150,000. All three groups are leaders in and those with household income greater personalized shopping experience in the preference for retailers to add digital than $150,000 consider social networks every channel and using every method. functions inside stores. to be most important. • When shopping assistance is So, if one of your key demographics is needed three segments are most open to women with household income greater Key Takeaways digital methods of communication: men, than $150,000 who are less than 45 years To dig deeply into customer preferences in younger age groups (less than 45), and old, then adding digital capabilities to stores the shopping phase we probed such areas high incomes. But all segments prefer FIGURE 3 Which personalization techniques do you prefer when shopping for specialty products? (1 = like least, 5 = like most) Special treatment in the 3.4 store based on loyalty Despite a plethora of Offers delivered in a store that are personalized 3.2 ‘engagement channels’ customers still seek Acknowledgement of status as a highly valued customer while in the store 3.2 preferred treatment in store Website recommendations based 2.9 on other products you searched for E-mails with personalized messages 2.9 Website recommendations based on products others have searched for 2.8 Personal greeting in the store 2.7 Offers delivered via a mobile phone that are personalized 2.3 1 2 R I S / C O G N I Z A N T S H O P P E R e x perience S T U D Y JUNE 2012Cog_ShopperStudy_0612.indd 12 5/23/12 12:40 PM
  13. 13. Pricing strategy has always played a critical role in retail, but findings throughout this study indicate shoppers consider pricing to be so decisive that it has taken on increasing urgency. fact-to-face interaction. idea of equipping associates with technology online shopping the top choices are: • The top two functions shoppers tools to improve service. product information is difficult to find, would like to see improved in stores are • All segments of shoppers prefer to purchase price is not communicated customer service skills and ability of store seek out a sales associate for help when they clearly, and search navigation is not associates to match competitive prices. can’t find a product they want. Therefore, helpful in finding products. • Women shoppers significantly prefer when associates are equipped with product Understanding store-based shopper customer service skills and price matching and inventory lookup capabilities a method preferences gives retailers guideposts to over male shoppers. opens up for them to save the sale. create a strategic roadmap that enables • Male shoppers are more open to the • When it comes to dislikes during stores to evolve and remain relevant. n FIGURE 4 Which customer service options do you prefer most while shopping? (1 = prefer least, 5 = prefer most) Go to in-store customer service desk 3.8 Despite digital information Call customer service # 3.1 available across channels, shoppers prefer real-time Online chat 2.3 interaction Social media page 2.0 Mobile text message 1.9 Mobile chat 1.8 Video chat 1.7 JUNE 2012 R I S / C O G N I Z A N T S H O P P E R e x perience S T U D Y 1 3Cog_ShopperStudy_0612.indd 13 5/23/12 12:40 PM
  14. 14. T h i r d A n n u a l 2012 SHOPPER EXPERIENCE STUDY t r an s act Make It Easy Shoppers still seek speed, simplicity and convenience when it is time to check out P rogressive retailers are they are maintaining strong service levels Some of these basics are related to rethinking every aspect of the with their existing store technology — in ensuring that POS technology remains store shopping experience, particular with their transaction processes. fast, easy to use and reliable, with exploring gesture-based digital This year’s survey reveals that shoppers minimal downtime — particularly in technology, gamification, still place a high value on checkouts that high-volume environments such as arming store associates with are fast, convenient, accurate and hassle- supermarkets (or in any type of retail multi-functional tablets and sending free. While these results will not be a store during the busy holiday season). targeted, location-based messages to surprise to experienced retailers, they do But reliable technology is only part of the shoppers’ smart mobile devices. These point up the critical need to keep a close equation. Retailers also need to ensure technologies show varying degrees of eye on the basics of store operations that their hiring, training and workforce/ promise, but while they try them out, no matter how radically the shopping labor management systems place alert, retailers would also do well to make sure experience is transformed. capable cashiers on the floor. FIGURE 1 Which aspects of the store checkout process do you dislike most? (1 = dislike least, 5 = dislike most) A smooth, hassle-free checkout experience Checkout process is inefficient or inaccurate 4.2 executed by an attentive cashier is very crucial. Cashier not available or distracted 4.2 Discount/credits not quickly processed 3.9 Cashier tries to sell me more products 3.8 Personal information requested before completing transaction 3.6 Cashiers can’t make customer service decision 3.6 Waiting in line 3.6 Self-checkout is not available 2.5 Self-checkout not a big draw 1 4 R I S / C O G N I Z A N T S H O P P E R E Xperience S T U D Y JUNE 2012Cog_ShopperStudy_0612.indd 14 5/23/12 12:40 PM
  15. 15. By Adam Blair #1 PayPal tops the list of preferred digital wallet solutions #8 Self-checkout is last on dislike list when paying and not a big factor 2X Twice as many $150K+ income shoppers would use a digital wallet via mobile #1 Tied at top of the list for payment methods are bank issued credit phone than those in less than $25K cards and cash income group #1 Dislikes at checkout are tied: process is inefficient or inaccurate and #1 Debit cards are top choice for 18-33 year olds cashier not available or distracted TRANSACT Asked which aspects of the checkout store, with minimal delays and maximum Financial Conservatives process they dislike the most, shoppers convenience. Shoppers surveyed about payment identified several relating to interactions with POS solutions, whether traditional fixed methods revealed strong preferences for POS personnel. Tied with “checkout process terminals or newer mobile POS options, the familiar. Three tried-and-true tendering is inefficient and inaccurate” was “cashier should provide the ability to access back- methods — cash, bank-issued credit not available or distracted,” both rated 4.2 on office and corporate systems involved in cards and debit cards — still hold sway a scale of 5. Shoppers also disliked cashiers handling the most common customer over newer options such as smartphone- trying to sell them additional products and service issues. Ideally, these systems enabled mobile wallets. (Figure 2.) requesting personal information during the should also send real-time alerts to In fact, using digital wallets via a checkout process, ranked at 3.8 and 3.6 managers’ mobile devices, bringing them personal mobile device was the least respectively. (Figure 1.) to the store’s front end to handle issues popular payment option among surveyed However, shoppers also expressed that are above the “pay grade” of cashiers. shoppers, ranking just 1.7 on a scale of a 3.6 level of dissatisfaction regarding Somewhat surprisingly considering the 5. Consumers may be enamored of their cashiers who couldn’t make a customer ongoing consumerization of technology, the smart mobile devices, but they are not yet service decision, either because they lack of a self-checkout option ranked lowest top-of-mind when it comes to monetary weren’t authorized to do so or didn’t have on the list of surveyed shoppers’ dislikes, transactions. sufficient data or execution capabilities. at 2.5 on a scale of 5. It should be noted, Several factors contribute to digital “Discount/credits not quickly processed” though, that not missing the presence of a wallets’ lack of traction. In North America, was disliked even more, at 3.9. Shoppers technology doesn’t mean shoppers won’t competition among players new to the want and expect to complete all aspects of use it if it’s available – particularly if it suits in-store payment arena, such as Google their transaction at a single location in the their need for convenience. and PayPal, has created different sets of JUNE 2012 R I S / C O G N I Z A N T S H O P P E R E Xperience S T U D Y 1 5Cog_ShopperStudy_0612.indd 15 5/23/12 12:40 PM
  16. 16. T h i r d A n n u a l 2012 SHOPPER EXPERIENCE STUDY T r an s act FIGURE 2 Which payment methods do you prefer for in-store purchases? (1 = prefer least, 5 = prefer most) Bank issued credit card 3.7 Traditional cash/ card methods still Cash 3.7 rule over new tendering methods Debit card 3.6 Store issued credit card 2.6 PayPal or Bill Me Later 2.2 Store installment payment plan 2.0 A digital wallet via a personal mobile device 1.7 Shoppers want and expect to complete all technological standards and limited the aspects of their transaction at a single utility of individual mobile wallet solutions. location in the store, with minimal delays In contrast, Asian and European countries with government-mandated standards and maximum convenience have created a more fertile environment for mobile payments overall. FIGURE 3 There’s also a bit of a Catch-22 at work: many retailers are waiting for consumer If available, which digital wallet solutions demand for these payment options to rise are you most likely to use? before investing in the technology required (1 = least likely, 5 = most likely) to offer them. However, the current lack of retail outlets accepting mobile wallet PayPal 4.1 payments is one of the main reasons consumer awareness levels and shopper demand remain low. Visa Wallet 3.8 Among the subset of shoppers who are aware of these solutions, PayPal is the Google Wallet 3.7 most preferred option, ranking 4.1 on a scale of 5. (Figure 3.) PayPal, a subsidiary Apple iTunes 3.7 of eBay, has high name recognition due to its strong position as an online payment method. PayPal’s closest competitors also ISIS (i.e. Verizon Wallet) 3.5 have strong corporate names attached: Visa Wallet, at 3.8, and tied at 3.7, Google Wallet and Apple iTunes. n 1 6 R I S / C O G N I Z A N T S H O P P E R E X P erience S T U D Y JUNE 2012Cog_ShopperStudy_0612.indd 16 5/23/12 12:40 PM
  17. 17. T h i r d A n n u a l 2012 SHOPPER EXPERIENCE STUDY P OS T- S A L E By Adam Blair Building the Shopper Profile Age AND Income are key factors in shoppers’ comfort levels with data sharing K “ now your customers” is good FIGURE 1 advice for retailers at any time, and in many ways today What information are you willing to share in order to is a golden age for gathering have a more personalized shopping experience? customer data. Many millions (1 = least willing, 5 = most willing) of people willingly share information about themselves, their opinions and their preferences on a variety 1.3 of social networks — and they carry mobile Locations you are at tracked 1.6 using geolocation service devices that can (with their permission) 2.2 on your phone provide their location in real time. But knowing your customers also 2.3 Information tracked 2.7 includes knowing their comfort level 3.3 by loyalty number with various data-gathering techniques. 3.2 Tracking by loyalty program number was 1.4 the most popular choice among shoppers 1.6 Younger customers Information tracked overall, scoring 2.9 on a scale of one to five. by credit card number 2.1 are more receptive to (Figure 1.) Not only is this an established, sharing information familiar data-gathering technique, but than older customers 1.9 these shoppers’ membership in a retailer Phone number 2.1 loyalty program means they already collected at POS 2.5 perceive the value they receive in exchange for sharing information about themselves. 2.1 Digging deeper into responses to this E-mail collected at POS 2.4 question reveals sharp differences along 2.9 generational lines. As might be expected, shoppers 45 and younger are consistently 1.3 Have cookies placed on your 1.7 more amenable than their elders to making computer to allow tracking 2.2 personal data available via any method, as 2.1 well as to being tracked by location. Household income also affects 2.2 Name, address, e-mail 2.6 shoppers’ attitudes. Those making for web account 3.0 $150,000 or more are the most willing 2.9 to share data about themselves, perhaps driven by the desire to get a more 65 and over 46-64 34-45 18-33 personalized retail experience. Complaint Channels When today’s shoppers take action after receiving poor service, they have a number JUNE 2012 R I S / C O G N I Z A N T S H O P P E R E X P erience S T U D Y 1 7Cog_ShopperStudy_0612.indd 17 5/23/12 12:40 PM