The document summarizes key findings from the 2012 RIS/Cognizant Shopper Experience Study, which surveyed over 2,100 shoppers. It finds that while most purchases still occur in physical stores, shoppers want personalized in-store experiences. Retailers need to focus on the basics like competitive pricing and knowledgeable employees, while differentiating themselves through loyalty programs and cross-channel personalization. Shopper expectations vary between consumable and specialty products. Overall, retailers must reshape their strategies and stores to provide personalized solutions in order to keep shoppers from showrooming or buying elsewhere.

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 2012
Cog_ShopperStudy_0612.indd 1 5/23/12 12:40 PM

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
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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 2012
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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 3
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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 2012
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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 5
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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 2012
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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 7
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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 2012
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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 9
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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 2012
Cog_ShopperStudy_0612.indd 10 5/23/12 12:40 PM

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 1
Cog_ShopperStudy_0612.indd 11 5/23/12 12:40 PM

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 2012
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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 3
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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 2012
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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 5
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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 2012
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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 7
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18. T h i r d A n n u a l
2012 SHOPPER
EXPERIENCE STUDY
P OS T- S A L E
#2 Name, address and e-mail
for logging in are second on
the list of options shoppers will share
#3 E-mail collected at checkout is third
on list of options shoppers will share
to get a personalized experience
to get a personalized experience
#1
Shoppers with income
#1
of $150K+ are more
Shoppers with income likely to comment about
of $150K+ are more problems on personal or retail social
willing to share information to get network sites than all other income
a personalized experience than all groups
other income groups
#1 2X
Shoppers younger than
Loyalty account informa- 45 are twice as likely to
tion tops list of options comment about prob-
shoppers will share to get a person- lems on personal or retail social
alized experience. POST-SALE network sites than older shoppers
Shoppers 45 of new options for bringing it to the retailer’s
attention, including public “venting” on
keep other channels open: responding
to an online survey or to one printed on
and younger are social networks. However, shoppers’ most a receipt was nearly as popular as in-
preferred action is a face-to-face interaction: person interactions, each scoring 3.4 out
consistently more telling the associate who helped them or of five.
amenable than asking to speak to the store manager each
received a 3.5 score.
Among shoppers overall, sharing their
dissatisfaction via a social network is a less
their elders to For retailers, this points up the fact that likely option, with an average 2.2 score.
part of providing good customer service in However, there are splits along generational
making personal the store is having procedures in place to and income level lines that are similar to
data available handle problems and complaints. Ideally,
every store associate should be trained
those seen in the data sharing area. Gen
X and Gen Y shoppers are twice as likely
via any method, — and consistently reminded — about the
retailer’s established procedures for dealing
as Baby Boomers and Emerging Elders
to use social networks as their forum for
as well as to with dissatisfied customers, including the commenting on service issues. Those in the
right point at which to bring in a manager or highest income bracket, making $150,000
being tracked other supervisor. or more annually, are also more likely to
by location Not everyone will raise an issue in
person, however, so it’s also critical to
use social networks in these cases than all
other income groups. n
1 8 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 2012
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19. T h i r d A n n u a l
2012ESHOPPER N D S
M GATRE
EXPERIENCE STUDY
M E G AT R E N D S
By Steven Skinner
2012 Retail MegaTrends
Keeping focused on the big picture to spot tomorrow’s opportunities
We introduced our Retail MegaTrends with the first Shop- tive shopping experience depends on who you ask. Shop-
per Experience Study in 2010. In addition to newly emerging pers across all segments are consistent in their desire to
megatrends, this year’s list includes trends that are growing experience “retail without boundaries” that caters to their
in influence. What is clear is that the definition of a posi- individual wants and needs.
NEW MEGATRENDS SHAPING RETAIL management across the retail chain and introducing more fulfillment
1 The Store at Risk of Becoming a Showroom. Price continues
to be the most influential factor determining purchase decisions.
Mobile devices increase transparency while shoppers are in the store
options will enable retailers to convert potentially disappointing shopping
experiences into sales and enable associates to provide better service.
6
putting previously guaranteed sales in jeopardy. Although today relatively
Death of the Task Worker. Shoppers increasingly demand
few shoppers go to their mobile phones first when they can’t find what
accessible and empowered store associates, and they expect
they are looking for, that number will grow rapidly.
them to have access to the same technology and information that
they have. More retailers are equipping their staffs with technology
2 Shoppers Desire Personalized Store Experiences. Shoppers
expect and appreciate personalized greetings and offers and
suggestive selling online, but what they really want is more personalized
solutions that provide information and enable workers to take on new
responsibilities. The bar has been raised for store associates, and the
stakes are higher.
in-store experiences. Although generally resistant to sharing information
they consider private, they are willing to share enough information to
ensure they have the best possible in-store shopping experience.
MEGATRENDS TAKING HOLD MORE SLOWLY THAN
EXPECTED
MEGATRENDS THAT CONTINUE TO HAVE TRACTION 7 Sales and Product Information via Mobile Phone. Although
smartphones and tablets are changing the way people manage
3 Taking the Store to the Shopper. Retailers continue to invest in
the online experience through traditional websites and increasingly
through dedicated mobile sites and third-party partnerships. Although
their lives, their impact on the shopping experience is mixed. Shoppers
are hungry for solutions that make shopping easier, more convenient
and more fun. Most retailers’ mobile solutions haven’t delivered.
the majority of shopping will continue to occur in stores, digital and
8
physical experiences are converging, with shoppers expecting cohesive,
Mobile Shopping Comes of Age. Although still a small piece
interactive, value-added experiences anytime, anywhere and through
of the pie, some segments (APAC, younger, and more affluent
any channel.
shoppers) are using smartphones to shop, suggesting rapid growth
will continue. The screen size and portability of smartphones will
4 Shoppers Demand Consistent Cross-Channel Experiences.
Consumers check multiple resources when shopping and are quick
to notice discrepancies across channels. Products, prices, and policies
naturally lead them to be in-store shopper aids, whereas tablets will
take over traditional online sessions due to the improved browsing
experience they offer.
on your website don’t match what are in stores? You’ll hear about it in a
9
request for a price match. Shoppers are beefing up their expectations –
Death of POS Becomes a Possibility. While there have been
and creating a challenge for retailers to stay ahead of the curve.
notable rollouts of mobile POS solutions, retailers continue to
maintain their substantial POS investments. Most shoppers are not
5 Distributed Order Management Integrates the Retailer.
One of shoppers’ greatest irritants is when a product is out of
stock or they cannot find what they are looking for. Integrating order
clamoring specifically for mobile POS, but they do want better access
to associates throughout the store, and mobile POS makes that a
possibility.
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 9
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20. A b o ut C o gn iza n t ’ s R etail Practice
Cognizant’s Retail practice, which works with 12 of the top 30 global retailers, leverages its deep domain, consulting, and enterprise architecture
expertise to deliver competitive advantage to supermarkets, department stores, specialty premium retailers, and large mass-merchandise discounters
across the grocery, general merchandise, apparel, home and office, and consumer electronics segments. The practice provides comprehensive business
solutions in the areas of supply chain, merchandising, stores, e-commerce, and retail analytics to enable retailers to transform their businesses, drive
innovation, and cater to the rapidly changing shopping needs, preferences, and methods of retail customers. The practice is enabling retailers to
embrace the future of shopping with innovative platforms such as IntellipeakTM, which helps manage peak/holiday season sales, and intelliSTORESM,
which leverages technologies around mobility, cloud, social media, and analytics to deliver a superior in-store customer experience.
A b o ut C o gn iza n t
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services, dedicated to helping the
world’s leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction,
technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over
50 delivery centers worldwide and approximately 140,500 employees as of March 31, 2012, Cognizant is a member of the NASDAQ-100, the S&P 500,
the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world. Visit us online at
www.cognizant.com or follow us on Twitter: Cognizant.
®
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 2012
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