WHAT S IMPORTANT TO CUSTOMERS IN THE OMNI-CHANNEL AGE. How Technology Has Changed The Consumer-Retailer Relationship And How Retailers Must Respond

Transcription

1 SURVEY REPORT: WHAT S IMPORTANT TO CUSTOMERS IN THE OMNI-CHANNEL AGE How Technology Has Changed The Consumer-Retailer Relationship And How Retailers Must Respond Sponsored by White Paper

2 While price and value are important to today s consumers, so is engagement, knowledgeable support, easy access to inventory, crosschannel consistency, recognition and rewards, and a sense of active participation in and control over the shopping process. INTRODUCTION We re living in an era of unprecedented access: to technology, to information, to social connections. Those capabilities equal power, and consumers are using that power to approach shopping with deep knowledge, informed opinions and high service expectations. They expect retailers to offer the same level of connectivity, instant answers and service choices that they now experience throughout their daily lives. Just as today s empowered consumers care far less about how their technologies work than about what those technologies enable them to do, their only concerns when shopping are what the retailer enables them to do, and the value they receive in trade for their business. Consumers made this message very clear in an online survey conducted by Retail TouchPoints in the fall of Respondents were asked to rate the importance of 15 aspects of the shopping experience on a scale of one to 10 (where 1 represented least important and 10 represented most important). The survey found that price is not king. While price and value are important to today s consumers, so are engagement, knowledgeable support, easy access to inventory, cross-channel consistency, recognition and rewards, and a sense of active participation in and control over the shopping process. Retailers investing in the technologies and training that make that happen stand to win the attention and the pocketbooks of today s empowered consumer. Survey: What s Important To Customers in the Omni-Channel Age 2

3 CHART 1: PRICE DOESN T RULE Getting the lowest price (if the quality is adequate) Getting a competitive price (not necessarily the lowest price, if the quality and/or value is better) 20% 24% 18% 23% 33% 30% 4% 1% 0% 0% 1% 9% 8% 8% % % 20% 18% Many retailers 4% 1% 0% 0% 1% mistakenly believe the current era of empowered shopping has accentuated price as the central element of a good deal. 9% 8% 8% 11% 11% 33% 30% THE RELATIVE VALUE OF PRICE Empowered consumers often take pride in their ability to access the information required to get the best deal available on the product they are buying. Many retailers believe the current era of empowered shopping has accentuated price as the central element of a good deal. In RSR Research s Retail Pricing in a Post-Channel World: Benchmark Report 2012, April 2013, 67% of retailers said they believe consumers are growing increasingly price sensitive. But consumers responding to the survey dispel the long-held belief among some retailers that price by itself defines a good deal for shoppers. As seen in the Chart 1, one third of respondents give top priority to lowest price, while just under two-thirds rate the lowest price somewhat to very important (5 to 9). Consumers value lowest price if the quality is adequate. But they also make it clear that value also matters. Nearly as many consumers prize lowest price as those that appreciate getting a competitive price with better value. And more respondents (69%) felt a combination of competitive price and better value was somewhat to very important (5 to 9) than just getting the lowest price. So it s clear that low price does not reign supreme. The right price/value combination matters more to the majority of consumers than just the lowest price. Survey: What s Important To Customers in the Omni-Channel Agee 3

4 CHART 2: CONSUMERS VALUE COMPETENT SERVICE Competent service defined as: Pleasant, attentive support and information provided by the retailer s staff, even if they have to ask someone else to answer my questions. 36% 20% 1 8% 8% 9% 3% 0% 0% 1% The majority of respondents clearly value competent support and information provided by attentive retail associates. A QUESTION OF SERVICE Service clearly is part of the value proposition for consumers. As seen in Chart 2, more than a third (36%) of respondents rated competent service the highest priority and the majority (60%) indicated it is somewhat to very important (5 to 9). Competent service clearly matters a lot to almost all shoppers. Survey: What s Important To Customers in the Omni-Channel Agee 4

5 CHART 3: SERVICE WITH MOBILE DEVICES NOT THERE YET Interactive service with a mobile device defined as: Pleasant, attentive support and information shared by the retailer s staff, e.g. on tablet computers that let them answer my questions on the spot. 21% 14% 16% 16% 8% 6% 6% 4% To improve service and the overall customer experience, retailers are beginning to arm their associates with mobile devices so they can engage shoppers more personally and seamlessly by providing instant answers to their questions and even executing transactions right on the store floor. To date, consumers responses to these initiatives appear mixed. As seen in Chart 3, just over half the number of people who prioritized competent service in the previous question prioritized interactive service with a mobile device. Fewer people felt that interactive service with a mobile device was somewhat to very important (50% compared with 60% who said competent service was important in the previous question). It s also true, however, that fewer people have been exposed to mobility and its benefits. Only 16% of retailers are currently deployed with consumer-friendly ipads, ipods and similar devices (although an additional 20% of retailers use traditional ruggedized handhelds), according to the 11th Annual RIS Store Systems Report, Jan Survey: What s Important To Customers in the Omni-Channel Agee 5

6 Enhancing the overall brand and customer experience is precisely how retailers should be viewing the tremendous value that new mobile technologies afford. Retail Systems Research Just as consumers perceive a combination of price and value as better than simply a lowest price, it s reasonable to assume that consumers would prefer richer, more seamless service over standard competent service. more current reference, based on the RIS News 11th Annual Store Systems Report (page 16) -- and place it as the last / third paragraph on this page: Most retailers seem to agree. The 2014 RIS News Store Systems Study reported that 66% of retailers are planning to adopt tablets in their stores within the next 24 months, and that 70% more retailers are currently emphasizing in-store mobility projects than in One of the huge potential benefits of mobile devices is the ability for the associate to access personal customer relationship management data right there on the store floor alongside the customer. That enables the associate to tailor product suggestions and services to the shopper s history and interests, and point out individual reward opportunities that help drive the sale. In short, mobility can help make service truly personal and more productive. Survey: What s Important To Customers in the Omni-Channel Agee 6

7 CHART 4: PERSONAL SERVICE IS OF VALUE Personal service (feeling that the staff knows what I prefer and is able to meet my individual needs) Personalized shopping rewards/loyalty program e.g. discounts or special offers (based on the amount I spend or how often I shop) 4% 8% 8% 4% 4% 8% 8% 4% 3% 3% 4% 8% 8% 4% 3% 9% 9% 6% 7%10% 9% 6% 7%10% 6% 7%10% 26% 26% 26% 23% 23% 23% 13% 13% % 13% % 12% 9% 13% 13% % 9% 9% 40% of consumers buy more from retailers that personalize the shopping experience consistently across all channels. the e-tailing group and MyBuys GETTING PERSONAL Consumers do in fact value being engaged as individuals (Chart 4). Although respondents rated personal service the feeling that the staff knows what the shopper prefers and is able to meet her individual needs lower than competent service (26% for personal vs. 36% or competent), almost as many (54%) rated it somewhat to very important. Shoppers have similar attitudes about personalization when it comes to loyalty program rewards. Just under one quarter feel these programs are a top priority, while 56% rate them somewhat to very important (5 to 9). Together the data send a strong message to retailers: Make it personal. The more a retailer is able to make the shopping experience all about the individual customer and what she values, the more that customer will value that retailer. According to a survey of more than 1,100 consumers, conducted by the e-tailing group and MyBuys, 40% of respondents said they buy more from retailers that personalize the shopping experience consistently across all channels. Additionally, 59% of consumers reported that personalized product recommendations make it easier for them to find products that interest them. Respondents noted that the most effective methods for receiving personalized messages were via web site recommendations (5) and unique s (54%). Survey: What s Important To Customers in the Omni-Channel Agee 7

8 CHART 5: BRAND IS IMPORTANT TO SHOPPERS Brand recognition defined as: Shopping with a retailer I identify with and trust. 23% 18% 19% 10% 11% 3% 3% 3% Brand recognition is a top priority for 64% of consumers, who rate it somewhat important to very important. RECOGNIZE AND ENHANCE THE VALUE OF YOUR BRAND Consumers face more shopping choices than ever before. So it helps retailer and consumer alike when a brand forges a strong identity for delivering a well-defined experience. Consumers recognize the value of shopping with a brand they can identify and trust. Nearly a quarter (23%) call brand recognition a top priority, while 64% rate this somewhat to very important (Chart 5). A brand acts as a kind of shorthand for time-pressed shoppers, who can select that store knowing that their expectations and needs will likely be fulfilled. Survey: What s Important To Customers in the Omni-Channel Agee 8

9 CHART 6: BRAND CONSISTENCY IS EVEN MORE IMPORTANT THAN BRAND ITSELF A consistent brand experience defined as: The same products, pricing, policies and style when shopping in a retailer s physical store, online store, or through their call center. 27% 23% 18% 1% 3% 0% 8% 6% 9% Most retailers believe that brand consistency is more important than brand itself. That s why it s so important that the customer's experience be the same no matter which channels that customer chooses. As indicated in Chart 6, survey respondents were even more likely to feel strongly about brand consistency than they did about brand recognition, with fully half of respondents assigning consistent brand experience a 9 or 10 in importance. Survey: What s Important To Customers in the Omni-Channel Agee 9

10 CHART 7: THE IMPORTANCE OF THE IN-STORE ENVIRONMENT A pleasant physical store environment defined as: A clean, well-organized and engaging store. 2% 2% 1% 0% 1% 0% 4% 4% 12% 12% 9% 8% 9% 8% 21% 21% 38% 38% Very 10 Important CHART 8: THE IMPORTANCE OF THE ONLINE ENVIRONMENT A good online environment defined as: An engaging, clear, and easy-to-use web site or web store. 3% 4% 1% 3% 4% 1% 7% 7% 20% 20% 10% 10% 23% 23% 27% 27% Very 10 Important Retailers can use the provision of a seamless experience as a key marketing differentiator. -Aberdeen Group What does it mean to offer a consistent brand experience? According to Aberdeen s Omni-Channel Retailing 2013, The Quest for the Holy Grail, May 2013, It allows the retailer to market the same product in every channel, without worrying about product availability or product information, according to the report, which identifies it as an attribute of 42% of retail leaders and only 24% of followers. Retailers can use the existence of a seamless experience as a key marketing differentiator. This one capability answers the customer demand to have a true brand experience, rather than a series of channel experiences. But delivering a great brand experience also means providing consistently high quality shopping environments in all channels. As seen in Charts 7 and 8, almost as many respondents rated a good online environment as being somewhat to very important as a clear, well-organized and engaging physical store (8 vs 88% respectively). Survey: What s Important To Customers in the Omni-Channel Agee 10

11 CHART 9: PRODUCT SELECTION IS RELATIVELY IMPORTANT Product selection defined as: Access to a wide range of products that are attractive and relevant to me. 30% 23% 17% 18% 3% 0% 0% 0% THE IMPORTANCE OF PRODUCT AVAILABILITY While many consumers undoubtedly pursue shopping as entertainment, typically the path to a purchase starts with the desire for a product. Shoppers will naturally gravitate to retailers they believe will be able to satisfy that need and to further enhance their shopping experience by ensuring a clear view of inventory and fast, direct access to all merchandise. To what extent does that matter and how important might it be as a competitive differentiator? Survey: What s Important To Customers in the Omni-Channel Agee 11

12 CHART 10:...BUT BEING IN-STOCK IS THE MOST IMPORTANT OF ALL In-stock products defined as: The products I want should be available where I am shopping: in-store, online, etc. 42% 17% 17% 13% 4% 1% 1% 0% 0% Product selection is not unimportant to respondents, but it s also not at the top of the list: The largest single group (72%) feel it is a somewhat to very important part of the experience (Chart 9). But the range of products a retailer does offer had better be available, no matter what the channel. In-stock products were valued more than any other attribute. They received the most 10s in the entire survey, and another 5 say this is somewhat to very important. This clearly matters a lot to almost all shoppers (Chart 10), and makes direct access to real-time inventory information across the enterprise a critical element of a retailer s infrastructure. Survey: What s Important To Customers in the Omni-Channel Agee 12

13 CHART 11: CROSS-CHANNEL INVENTORY THE NEXT BEST THING Quick product availability defined as: If the products I want are not in-stock, I should be able to get them quickly from another store or delivered to my home. 38% 19% 1 1 1% 3% 0% 0% 4% Quickly connecting shoppers with their products is clearly an important capability for retailers to focus on. Being able to get products quickly may be the next best thing to having them right in stock; nevertheless, it matters almost as much to almost as many shoppers. As seen in Chart 11, fewer respondents prioritize quick product availability than in-stock products, but just as many people say it is somewhat to very important (44%). Retailers are working to respond to this need, but for many it is easier said than done. According to Supply Chain Execution 2014: Making Omni-Channel Profitable, from Retail Systems Research, Retailers are reaching for the brass ring when it comes to their opportunities: targeting fulfillment from the most profitable location as their primary omni-channel fulfillment opportunity. However, without increased visibility across their network, their ability to achieve this goal is doubtful." Nevertheless, quickly connecting shoppers with their products is clearly an important capability for retailers to focus on. Retailers that ignore the need to satisfy this demand with an acceptable option for managing out-of-stock products, such as an enterprise-wide/cross-channel ordering capability, do so at the risk of alienating a shopper very focused on getting the product they want as soon as possible. Survey: What s Important To Customers in the Omni-Channel Agee 13

14 CHART 12: FLEXIBLE RETURNS GET HIGH PRIORITY Flexible return options defined as: Being able to return products at any location, even if I bought them online. 41% 19% 19% 3% 0% 1% 1% 7% 4% 41% of respondents say Being able to return products at any location is almost as important as having the products in stock: 41% of respondents say this is a top priority, the second largest number of 10s in the survey (Chart 12). An additional 50% say it is somewhat to very important. Retailers without cross-channel returns capability place shoppers brand expectations, experience and loyalty at risk. being able to return products at any location is a top priority. Survey: What s Important To Customers in the Omni-Channel Agee 14

15 Consumers feel most strongly about product selection and availability, followed closely by flexible returns options and good price and value. BUILDING A STRONG CUSTOMER EXPERIENCE FOUNDATION With the exception of interactive service, the clear majority of respondents rated the importance of each of these dimensions of customer experience at between 7 and 10 on a scale of 10 (Chart 13). Consumers feel most strongly about product selection and availability, followed closely by flexible returns options and good price and value. Price remains important, of course. So after initially asking about the importance of price, then drilling down into other aspects of the shopping experience, the survey took another gut check with respondents on where price falls in relative importance. The survey asked the respondents to assign a rating to this statement: Price is more important than my overall shopping experience. I will shop more often with a retailer that will offer the best prices if the overall experience is adequate (i.e., adequate service, selection, availability, flexibility, environment, consistency and rewards). The average response was a 7.78 on the 1 to 10 scale. Look at Chart 13 on the next page, and note that a 7.78 trails the average for most other aspects of the shopping experience. Survey: What s Important To Customers in the Omni-Channel Agee 15

16 CHART 13: WHICH ASPECTS OF THE SHOPPING EXPERIENCE ARE MOST IMPORTANT TO TODAY S CONSUMERS? Interactive shopping with a mobile device Personalized loyalty rewards Personal service Brand recognition A good online environment A consistent brand experience Product Selection A pleasant physical store environment The lowest price, if quality is adequate Competent service Competitive price, if quality/value better Quick product availability Flexible return options In-stock products Taken together, the survey results show that most respondents continue to prioritize what might be considered the "classic" elements of a good shopping experience: being able to easily get the right products at a fair price with good service. Contemporary refinements, such as personalized service, rewards, and mobility appear to fall into the category of "nice to have," not "must have." It will be interesting to track, over time and through additional surveys, how much that balance of priorities shift, especially as consumers are more routinely exposed to a range of mobility and personalized options. Nevertheless, the current variance in responses to most questions are far from extreme, and focusing on and delivering what the customer wants remains an essential ingredient for retail success. Survey: What s Important To Customers in the Omni-Channel Age 16

17 CONCLUSION: CUSTOMER-CENTRICITY IS THE BOTTOM LINE Shoppers expectations are higher than ever and they will be quicker than ever to move on if a retailer is not firing on all cylinders to meet them. Getting a good price the right combination of price and value remains central to those expectations, but it is far from an exclusive expectation. The survey showed that many other factors significantly influence the experience that customers have when shopping and thereby the perceptions they form of their chosen retail brands and the relative positions those brands will hold for the consumer as regular go-to shopping destinations. To elevate and strengthen their position, retailers must approach almost all areas of their business from a customer-centric viewpoint with the aim of optimizing the customer experience. In particular, they must enable their customers to: Shop effortlessly, with clear information, compelling offers, consistent terms and calculations, and pleasing environments, in-store and online aided by advanced POS and Cross-Commerce solutions that support and process transactions efficiently and transparently; Engage the experience richly and get support and answers quickly from competent, well trained associates who are equipped with the right tools which will increasingly include mobile solutions; Access products easily and quickly, in-store and from any other location and channel via Cross-Channel and Order Management solutions that offer enterprise-wide views of inventory and enterprise-wide order, fulfillment, and returns capabilities; Choose compelling, relevant merchandise via Planning solutions that can properly align products with markets, and Merchandising solutions that can apply the plan and manage product distribution effectively across the chain; and Be treated personally and rewarded for their business via CRM applications that facilitate an understanding of the customer, and loyalty applications that reinforce the retailer-customer bond in all channels and at all transaction points. By viewing and planning all operations that directly or indirectly touch the customer with reference to the expectations of the customer, retailers can leverage tremendous opportunities for competitive differentiation, customer loyalty and referrals and, ultimately, sales growth. Survey: What s Important To Customers in the Omni-Channel Agee 17

18 ABOUT EPICOR Epicor Software Corporation Corporate Headquarters 804 Las Cimas Parkway Austin, Texas Toll Free: Direct: Epicor Retail Headquarters 2800 Trans Canada Highway Point-Claire, Quebec Canada H9R1B Epicor Software Corporation provides advanced solutions for retailers seeking to streamline processes, integrate channels, leverage intelligence and inspire customers, to maximize profitability. Our end-to-end suite for softgoods, specialty, and general merchandise retailers includes: Planning/Assortment Planning, Sourcing, Merchandising, Store/Mobile Store, Cross-Channel Order Management, Cross-Commerce, CRM/Clienteling, Audit and Operations Management, LP, Business Intelligence, and Secure Data Manager, plus complete professional services, hardware services, and 24/7 support. They are designed to support Tier 1 through Tier 4 retailers on their terms best-of-breed, packaged, and through Cloud-based software as a service with low total cost of ownership and high ROI. More than 500 of the world s leading apparel, specialty, and general merchandise retail brands, operating in 45 countries, trust Epicor to help them remain current, competitive, and consistently strong. Epicor has headquarters in Austin, Texas and maintains offices worldwide. For more information, write to retailinfo@epicor.com, call , or visit Epicor.com/retail. ABOUT RETAIL TOUCHPOINTS State Route 17 South Suite 410 Hasbrouck Heights, NJ Phone: Fax: info@retailtouchpoints.com Retail TouchPoints is an online publishing network for retail executives, with content focused on optimizing the customer experience across all channels. The Retail TouchPoints network is comprised of a weekly newsletter, categoryspecific blogs, special reports, web seminars, exclusive benchmark research, and a content-rich web site featuring daily news updates and multimedia interviews at The Retail TouchPoints team also interacts with social media communities via Facebook, Twitter and LinkedIn.