Why are some retailers thriving while others are closing for good? The most innovative retailers watch shoppers’ evolving preferences and behaviors — and evolve along with them.
Based on Salesforce’s broadest consumer study to date, the third edition of the Connected Shoppers Report reveals insights from over 10,000 global shoppers on what they want from the modern retail industry. Their research asked four questions that lead to insightful business revelations:
1. Who wins the retail industry battle for wallet share?
Shoppers are presented with a virtual buffet of information and purchase options when shopping online. Rather than sticking to one digital storefront, 86% of shoppers turn to a combination of retailers, brands, and online marketplaces to make their purchases. When it comes to winning the greatest share of wallet, online marketplaces take the cake, with 47% of purchases going to sites like Amazon, eBay, and Etsy.
But what draws consumers to each shopping destination?
- Shoppers say retailers stand out for their superior return policies, service, and rewards programs.
- For high-quality, unique, or customized products, shoppers turn to brands.
- When prioritizing price, shipping convenience, and product variety, consumers choose online marketplaces.
Which channel a consumer chooses varies between the first and repeat purchases. Seventy-one percent of first-time purchases are made in a brick-and-mortar store, as consumers prefer to inspect new products in person. But once a shopper is familiar with a product, this behaviour shifts. Online purchases win three-quarters of repeat buys, with physical stores earning just one in four.
2. What drives loyalty among today’s consumers?
To win the hearts (and wallets) of consumers, all members of the retail industry — including brands as well as retailers — must show they understand customers on an individual level while integrating seamlessly into their daily lives. More than 10,000 global shoppers made it clear: Their favourite brands make them feel understood and special.
Differentiated products and experiences earn shopper relationships. Nearly eight in 10 consumers are more likely to buy from brands with a loyalty program — and more than half of shoppers are drawn to brands and retailers that offer limited-edition or customized products (54%) or exclusive shopping events (51%). These preferences are even more pronounced among younger generations, with 72% of Gen Zers more likely to buy from brands or retailers selling limited-edition or customized products.
3. How is the retail industry adapting to changing shopper behaviours?
With consumers defining these new terms of engagement, one thing is clear: The future of shopping isn’t limited to the retail industry’s physical and digital properties. Instead, shopping activities will increasingly occur on third-party storefronts, beyond brands’ and retailers’ physical and digital properties. We refer to transacting at these off-property channels — including voice, social media, gaming consoles, and chat — as “shopping at the edge.” At the edge, shoppers are surrounded by products, promotions, branded content, and the ability to buy wherever they go.
Consumers say they already make 9% of their purchases on emerging digital touchpoints.
With 13% of Gen Zers already shopping this way, whether by buying on Instagram while walking to class or asking Alexa to order dinner while watching Netflix, shopping at the edge is poised for growth.
4. Are brick-and-mortar stores still relevant?
While store closures are often in the news, brick and mortar remain a cornerstone of the retail industry moving forward. Shoppers view physical stores as central hubs for three key things: discovery, experience, and fulfillment. Contrary to popular belief, millennials and Gen Zers are the most reliant on stores to discover new products.
When shoppers want to touch and feel new merchandise for the first time, they visit stores. Product details may be a mere Google search away, but the act of walking down store aisles still matters. Even better for retailers, 62% of shoppers say when they shop at a physical store, they tend to buy more than initially intended.
In our digital era, the brick and mortar store remains one of the few places for consumers to engage with a brand in person. Thirty-seven percent of shoppers — and 45% of Millennials — have engaged with a unique in-store experience. Whether it’s a shoe customization workshop at Dr. Martens or an in-store meet-and-greet with influencers at Sephora, retailers are showing their creativity with these engagements.
From click and collect to endless aisle (shipping a store’s out-of-stock product to their homes), shoppers are taking full advantage of in-store fulfillment services. The retail industry is reaping the benefits: 67% of shoppers have bought something else while making an in-store return.
This blog post is an adaption of an article by Salesforce. To read the original article, click here. https://www.salesforce.com/blog/2019/10/retail-industry-trends.html