5 Shopper Study Megatrends
The future of retail is not about technology, it is about rapid change and adapting to shopper trends and competitive forces. Technology plays a big factor, but in a supporting role, one that strengthens big goals but is not the goal itself.
Even in support, however, technology is essential to success and the 9th Annual RIS Shopper Study, “Retail 2025” connects the dots between shopper trends, technology and retailer responses to close gaps and open new doors to opportunity.
The underlying mission of the RIS Shopper Study is that all technology should be customer-centric (aimed at achieving customer benefits) and there is no better way to find out what customers want than by asking them. So in this study, we ask 5,000 consumer what they like, dislike and would like to see in their shopping experiences.
There are too many takeaways too fit in this space, so here is a short list of the major shopper megatrends that retailers should pay attention to today and in the next decade.
5 Shopper Megatrends
- Today’s brick-and-mortar experience is dying and will be replaced by smart stores that convert the shopping journey into a convenient, tech-driven and immersive experience. While the economy is booming right now and many retailers are posting the strongest numbers they have seen in years, the truth is there is still room for concern about the in-store experience.
Over the last five years, 31% of shoppers say they do less shopping in stores and more shopping online or on smartphones. Also, 55% of consumers say they do less shopping in shopping malls over the last five years.
This trend does not bode well for brick-and-mortar retailers, who need to reinvigorate their in-store experiences to avoid losing a generation of shoppers.
- Amazon Prime is the most successful loyalty program the retail world has ever known, which changes the center of gravity for all retailers. 67% of all consumers in the study are members of Prime or in households that possess membership. In a related datapoint, 66% of shoppers primarily go to Amazon.com when they search for products to buy. No other retailer comes close to matching these numbers.
Does that mean Amazon has locked up the consumer marketplace and the game is over for other retailers? Definitely not. However, it means that retailers must do more to attract loyal customers and keep them coming back again and again. The only retailer that comes close to competing with Amazon Prime is Costco, which was chosen by 26% of shoppers as having an outstanding loyalty program.
Conventional wisdom holds that no one can compete with Amazon Prime and that Costco is a membership club and not a loyalty program. But these perceptions underscore the critical point that It’s time to rethink the loyalty program model and throw out traditional barriers.
Loyalty programs work to drive business, customers love them and yet they are an underutilized resource, an opportunity for retailers to engage their best customers, but only if they are willing to break the standard mold.
- Retailer mobile apps have failed shoppers and they are not getting better. Mobile commerce is growing because shoppers are mobile-centric and not because retailers are good at it. Retailers admit they have difficulty getting shoppers to download their mobile apps and, once downloaded, to use them, especially while the shopper is in a store at the moment of decision.
Year over year, shopper frequency using a retailer’s mobile app in the store dropped from 10% who said they use it every time to 3%, and from 24% who said they use it most of the time to 15%.
Shoppers want mobile apps to deliver promotions and discounts personalized just for them (66%) and promotions and discounts available to everyone (61%). Every other feature is much lower on the list.
Retailer mobile apps are another underutilized resource, which is a troubling because shoppers who download mobile apps and use them in stores are the very definition of loyal shoppers.
- Shoppers are actually open to being digitally identified in stores in real time, which is one of the major findings in the study that goes counter to traditional retail thinking. 73% of shoppers say they are open to being identified in stores if they receive what they want in return – tailor-made offers just for them, promotions available to anyone, and loyalty program alerts informing them they can redeem an earned award.
These findings indicate shoppers are on the cusp of allowing retailers to identify them in the store and receive personalized messages and alerts on smartphones. This is the holy grail of personalized marketing and something retailers should aim for in a careful, non-aggressive way. Ask permission, persuade don’t sell, become a trusted advisor who helps and supports.
- Shoppers are open to emerging technologies if they add convenience and service. The top emerging technology that shoppers want is cashierless checkout chosen by 59%. Retailers other than Amazon, Kroger and Dollar General show little desire to rush into the grab-and-go store concept, but shoppers want it and what shoppers want they always get.
Voice-activated shopping falls into the same category. 23% of shoppers say they have tried voice-activated shopping, which is up from 20% last year. Interestingly, all of the year-over-year gain was made by Amazon, which nearly doubled its market share over Apple Siri and Google Home.
The dollar volume for voice commerce is tiny right now, but so was the dollar volume for Amazon in 1995. Nothing is more convenient than voice shopping and it is easy for retailers to deploy. Again, shoppers will be in charge of how fast voice commerce grows.
The doors of opportunity remain open for retailers who keep up with major consumer trends and take bold steps to continually reinvigorate the shopping experience.
To read the full report and get a complete set of charts and analysis, click here.