Don't Believe the Hype: Which 5 Retail Myths Need Busting?

6/19/2013
Technology is cool, but shoppers want service. Retailers need to modernize and respond to industry and consumer trends with an array of shopping and fulfillment options. They need to deploy new technologies. But shoppers also want the basics.

Whether they shop in stores or online, the top influencers of purchase decisions are price and product selection. Out-of-stocks is the number-one in-store dislike, as it has been every year since Cognizant and RIS News first partnered for the annual Shopper Preference study.

This year's report, titled "Rise of the Individual Shopper," is the fourth annual deep dive into the likes and dislikes of 2,500 shoppers in the United States and Canada. It provides specific insight into shopper behavior preferences that have a direct impact on current and future retail strategy.

Here are some overarching takeaways and five retail myths that need busting to align with shopper preferences.

Myth-busting: Five over-hyped trends
Myth 1: Mobile shopping is the wave of the future. Sure, shoppers, particularly millenials, love to use mobile devices to find the nearest store, comparison shop and check prices. But when it comes to tapping the "buy" button for online purchases, they prefer to use more traditional devices. Shoppers' overwhelming first choice is a desktop or laptop computer in the home or office. They make less than 3 percent of annual purchases with mobile devices, a finding that's consistent across segments by age, income and education.

Implication for retailers: While a mobile presence is the cost of doing business today, retailers should select mobile sites' features, functions, offers and product categories cautiously. Maintaining their investments in traditional online sites and the physical store is a must.

Myth 2: Price matching is the answer to Amazon and showrooming. Time and again respondents note the importance of price in their purchase decisions. Indeed, by a factor of 3 to 1, shoppers in our survey ranked online pricing as their top reason for shopping in-store but purchasing online. Less clear, however, is what shoppers do when unsatisfied with store prices. Our research shows that more than half the time, shoppers exit stores and look elsewhere, whether in another brick-and-mortar store or online. Only 20 percent of shoppers request price matching.

Implication for retailers: While many retailers are revamping their price-match policies and capabilities, there is no substitute for getting price right the first time – and for ensuring it is consistent with customer expectations and brand image. Price matching does not save the sales that are lost when shoppers walk out of stores without buying.

Myth 3: Shoppers want more self-service tools. It's true that online shoppers expect functionality and information. But when it comes to in-store shopping, customers' consistent message for the past four years is that they want -- and expect – service, not technology. They'll use in-aisle scanners for price checks, but they shy away from kiosks. Personalized experiences rank well ahead of interactive ones. To shoppers, inefficient checkout is worse than no self-checkout. As an influencer of in-store purchase decisions, customer service closely follows price and selection. And when store shoppers need help, they are most likely to visit the customer service desk.

Implication for retailers: Retailers need to arm their sales associates with the same information customers have access to, but shoppers reiterate that they favor better "soft" interpersonal skills from sales associates, not more technology.

Myth 4: Social media's impact on shopping is increasing. While there's no denying the influence of social media, its role in the shopping experience remains far more measured than first predicted. Three years ago, retailers were rushing to set up Facebook stores and garner ‘likes.' Today, most have shuttered their Facebook stores. Our survey respondents say social media is their least used source of information and the lowest influencer while shopping. Shoppers are more likely to want to discuss problems with people or fill out surveys than they are to post comments on social media sites.

Implication for retailers: Social media provides an additional way to interact with customers, but it does not replace traditional communication methods. Retailers should focus their investments on social media customer outreach and social listening for broad patterns in customer behavior and use that knowledge to fine tune their core services and products.

Myth 5: Cross-channel fulfillment is a key customer expectation. Many retailers have rolled out "order online/pick up in-store" capabilities and many others are making plans to. Yet our respondents indicate that seamless pricing and service are "must haves" that are often missing with this option. The majority expresses frustration that retailers have not modified their policies and trained their employees to address seamless cross-channel fulfillment.
 
Implication for retailers: With all its moving parts and information needs, order online/pick up in-store is easy to get wrong and can result in disappointed customers. Given the substantial investment the service requires, retailers should address associate training, store policies and inventory processes to scale operations as well as supply chain efficiencies.

"Know thy customer" has long been the merchant's mantra. But in today's omni-channel, hyper-connected world, the adage applies to all parts of the organization. The challenge is focusing on the themes that are most important to your most valued customers, and then bringing policies and processes into alignment across your customer touchpoints. And then getting the details right.

Steven Skinner is vice president of Cognizant's retail, hospitality and consumer goods practice. For a download of the complete 20-page report click here.

This article first was published by Apparel's sister magazine, RIS News.
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