Salesforce has released its third annual “Connected Shoppers Report” which highlights the behaviours and expectations of over 10,000 global consumers. John Strain, SVP Retail and Consumer Goods Industry at Salesforce released a video blog to unveil the report. Based on the company’s broadest consumer study to date, the report reveals what consumers want from the modern retail industry.
Battling for wallet share?
The report suggests 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. The greatest share of spend goes to online marketplaces like Amazon, eBay, and Etsy taking 47% of purchases.
But what draws consumers to each shopping destination?
- Shoppers say retailers stand out for their superior return policies, service, and rewards programmes.
- For high-quality, unique, or customised products, shoppers turn to brands.
- When prioritising 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.
Driving consumer loyalty
All members of the retail industry, including brands and retailers must demonstrate they understand customers on an individual level. In addition, retail industry must integrate seamlessly into their daily lives. More than 10,000 global shoppers made it clear that their favourite brands make them feel understood and special. The report makes it clear, that this is vital to win the hearts (and wallets) of consumers.
Differentiated products and experiences earn shopper relationships. Nearly eight in 10 consumers are more likely to buy from brands with a loyalty programme. More than half of shoppers are drawn to brands and retailers that offer limited-edition or customised products (54%). Exclusive shopping events were also attractive to consumers (51%). These preferences are even more pronounced among younger generations. Seventy-two percent of Gen Zers more likely to buy from brands or retailers selling limited-edition or customised products.
Adapting to changing shopper behaviours
Consumers are defining these new terms of engagement, the report makes this 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. Salesforce 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. Alternatively, asking Alexa to order dinner while watching Netflix, shopping at the edge is poised for growth.
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 fulfilment. 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. Sixty-two percent 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 a place 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 customisation 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.
Enterprise Times: What this means for business?
Some retailers see adding eCommerce offerings, as another tick box exercise they must complete to compete in today’s competitive marketplace. However, online shopping is more than just a transaction at a checkout counter. Rather, it’s a full spectrum of activities — including research and discovery, browsing and buying and receiving service. Ultimately its about building a long-term relationship between retailer and brand.
The Salesforce report is particularly interesting because it attempts to explain why some retailers thrive while others are closing down. The most innovative retailers watch shoppers’ evolving preferences and behaviours — and evolve along with them. The key remains understanding customer needs. Thereafter managing and cultivating that relationship, so that ultimately, those customer become your brand advocates. Easier said, then done. But ultimately that remains the challenge for business in the 21st century.