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GUEST COMMENT From price to value: understanding the modern shopper

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Understanding how people shop – on and offline – is key to saving the High Street
Understanding how people shop – on and offline – is key to saving the High Street
Myles Dawson, UK Managing Director, Adyen
Myles Dawson, UK Managing Director, Adyen

The retail world is changing – and technology will continue to influence how we shop and what we expect from retailers. But while many industry experts equate the challenging retail environment down to the rise in online shopping, our research suggests that many UK stores are simply failing to create an in-store experience that matches customer expectations.

 

Of all the countries surveyed as part of Adyen’s 2018 European Retail Report – Brits are less inclined to shop in-store than other countries and this is because we don’t like to queue as much as the national stereotype suggests. Long queues are costing British retailers up to a staggering £12 billion per year, with shoppers either going elsewhere or abandoning a purchase altogether.

 

Despite the challenges, there is a bright future for high street retailers and everyone from the shops themselves, consumers and the Government are backing the survival of in-store shopping. It’s recently been reported that UK politicians have been receptive to helping retailers adapt to the ever changing landscape by looking at cutting business rates and building larger communities around designated shopping areas.

 

With everyone rooting for the survival of the high street, retailers need to explore new and innovative experiences that will make customers fall in love with visiting their stores once again. A great example of this is Zara, who are implementing augmented reality via mobiles in-store for customers to visually “try before you buy”. It also opened its first click-and-collect concept store in London. Sweaty Betty have approached their brand experience in a different way, creating an integrated destination for their customers, housing a shop, fitness studio, beauty bar and cafe all under one roof. This demonstrates a retailer adopting technology or experience in a clever way. It’s not as simple as just using what’s available for the sake of it. Instead, retailers should look to understand their customers and their needs.

 

It’s with this in mind that we come to the emergence of a new category of shopper: the ‘Spendsetter’. The Spendsetter is tech-savvy and wants quick, easy, connected experiences. They have a keen eye for quality and are far more concerned with value than low prices. Half the European population falls into this category, and there are three important factors that appeal to this new audience.

  1. Convenience

Spendsetters have high expectations, particularly around the use of technology to enable them to shop and pay for items, Amazon’s one-click payments being the benchmark. These one-click payments allow consumers all over the world to make transactions, at the touch of a button, in their preferred currency. Now, the Spendsetters’ expectation is the same in-store. Our research found that 65% of Spendsetters would shop at a specific location if it was more convenient or there were less queues. Mobile tills and “queueless shopping” are being trialled by the likes of Sainsburys in the UK and Amazon stores in the US, in an attempt to keep up with the demand for frictionless experiences.

 

The UK leads Europe in the adoption of contactless payments, further proof of the Brits’ love for convenience when shopping 88% of Brits say they are comfortable using the payment method, followed by Spain (80%), France (79%) the Nordics (73%) and then Germany (70%). The boom in contactless is a good example of how a convenient experience can ultimately increase long-term customer loyalty as shoppers remember how easy it was to make a purchase.

 

  1. Context

Personalisation is increasingly more meaningful to shoppers, but it’s still yet to be mastered by retailers. Our research shows that only one in five (19%) customers find in-store product recommendations to be ‘very satisfying’, yet just two in five retailers see merit in equipping associates with tablets or other mobile devices to assist customers with a more personalised service. Retailers are missing a trick if they are not tailoring a Spendsetter’s customer journey.

 

The shopping journey of a Spendsetter is also a break from conventional methods. Unlike past generations, they will start to browse for products through social media, then move to the mobile app, then finally go in store to try and then buy. This is driving appetite for omnichannel shopping experiences and further innovations, like using chatbots and smart speakers to make purchases.

 

  1. Control

Control over personal information is increasingly at the top of every Spendsetter’s mind, especially with the latest roll out of the European General Data Protection Regulation (GDPR). Almost a third (31%) of Spendsetters saying security incidents significantly impact the likelihood of returning to a retailer, so it’s important that businesses have fraud or risk mitigation as a priority.

 

Control over payment choice is also an important area often overlooked by retailers. For example, our research shows that 40% of consumers aged 18-24, who increasingly expect to pay with digital wallets like Apple Pay and Google Pay, encountered a retailer who did not accept these methods. Moreover, our research found that a lack of preferred payment methods has cost British retailers £422 million in the past year.

 

Light at the end of the tunnel

Technology is changing retail and innovative retailers are using it to evolve, with in-store experiences the order of the day. Retailers must use the data available to build memorable experiences that connect with their customers, making them want to leave the comfort of their homes and towards the bricks and mortar stores. The shop serves as a great tool to create the experiences that Spendsetters love and will allow them to share, learn and interact with the brand in a refreshing way, encouraging customers to return and build brand loyalty. Omnichannel retailers should also explore the opportunity to connect their online and offline sales channels to create a more seamless experience for their shoppers, helping them to purchase the product they want through their preferred sales channel. Lastly, it’s not only important for retailers to keep on top of what their customers want today, but also to continue to innovate and implement new technologies to add value to customer shopping experiences.

 

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