Shopper Expectations in the Digital Age

ShopperExpectations
intheDigitalAge
GuidedSellingLive!
June 23, 2016
Gabe Weiss
Retail Innovation Lead
Copyright © 2016 Sapient Corporation

Gabe Weiss
iN: gabeweiss @geedub_nyc

Agenda
01 Shopper Expectations
02 Experience Matters
03 Ways to Win at Retail Today, and in the Future

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2005 2013
Profound changes have
rocked our world
Vatican Square
Announcement of New Pope

7
The “Always-On”
consumer is accessing
multiple kinds of
content across multiple
devices everyday
The average person spends 5.6 hours
a day with digital media

8
94% have done online research prior to buying
44% purchased through smartphone's web
browser
44% purchased through retailer app
Digital plays a major
role in modern purchase
61% prefer shopping in
digital channels (website/app)
Source: GSL May 2016

Customers are engaging across a broad journey,
across many channels, in their own way
EXTENDADOPTACQUIRECHOOSECONSIDERDISCOVER
DESKTOP
MOBILE WEB
MOBILE APP
SOCIAL
MEDIA
DIGITAL
RETAIL
EMAIL
CHAT
DISPLAY
TABLET
SEARCH
OFFLINE
`

10
Consumers are
consolidating their
shopping destinations
67% of consumers shop at
less than five different online stores
regularly, only 10% shop at 9 or more
stores

The global retail industry
is being disrupted

12
Online dominates
consumers’ changing
preferences
44% of favorite places to
shop are websites, then store (39%)
and store apps (17%)

E-commerce continues to grow – with 10% of all
Retail Sales online
Source: U.S. Census Bureau, Federal Reserve Bank of St. Louis (5/16)
Note: E‐commerce and retail sales data are seasonally adjusted. Retail sales exclude food services, retail trade
from gasoline stations, and retail trade from automobiles and other motor vehicles
~10%

14
Amazon is leading the
transformation
51% of all online retail
growth in 2015 was on Amazon
24% of all retail growth in
2015 was on Amazon
Source: NYTimes, It’s Amazon and Also‐Rans in
Retailers’ Race for Online Sales, 12/30/15

“How did you go bankrupt?"
“Two ways. Gradually, then suddenly.”
― Ernest Hemingway
The Sun Also Rises

0
5
10
15
20
25
30
35
40
2010 2011 2012 2013 2014 2015
Physical Stores Are Facing a Permanent Decline
in Foot Traffic (Even as Conversion Improves)
Source: WSJ, RetailNext. SapientNitro. 2015 estimated based on early 2015.
Billion Visits
15.7
billion
Permanent Slowdown?
Total U.S. retail foot traffic for November and December

17Source: http://www.businessinsider.com/photos-that-show-why-sears-is-vanishing-2013-10

Businesses have to differentiate
by offering consumers something
that goes beyond low price…
A Better Experience

The Retail Experience
Transformation Imperative
Experience Matters

20
Consumers value great prices, easy shopping
experiences with a good selection
Characteristics of favorite shops:

21
After fair price, consumers want an ideal selection
and easy to find and discover products
Characteristics of the ideal store
(online or physical store):
2%
28%
44%
61%
67%
85%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Other
Support in selecting the right product for me
Helpful service
Easy to find what I need and ability to discover new,
interesting products
Broad selection
Fair price

Modern Consumers Prefer
Self-Service Options

23
Self-service benefits:
• 55% convenience
• 49% ease of use
• 43% speed compared to human service
32% liked not having to interact with anyone
Modern consumers
prefer self-service
options
55% would prefer self-service
instead of speaking to a company
representative.

24
Biggest self-service
challenge?
67% contacted a call center
after a digital self-service option
didn't solve their problem
Of the following, what made it less than
satisfactory?
• Problems take too long to resolve 21%
• Suggested solution may not help me 19%
• Confusing to use 16%
#FAIL

25
US consumers prefer
self-service options
compared to other
markets
Only 34% of German respondents
were satisfied (Top 2 Box) with self-
service vs. 54% of U.S. and 52% U.K.
consumers.
81% of Germany respondents who
didn’t solve their problem via digital
self-service, didn’t call after vs. 58% of
U.S. and U.K. consumers.

Modern Consumers Want Help
Assessing Their Options

27
The top aspects that inform the purchase
decision-making process are:
40% How a product is different
46% How the product suits the consumer's
needs and requirements specifically
63% Performance, functionality and
reliability of the product
Consumers are seeking help understanding the benefits of
individual products in purchase decision process
What does it do
better?
How does it support
my needs?
What does it do?

Copyright © 2016 Sapient Corporation | Confidential
The Paradox of
Choice
“You have so much choice in the US
– you have whole, 1%, 2%, half &
half…we just have milk”
- Karen, visiting US from UK

29
Brands need to educate
about differences to
support the purchase
decision process
American consumers were
more likely to comparison shop
than European consumers
67% of U.S. consumers considered multiple
products vs. 57% of British and German
consumers.

30
Consumers don’t see
much differentiation
among Consumer
Electronics brands
60% believe the products are
pretty similar
• 2/3 of consumers had considered
and compared at least 2 different
brands
• Only 36% know exactly what brand
and product that they wanted

MODERN CONSUMERS ARE SEEKING
REDUCED COMPLEXITY

32
Telecom Service
providers fail to
communicate product
benefits and educate
customers
53% of people who are less satisfied with
their carrier don't understand their mobile
phones vs. 85% who are satisfied and do
understand their phones
58% of surveyed people who are less
satisfied don't understand their mobile plans
vs. 84% of the satisfied who do understand
their plans
Source: GSL May 2016, Assumes: Correlation
between satisfaction and plan understanding

33
Plans are still too
complex and not
communicated well
20% said it was too difficult to choose
between plans
9% of people who are less satisfied with
their current plan don’t switch because they
find it too confusing to choose

34
Good service is the main
reason why respondents
don’t switch
59% who are satisfied with their current
provider rated it due to friendly, knowledgeable,
and helpful staff

35
SHOPPER EXPECTIONS IN THE DIGITAL AGE
Digital plays a major role in modern purchase
Experience matters
Modern consumers prefer self-service options
Modern consumers are seeking help assessing their options
Modern consumers are seeking reduced complexity

FUTURE RETAIL WINNERS
WILL SOLVE CUSTOMER
NEEDS ACROSS THE ENTIRE
PURCHASE PATH

37
1 DON’T DENY THE
POWER OF MOBILE
Mobile platforms dominate because
they connect consumers at all times
and places, and help create a more
individualized experience

38
MOBILE: TARGET’S
CARTWHEEL SAVINGS
APP
Encourages increased
customer engagement
• Scanning
• Exclusive offers
• Social integration
• Game-like rewards

39
MOBILE: TARGET’S
CARTWHEEL SAVINGS
APP
$1 billion in sales annually *
Cartwheel users spend more per trip
and visit more often*
Sources: Chart: comScore Custom Solutions, U.S., Q1 2016
*Fortune. “Target Finds Rare Tech Edge: Its Popular Cartwheel Shopping App.”
http://fortune.com/2014/06/05/target‐cartwheel/

40
2 MIND THE CHANGING
ROLE OF THE STORE
Brick & mortar spaces should
expand beyond sales
- Media and content ecosystems
- Decision support
- Deeper service
Ultimately a foothold for all activities,
rather than just as its experience
journey’s final frame

51
3 “IN-STORE DIGITAL” IS
NEITHER YOUR MOBILE
APP, NOR YOUR
WEBSITE FORMATTED
FOR A TOUCH SCREEN
You can’t just recast your website in-
store. Solutions need to be created to
solve the problems that customers
face

56
4 DON’T THINK OF
LOYALTY AS YOUR
FATHER’S “LOYALTY
PROGRAM”
STARBUCKS MOBILE
WALLET + ORDER
of all retail transactions are
conducted before the customer
walks in the door
25%
Source: Business Insider. “Starbucks’ Controversial Rewards Program Changes Drove Almost 1 Million
Customers to Join.” http://www.businessinsider.com/starbucks‐new‐rewards‐program‐pays‐off‐2016‐4.

57
5 EMBRACE THE
CUSTOMER’S
ECOSYSTEM, NOT JUST
YOUR OWN.
Nordstrom is famously focused on
great products and stellar customer
service
Nordstrom engages uniquely in every
channel their customer is in

65
FUTURE RETAIL WINNERS WILL SOLVE FOR
CUSTOMER NEEDS THROUGHOUT THE ENTIRE PATH
TO PURCHASE
1 DON’T DENY THE POWER OF MOBILE
2 MIND THE CHANGING ROLE OF THE STORE
3 “IN-STORE DIGITAL” IS NEITHER YOUR MOBILE APP, NOR YOUR
WEBSITE FORMATTED FOR A TOUCH SCREEN
4 DON’T THINK OF LOYALTY AS YOUR FATHER’S “LOYALTY PROGRAM”
5 EMBRACE THE CUSTOMER’S ECOSYSTEM, NOT JUST YOUR OWN.

INSIGHTS

ShopperExpectations
intheDigitalAge
GuidedSellingLive!
Gabe Weiss
@geedub_nyc

Shopper Expectations in the Digital Age

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