Millennials Would Pay Up to 20 Percent More for Better Retail Experiences
Disappointing shopping experiences are costing brick-and-mortar retailers serious money, according to the latest State of Retail 2017survey of U.S. consumers from business personalization firm TimeTrade. In fact, the survey results suggest that U.S. retail stores left about $150 billion in potential revenue on the table in 2016 by failing to offer shoppers the personalized shopping experiences they want.
Respondents said that, on average, they would increase their in-store spending by 4.7 percent if they received better, more personalized service from retailers. This additional revenue would represent a huge improvement for brick-and-mortar retailers, who are struggling to meet revenue, profit and stock valuation goals.
“Just imagine the positive financial impact on brick-and-mortar retailers if revenue jumped by 5 percent,” said Gary Ambrosino, CEO of TimeTrade, in a news release. “Right now, retailers’ revenue projections and stock prices are under pressure as the landscape continues to change. A renewed focus on providing shoppers with a better, more personal in-store experience would go a long way toward stemming the tide of defection to competitors and online sellers.
How much more would you be willing to pay for highly personalized experience?
|Up to 5 percent more||20.2||%|
|Up to 10 percent more||20.9||%|
|Up to 20 percent more||8||%|
Previous TimeTrade surveys of retail executives consistently show they believe their stores do provide customers with personalized shopping experiences. But consumers see things differently—about half of this year’s survey respondents (49 percent) said they “never” or only “sometimes” receive what they consider to be personalized service. In fact, 70 percent of the time they shop, they said they “never” or only “sometimes” can find a sales associate when they need assistance.
Do you feel retailers today are providing you with a personalized shopping experience?
|All of the time||15.1%|
|Most of the time||35.5%|
This disparity is financially damaging for retailers. For example, 71 percent of consumers surveyed said they sometimes or always abandon dressing rooms and leave stores if they can’t obtain help with sizes, color, etc. On the other hand, 88 percent said that when helped by knowledgeable associates, they are “somewhat likely” or “extremely likely” to make the purchase.
BRICK-AND-MORTAR IS ALIVE AND WELL
Despite the continued growth of online shopping, 82 percent of respondents said they still do half or more of their shopping in physical stores (excluding grocery stores). Moreover, 70 percent said they planned to do the same in 2017, with 14 percent saying they would increase the amount of shopping they do in-store. Even when an item is available online—as well as in a nearby store—75 percent of respondents said they preferred to buy from the physical store.
When asked what they value most when shopping in a retail store, respondents cited prompt service, personalized experiences and smart recommendations the most. To improve service, 64 percent said they would like to schedule in store appointment (from any device) with a retail associate at a time most convenient to them.
What do you value most when shopping in a retail store?
“In-store shopping is far from dead—but it does have to change to keep up with the trends. These survey results show that people definitely like shopping in stores so they can touch and feel products, and because they enjoy receiving prompt, personalized service,” Ambrosino said. “The key to success for brick-and-mortar retailers is to fully utilize their existing staff and relentlessly focus on providing personalized service to every customer. We know consumers are willing to pay for better service. It’s a big opportunity for traditional retailers to up their game across the board and capture that additional revenue, instead of letting those dollars go elsewhere.”
THE MILLENNIAL OPPORTUNITY
Millennial respondents (aged 21-35) offered some counter-intuitive findings. Members of this generation, the largest in U.S. history, are entering their earning and spending prime, making them especially important to retailers. While many assume that Millennials—who came of age in the digital world—shop mostly online, survey results show that they prefer shopping in stores (89 percent said they will shop as much or more in stores in 2017) and scored higher than other age groups in the following areas:
- Almost half of them (47 percent) do 75 percent of their shopping in stores vs. online.
- 29 percent always start shopping online and go in-store to complete the purchase.
- When helped by a knowledgeable associate, 58 percent are extremely likely to make purchases.
- Nearly 70 percent said they would pay more for products or services if they had a highly personalized in-store experience. In fact, 24 percent of these respondents would pay up to 20 percent more.
Millennials said they would enjoy improved shopping experiences if provided personal assistants/shoppers (45 percent), beacon technologies (31 percent) and organized systems with wait-time displays and text/email updates when their turn is near (29 percent).
VARYING OMNICHANNEL EXPERIENCES
Respondents noted differences when it came to providing a consistent experience across channels. While 75 percent agreed that stores provide good service, only 38 percent felt that way about the web, 31 percent for email, 26 percent for call centers, 24 percent for social media, 21 percent for text, and 14 percent for kiosks.