Customers Prefer The Online Experience To In-Store
I have been reading several research reports from both sides of the Atlantic recently that talk about how customers are starting to favour the online shopping experience over the real, in-store experience. How could this be? Haven’t retailers always found that some customers prefer to see and touch products before purchasing?
Times are changing. If you read the results of this study then it is clear that the Millennial demographic spends at least half of their entire shopping budget online. The report shows that 67 per cent of Millennials and 56 per cent of Generation X “prefer to search and purchase on e-commerce sites rather than in-store” while 41 per cent of Baby Boomers and 28 per cent of seniors “prefer online to offline shopping.”
In my opinion the industry analyst community talks too much about demographic differences – especially how the Millennials are changing the world. I believe that customer behaviour is changing across all age groups and to see this report state that even a third of seniors prefer to shop online supports this view.
Another recent research paper on this topic suggests that 50% of European and 70% of American shoppers find it easier to shop online. However it is more important to observe that their satisfaction with the online experience is creating dissatisfaction with the in-store experience.
A quarter of all the shoppers questioned in this research said they felt that it is a ‘let-down’ when they visit a store, even if they like the brand online. The report suggests that this is because all the information about the customer that allows for a more personal online experience – such as recommendations based on your individual preferences – is lost when walking into the store.
This is important for retailers to understand. When a customer uses an app or website, the retailer knows who that customer is, what they bought previously, and what they are browsing right now. Deals and offers can be suggested and recommendations can be smart because the system knows exactly what that customer likes.
When a customer walks into a regular store how can that personal experience be mirrored? In most cases it is not. When the online shopping experience features knowledge of past purchases, preferences, and the ability to offer suggestions based on all this data, the in-store experience can seem bland and dull.
Retailers need to create a single view of the customer that works even for customers browsing in-store. This will need in-store customers to share their identity at the very least, but if the in-store experience is boosted dramatically because of this then many customers will start finding it normal. Many customers are used to loyalty cards or apps that identify them and offer deals after a purchase, but I think it will become increasingly common to identify yourself as you enter a store. It may even be that you just give a popular app (like Facebook) permission to tell retailers when you are in their stores so the process is automatic.
Is this going too far and breaching the privacy of customers or is it something that customers will actively want so their in-store experience can be improved? I’d love to hear your views because I think that eventually we will be demanding personal attention in-store, so this experience matches what we are used to online, and we will be giving up our personal information to get it.