Price tops in-store experience in shopping decisions
Price, choice and location are key when it comes to making a purchase
Many bricks-and-mortar clothing retailers have been working to improve the in-store environment as a means of differentiating themselves from pure-play online retailers. But new research from Oracle Retail now suggests that price, choice and location are more important.
This is "counter-intuitive to what we believed," explains Oracle Retail senior director Sarah Taylor.
The Evolution of Experience Retailing report, which surveyed people above the age of 18 in Brazil, China, Germany, Japan, Russia, the UK and US, found that price, choice and location were the most important considerations when it comes to making purchasing decisions. Whereas personalisation and experience were second order motivators in all countries.
Meanwhile, only 59% of UK respondents said vibrant and engaging store environments were important, while 44% said product showcases were of high importance.
Taylor suggests retailers might be better off investing in service, and ensuring that the online and in-store experiences are integrated - such as offering free wi-fi in stores, and ensuring that products ordered online can be returned in store.
While Amazon was named as the favourite retailer in all of the countries where it has a presence, since it offers choice with some 78 times the range of Wal-Mart, there is an opportunity for bricks-and-mortar retailers to differentiate themselves through service.
Taylor says consumers are becoming disillusioned with the knowledge gap, primarily in store. Changing consumption patterns mean that bricks-and-mortar retailers' traditional strengths like service and experience are being eroded as the "consumer now holds the power" through their ability to research and compare online.
She adds that retailers able to offer quality advice and transparency around availability across all channels will be the ones to succeed in coming years.
While consumers may not yet be shopping via social media yet, there still remains an opportunity to better service them as "individuals" using information shared online. For example, retailers could make suggestions about products consumers might like by tapping into their, and their friends', likes on Facebook.
Being able to do this, however, requires consumers giving up some of their privacy, and in return, they may expect lower prices, or targeted exclusive offers.
"The key to better understanding your customers and their preferences is to offer something in return as a way of opening and building that two-way communication and using the data gleaned from this to build up a profile of each customer," the report said.
"These are the early days of the art of engineering meaningful personal retail experiences, identifying the role of the mobile device as key for retailers to engage with customers at the immediate and individual level.
"Consumers want to browse and engage on mobile devices,researching up to the point of purchase, so retailers need to consider new ways of making recommendations, showing availability and incentivising the customer with custom data that motivates a buying response while avoiding any disappointments."
Integration and fulfilment
Yet, offering a great price, service and choice will only get you so far if you're unable to fulfil consumers' orders. Taylor emphasises the importance of integration across all business functions - from merchandising, to marketing and supply chain.
"Effective operational execution - the ability to achieve consistency in inventory availability, pricing, assortment and service across channels - can only be achieved by integrating operations from the head office, through the supply chain to individual channels.
"Only once retailers achieve this operational flexibility, can they really focus on putting the customer at the heart of their business, enabling customer priorities to become business priorities and delivering an experience that meets the needs of the individual," the report said.
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