Mar 18 2019

Fresh Perspectives on Today’s Consumer from Leading Research Firms: Shoptalk ’19

Today’s consumer: they want it and they want it now. But what is “it?” And how do they want it? Ken Cassar, Principal Analyst and VP at Rakuten Intelligence, Piers Fawkes, Founder of PSFK, and Mark Berry, EVP, US at Ipsos Marketing share their latest consumer insights, from delivery and store experience to touchpoint strategies.

Delivery Experience

Starting with the fulfillment experience, Ken Cassar, Principal Analyst at Rakuten intelligence, shared his findings. The long trend of faster online order fulfillment continues. In 2017, the average click-to-door speed was 5.2 days. In 2018, this improved to 4.2 days. He jokes that by 2023, we’ll receive packages before we’ve even ordered them, but is it a joke?

When you think about delivering the package to the consumer, you need to think about both the warehouse speed and the delivery speed. Retailers improved the most in their delivery speed as opposed to their warehouse turnaround. It was the reverse for Amazon, giving retailers an opportunity to shrink the gap between them and the marketplace giant.

Keep in mind, it cost twice as much to deliver a package in two days than five days. But it could be worth the expense. Rakuten found that faster shipping brands and retailers are more likely to grow faster. Regardless of the added cost to merchants to expedite shipping and warehouse turnaround, consumers expect faster and free delivery at no cost to them. Merchants are taking note—as of 2018, 92% of merchants offer free shipping.

Cassar lays out three things a merchant can do to improve the delivery experience.

  1. Leverage your brick and mortar stores. Brands and retailers that have existing store locations can use a click & carry strategy to reduce shipping costs and delivery time. “Click & carry is the most visible manifestation of omnichannel that we see today,”  says Cessar. In fact, when looking at the top retailers, 27% of their sales went through click & carry.

    The speed of click & carry is clearly an advantage to those that offer same-day fulfillment. In December of 2018, weekly online sales of the top ten brick and mortar retailers that offered click & carry surpassed Amazon’s weekly sales. “Stores are not just for click & carry,” says Cessar. “Increasingly, they are acting as local-ish shipping hubs.”
  2. Attract customers willing to pay a premium for fast delivery. When it comes to shipping cost, how much are customers willing to pay extra for expedited delivery? Various surveys have the estimate anywhere between $5.60 and $18.00 for same-day delivery. The willingness to pay extra for faster shipping decreases as the length of the delivery increases.

    It’s more common to see large retailers offering same-day delivery over brands and manufacturers—leaving the former to lay the groundwork for this type of service. Retailers like Macy’s, Nordstrom, Barnes & Noble, and Best Buy all offer this service in particular markets for a substantial cost usually around $25.
  3. Offer unique merchandise assortment. Cessar notes that the “merchants that thrive depsite slow fulfillment tend to offer unique assortment.” Some of the examples he gave include Ikea, Poshmark, and Total Wine. While these players attract critical mass with their products, this will only sustain them for so long.

In-Store Experience

Delivery is the last moment of truth for any company, but customers heightened expectations carry over across the entire customer journey. Piers Fawkes says that he’s seeing more and more retailers strategically thinking of stores outside of transactions. “[Consumers] want more meaningful experiences and they look for something beyond the transaction because often the transaction takes place on the phone,” says Fawkes.

Fawkes’s agency PSFK found that people love the physical store experience, they see their mobile device as a tool when shopping in-store, they want to resonate and emotionally connect with brands, and they want flexibility in how, when, and where they shop.

Many legacy retailers who failed to adapt to new technologies and trends are shuttering their stores. However, they have an opportunity to test with diverse store formats, events, and experiences. For example, Fawkes found that many retailers are eliminating the aisles and aisles of merchandise and focusing more on storytelling, creating an emotional connection through experiences, and flexibility.

Tell Your Brand Story

Architectural storytelling enables brands to create a unique narrative in the store that’s different than the general conversation. For example, Starbucks has their Reserve Roastery concept store. Based on the selected inventory, consumers have a better understanding of what Starbucks stands for: they strive to serve customers with the highest quality of coffee.

Companies like Brand Box offer direct to consumer brands a turnkey store to test different story concepts before making a commitment. This lowers the barrier of entry to create a physical store and a controlled platform to test new products and store layouts.

Go Beyond the Transaction

“Stores are a tool…to drive future purchases and loyalty,” says Fawkes. It’s no longer about the last touchpoint that drove the customer to complete the purchase; it’s about the entire customer journey. Retailers and brands are thinking of ways to enhance the entire customer journey while they’re in a physical store. For example, Office Depot opened workspaces, allowing customers to integrate the retailer’s products into their everyday lives.

Be Flexible and Responsive

Retailers and brands are using responsive shelf displays to give AR-powered virtual demos, promote complementary products, or provide more information on the shelves—anything that helps bring the brand story to life. As shoppers interact with the displays, brands are capturing data about what type of information they need to see in order to drive them towards a transaction.

To offer complete flexibility in products, more and more brands are opening customization studios within their stores. This enables shoppers to create a product that reflects who they are and what they want to communicate to the people around them.

Customer Touchpoint Strategies

In addition to physical stores, there are numerous other touchpoints within the customer journey. According to Mark Berry, a touchpoint is any interaction with a customer that can influence them. Many brands fall victim to creating conflicting touchpoint strategies and tactics and have a limited understanding of how customers decide to purchase one product over another.

Behavioral science is changing the way brands and retailers think about touchpoints and how they present them to the consumer. We assume customers think logically and rationally, but there are signals all around them that influence their buying habits.

Berry ran a test to examine the degree to which evoking emotions around “security” would influence the purchase of a national brand over a private label. A Charmin ad showed the quality of their paper over the private label by putting a stack of quarters on a suspended sheet of toilet paper. The quarters fell right through the private label’s paper, but Charmin’s held them up. Not only did Charmin prove they were higher quality, but they also made the unconscious effect of saying their brand is worth the money by using the quarters. After consumers saw the ad, they were more apt to purchase Charmin over a private label.

“Is this (behavioral science transformation? Our belief is that it is. We can understand more succinctly, more concretely, and with more granularity how you’re customers think.”

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Shannon Kenneally

Media Marketing Specialist

After graduating from Clemson, Shannon started her career in marketing, focusing on content creation and engagement. As Blue Acorn’s Content Writer, she keeps clients and customers up-to-date on the latest trends and news in the ecommerce world. In her free time, she enjoys running with her dog and checking out the local breweries in Charleston.

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