Convenience is now the key to retail, and today’s consumers want more stimulating shopping experiences, steady access to product information, more payment methods—and they want it all to be simple and seamless.
But today’s consumer is already old news. According to MasterCard, retailers should be marketing to tomorrow’s consumer: the omnishopper.
In its recent research, “The Retail CMO’s Guide to the Omnishopper” MasterCard surveyed 10,000 shoppers in 10 countries to understand why they buy the way they do and found that these smarter customers are channel agnostic so long as they can easily find just what they want.
So shifting from the notion of channel profitability to one of customer profitability is the next step for retailers.
“It is the consumer, not the channel, that has defined and will continue to define retailing,” the report noted. “Amidst a deluge of big data, a new world of technology to sort it, and the continued maturation of digital commerce in all forms, it’s a good time for retailers to take stock of that truth.”
And contrary to popular commentary about brick-and-mortar being dead, omnishoppers still see the benefits of in-store buying.
Fifty-nine percent of shoppers still spend time in stores because of the instant gratification they provide, 54 percent visit for associate advice and 53 percent still consider it a social experience.
Omnishoppers are also comfortable with the retailers they know—80 percent said they like to buy from merchants they’ve bought from before. But beyond comfort, 44 percent of shoppers said value is what keeps them coming back, 36 percent indicated that track record/experience is what does it and 34 percent cited convenience.
These shoppers have cut back on the stores they visit but are more informed about what they’re buying.
“The path to purchase for the omnishopper is informed by the necessity of getting information about product details and the way to discover real value,” according to the report. “The more diverse information omnishoppers get, the more comfortable they are pulling the trigger on a purchase.”
MasterCard also released results of another study this week looking at shopper’s social commentary and found that not only do they want to shop at the “speed of life,” now they want more ways to pay.
Consumers don’t want to take their wallets everywhere they go anymore, ideally, near-field communication (NFC) payments—which let them hover smartphones in front of an NFC-enabled reader to complete a payment—would be more readily available.
“The wave of social engagement we see every time new payment innovations are rolled out truly reflects the demand and desire for new and more convenient ways to pay,” Carlos Menendez, MasterCard executive director for international markets, said. “It also shows that payments have really moved into the heart of the shopping experience – causing frustration when not accepted and engagement when fast, easy and personal.”
The one thing, however, that most hinders the path to purchase is unavailable inventory. Seventy-three percent of shoppers cited unavailable items as the most frustrating thing about shopping today, more so than the 54 percent that blamed shipping policies and the 46 who said shopping effort was the peskiest.
When omnishoppers do buy, though, the lowest price isn’t the primary consideration—most are looking for a fair price at a high quality. In ranking the most important factors in a decision to purchase, surveyed shoppers said price/quality was the most important, followed by product specs, payment options, user reviews, reputation and lastly, discounts and promotions, which hardly jives with today’s heavily promotional retail environment.
The new consumer is predisposed to be loyal, but retailers will have to look at loyalty in a new way to keep omnishoppers long-term.
Today, it’s all about commitment marketing, says MasterCard.
Commitment marketing means retailers create commitments (like subscriptions, experiences, community efforts or philanthropy) that increase the intensity of consumer relationships and ultimately revenue.
“A commitment strategy is different than loyalty,” Dr. Jeff Inman, associate dean for research and faculty and Albert Wesley Frey professor of marketing at the University of Pittsburgh’s Katz School of Business, said for the report. “It’s a strategy that puts retailers in the ‘get, keep and grow’ mode that I don’t hear enough about from this category.”
Amazon’s Prime subscription shipping service for $99 a year is one current example of commitment marketing. The offering has earned Amazon 44 million customers with a monetary commitment, which accounts for 47 percent of its customer base.
Socially conscious consumers also want commitments from brands that involve causes and community involvement, and those kinds of commitments will be key for strengthening relationships with Millennials in particular.
“Consumers will want a sense of impact,” one analyst noted. “It’s not just Millennials who will be socially conscious. It will go beyond money and product into altruism to gain a stronger relationship. It is a very real trend, and I would say one of the most important things any retail executive should focus on.”
Retailers should be investing in shopper data and advanced analytics, analytics technology to parse that shopper data, human intelligence to make all that tech actionable, and content to keep the info-hungry consumer sated.
Omnishoppers want content that’s agile, generated, renewed near-constantly and made available across segments.
“Institute a culture of focusing on that customer, create a chief customer officer role, and quantify the value that customer will produce,” Don Peppers, founding partner of marketing consultancy Peppers and Rogers Group, said. “The mistake retailers make is becoming myopically focused on the quarterly revenue number. That’s a short-term issue. Focus on the customer and customer value, and take the long-term view.”