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Almost half of shoppers still prefer brands with stores
Despite an increasing amount of people shopping online, factors such as product pricing and whether a brand has a physical store still come into play
Almost half of shoppers prefer shopping with brands that have physical stores, according to research.
A study by agency Wunderman Thompson Commerce spoke to consumers across several regions, including US, UK, France, Germany, Spain, Czech Republic, Belgium and the Netherlands, and found 46% of consumers like shopping with brands who have a physical store to visit – a number that was higher amongst Gen Z shoppers, those of which who are old enough to be considered shoppers in Wunderman’s eyes are between the ages of 16 and 24.
But digital hasn’t been ruled out altogether when it comes to shopper’s choices, with 43% of consumers saying they’re more likely to buy products from a brand they deem to be digitally innovative.
“The research shows that customers will remain loyal to those that can provide a memorable experience online,” said Angel Maldonado, founder at Empathy.co. “It’s time for the retail industry to create more tailored customer interactions, ones that evoke emotions and feelings. This is something that technology is capable of triggering and it needs to be done in a way that ensures shoppers feel like individuals, not numbers on a graph. It’s time to make online shopping relatable, personal and irresistible.”
Access to technology has made customers even more fickle, with consumers now expecting services such as next day delivery, personalisation and rewards – something Amazon is succeeding at, while other retailers are often left behind.
Wunderman’s study found Amazon sales make up 36% of all online retail spend internationally – an indication of customers’ growing need and expectation for convenience in the shopping process.
As for other brands, in many cases, shoppers feel they are more digitally advanced than some high street retailers, with 40% of consumers seeing themselves as more digitally savvy than retailers and the services they use.
Work with Amazon or find a niche
With almost 70% of shoppers researching products they want to buy before purchasing them in-store, Neil Stewart, global CEO at Wunderman Thompson Commerce, warned brands to either work with Amazon rather than against it, or find a niche Amazon isn’t covering in order to survive and thrive.
“Brands and retailers continue to grapple with the challenge of how to exist alongside Amazon,” he said. “While the retail giant may be a competitor, it is also a platform that can give brands and retailers enormous scope to reach millions of consumers globally. The most important thing is that they find a way to partner with Amazon but still own the relationship with the customer; now and into the future.”
But the attitude younger consumers have towards the shopping experience is changing, with Wunderman finding Gen Z shoppers don’t think Amazon give them enough access to brands, returns or a good customer service.
Sustainable and ethical practices are becoming increasingly important to both shoppers and businesses as technology has increased access to knowledge about the impact retail can have on the planet and on the people involved in the supply chain.
Almost 20% of Gen Z shoppers said ethics came into play when they were making a decision about whether or not to purchase something and where from, which may lead them away from purchasing on Amazon.
David Nicholls, chief technology officer for Retail and Hospitality at Fujitsu UK, said this shift in behaviour may be positive for high street physical stores.
“These latest findings on spending habits of Gen Z is positive reading for retailers that are worried about Amazon’s dominance over the industry,” he said.
“The verdict that many young people are seeking alternatives to Amazon is particularly positive for the high street, given that the threat of online is the cause for much of the decline in sales in-store.”
Many believe younger shoppers are the leaders when it comes to searching for products online for research in store, but the common misconception is that they are performing this research on search engines – only 36% of young people are using search engines for their online research before making a purchase, with many more likely to search on other retailer sites for inspiration, or on social media.
For consumers of all ages, half use Google to look for shopping inspiration, 33% go to brand websites and 32% on social media. When searching for a particular product, more than half will go directly to Amazon as the first port of call for their research.
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The only specific products where shoppers do not approach Amazon first for their search include clothing, health and beauty, and luxury products, Wunderman found.
For other retailers to compete with Amazon, they should look to enhance customer experience, said Empathy.co’s Maldonado.
“It’s clear that Amazon has captured shoppers’ attention; so much so that they are pulling in more than a third of online retail spend,” she said.
“The e-commerce giant has drastically changed expectations in retail with its next-day Prime delivery, Fresh grocery service and Alexa-controlled devices; all three designed to keep the shopper locked into the brand. Other retailers can learn from Amazon’s tenacity to provide the now instantaneous, convenient service that is expected from online shopping.”
Retailers who are succeeding in the current difficult and competitive landscape are in many cases using digital to make their supply chain more efficient and offer a personalised customer experience.