Customer Insight

Created and published in house by TLF Research. Customer Insight magazine is our way of sharing features, case studies and latest thinking on creating an outstanding customer experience. All designed to inform, stimulate debate and sometimes to provoke. We hope you enjoy reading it as much as we enjoy creating it!

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Clicks and Mortar

By Tom Kiralfy, Panel Manager, TLF Research

If the news is to be believed, we could lose the – once mighty – retail juggernaut that is the British high street within the next 10 to 15 years. This seems a little pessimistic to me - as anyone that has been to a city centre recently will tell you, they’re still buzzing.

What it does highlight though, and the 20 or so major retail closures so far this year will testify to this, is that consumers’ shopping habits are changing. There will always be the need for people to shop, so the frequency of shopping won’t change significantly, but what will, what is, changing is the way in which people shop.

With this in mind, we used our dedicated consumer panel, TLF Panel, to see what the nation’s shopping habits really were: will we all be shopping from our armchairs in the future, or will the high street live to fight another day? Keep reading to find out…

How do you usually prefer to shop for non-food items?

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Only 10% of people shop online only, which is good news for the high street. 13% shop in store only, but the majority of consumers (77%) shop using a mixture of both online and in store.

Millennials are twice as likely as those aged over 65 to shop online only, but this figure still isn’t high, at only 13%. People choose the best method for them depending on a number of factors, including convenience, price and item required. They don’t choose a particular shopping method and stick to it regardless.

When it comes to products that people only shop either online or in store for, it really does depend on what the product is. Consumers are happy ordering commodity goods such as DVDs, books and video games online only; but would choose to buy in store for products that are more expensive or come in different sizes/varieties, such as clothes, toiletries or furniture.

Why Do Consumers Choose Whether to Shop Online or in Store?

Understanding how consumers shop is a useful insight, and goes some way to explain the nation’s retail habits, but it is only really half the story - understanding the perceptions and attitudes behind these choices will help to explain why they make these decisions. And understanding these is what will help the retail sector best meet its customers’ needs.

For many years now the consensus has been that what differentiates a company from its competition is the service it provides to its customers, and with so many companies offering the same products these days, this is pretty accurate. But what customer service doesn’t seem to affect is where people go to do their shopping.

We asked our panel “What is the MAIN reason you buy some products online and others in store?”

The results were surprising:

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Customer service only received 7% of the vote - so it’s still vital to a good consumer experience, to ensure they pick your brand over another, but it won’t massively affect whether they choose to purchase their items online or in store.

Convenience (36%) is the number one reason that determines this, followed very closely by price (35%), but these results differ by gender and age:

  • Men say price is the main reason that determines whether they shop online or in store, with 36% compared to women’s 35%, and women say convenience is key; 39% compared to 33%.
  • The over 65s say price is the most important factor; 36% compared to 24% of 18–24 year olds - who say convenience, with a whopping 60% (compared to 33% of over 65s) is the deciding factor.

So, who your brand/product is aimed at really dictates how consumers prefer to shop. Older generations, particularly men, will be more likely to buy something where they find it cheapest. But the younger market are more concerned with convenience – if they’re busy, they’ll buy online, if they have the time they’ll go in store.

Why do you only shop in store?

For those consumers that stated they only shop in store, we wanted to know why – was it a trust issue? Was it technology? We wanted to understand why they were not willing to adopt the digital trend.

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Consumers choose to shop in store only because they want to physically see and touch what they’re buying. They also like to browse, something which can be done online, but not as easily. And habit keeps people on the high street – it’s what they’ve always done.

Over 65s are more than three times as likely to shop in store only compared to those aged 18–24, and are more likely to do so because they like being able to browse the products on offer. They also prefer talking to a person/assistant for help, but, maybe surprisingly, are more trusting of online shopping than millennials.

Why do you only shop online?

We also wanted to know what drove those that said they only shopped online to do so – was it just down to convenience, as touched on above, or was there something deeper?

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Convenience is still king when it comes to only shopping online, followed by price (usually cheaper online) and then speed (although, speed can be a tricky thing to measure – in this case we mean from when the consumer thought about wanting the product to when they actually bought it).

Women are more likely to only shop online for the convenience: 67% to men’s 62%; but men are more likely to do so because they can compare items more easily (38% to women’s 26%).

Convenience is also far more important for the over 65s: 92% compared to 60% of millennials, along with the ability to order a variety of different products from one place: 50% to millennials’ 20%.

So, bringing things back round to customer service, we wanted to know what consumers really wanted – was it terrible customer service but with really cheap prices, or do they want outstanding customer service accompanied by very high prices?

We asked our panel to rate their preferences on a scale from 1- 10, and the result was 6.1 with consumers preferring a mix of just above average customer service with just above average prices.

It’s all in the delivery…

Once you have made your purchase, and the excitement has died down, then begins the waiting game – how long will it take for the product to arrive?

This is where companies can make real strides into growing their customer base – people will tend to shop where they can get their items the quickest (just look at Amazon, who saw, after their introduction of 1-day delivery, their net profit in the subsequent quarter double!).

To begin with, we didn’t want to assume where people could or could not receive shopping deliveries. As it turns out, not everyone can have items delivered to home (only 88% can), and even less can have them delivered to work; 19%.

16% can have items delivered to an Amazon pick-up location (where you can collect your item from a local shop/location), and only 12% can have them delivered to an Amazon locker (a self-service kiosk where you can collect your items).

But it’s not just about how quickly items are delivered that’s important, but also the state in which they arrive - It’s no good delivering items within 24 hours if they arrive in pieces, or even worse, if it’s the wrong item.

Damaged Goods

Unfortunately, though, this can sometimes be the case. We asked consumers if they had ever received a damaged shopping delivery, either after ordering online or in store, and the results weren’t good.

36% said that they had received damaged goods from an online order, and 11% said they had after ordering in store.

When companies do get it wrong, they are quite quick to rectify the situation, which will go a long way to maintaining customers’ loyalty. Of the people that had received damaged items, 72% said the order was replaced to their satisfaction, quickly and easily, and only 16% said that it wasn’t, and that it took some effort to resolve it.

Substitutions

Anyone that’s ever ordered groceries online will probably have the odd horror story or two about ridiculous substitutions. Just ask the lady who requested a loaf of walnut bread from Tesco but received a whole octopus, or the mum who received a pomegranate from Asda instead of hair conditioner (I suspect a creative person could possibly turn the pomegranate into some kind of conditioner, but I challenge anyone to make a suitable sandwich using an octopus instead of bread).

These substitutions happen a lot of the time with food shopping, whether it be down to best intentions of the picker, or some AI algorithm churning out the ‘next best option’. Where it doesn’t happen as often is when ordering non-food items online. But…although it doesn’t happen as often, it does still happen, and we wanted to know how often, and what sort of substitutions people received. So we asked them.

Have you ever ordered something (non-food) online and had substitutions?

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In this category, the results are more promising than the grocery sector. An encouraging 78% of consumers have NOT received a substitution when ordering online. Although, of the 22% that had received a substitution, 64% received a substitution that was completely unsuitable compared to what they had originally ordered.

Ordering Online to Collect in Store

Sometimes it’s more convenient to pre-order an item but then actually go and collect it from in store. There are many reasons why people do this; from saving time shopping, to reserving items ahead of time, which we’ll look into shortly. But first we wanted to test the waters, to see if, and how many, consumers had actually used this service in the last 12 months.

And it turned out, they had: 50% of people surveyed had ordered an item online to collect in store. Although, this style of shopping seems less popular in Scotland, with only 39% of Scots doing so.

Ordering online to collect in store, in its current guise, is still pretty new. So we wanted to know how consumers were finding the experience. Was it fit for purpose? Were the consumers seeing a benefit? How were people using the service?

Why did you order the product online first?

Understanding that half of consumers do use the ‘order online, collect in store’ feature is helpful to understand the appetite for it, and uncovering how people place these orders will help with where and when to target advertising, and predict busy periods. But what we also want to know is why do people feel the need to order products online first and collect in store later? Can they not just wait until they next go shopping and pick them up then? Are consumers paranoid that products will sell out, and they’ll have to wait to get them? Or is it something else?

Well, it turns out, it’s nothing as material as that, it all boils down to what we covered at the beginning of this article: convenience.

43% of consumers said that they ‘ordered online first so they didn’t waste their time going to the shop if there weren’t any in stock’, making the shopping experience more convenient for them.

After this the next most common reason was ‘I really wanted it, so reserved one ASAP’, with 25% of the vote, so maybe we are a little materialistic.

A further 18% went on to say it was either ‘To save time walking around the shop trying to find it’, or ‘To save time having to queue in the standard lines’, so again, making the experience more convenient to the consumer.

The top 3 products that people order online to collect in store are:

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“People will forget what you said. They will forget what you did. But they will never forget how you made them feel.” – Maya Angelou

Service with a Smile…

When it comes to the quality of the service consumers receive, the results are universally positive. 70% said the customer service was good both online and in store. 17% said in store was better, 10% said online was better. Millennials were happier than the over 65s with the service they received online, with 21% reporting a positive experience compared to only 1.4%.

Is Omnichannel Shopping the Future?

With the omnichannel shopping experience becoming increasingly prevalent, consumers are becoming savvier with how they shop. With so many options open to them, shoppers have become experts in finding the best deals, and knowing when and where to check if what they’re being sold is in fact a good deal or not.

Have you ever been in store and looked up a product on the shop’s website to check details/read reviews/look for deals before purchasing?

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No longer willing to take shops at face value, 62% of consumers say that, whilst being in the shop itself, they have looked up a product online before deciding whether to purchase it. 33% do so to read reviews first, 26% do it to check it’s the right product, and 21% do so to check if the shop’s in store price is the same as the online one.

18-24 year olds are more than twice as likely to go online to check reviews; 49% compared to 20% of over 65s, but the older generation are more likely to not check online at all (once in the store), with 56% to 24% of millennials.

Going into a physical shop to then check product reviews and deals online is one thing, but going into a shop only to have to buy a product online because the shop didn’t have it in stock is a whole different experience.

With modern inventory management it is surprising to see that nearly half of consumers have been subject to this, with 49% saying they have been into a store to buy something only to find it wasn’t in stock so had to order it online. This is 10% more likely to happen to women than men, and 7% more likely to happen to millennials than over 65s. Scotland is best at having items in stock, with only 38% of consumers reporting having to resort to ordering online after going in store, and the south west of England is the worst, at 53%.

Another aspect of the omnichannel experience is being in store to browse, but then ordering products using the shop’s app or website. It seems, however, that this method still has some way to go before it becomes fully integrated into the experience, as only 21% of consumers have used this way to shop.

Social? Media.

Social media has its fair share of supporters and detractors, and has affected the way in which we as humans communicate enormously. Whether you see this as a good or bad thing often depends on a myriad of factors, with the biggest one usually being age.

As a tool to communicate, social media is often seen as a young person’s game, with older generations stereotypically preferring more traditional methods such as the phone, letter, or even – shock horror – face to face. But how does it stack up as a tool to sell items, does advertising on social media actually work? We asked the panel:

In the last 3 years, have you seen an advert on social media and bought something from the company after viewing it?

67% said an emphatic ‘no – I have not bought anything after seeing an advert on social media’. 4.5% said that they did look at the product being advertised, but ended up buying something different, from a different company.

On a more positive note, 12% looked at the product being advertised, but then bought something different, but still with the same company, and 16% actually bought the product being advertised.

These figures don’t change much by gender or location, but they have quite drastic differences when you compare it by age group: a massive 90% of over 65s have never bought anything after seeing it advertised on social media, compared to just 43% of 18-24 year olds. And only 6% of them have actually bought the product being advertised, compared to 24% of millennials.

Bricks & Mortar, or Clicks and Order?

So, is the high street something to be cherished now, whilst it’s still around? Or is online shopping just a fad that will disappear as quickly as it’s risen? To be honest, it looks like it’s somewhere in the middle.

Consumers don’t want to pigeonhole themselves into just one method of shopping, and why should they? Every individual product has a preferred method of purchase, driven by a number of human factors, the biggest one being convenience, and these won’t change over time.

The big thing going forward, and one that smart companies have been quick to adopt, is the omnichannel experience; it gives more choice, and therefore more power, to the customer, making the whole process much more consumer focused.

What it also means is that people will continue to want, and to use, both shopping in store and online as part of their retail experience. Sure, one method will be more popular than the other depending on the demographics of the customer base, and what type of products are required, but it’s unlikely one will completely eclipse the other. The high street may be down, but it’s not out…not by a long shot.

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