When it comes to shopping behavior, price is always a key motivator. However, to sustain a customer’s loyalty over the long term, retailers often find it valuable to focus on the customer experience.
But which experiences are most important to shoppers? And how likely are they to influence a change in behavior? Which are the most profitable areas for retailers to focus on—and which are the least? Where should they invest their efforts?
For answers, we conducted a Customer Experience and Impact study. While the study focused on apparel, department store and mass merchant retailers, the survey methodology can be applied to any retail vertical.
Below, we examine the customer experience elements customers find most—and least—important, while uncovering how
strongly those factors drive behavior. Some key insights:
• There are 4 key experiences—out of 27 tested—that were most valued by customers
• More than half of shoppers say they would pay a higher price for the customer experiences they value most
• 77% of shoppers would be more loyal to stores that provided their personal top three customer experience benefits
How does customer experience impact shopping behavior?
Consider these three examples.
#1: Giving Chris more control over the shopping experience
Chris works hard at looking good. In the past, shopping for cosmetics meant stopping at numerous stores, many of which didn’t offer much in terms of loyalty programs. Even the ones that did had limited programs with fixed benefits. Then a favorite retailer that has great products created a loyalty program that puts the customer in control of how and when to use the accumulated points. As a result of being able to choose rewards—from free products, to discounts, to special bonuses for members—Chris is now a loyal customer who rarely shops anywhere else for cosmetics.
#2: Turning stress into peace of mind for Alex
Alex used to get nervous buying big-ticket items, worrying about making the wrong choice. Despite exhaustive research, the original packaging from these items would stay in the closet, just in case. But that was before discovering a warehouse club that implemented an easy return policy. Bought it six weeks ago? No worries. Tossed the packaging? No problem. With competitive prices and a wide selection, Alex now shops the warehouse club with total peace of mind. Returns are no longer a hassle and there are
no questions asked.
#3: For Cameron, shopping hassles are a thing of the past
Cameron’s family has style. With two teenagers who love fashion, Cameron’s family used to spend hours searching for coupons and discounts, always on the lookout for the best deals on clothes and shoes. Then they discovered a store they like offers a premium loyalty program—one that applies all coupons and discounts to account purchases automatically. The shopping experience is simple, easy and hassle-free. They no longer have to worry about printing the wrong coupon or having the right discount codes, creating loyal, happy shoppers. Now, the only thing Cameron’s family has to focus on is looking great.
The common denominator:
A great customer experience
Chris, Alex, and Cameron all have one thing in common:they all value their personalized customer experience.
So much so that they increase their loyalty based on which retailer provides their favorite benefits. Of course, price is still an important consideration. But as these stories demonstrate, customers based their decisions on their perceived value—which goes beyond price alone.
The Study Results
Our survey of over 1,000 individuals revealed four main insights into the customer experience—providing us with information on which elements matter most, which ones matter least and how those elements affect customers’ shopping habits. This white paper illustrates the most important findings.
• Self-administered online survey*
• Field Dates: May 22 – 26, 2015
• 1,003 total participants, sourced from national panel (18+, participate in household financial decisions, have a debit,
prepaid or credit card and shopped in one of a list of 35 retailers in the past 12 months)
• All references to customers or consumers in this paper refer to survey respondents
*Sponsored by Synchrony Financial - research conducted by an independent third party firm, RTi Research, a global insights agency based in Norwalk, CT.
Key Finding #1
Customers are looking for ways to feel valued and make their lives easier
“Make me feel valued, give me control, make my life easier.”
When customers were asked to rank which of 27 retail experiences mattered most, certain benefits rose to the top. The top elements chosen were of a practical nature - things that eliminated stress, gave shoppers more control and made their shopping experience simpler and easier.
ANALYZING THE TOP BENEFITS
Pick your own sale items
This feature was the highest rated item in the survey, with 42% of customers stating that it was the most important criterion. This is different from lowest price. It’s about giving shoppers the control to personalize their experiences based on their unique needs and wants.
Knowing an item can be returned is valuable to customers, and retail brands with generous return policies are
highly regarded. Some of the favorite benefits are: no time limit on returns, no need for a receipt with a return
or free postage on returns.
No coupons needed to always get the sale price
Receiving the lowest price without working for it reduces stress for customers. Retail credit card value propositions sometimes include “best price” programs, particularly for premium customers, so customers don’t need to clip coupons to automatically get the sale price.
Customers who redeem loyalty points for savings feel valued
Customers love points-based programs and they drive loyalty behavior for retailers. Over one-third of customers said points programs were important for the extra savings or gift cards generated. If programs are easy for customers to accumulate and redeem points, they will often spend more.
Key Finding #2
Discover which experiences do not matter to customers, in order to focus on areas they value
Among the 27 elements we queried, some were more important to shoppers than others (see page 8 for the
full list). The chart below illustrates the benefits shoppers told us they valued the least. Knowing which
matter most and which matter least is an important way for retailers to focus their efforts and resources on
experiences that matter most to customers. Important to note, however, is that shoppers’ expectations are all
different. Some things may not matter to the general population, but among certain retail segments they may
be extremely important.
Key Finding #3
Factors determining a positive customer experience vary by retail category
We asked customers to think about the best store experience they had in the past 12 months. Their feedback fell into distinct categories, which are presented in the chart below. The percentages represent how often the category was selected. Apparel and department store shoppers were most likely to remember excellent associate interactions, while mass merchant customers most often cited stock conditions and selection.
A great customer experience does drive incremental shopping. Over half of surveyed customers say they will shop a retailer more often because of a positive experience in the store.
Key Finding #4
Finding and implementing the top experiences your customers value does have an impact on their behavior
The value of a great customer experience cannot be overstated. Customers tell us they would pay more and remain much more loyal in exchange for a great customer experience.
The customer experience matters, and the most compelling experiences do drive increased spend and loyalty. Giving customers what they want doesn’t have to be expensive, it needs to be relevant. Retailers who are successful often implement differentiated experiences to simplify the lives of their customers and make them feel valued.
The key is to find out what your customers want and give it to them. A well-designed customer insight study can help uncover which customer experiences matter most and to what extent they influence loyalty behavior.
27 ELEMENTS RESEARCHED, IN ORDER OF CUSTOMER PREFERENCE:
Percentage of instances feature was selected as most important vs. not important.
For additional insights from Synchrony Financial, click here.
Authors: Sue Yasav—Research Insights Leader
Robert Leonard—Sales Force Effectiveness Leader
Contributors: Judy Lahart—Market Research Leader
©2015 Synchrony Financial. All rights reserved. No reuse without express written consent from Synchrony Financial.