2012 Shopper Study Overview Retail Without Boundaries

2012, Cognizant

Study Summary

| 2012, Cognizant

Our third annual, 2012 Shopper Experience Study respondents reflect the typical mix of retail shoppers
4,000 Shoppers Around the World
Respondent Geography Respondent Income Group
US Canada UK Australia Hong Kong China

Low Income Middle Income High Income

Respondent Age Group

18-33 34-45 46-64 65 and over

Respondent Gender

Male Female

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On-line survey conducted April 12 April 22, 2012

Retailers must devise their shopper experience strategies based on the shoppers they serve

ONE

size

does

NOT

fit

all

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Retail without Boundaries is about knocking down the walls.

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Shoppers love to shop anytime, anywhere and through any channel, but especially at stores

occur in stores and the most influential factors are:

4 out of 5puchases

1 #2
#
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Price
Product

Showrooming (browsing in a store and then purchasing online through a smart phone, tablet or PC) is the number one risk facing retailers today. The key to winning with shoppers today is to enable Retail without Boundaries.

Shoppers have high expectations for in-store execution

How much do you dislike each of the following when shopping in a store for products?

Some of the highest scores across the study are related to how much customers dislike when stores fall short on execution.
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Sales in digital channels are growing varied by categoryand influencing in-store sales.
What percentage of your annual purchases for each of the following types of goods do you make through the following channels?

Although the lion share of sales still take place in stores, retailers must create digital experiences that both support in-store purchases as well as digital commerce.
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Higher income shoppers are most inclined to use digital channels

% of Purchases by Channel 100% 80% 60% 40% 20% 0% Lower Income Middle Income Higher Income In-Store Online Mobile Other In-Store Online Mobile Other 70% 60% 50% 40% 30% 20% 10% 0% % of Purchases by Channel Split by Type of Product for High Income Shoppers

The highest income shoppers are more likely to use digital channels

They are most likely to use digital channels for the purchase of specialty products

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The basics for creating digital experiences that shoppers want are similar to stores
How much do you dislike each of the following experiences when shopping online?
Cannont return the product to a store Payment method you like is not available Too many steps or too much information is required to check out 3.8 3.6 3.7 3.3 3.1 3.8 4.0 3.4 4.0 3.9 1 2 3 4 5

The shipping options you prefer are not available

No order online and pick-up in store Online price or promotions/discounts are different from what's available in-store Purchase price not communicated clearly or early enough Ability to compare different products is not available The product information you need is not available

You can't find the product you want using the website's search engine navigation

Shoppers increasingly expect online and in-store experiences to be consistent.

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Key Shopper Study Themes

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There are four themes essential to becoming a retailer without boundaries

Showrooming can be a retailers frenemy

Are you keeping up with the Jones' or investing in the future?

Retail Without Boundaries

How personal can you get without being creepy?

Store associates are a retailers brand ambassador for better or worse

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With the right shopper strategy showrooming can become your frenemy
Differentiated Experiences

Showrooming

Jones?

Retail without Boundari es

Associat es

Personal ization

Customer Service Product, Price, Promotion Location

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Factors that influence purchase decisions are consistent across segments and channels
The top five influencers of in-store purchase decisions are unanimously agreed upon by all shopper segments:
Rank Order 1 2 3 4 5

Competitive price, promos, etc. Right product selection Customer Service (quality/access) Fast, easy check-out Compelling loyalty program

Online shoppers value the same retail fundamentals. However, they rank return processing higher (#3) and compelling loyalty programs lower (#8).

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How purchase decisions are being influenced is changing and varies based on product type
In a typical month, how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)?
TV is continuing to lose ground
Significant differences between specialty and consumables for traditional resources

Mobile and tablet are still nascent

Specialty product purchases are more influenced by digital experiences

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The best way to stop showrooming is to give shoppers what they want.
The two essential elements to combat the risk of showrooming is to match prices and provide exceptional customer service.

Of shoppers want store associates to match prices

29%

35%

Of shoppers want store associates to have better customer service skills

Equipping store associates with mobile technologies is the second line of defense.

Of shoppers want store associates to be more available in the aisles

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14%

Of shoppers want store associates to have real-time access to product information, inventory and ordering

10%

Experimenting with new shopper experiences will endear shoppers and differentiate retailers
For the product category(s) shown below, how important it is for you that your favorite stores work with the following types of partners to provide you with better experiences, more products, or more specials/promotions?
Product Comparison Smartphone App 2.1 2.5 2.0 2.3 2.7 2.8 2.5 2.7 2.2 2.3 1 2 3 4 5 Female Male

Geo Location

Member Discount

Group Buying / Deals

Social Networking/Media

Surprisingly, men are more interested in some of the newer mobile and social retail experiences. Shoppers are most interested in member discounts (e.g. Beyond the Rack and Ideeli) closely followed by group buying sites (e.g. Groupon and Living Social). These trends are consistent with 2011.
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Store associates are a retailers brand ambassador for better or worse

Showrooming

Jones?

Retail without Boundari es

Associat es

Personal ization

Help with purchase decisions

Help find product

Go to person for issues

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Shoppers rely predominantly on traditional resources to help with purchase decisions, excluding store associates
Resources Used to Help with Purchase Decisions
Digital Resources Product Packaging Store Associates Word-of-Mouth Store Signs Traditional Advertising

19%

11% 10%

13% 22% 25%

Store associates is the only traditional resource that ranks very low across all segments as a preferred resource to help with purchase decisions.

Age 18-33
13 % 16 % 18 % 18 25 % % 10 %

Age 34-45
9% 9% 12 % 19 %

Age 46-64
7% 22 % 9%

Age 65 and over

5%
20% 27% 33% 8% 7%

23 28 % %

9%

23 30 % %

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When shoppers cant find what they want, most likely theyll look elsewhere
What do you do when you can't find what you want?

Leave the store and look for the same product elsewhere 9% Leave the store and look for the same product during a future visit 49% Ask an associate to help you locate the right item Purchase an alternative item available in that store 11% Use your mobile phone to identify the product elsewhere

At first glance, its affirming that nearly 50% of shoppers ask for help when they cant find what theyre looking foron the other hand more than 25% buy the product elsewhere--13% of 1833 year olds use their mobile phones to do so.

Ask an associate to help you locate the right item

65 and over

20%

6% 5%

46-64

34-45

18-33 0% 20% 40% 60% 80%

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When shoppers have a problem, retailers might never know about it.
When you have a problem while shopping in a store (e.g. product availability, poor customer service, out of stocks, etc.) indicate whether you are unlikely to report it.

65 and over

11%

46-64

10%

Younger shoppers are unlikely to report store issues

34-45

13%

18-33

21%

0%

5%

10%

15%

20%

25%

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When shoppers do seek help, nothing beats a live person.

When you need assistance while shopping, how likely are you to use the following customer service options?
Call customer service # 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 In-store associates are the most likely resource for shoppers to seek when they need help. Younger shoppers especially are increasingly gravitating toward digital channels (e.g. social media, mobile text and chat) for help

Social media page

Go to in-store customer service desk

18-33 34-45 46-64 Online chat

Mobile text message

65 and over

Mobile chat

Video chat

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Showrooming

How personal can you get without being creepy?

Jones?

Retail without Boundari es

Associat es

Personal ization

#1
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Personalized in-store experiences

- Versus -

Resistant to sharing personal information

Personalization is a proven tactic to increase shopper engagement.

Personalized in-store experiences (e.g. promotions,

#1
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offers, preferences customized

based on past purchases or

status etc.) was ranked the most desired feature by

shoppers in North America

Above all, shoppers want to be recognized and uniquely appreciated while in stores.
When shopping for specialty products, how much would each of the following techniques to personalize your shopping experience influence your shopping choices, if available?
1.00 2.00 3.00 3.44 3.17 3.15 4.00 5.00

Special treatment in the store based on loyalty

Offers delivered in a store that are personalized Acknowledgement of status as a highly valued customer while in the store Website recommendations based on other products you searched for E-mails with personalized messages Website recommendations based on products others have searched for Personal greeting in the store Offers delivered via a mobile phone that are personalized 2.26

2.91
2.88 2.76 2.72

The top three personalization techniques that will influence shoppers choices are about enhancing the in-store experience.
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Shoppers are skeptical about sharing information

Information tracked by loyalty number Name, address, e-mail for website account E-mail collected at point of sale Phone number collected at point of sale Have cookies placed on your computer to allow tracking Locations you are at tracked using geo location service on your phone Information tracked by credit card number 1.86 1.83 1.82 2.89

How willing are you to share the following information with stores in order to have a more personalized shopping experience?
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

2.69
2.60 2.26 Shoppers are especially resistant to sharing information when it is tied to their personal property

Although shoppers want personal experiences, they have boundaries around how much information theyre willing to share in exchange for those experiences. Highest income shoppers are most willing to share information where as older shoppers are least likely.
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Are you keeping up with the Jones' or investing in the future?

Retailer mobile and tablet apps are the least favored resources

Showrooming

Jones?

Retail without Boundari es

Associat es

In APAC social media is a leading influencer of purchase decisions

Personal ization

Digital assets as an enterprise resource is the next frontier

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Everyone LOVES Facebook

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Shoppers go to digital resources first when shopping for specialty products.

Retailers investments in mobile phone and tablet apps arent paying offyet.
Rank order of resources used to make purchase decisions for specialty products
Other Internet searches and websites Stores website Print materials Information provided on product packaging Television Shelf signs or interactive product displays Friends and family Store associates Social media Stores mobile smartphone app Stores tablet

Other Internet searches and websites

Stores website 3.0 2.5 2.0 1.5 1.0 0.5 -

1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th

Stores mobile smartphone app

Consumables Specialty

Stores tablet 27
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Retailer mobile and tablet apps are the least favored resources

Many digital trends are moving east to west--APAC has become an indicator of where to invest
5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

China Hong Kong North America Comments aboutOther customers online ratings the product on social media and reviews sites (e.g. Facebook) Australia U.K.

Although North American Shoppers social influence lags APAC, theres every evidence that the influence of social will only grow in North America.

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

China Hong Kong North America

Australia
U.K. Pay Pal and Bill Digital Wallet Me Later via a Personal Mobile Device

Mobile payment ranks dead last by a large margin for shoppers in North America, yet shoppers in APAC are ready.

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Leveraging digital assets in stores is the next frontier

Although cross channel integration and interactive experiences are not yet demanded by shoppers, customers will respond to themespecially those who are ages 18-45.
3.6 3.5 3.4 3.3 3.2 3.1 3 2.9 2.8 2.7 Interactive experiences (e.g. digital kiosks or signs, interactive product displays) Consistent experiences and information on websites, on mobile devices and in the store

All Shoppers Shoppers Age 18-34

Poor quality information is the leading dissatisfier for online shoppers. If retailers can cleanse their online data and extend it for use in stores, theyll be two steps ahead
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Unclear Information Cannot Find Product Undesirabel Policies Difficult to Purchase Lack Cross Channel Integration Lack advanced Web Features

1 2 3 4 5 6

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Shoppers expect retailers to extend their brands through social media, especially Facebook
It is important for shoppers favorite stores to have a presence on social networking sites to provide better experiences, more products, and specials/promotions
Other MySpace Blogs Pinterest Twitter Facebook 1 2 3 4 2.9 3.0 2.8 2.8 3.4 3.4 3.1 3.1 3.2 3.2 Specialty Consumables

Facebook is the only technology driven retail experience where shoppers age 65 and over expressed a strong interest

4.1 4.2
5

Shoppers want to engage with their favorite brands via social media, not shop on social site.
Exclusive promotions/sales New products sneak peak Feedback on products Customer Service Fun, interactive experiences Social responsibility Make a purchase
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Rank Order 1 2 3 4 5 6 7

Thank You

Please contact Rachel Cosby at rachel.cosby@cognizant.com to request a customized briefing of the Shopper Study results or a copy of the detailed global shopper research results.

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