Today’s digital consumers have more options and access to information than ever before. And while this may have changed the way they shop, what hasn't changed is how they make buying decisions – based on emotion. More than just an account number or online profile, your customers’ thoughts, needs and concerns are driving the future of retail, and businesses who manage to understand them are on the fast track to success.
But is it really that easy? Many companies would say yes as they scroll through spreadsheets and debate with analysts on the next big trend. Yet, they are missing the bigger picture. While logic is a large deciding factor in actioning plans and building strategies, the greatest element at play is consumer sentiment. How your customers truly feel about your brand, offerings, and customer journey.
This year, we conducted several surveys aimed at understanding the wants and needs of the digitally conscious customer. Through these, we've discovered a common theme: Consumers want their needs to guide the narrative.
To expand further on these findings, we sat down with Global Commercial Director Matthew Furneaux to discuss what's he's seeing in the current digital climate and learn what businesses at all stages of digital transformation can do to engage and win customer loyalty.
Over the last two years (since the pandemic hit), what does Loqate see as driving factors for the increasing number of digital transactions globally?
From “The future of the digital checkout: Today’s trends shaping tomorrow’s tech” report, we found that 72% of shoppers are more reliant on online shopping now than they were before the pandemic. That reliance is born out of multiple causes – there was a time when there was no choice. If you wanted to shop, you had to go online because stores were closed. We’ve seen stores like Pier 1 Imports, Debenhams and Arcadia go fully online during the pandemic, choosing to close in-person shops and bring their assets online to survive financially. Now that stores are opening, the convenience factor of shopping online remains for many. There is also still a degree of anxiety around shopping in busy places, so we see an element of that driving eCommerce growth.
Can you share a bit about your own experience living more of your life online over this timeframe?
I’ve significantly sped up my reliance on online shopping in the last few years. Evidenced by the fact that we probably have delivery drivers to our home almost every day, especially since I've got two teenagers who buy loads of stuff. I'd always been pretty active in online shopping because it's convenient and the market we work and live in. But as an informed consumer, because of what I do for a living, I think my expectations are very high.
I expect it's like salespeople hate being sold to, right? If you know what a good checkout experience looks like, then you're pretty intolerant when you see retailers expecting me as a shopper to do most of the work. I think that makes me a hard customer to please.
Loqate has recently conducted several consumer studies on people’s preferences and feelings about digital experiences, fraud & delivery concerns, what aspects are delightful, and which drive them up a wall. What have you found most interesting from those findings? How do these consumer preferences and frustrations impact brand loyalty?
There’s a sentiment that's come out to me across all of our reports: “If you disappoint, I’ll retaliate.” And conversely, “if you give me a great checkout experience, I’m yours forever.”
Consumers are far less tolerant of the wrong sort of friction, and we see this kind of pent-up anxiety coming through all of our reports. There’s this weird thing where shoppers are already prepared to be disappointed before you’ve ever let them down. If you do, 44% will never shop with you again, and 12% will leave you a bad review.
You have this absolute binary opportunity as a retailer to create an experience that builds trust at a very early stage of the shopping experience. And we've seen, even with something as easy as implementing address autocomplete, in the minds of 38% of shoppers, you're already at a slightly raised level of trust. They know that even if they entered an error or didn't know the right ZIP code, we’ve already corrected that for them. Just creating that slick experience motivates them to become a regular.
Based on our research, what three words do you think best define the current consumer sentiment on digital experiences, and what can businesses do to best support their needs?
Anxious, expectant, and strict. These are all in line with what’s coming through in our research. Knowing this, the best thing businesses can do is operate at the highest standard and respect customers’ expectations. There are a thousand ways to do that, but the easiest is getting the customer checkout experience right the first time.
In a traditional in-store experience, consumer emotions bounce between excitement, delight at the close of the purchase, and then perhaps slight regret about price or fit. Whereas, an online experience has higher stakes, with the risk of failure being potentially destructive to your brand reputation. You feel delight while online shopping, then anxiety as you wait, and a smaller hit of dopamine when the package arrives. Then regret follows when you find the experience was not as great as expected. That feeling can be so strong that it cancels out the dopamine response of finally getting your package to the point that letting someone down becomes worse than them never shopping with you at all.
Recognizing that consumers have that constant anxiety, we can mitigate it by implementing the appropriate interventions and only dealing in accurate data. In doing so, you really get to know your customer and also have the data needed to support the relationship. That’s going to lead to a building of trust and confidence from the consumer’s perspective at the very start of the transaction.
As all ages/generations have needed to spend more of their lives in digital channels due to the pandemic, what does the research show about new ways a brand should be segmenting their audience?
When everyone came online, customer bases likely included some cohorts of shoppers who’d never been online–either because they just didn't want to, or they felt that the technology was a barrier. But now we see plenty of evidence that older or technically adverse people that came online in record numbers are still embracing digital now that stores are open. Many are increasingly coming into stores to check the quality style and fit of a product but then returning home to complete the purchase.
Going forward, the best practice would be for brands to provide the right range of omnichannel experience. Fundamental to that is data. When it comes to methods like click and collect or buy online, pick up in-store (BOPIS), data should be used to unify that online/offline experience. Whether they go in-store or shop via the website, you are still able to accurately identify your customer.
For customers, the thinking is, “when you know it's me, and you can understand my buying patterns, then you're going to be able to care for me better as a consumer.”
Traditionally there was a lot of work put into removing friction from digital journeys, but recently there’s been more recognition of “good friction” vs. “bad friction” – could you expand on this?
The purchase journey is not just a linear set of things to which you can apply the same rationality. The experience that is built should be customized to fit the consumer's needs. For something like buying dog treats online via Alexa voice command, that's where many want zero friction because it's low value and high frequency. Now, if we’re buying something of greater value, something like a Fender guitar, customers want more of a drawn-out purchase journey. They don’t want anything like one-click or one-swipe because it can be risky considering they are about to spend a couple thousand dollars.
It also takes away from the quality of experience. Customers want time to enjoy the color selection or decide on accessories. So, Fender adds just the right amount of friction by slowing things down, mitigating the risk of accidental purchase but still simplifying the checkout when it comes to something like address verification or payment options.
On one end, friction can be introduced into a checkout as a practical way to manage risk or to protect customers from going too quickly and ending up with regrets. Conversely, if no risks to the customer or your business are present, you can confidently modify the customer checkout to remove unnecessary friction.
Now that customers are in the driver’s seat, businesses are charged with perfecting the blend of emotion and science. Achieving the perfect balance of human demands and consumer data will unlock a future of better analytics, more personalized strategies, and winning customer experiences. Above all else, we must prioritize the consumer perspective if we hope to capture the hearts and loyalty of the digital consumer.
Check out the following Loqate consumer research reports to deep dive into the current consumer perspective:
