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Mobile Users Speak: Digital Cross-Shopping In Physical Stores

September 6, 2012 Leave a comment

Researching products on a smartphone or tablet is quite popular among Mobile Users – 39.6% say they regularly conduct mobile research while 48.5% occasionally do so. Two in three (66.5%) also regularly or occasionally purchase products using their mobile devices. It’s no big surprise that mobile cross-shopping (searching the web on a mobile device to compare offerings and prices while browsing a physical store) is a growing trend among shoppers equipped with smartphones and tablets.

More than half (59.1%) say they have compared prices on a mobile device while shopping in a physical store. 1 in 3 still purchased from the same physical store (34.5%) but just as many chose to purchase from a different retailer (33.8%). The next most popular mobile cross-shopping activities include purchasing from another retailer’s website, either using a smartphone or tablet (25.9%) or logging on using a laptop after leaving the store (22.3%). Those Mobile Users who shopped Best Buy or Amazon.com in the past 90 days are more likely to engage in these activities:

*For this analysis, Shoppers are defined as those who said they shopped at a particular retailer in the past 90 days.

It’s interesting to see the vast majority of those who’ve recently visited Best Buy have cross-shopped without leaving a store, further promoting Best Buy’s growing reputation as Amazon.com’s showroom. These savvy mobile users are looking for the best buy, whether it’s at their current shopping location, next door or online.

Further, mobile devices are great shopping companions. 39.0% say they’ve used a smartphone or tablet to check out product reviews, 35.7% have scanned a QR code for more info, 23.8% have “checked in” for a discount and 17.7% requested a price match—all while shopping in a physical store! Amazon and Best Buy customers are even more prone to these thrifty digital habits:

Over a third (36.8%) of Best Buy shoppers say they’ve requested a price match via mobile while shopping…perhaps they’ve informed a Geek of a better buy found through the Price Check app from Amazon? Best Buy could be in trouble if Amazon’s customers continue to find the site so favorable.

Source: Prosper Mobile Insights™, Mobile Survey (AUG-12), N=328

© 2012, Prosper®

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Amazon #1 In Customer Service, But Will This Lead To Sustainable Loyalty?

September 5, 2012 Leave a comment
Recently our friends over at the National Retail Federation directed us to Amazon.com, where Founder and CEO Jeff Bezos had once again posted a public letter to customers, this time stating:

I’m happy to report that Amazon has been rated #1 in the National Retail Federation Customers’ Choice Awards…

Why were we excited to see this? BIGinsight compiled the list of Customers’ Choice Award recipients for the NRF Foundation, which was unveiled at their BIG Show earlier this year. These awards recognize the retailers that provide the “best” customer service and were nominated through an unaided, write-in question by (who else?) consumers.

2011 Customers’ Choice Awards: Top Ten (source: NRF Foundation)

  1. Amazon.com
  2. L.L. Bean
  3. Zappos.com
  4. Overstock.com
  5. QVC
  6. Kohl’s
  7. Lands’ End
  8. JC Penney
  9. Newegg.com
  10. Nordstrom

Customer service in the conventional sense has generally implied face-to-face communication: greeting a customer; providing him/her with product information, demonstrations, additional options, or size assistance; suggesting add-ons or complementary products; and finally, completing the sale. Historically, the best opportunity to cultivate great customer relationships is within an environment where personal interaction between the retailer (i.e. sales associates) and customers is at its peak: a physical store.

So does it surprise you that a traditional brick-and-mortar retailer didn’t top this year’s list? Further, just three of the retailers (Kohl’s, JC Penney, Nordstrom) who graced the top 10 aren’t primarily entrenched in e-commerce, catalog selling, or home shopping.

So how does Amazon rank #1 in customer service?

The digital age has forced the evolution of customer service. In a world where emails and texts have replaced more intimate forms of communication, where shoppers can complete a sale 24/7 via online transactions, and where showrooming is linking the physical shopping experience with the virtual, the modern definition of customer service seems to have downgraded the importance of direct human interaction. And, let’s not forget that customer service in the traditional sense has also been crippled in recent years by an economy fostering a trend toward part-time, minimum wage, less “invested” sales associates.

As the world’s largest online retailer, Amazon has been a driving force behind the e-commerce movement and changing standards for customer service excellence. Some of the words consumers used in their reasons to nominate Amazon for Customers’ Choice included “efficient,” “fast,” “reliable,” “no hassle,” “easy,” and of course, “free shipping.” Note that these terms differ vastly from those who nominated Nordstrom, THE purveyor of traditional customer service: “experience,” “friendly,” “personal,” and “knowledgeable.” [More specific reasons can be found here for each retailer included in the top 10.]

Consider too the e-commerce services that online shoppers (a growing group) value. While the majority indicates that toll free “live” customer service very important or important, this figure has declined nearly 10% from 2007. With customers increasingly gravitating to such services as low prices, free shipping, and easy to use websites over the past few years, it’s obvious that verbal communication isn’t a service prerequisite when it comes to buying online.

Important/Very Important Services when Shopping Online

But are Amazon’s low prices, free shipping, and efficient turnaround enough to capture sustainable customer loyalty? After all, the troubled economy did create a new consumer – one who shops around, is value-oriented, and may find it increasingly difficult to create ties with one retailer over another.

One of the most fascinating parts of the retail industry is that we are always looking toward for what’s “next” – hot new trends, advancements in technology, gotta-have products, or evolving practices that change the way we do business. Retailers like Best Buy and JC Penney have already announced efforts to ramp up one-on-one interaction to drive customers back to their stores, looking ahead to perhaps a renaissance of traditional customer service.

With its history as a game-changer, though, Amazon just might remain what’s “next” for the foreseeable future.

This post originally appeared on Forbes.com as a contribution to the Prosper Now blog.

The Showroom Showdown: Best Buy vs. Amazon

August 21, 2012 1 comment

Once upon a time, Best Buy was a magnet for shoppers. We came, we saw, and we unflinchingly bought. Fast forward to 2012, and Best Buy is seemingly no longer a “best bet” among consumers. The big box made news recently, not because of stellar sales performance, but because of its store closings, layoffs, and failure to evolve with changing consumer needs. Best Buy’s growing reputation as Amazon.com’s showroom isn’t doing much to help the matter, either.

For this post, you’ve got ringside seats to the bout pitting the big box veteran against the online “underdog.” We’ll go three rounds with BIG insights to see who might have more long-term stamina.

Round One: Customer Share

It’s interesting to note that – despite its troubles – Best Buy still remains a top-of-mind reference among electronics shoppers. About a third of the 8,000+ consumers we talk to each month indicate they shop most often at Best Buy for electronics (an unaided, write-in response), leading Walmart (with about 20%) as well as Amazon.com (just under 10%). Further, our 10+ years of insights show us that Best Buy’s lead as the store shopped most often hasn’t been challenged – ever.

Amazon didn’t start gaining traction in this category until late 2009 (the same year which marked Circuit City’s demise) and has been steadily been increasing ever since. However, with Best Buy’s current customer share quadruple that of Amazon, the online giant will have to vastly pick up its growth pace to catch up with Best Buy within the foreseeable future.

Winner: Best Buy. There’s still equity in the Best Buy nameplate – and that’s a high percentage of customers who still consider the big box their prime destination for electronics.

Round Two: Cross-Shopping

Let’s discuss the meaning of the “shop most often” phrase we use to gauge customer share; the term “shop” can mean “browse” and/or “buy.” So while it appears that Best Buy may be the store shoppers head to or think of first for electronics, the retailer’s recent performance suggests that it isn’t the only option (i.e. they are, in fact, shopping around). And in the realm of high-dollar electronics, who can blame them in this economy?

We collected some interesting cross-shopping insights in July that highlight Best Buy’s current predicament:

– Among Best Buy’s most loyal electronics shoppers, 51.6% admit to surfing Amazon (for any category) within the past 90 days. Fewer (40.6%) perused the offerings at Best Buy during this same time period. Ouch.

– On the flip side, among Amazon’s most loyal electronics shoppers, a whopping 92.4% had visited the site within the past three months, while just 16.8% had been curious enough to enter a Best Buy. Double ouch.

Which of the following retailers have you shopped within the past 90 days?

Best Buy’s electronics shoppers were more prone to visiting Amazon within the past 90 days than the big box itself.

Is there any loyalty towards retailers in an uncertain economy? As evidenced by our cross-shopping data, Best Buy customers were more likely to head to Amazon than they were to the big box itself in the past 90 days. Granted, they could have been surfing Amazon for books, toothbrushes, or even apparel, but how hard would it have been to check out the electronics offerings? Just a few mouse clicks.

Winner: Amazon. While the online retailer’s customer share for electronics is relatively minor, Amazon’s vast product offerings are a major plus with shoppers.

Round Three: Price Comparisons and Showrooming

One of the biggest retail buzzwords today is “showrooming”: the art of demoing merchandise in a physical store and using mobile devices to locate the retailer with the best price. It’s the most modern way to compare prices [for now].

When Best Buy began reporting problems, pundits began pointing the finger at showrooming (and that handy little Price Check by Amazon app). But are Best Buy’s customers guilty of using the big box’s sales floor for this purpose?

Also in July, we found that among Best Buy electronics shoppers carrying mobile devices, 67.1% regularly or occasionally comparison shop via their mobile devices – and about two in five (38.3%) use Amazon’s Price Check app specifically (regularly or occasionally). However, these figures aren’t out of line with what we recorded for Amazon’s mobile-wielding electronics shoppers: 70.4% regularly or occasionally compare prices using their smartphones or tablets and a higher percentage (45.4%) utilize the Price Check app. Further, these percentages are nearly identical to mobile owners in general (67.2% compare prices with their devices; 40.3% report using the Price Check by Amazon app).

While showrooming may be contributing to the big box’s woes, it’s evident that this isn’t a “problem” unique to Best Buy in particular. Showrooming just “is” – it’s another smart shopping strategy being adopted by today’s well-informed consumers and an inevitable trend born from the mobile movement.

Winner: Amazon. The online retail threw a hard punch at more retailers than just Best Buy when it introduced the Price Check app. And the intel it receives from Price Check participants ensures that Amazon’s sticker prices remain low – making non-price competition a “must” for other retailers.

Best Buy seems to be missing the benefit of its so-called showroom status: the retailer has the initial opportunity to make a direct connection with customers and close the sale before shoppers begin scanning SKUs. Instead of placing blame on Amazon and the showrooming trend, perhaps these are the real questions we should be asking: Why has Best Buy failed to capitalize on the customers entering their stores? And, why haven’t shoppers felt compelled to buy from Best Buy once inside the store? Where is Best Buy’s value proposition to its customers?

With pricing transparency between retailers only likely to increase as we become a more technologically-savvy society, Best Buy’s near knockout should serve as a warning. Retailers will have to look to their customers – creating value that will fulfill customers’ needs, fit their budgets, and leave them feeling good about their purchases – and wanting to return for more.

This post originally appeared on Forbes.com as a contribution to the Prosper Now blog.

Heyday for Layaway?

November 10, 2011 3 comments

When the biggest name in retail – Walmart – announced that they planned to revive layaway for Holiday 2011, BIGinsight™ took notice. And this month as part of our November monthly survey, we asked consumers if they were planning to utilize this service to help with holiday shopping, what items they planned to add to layaway, and – of course – where they would open an “account.”

The results are in: more than one in ten consumers (12.2%) plan to utilize layaway for Holiday 2011. This number rises to 20.0% among Kmart shoppers*, 15.6% with Walmart shoppers, and 15.8% for Toys R Us shoppers. Best Buy shoppers index slightly lower than average (11.0%).

So why are we looking at Best Buy shoppers? Best Buy doesn’t offer layaway.

That might be too bad for Best Buy. A closer look shows us that among Best Buy shoppers planning to use layaway, 58.0% plan to put Electronics into a plan. And where are Best Buy shoppers most likely to use layaway services? That’s right, at Electronics rival Walmart. A holiday shopper knows no loyalty when it comes to finding the best way to maximize budgets and ward off debt.

But let’s get back to the broader details of our findings. Electronics (56.5%), Toys (40.3%), and Apparel (32.5%) are the items most likely to find their way into layaway this holiday season:

Layaway Items

To be read as: Among shoppers planning to use Layaway this holiday season, 40.3% are planning to put Toys on Layaway.

Finally, while Walmart (69.0%) and Kmart (42.1%) are by far the preferred venues for layaway, it appears that Toys R Us and Sears will see a fair share of layaway shoppers as well:

Layaway Retailers

To be read as: Among shoppers planning to use Layaway this holiday season, 69.0% are planning to use Layaway at Walmart.

For more information on this data, please contact BIGinsight™.

* “Shoppers” defined as those who shop most often at a particular retailer for one or more major merchandise categories (including Apparel, Shoes, Groceries, Electronics, Sporting Goods, Heath & Beauty Care, Linens/Bedding, Toys, etc.)

Source: BIGinsight.com

© 2011, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

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