Computers and artificial intelligence have come along at an exponential rate over the past few decades, from being regarded as oversized adding machines to the point where they have played integral roles in some legitimately creative endeavours.
Australian consumers are feeling more confident and looking to spend more online, yet brand advocacy and engagement with retailers is at an all-time low, a new consumer study reports.
The IBM Institute for Business Value’s 2015 Smarter Consumer Study: Shoppers Disrupted: Retailing Through the Noise was based on a survey of 1800 Australians and found consumer optimism is rising, increasing to 63 per cent this year from 58 per cent in 2014. In addition, one in four respondents said they’re ready to spend more, 6 per cent more than last year.
Yet brand advocacy was just 10 per cent, down from 13 per cent last year and 32 per cent in 2013, the lowest score recorded by the report in its six-year history. The result was also reflected in the global IBM consumer survey, which showed a global drop in brand advocacy from 21 per cent to 15 per cent over the same period.
In addition, unengaged consumers increased to 37 per cent, up 13 per cent year-on-year.
IBM interactive experience leader, Ian Wong, attributed the dip to the gap between consumer expectations and the level of innovation retailers have invested in to better meet their needs.
“There is an expectation of constant revolution in retail, not evolution,” he told CMO. “In 2013, we heard a lot of retailers speak about the new omni-channel capabilities they were bringing on, and there was a lot of anticipation around that. But what we’ve seen is an evolution of capabilities in the last two years.”
Wong pointed out 27 per cent of Australian shoppers now prefer to shop online, a figure that is increasing year-on-year and sat at 43 per cent globally. The report also found 20 per cent of Australian consumers had made their most recent purchase online, up from 5 per cent in 2013 and 15 per cent in 2014.
“Technology isn’t letting consumers down, what’s causing disengagement and a lack of advocacy is this gap between their expectations and what they want from a retailer, versus what is being delivered,” Wong said.
Just offering the tools to enable consumers to shop successfully online isn’t the answer to winning back advocacy, Wong said. It’s a retailer’s ability to blend this seamlessly with physical stores and fulfilment, along with contextualised and personalised communications and offers, that is vital.
The IBM report offers suggestions on how retailers can improve consumer satisfaction. For example, 50 per cent of shoppers said being able to see whether or not an item is in stock before going to the store is important, and 57 per cent agreed they would switch to a retailer who allowed them to see whether the item was available in-store or not.
In addition, 53 per cent said the ability for a shop assistant to locate out-of-stock items, order online, then have those shipped to their home was important in their choice of retailer, and 29 per cent wanted physical employees to be able to use mobile devices to fix an out-of-stock issue.
“That is hard work for a retailer –they must knit these new omni-channel capabilities into their legacy capabilities around inventory management,” Wong admitted.
Customers also favour a ‘know me’ approach where retailers listen to them and act on that. For example, one in four want store associates to be able to offer personalised promotions based on their purchase history and preferences, and 20 per cent want personalised promotions via text when they’re in the store.
To help, consumers are more willing to share personal information such as email addresses, mobile numbers and location/GPS data. Sixty-three per cent would share their email address, up from 56 per cent in 2014, and 41 per cent would share their mobile number for text messages. Twenty-eight per cent would share their social handle, and one in four their location.
“Yet there was a gap between the willingness to share, and proof that value is being driven through those channels,” Wong explained. “For example, I’m willing to share this information with you, but I’m not seeing the value from sharing that information.”
Retail Council of Australia CEO, Anna McPhee, said the number one thing in the retail sector is understanding the customer, and she noted retailers are at various stages of that.
“That is a never-ending journey as the customers is always continue to change, and how they best connect with their customer will change,” she said. “The first part is being able to talk directly to the customer – no longer through advertising perhaps, which is the way they used to, but more directly. Retailers certainly are focused on knowing their customers better and therefore meeting their needs.”
McPhee saw technology as a great opportunity for the sector as an enabler, albeit a complex one.
“If you’re unable to know directly who your customer is by name, email address or mobile number for example, that’s complex and significant investment required, as is being able to mine it in an effective and efficient way to serve the customer,” she commented.
“This research shows the customer wants convenience and wants to be served. That’s not revolutionary in itself, but the customer knows now there are technologies and other efficiencies that can improve that level of service. If they don’t see it, or realise they can get that somewhere else, they will switch retailers.
“Australians have busy lives, are looking for that convenience, and going to retail stores in whatever segment is an important part of their day-to-day lives. We need to get that right so the customer is always happy and the industry continues to thrive.”
The IBM report provided further insight into how retailers can be contextually relevant to consumers. For instance, the study showed shoppers are showing an increasing interest in being able to control the identification process via mobile apps.
The preferred method for identification was opt in/out using a mobile app (50 per cent), and sign-in via text (25 per cent). Twenty-four per cent they’d also be happy with automatic recognition upon entering a store through a mobile device, down from 32 per cent compared to 2011.
Consumers also indicated increased interest in being able to ‘control’ the communications received and valued on-demand options more. One in five wanted offers and promotions personalised while they’re in-store, and 23 per cent wanted an option for on-demand personalised promotions when they’re in the store. One in three also wanted an option for on-demand personalised promotions when online.
The 2015 global IBM research surveyed more than 28,000 consumers across 15 countries.
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