Posted by Jessica Beaudry on Fri, Mar 16, 2018 @ 11:00 AM
In the National Retail Federation’s (NRF) Winter 2017/2018 Consumer View report, the trade association examines U.S. consumer preferences about today’s retail shopping experience including fulfillment, marketing techniques and emerging technologies. The quarterly report surveyed 3,172 consumers from November 11 – December 1, 2017 and possesses a “margin of error of plus or minus 1.7 percentage points.” As consumer buying habits and demands continue to reshape the retail industry, businesses must successfully adapt to remain relevant.
Fulfilment and Shipping Trends
Increasingly, consumers are demanding more fulfilment options such as free shipping, two-day delivery and buy online and pick up in store (BOPIS). Retailers are investing in omnichannel fulfillment capabilities, live chat for customer service and employee training for in-store orders to meet this rising demand. In addition, businesses are dedicating resources to improving operations in distribution centers. In NRF’s report The State of Retailing Online 2017, 31 percent of retailers surveyed reported experiencing an increase in fulfillment costs per order in the past year.
Free shipping has shifted from primarily promotional to a “competitive necessity,” NRF reports. If an online order does not qualify for free shipping, 47 percent of shoppers will usually back out of the purchase, while 51 percent will add additional items to the order to meet the retailer’s free shipping requirements. A total of 68 percent of survey respondents expect free shipping on orders under $50: 68 percent of Gen Z, 58 percent of millennials, 67 percent of Gen X and 77 percent of baby boomers.
Consumers have identified shipping speed as a key factor in determining where to shop online. Two-day delivery is quickly becoming the standard according to NRF, with nearly four in 10 consumers expecting online retailers to offer the service. In comparison, 24 percent of consumers expect retailers to offer same-day delivery. Leading the demand for fast shipping, 49 percent of millennials expect a free two-day shipping option and 40 percent expect an offer for free same-day shipping. In response, companies such as Target will offer same-day delivery to “half of its stores by the summer of 2018,” while Macy’s currently offers same-day shipping at select locations.
Respondents pointed to fast and free shipping as a major draw for holiday shopping. NRF found that nine in 10 consumers plan to “take advantage of free shipping” during the holidays. During Thanksgiving weekend 2017, nearly half of all holiday shoppers stated that a free shipping offer persuaded them to make a purchase that they were initially hesitant about.
A Unique Retail Shopping Experience
More consumers are selecting brands that offer unique and convenient retail shopping experiences. Retailers hosting special events at brick-and-mortar stores are increasing traffic and loyalty. “Nearly six in 10 respondents said they were interested in special events and experiences hosted by retailers,” NRF states. By generation, 27 percent of Gen Z, 44 percent of millennials, 27 percent of Gen X and 9 percent of baby boomers indicated they are “very interested” in special events and experiences.
Among millennials, 60 percent of men and 28 percent of women expressed great interest in promotional events. While millennial men lean toward product demonstrations and tutorials (52 percent), millennial women (43 percent) want early or exclusive access to items on sale. Other events that drive in-store traffic include games and competitions, a party or special event, pop-up shops and interacting with an expert or brand ambassador.
Due to the majority of shoppers (54 percent online and 73 percent in-store) visiting a retailer to purchase a specific item, convenience is crucial. Respondents (58 percent) ranked the ability to find an item quickly and easily as the most important factor in determining where to shop. Consumers (44 percent) also identified quality customer service and a streamlined checkout process as highly important.
Integrating New Technologies and Effective Services
Overall, consumers welcome and express interest in testing retail innovations. Nearly half of respondents reported trying a technology and stated that it had “ultimately improved” their retail shopping experience. In particular, consumers gravitate to technologies that “personalize the experience or simplify the process.” Top-ranking technologies include retailer messaging apps, in-store navigation and voice-activated shopping.
Alongside increasing delivery speeds, providing unique online and in-store experiences and incorporating the latest technologies, retailers can improve the retail shopping experience by implementing one or more of CrossCheck’s check processing services to increase consumer satisfaction rates and revenue.
For example, our Multiple Check service provides customers with additional time to fund purchases without using or applying for credit. Better than the old-fashioned layaway concept, Multiple Check enables customers to take purchased items home on the sale date by writing 2 – 4 checks that are deposited over the 30-day period by merchants. Merchants can save the sale and confidently accept checks with guaranteed funding of each deposited check by CrossCheck. Learn more by downloading our free guide.