Retailers risk customer loyalty through online and store "disconnect" - study
Be warned. Brands are putting customer loyalty at risk due to a disconnect between their physical and e-commerce experiences, a new research claims.
The PFS report, called Overcoming the Physical Disconnect: How Retailers Can Maintain Customer Loyalty in an Omnichannel World, reveals retailers, that were forced to rapidly scale their e-commerce offering by the pandemic, are falling short when it comes to “replicating tangible in-store elements digitally”.
This has led to 80% of all respondents confirming they miss at least one aspect of the traditional shopping experience while perusing online, while 35% admitted they’ve had such an unsatisfactory shopping experience with a previously-trusted brand this past year, they’ve gone on to look elsewhere.
Meanwhile, 23% said online stores either don’t do enough to engage with them, or that they only want their money and don’t care about their satisfaction, according to the survey of 2,000 UK consumers.
The report said the most missed facets of the in-store shopping experience include being able to physically touch products (43%), and to test certain items (41%) for suitability across aspects such as size or colour.
“While retailers have responded to these shortfalls with the rise of online tools such as FAQ pages and website chatbots, it would seem these attempts to elevate brand loyalty aren’t quite hitting the mark”, the report said. In fact, 21% of respondents reported that online customer service is still not as good as in-store assistance.
And customer loyalty isn’t just based on the point of sale. Slow delivery (18%), a lack of available stock (17%) and difficult returns processes (14%) were all listed as potential factors behind reduced interest in using a previously preferred brand.
A net total of 88% reported at least one fulfilment factor that could or already has made such an impact. These contributing factors could well be responsible for 63% of Gen Z consumers, 46% of Millennials admitting that they had endured such a poor shopping experience with a previously trusted brand, that they've abandoned it.
So what’s the answer? Fulfilment is set to be a key differentiator, the report believes. According to its findings, 37% of consumers would prefer to choose how their product is packaged; 64% would be more loyal to brands that provide them with delivery timeframe options; 52% would prefer to shop with companies that help them to minimise their carbon footprint; 49% would prefer to shop with a brand that provides packaging that can be repurposed in some way; and 70% more generally expect online retailers to minimise packaging.
Although the 37% figure who’d prefer to choose how their product is packaged is high, an even higher 44% of Gen Zs think that way. The option of buying and returning in-store, or to use click & collect when online shopping, was also 6% more popular for this age group (43%) than the overall total of net agreements (37%).
“To keep up with these future shoppers, retailers must ensure that all of these boxes are being ticked, simultaneously, to guarantee long-term brand connections”, the report suggested.
Also, the reopening high street stores will be the “true test” for online brands when it comes to loyalty. While 39% of consumers agree the safety measures implemented in-store should continue after lockdown, as many as 40% of consumers still claim that their loyalty will revert to retail brands that have a high street presence in Covid’s aftermath.
However, this might not last for long. Once the dust settles on the high street’s homecoming, 34% expect to return to online shopping after the initial buzz has died down.
“The role of the high street will instead be based on experientialism”, the report said, with 37% of Gen Zs expecting retailers to offer more of an in-store ‘experience’ than they did before lockdown, and 51% of them expect shops to become more of a space for browsing in the future.
Christophe Pecoraro, Managing Director of PFS Europe said: “While the flagship store has moved online, this does not spell the end for the high street. What we’re more likely to see is a challenge to the physical stores’ core functions. What our data tells us is that we are heading towards an omnichannel future based around in-store experientialism, in support of online points of sale”.
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