Beauty Store Business magazine - December, 2019

Online Retail Mistakes Could Cost Retailers In-Store Visits This Shopping Season

Customer service mistakes made with Cyber Monday online shoppers could lead to significant in-store sales losses in the 2015 holiday gift-buying season, according to the latest LoyaltyOne consumer research.

Nearly half (47%) of Cyber Monday shoppers indicated they’ll be reluctant to make an in-store holiday season purchase from a retailer with whom they have an unhappy online experience on the Monday after Thanksgiving, per LoyaltyOne’s October 2015 nationwide survey of 1,019 American consumers.

When asked: “If I have a poor experience shopping online at a retailer’s Cyber Monday, I would still shop at the retailer’s physical store,” 30% of survey takers wouldn’t commit one way or another, 12% said they were unlikely to shop in-store, and 5% said they were very unlikely to shop in-store.

Cyber Monday online shoppers represent a significant portion of overall holiday season shoppers. Nearly eight out of ten LoyaltyOne survey respondents said they plan to make Cyber Monday purchases. In the youngest end of the millennial demographic, 18- to 24-year-olds, the rate of Cyber Monday shoppers skyrocketed to 93%. Notably, a retail study conducted earlier this year by LoyaltyOne with Verde Group, a customer experience research consultancy, and the Wharton School showed that 14% of shoppers experience at least one online problem when they shop.

Consumers indicated in this month’s LoyaltyOne survey that a negative in-store experience would have a somewhat less deterrent effect on their online shopping behavior. When asked: “If I have a poor experience at a retailer’s store location, I would still do my holiday shopping at that retailer’s on-line store,” 22% were neutral, 11% said they’d be unlikely to shop online with the retailer, and 3% said they’d be very unlikely to shop the retailer online.

In another key finding from the latest survey, American consumers seem to have relegated to the history books the notion that there is intrinsic value to trudging to the store to touch and hold just the right item purchased for the magic gift exchange moment. When asked about the statement: “I’d be reluctant to tell friends and family that I purchased a gift online or through a mobile device,” 83% of consumers said they disagree or strongly disagree.

Even more emphatic, 88% of survey takers said they disagree or strongly disagree with the sentiment that gifts bought online are NOT as heartfelt and sincere as gifts bought in a physical store.

Still fashionable and valued by shoppers, apparently, is the encounter with the charming, knowledgeable, perhaps sympathetic in-store sales person. Eighty-three percent of consumers said they agree or strongly agree with the statement: “I think a salesperson who is exceptional can give a store an advantage.”

“We know that a poor experience can have a negative impact on shopper spend. This study shows that the online purchase itself is a high-risk touchpoint,” LoyaltyOne VP Dennis Armbruster said. “Retailers that fail to reduce the risk of an unhappy Cyber Monday experience could pay a crossover price in the form of lower in-store sales this year.”

“Online shoppers react to different problems than those who shop in-store,” said Verde Group president Paula Courtney. “The value of an online shopper to a retailer is more negatively impacted by problems associated with the lack of free shipping or issues with returns,” she said. “Online shopper value also is damaged when rewards cards or coupons cannot be used online, when sales or specials are only available in the store, and when shoppers cannot use their preferred credit card or payment type online.”

In other key results from LoyaltyOne’s online holiday-shopping customer experience survey:

  • Drone delivery of holiday gifts is slow to take off with consumers, with 22% saying they would choose drone delivery, if it was available, to get an online purchase faster, versus 55% who said they’d be more comfortable with traditional shipping methods and 23% who said they had no shipment method preference
  • 69% of consumers said that if a retailer couldn’t guarantee the delivery date of an online purchase, they’d cancel the order and place the buy with an online competitor

Millennials (18- to 34-years olds) demonstrated once again that they march to the beat of a different drummer boy. Here are some of millennials’ sharpest contrasts with the general population (18 to 65 and over):

  • 48% of 18- to 24-year-olds and 33% of 25 to 34-year-olds chose drone delivery
  • 25% of 18- to 24 year-olds and 27% of 25- to 34-year-olds said they’d be reluctant to tell friends and family they purchased their gifts via smartphone, versus 17% of the general population
  • 45% of 18- to 24-year-olds and 42% of 25- to 34-year olds said that if notified their gift purchase wouldn’t be delivered on time they’d wait for the retailer to fulfill the order, versus 30% of the general population

[Image: Getty Images/Phillip Waterman ]