The Consumer is Boss on the Digital Path to Purchase

Stephen DeAngelis

October 30, 2017

Sam Walton once stated, “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” The truthfulness of that statement has been verified by the spate of brick-and-mortar store closings over the past several years. Most analysts attribute those closings to the rise of the digital path to purchase and the convenience of e-commerce. Even though purchasing patterns may be changing, the consumer remains the boss and that could be a big problem. As Allison Zeller points out, retailers ultimately “have billions of bosses in terms of consumer.”[1]

Consumers are on the Digital Path to Purchase whether Online or In-store

With dozens of malls sitting empty across America and with almost weekly announcements of retailers shuttering brick-and-mortar stores, you might begin to believe traditional in-store shopping is dead or dying. However, Ayaz Nanji (@ayaznanji), an independent digital strategist, reports, “Most adult consumers in the United States still prefer to shop in physical retail stores rather than online, according to recent research from Walker Sands Communications.”[2] That’s good news for retailers who can master omnichannel operations. Omnichannel operations are important because even when consumers are in stores they are still on the digital path to purchase thanks to their smartphones. Sandy Skrovan reports, “Digital interactions now influence 56 cents of every dollar spent in brick-and-mortar stores, according to Deloitte Consulting.”[3] That figure will only increase as more consumers gain access to mobile technologies. Gabriel Hauari reports, “The number of mobile users around the world will surpass 5.5 billion by 2022, according to Forrester Research. This number is nearly double the amount of mobile users in 2008, then estimated to be 2.8 billion.”[4]

Skrovan notes consumers use their smartphones to “research products, compare prices and download coupons, among other things, while shopping in a physical store.” Retailers have had to adapt to this new reality. Several years ago, retailers lamented a practice known as “showrooming.” Showrooming involves consumers using a brick-and-mortar store to physically check out items but then purchasing those items online. Although showrooming remains a challenge, most retailers are trying to adapt to what is known as the “Amazon effect”. Margaret Rouse (@WhatIsDotCom) explains, “The Amazon effect is the ongoing evolution and disruption of the retail market, both online and in physical outlets, resulting from increased e-commerce. The name is an acknowledgement of Amazon’s early and continuing domination in online sales, which has driven much of the disruption.”[5] In what must be one of the Digital Age’s most ironic moves, Amazon has patented a technology that can block showrooming in its physical stores. Matthew Humphries explains, “Retailers are well-aware that when shopping in their physical stores, many consumers pull out their phone and start comparing prices. If a product is cheaper elsewhere, chances are the store they are standing in loses a sale. Amazon doesn’t want shoppers doing that in its own stores, and the technology described in this patent ensures they cannot.”[6] He notes, the patent carries “the rather sinister title of ‘Physical Store Online Shopping Control’.” Of course, all that a consumer has to do is step out of the store to get back online. Since having to do that may irritate a customer, Amazon may find consumers leaving and never coming back.

Like it or not, the numbers of consumers on the digital path to purchase is only going to grow. Skrovan observes a recent study concluded, “Consumers [are] more willing to consult their mobile phones than store associates while shopping in stores. If nothing else, these findings should set off a few warning bells for retailers and brands. They confirm the importance of offering a seamless and top-notch integrated retail customer experience — one that includes mobile. They also suggest work is needed inside the store to improve the customer experience, providing knowledgeable staff and better information at the point of sale.”

Keeping the Consumer Boss Happy

Zeller reports that Kate Ancketill (@kateancketill), founder and CEO of GDR Creative Intelligence, provided four suggestions to participants at a National Retail Federation conference about how to keep consumers happy. They are:

  • Tailor products and services to the implicit needs of the consumer. Brands should consider their customers’ needs and provide offerings to solve their problems.
  • Involve the consumer in your process. Through crowdsourcing ideas or providing opportunities to provide input or customization, consumers feel more of a connection, if not a bit of ownership, over the products and brand success.
  • Be an authentic brand. Consumers, especially the younger generations, are looking for brands that genuinely reflect their own values. Today’s consumers can see through false or forced attempts to make a connection.
  • Build trust through transparency. Consumers have the internet at their fingertips, and expect to have access to the information they want. When it comes to making a purchase, access to a retailer’s supply chain or background on the product can help spur the purchase decision. Without it, a retailer can give the impression of hiding something.

Zeller adds, “Ancketill’s portrayal of this new, demanding ‘boss’ stems from the insight that truly understanding consumers’ behavior means looking at more than their shopping habits.” To keep in-store consumers happy, Skrovan insists, “Retailers and brands must be on their games, featuring adequate and accurate information both offline and online to meet shopper expectations. Inside stores, this could take the shape of informational POS signage or kiosks, take-home pamphlets and interactive displays.”

Summary

Whether in-store or online, consumers are the boss and they’re probably using their smartphones to enhance their shopping experience. Alex Hickey (@a__hickey) reports more and more companies are discovering that artificial intelligence can help ensure better customer experiences. She writes, “Most companies that have implemented artificial intelligence believe it has improved customers’ experiences, with roughly three-quarters reporting a 10% sales increase, according to a survey of almost 1,000 respondents from Capgemini’s Digital Transformation Institute. Around 60% of companies also reported increased customer satisfaction, reduced customer churn and improved customer intimacy.”[7] Keeping the boss happy — or the billions of consumer bosses in the world happy — should be at the top of every retailer’s priority list.

Footnotes
[1] Allison Zeller, “The Consumer is Your Boss: All 7.5 Billion of Them,” National Retail Federation, 27 September 2017.
[2] Ayaz Nanji, “Online vs. In-Store: How Consumers Prefer to Shop,” MarketingProfs, 31 July 2017.
[3] Sandy Skrovan, “How shoppers use their smartphones in stores,” Retail Dive, 7 June 2017.
[4] Gabriel Hauari, “Global mobile users to surpass 5.5B by 2022,” Information Management, 26 July 2017.
[5] Margaret Rouse, “Amazon Effect,” TechTarget, June 2017.
[6] Matthew Humphries, “Amazon Patents Tech to Block In-Store Comparison Shopping“, PC Magazine, 16 June 2017.
[7] Alex Hickey, “AI improves customer experience and creates job, study finds,” CIO Dive, 13 September 2017.