New Retail Study Finds Not All “Great Shopping” Experiences Drive Shopper Loyalty

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Only certain “WOW” shopping experiences will bring customers back

Philadelphia, July 7, 2009 — Over 50% of all shoppers have experienced truly great “WOW” shopping experiences, according to “Discovering WOW – A Study of Great Retail Shopping Experiences in North America,” a new study examining the loyalty dynamics of outstandingly positive shopping interactions. But the study – released today by the Jay H. Baker Retail Initiative at the Wharton School, the Verde Group and the Retail Council of Canada – establishes that not all great experiences deliver impact for retailers in terms of shopper loyalty and intent to return. In fact, of the 26 “great shopping experiences” assessed in the study, fewer than half measurably improved loyalty.

The study found that great shopping happens frequently:

  • A majority of customers (52%) have enjoyed a “WOW” shopping experience
  • 35% of all shoppers encountering great shopping within the past 6 months.

Notably, great shopping occurs when a number of things go well for the shopper: on average over 10 distinct elements are required to create a single great shopping experience for a customer.

But not all of these “great shopping” elements drive loyalty. The study determined that there are five categories of great shopping experiences:

  • Engagement– being polite, genuinely caring and interested in helping, acknowledging and listening
  • Executional Excellence– patiently explaining and advising, checking stock, helping find products, having product knowledge, providing unexpected product quality
  • Brand Experience– exciting store design/atmosphere, consistently great product quality, making customers feel they’re special and that they always get a deal
  • Expediting– being sensitive to customers’ time and long check-out lines, being proactive in helping speed up the process
  • Problem Recovery – helping resolve and compensate for problems, upgrading quality and ensuring complete satisfaction

The presence of “great” clearly makes a difference: customers who have enjoyed a “WOW” experience are over 75% more loyal to a given store than customers who have not enjoyed “WOW” shopping. However, only “Brand Experience” and “Engagement” elements measurably build shopper loyalty. Ultimately, “Brand Experience” is the most critical quality, nearly 40% more important than the next closest factor.

“The good news for retailers is that consistent “greatness” is possible, and can have a significant impact on the loyalty bottom line,” said Paula Courtney, President of the Verde Group. “Our research shows that retailers are excelling at delivering on “Engagement” elements. Their biggest challenge is that they deliver significantly fewer “Brand Experience” elements than elements from the other four categories.”

“The research makes clear that “WOW” shopping is a complicated phenomenon,” said Stephen J. Hoch, director of the Baker Retail Initiative at Wharton. “Retailers that want to deliver great shopping experiences that build loyalty must understand their customers deeply. But the payoff of that understanding can be very large.”

“Discovering “WOW – A Study of Great Retail Shopping Experiences in North America” is the sixth in a series of Wharton/Verde retail experience studies. All respondents were randomly selected and qualified if they had purchased products at a retail store in the past month. Respondents were asked to focus on items excluding liquor, beer, groceries, prescription drugs, or items valued at more than $2,500.

About The Verde Group
The Verde Group specializes in helping North American organizations measure the cost of customer dissatisfaction, prioritize the issues based on ROI, and quickly fix them for improved retention, spend and profitability. With offices in Canada and the United States, The Verde Group has consulted internationally to clients including Wal-Mart, Toyota, Levi Strauss, Allstate Insurance, HSBC and Eli Lilly. Visit http://www.verdegroup.ca for more information.

About the Jay H. Baker Retailing Initiative
The Jay H. Baker Retailing Initiative at the Wharton School of the University of Pennsylvania is an education “industry center” created with a $10 million gift from Patty and Jay H. Baker, Wharton Undergraduate 1956, and former president of Kohl’s, with the sole focus of exposing students to the dynamic opportunities of a retail career. Visit http://bakerretail.wharton.upenn.edu for more information.

About the Retail Council of Canada
The Retail Council of Canada (RCC) is a not-for-profit, industry-funded association representing more than 40,000 store fronts of all retail formats across Canada, including department, specialty, discount, and independent stores, and online merchants. RCC is a strong advocate for retailing in Canada, supporting employment growth and career opportunities in retail, promoting and sustaining retail investments in communities from coast-to-coast, and enhancing consumer choice and industry competitiveness. For more information visit www.retailcouncil.org.

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