Online, mobile, and catalog channels support bricks and mortar shopping
Philadelphia, PA – About three-quarters (76%) of all purchases still occur at bricks and mortar stores, according to “Understanding the Multi-Channel Shopper,” a new survey-based study by the Jay H. Baker Retailing Center at the Wharton School of the University of Pennsylvania and the Verde Group. While the web, catalogs, and mobile phones generate just 22%, 1.4%, and 0.6%, respectively, of all purchases, these channels are important in the shopping process, for example to browse for items and research prices.
The study also identified four types of shoppers, based on their channel usage: the Tech-Savvy Multi-Channel Shopper, the Discerning Online Shopper, the Experiential Bricks and Mortar Shopper, and the Retailer-Loyalist Multi-Channel Shopper.
“In spite of all the attention on online shopping, 76% of purchases are still made offline. This is a great opportunity for retailers to differentiate themselves through a unique in-store experience,” says Barbara Kahn, Patty and Jay H. Baker Professor, Professor of Marketing at the Wharton School. “Retailers with well-designed omni-channel strategies should do better because they reach all four segments.”
“This study reminds retailers that when designing and delivering channel experiences; ‘know thy customer’ remains the critical principle,” said Paula Courtney, President of the Verde Group. “Different channels attract different types of customers who demand experiences that are specific to their needs and preferences.”
Key findings of the study are as follows (authors of the report are available to expand upon these and other findings):
Customer segments based on channel usage:
- The Tech-Savvy Multi-Channel Shopper: Most likely to make purchases through 3+ channels. Interested in new technology, high social media participation. High online spending. Predominately male, 33 years old on average.
- The Discerning Online Shopper: Likes the convenience of the web to browse and buy. Least likely to know which retailer to buy from. Uses online technology but not a heavy social media user. Best-educated shopper, second wealthiest among the segments, skews older, female and married.
- The Experiential Bricks and Mortar Shopper: Most frequent bricks and mortar shopper. Most likely to be mono-channel user. Likes to browse and see displays of many types of products. Less likely to know what retailer to purchase from. Lowest spender. Predominantly female, older, married and lower income.
- The Retailer-Loyalist Multi-Channel Shopper: Multi-channel shopper with preference for bricks and mortar stores. Most loyal to past retailer(s) driven by good previous experience with preferred retailers and established shopping habits. Second most likely to use a smart phone for browsing and purchasing. Skews male and slightly lower income.
- Shoppers are retailer loyal. About two-thirds are likely to stay with their most recently used retailer. Nearly six in ten customers know which retailer they are going to purchase from in advance. Suggesting high customer satisfaction, 86% would recommend their most recently used retailer to others.
- 66% of shoppers anticipate their online spending to be the same in the next twelve months, compared to 24% who expect to spend more online.
- 38% of cell phone owners use their phone to shop or browse for products; 33% research products before purchasing; 32% make price comparisons; 40% find it useful to scan a barcode in a magazine, on a retail display or on a product with their smart phone; and 45% find it useful to browse smart phone advertising.
- Price and value (37%), followed by selection of items (10%), are leading drivers of shoppers’ decision about the purchase channels.
The “Understanding the Multi-Channel Shopper” study is based on an online survey of 1,221 respondents about their most recent purchase of electronics, apparel/accessories, and housewares items, purchased through brick and mortar stores, a website/online, catalog/call center, or mobile/smart phone. The study defines a multi-channel shopper as someone who uses at least two channels all or most of the time to make purchases, including activities before and after the purchase.
About the Wharton School and the Jay H. Baker Retailing Center
The Wharton School of the University of Pennsylvania— founded in 1881 as the first collegiate business school — is recognized globally for intellectual leadership and ongoing innovation across every major discipline of business education. The most comprehensive source of business knowledge in the world, Wharton bridges research and practice through its broad engagement with the global business community. The School has more than 5,000 undergraduate, MBA, executive MBA, and doctoral students; more than 9,000 annual participants in executive education programs; and an alumni network of 88,000 graduates.
The Jay H. Baker Retailing Center, an interdisciplinary research center at the Wharton School at the University of Pennsylvania, was established in 2002 through a generous gift by Jay and Patty Baker. Jay Baker, former president of Kohl’s Corporation, is a graduate of the Wharton School’s class of 1956. The Baker Retailing Center’s mission is to be a leader for industry-relevant knowledge creation, academic retail education, and job placement of graduates—guided by a global perspective of the retail industry. The Baker Center counts the leaders of America’s largest retailers among its advisory board members. For more information about the Baker Retailing Center, visit http://www.wharton.upenn.edu/bakerretail/.
About The Verde GroupThe 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 www.verdegroup.ca for more information.
