In a world that feels so uncertain in 2021, some would say it would be difficult to determine what the future of retail will look like. At KNOWTHM, we’ve been researching, getting results, and discussing in detail our findings. We know many countries around the world, high street retail as we know it has retreated into a derelict landscape, making all of us wonder…
How will retail survive in our future?
What will customer satisfaction look like?
Currently, high street retailers, for the sake of this discussion let’s call it pre2020 retail, have almost been replaced with the comfort and safety of online shopping. Lockdowns around the world restricting citizens to the confines of their own homes, with those that have never considered or ventured into shopping online before, are now doing it for the first time.
Even though for many the concept of online shopping in this way would be deemed a temporary one, something that consumers are doing during the pandemic, it’s hard to imagine at this point that the purchase journey, psychology, and behaviors of shoppers haven’t changed considerably as a result. It would be a mistake to think that retail will return to its pre2020 concepts after this time.
of respondents still wants to buy a phone in a store
However, a common misconception from this is that brick-and-mortar stores are now redundant. Sure, the world has been forced to head to online retail at a faster rate, but our studies have shown that high street retail is not dead, consumers still need and want retail stores. 97% of our survey respondents*1 told us that they still want to visit a store as part of their shopping journey. Keep reading to find out more about the results.
Patience is no longer a virtue.
Impatience, immediate action, instant gratification, even some impulsiveness—these are just a handful of descriptors for behavior today. We have all been empowered and emboldened by information. With our phones acting as supercomputers in our pockets, we can find, learn, do, and buy whenever the need arises—or the whim strikes
Back in 2017, Google released some research that suggested consumers were becoming increasingly impatient. The trend in instant services has become more widespread with apps like Uber, Uber Eats, Deliveroo, and let’s not forget Amazon Prime delivery which was the driving force for all of these services to appear in the first place. The success of these applications and services have all evidenced the need for instant gratification. The natural increase of Amazon Prime customers reached a whopping 150 Million subscribers in Q4 2019 (Source: Statistica) and they’ve yet to publish the report for 2020. Considering the forced shopping changes around the world thanks to global circumstances, this would have significantly increased.
The changes in instant services further evidence that customer satisfaction is still at the forefront of consumer shopping journeys. The only distinction of this from pre2020 retail and now is that the satisfaction bar has been raised. Something for retailers to be aware of in the future, and if they’re not already considering this, need to pay close attention to their Net Promoter Scores.
The dependence on instant gratification from purchases has become more prevalent in current climes. There is a general consensus (seen in social media) that humanity as we know it is ‘simply surviving and not thriving’. Our daily needs of social interaction and engagement are limited to that we experience through digital screens. The biggest fix in our lives coming from those wonderfully addictive ‘Buy Now and get it tomorrow’ buttons. Imagine the satisfaction customers would have seeing a button stating “Get this in an hour”, then simply going to the store and making their purchase. This is something that KNOWTHM can support you to offer your customers.
Retail will now become a place where consumers will interact with a human, something that would be considered a luxury and social after being online for so long. This shows that brick-and-mortar stores are not dead but simply need to adapt to the new customer needs. Customers will want to enjoy the whole experience, talk with team members like they’re friends, and savor the products and services they purchase. Retailers who are slow to react to these changes will likely suffer in the future.
It’s not simply about price anymore.
Consumers not only want to receive their purchases quickly but it’s the serotonin-induced satisfaction that arrives along with their purchases. At the moment, this is becoming the only excitement that people can ‘look forward to’ in a world of unknowns. There is no denying that this has become an addiction for many in a world where there is a lack of excitement, but at the same time, consumers have been exposed to this way of shopping that now has just become acceptable. Almost embedding it into the make-up of how things are purchased.
As a result, it’s more important to acknowledge that emotional buying has now become an even more important factor within the customer satisfaction metric. There’s no denying that emotional buying, impulsiveness, and the need for instant gratification were on the rise before the pandemic, but most certainly have increased significantly during this time, purely on the shoppers’ pleasure principle being fulfilled.
In most psychological models, humans are believed to act upon the “pleasure principle.” The pleasure principle is basically the driving force that compels human beings to gratify their needs, wants, and urges. These needs, wants, and urges can be as basic as the need to breathe, eat, or drink. But they can be as complex as the “need” for an iPhone or some other cool new product. When we don’t get fulfillment, our psychological response is anxiety or tension.
But what does that mean for the future?
There is significant evidence to suggest that retail will not return to pre2020 standards. The behaviors consumers have adopted and have been experiencing for the past 18 months through the ‘forced need’ to shop online have significantly shifted their purchasing behavior and expectations of retail. Customer satisfaction is going to be harder to achieve if your brand isn’t ready to adapt to the new needs of consumers.
Intelligence Node released some interesting insights in their recent report on shopping behaviors in 2020. Particular statistics of note are that “82% of shoppers will continue shopping online even when stores reopen”, and “1 out of 2 shoppers choose websites with fast, easy and affordable delivery while 1 out of every 3 shoppers [will] buy from the website with the lowest price”.
While these 2 facts almost contradict our theory for the need for brick-and-mortar stores, what it does show is how online will still be part of the consideration journey, no different than in pre2020 retail. Adding to this that shoppers are more likely to choose the website with the fastest delivery option, including reserving at stores, which shows how high street retail will still be important in the future.
Intelligence Node then goes on to suggest that “In-store shopping will evolve to customer experience and education”, and “Shopping by appointment, online consulting & the use of tech will become the new norm”.
In the future, shoppers visiting stores are more likely to have started their journey online meaning that retailers will need to use their stores differently. Online will become a traffic driving method to high street retail, allowing appointment booking and reservations. Brick-and-mortar stores will not only provide social interaction but will become the final destination for consumers who require information, to experience the products, and wants to walk away with their new purchase.
Shopping behaviors have shifted.
The way people shop has already changed and won’t be the same again. It’s very unlikely the way consumers would shop pre2020 will ever return. This and shopper expectations have risen. Service has improved and the demands for gratification are a lot higher. There’s not only a level of safety and trust needed to go back into encouraging the public to the high street we love, but also the levels of service and experience that shoppers will crave needs to meet the same demands that they’ve been exposed to through digital channels. Retail stores that have yet to adapt to the digital climes should now realize that this is no longer a luxury. It’s essential for survival.
In summary, the retail industry is going through a wave of transformation and will never be the same. Unprecedented external factors have contributed to this turn of events and have carved a sure-shot path for a data-driven, digital-first, unified future of retail. Retailers and brands need to embrace this change, understand the consumer expectations, and ride this transformative wave to win in the age of Amazon. They need to unify compelling online and instore experiences and weave them throughout the consumer buying journey to reel in consumers at every stage and win market share.
So what next?
Retail’s fundamental shift from sales to experience and service has now already set in the high street concrete. Whether we want to accept it or not, consumer behavior has made a rocketing shift and it will be much harder for the retail high street to maintain customer satisfaction and loyalty. A shoppers’ experience needs to feel seamless with the one they would experience online from a brand.
At first, there will be some retail sectors that will struggle to adapt more than others. To name a few, locations like banks, car dealerships, and phone stores purely based on their customer experience. Most of us that have had the opportunity to go to any of these locations know that they’ll have to wait a long time to be seen by a team member and that’s before the negotiating purchase process.
When purchasing expensive items like these, consumers expect a high level of service while in the store. This is to match the high quality and price of the item. In comparison, the expectation and the reality are somewhat different, making it much harder to achieve instant gratification.
Our most recent study indicates that 97% want a store experience as part of their purchase journey. The main reasons we discovered for Millennial and Gen Z respondents are:
The item is expensive and the customer wants to see and hold it before completing their transaction *
Needing advice and recommendations before purchase *
Ensuring the item is working and set up for use *
Wanting instant gratification by walking out of the store with their purchase *
As you can see, retail won’t just be a place to buy something anymore. High street shopping has shifted towards emotional experiences rather than transactional ones.
Instant gratification applies to all sectors of retail, including banks, car dealerships, and phone stores. In our study, we discovered that after 13 minutes, a customer’s NPS Scores would drop by 1.15 points every additional minute of waiting. The urge for access to high-quality services has become an immediate one. Brands that are able to bring customers to the stores and serve them quickly and efficiently will find they will succeed in the future.
In summary, consumers will want alternative methods to get their products and services, making high street retail as we currently know it, completely change. Footfall will be much lower for a start but the focus will become service with a much higher bar for customer satisfaction. Keeping your consumers happy and returning will be far harder than before. They will expect speed, to be kept up to date on their status, recommendations and advice, the information in their pocket, personalization, accuracy, emphasis on emotions, and options that suit them at all times. Brands that are unable to keep up with find their footfall and NPS Score to be ever decreasing.
One way to satisfy the instant gratification from online traffic is to offer reservations and bookings with a team member in-store, allowing customers to complete their journey within an hour. Customers can feel assured they would be seen at a time that is convenient to them but also have a dedicated member throughout their time in the retail environment. Remember, it’s not just their money they’re spending but their time.
In our recent study, we identified that for those looking to purchase an iPhone 12, 78% of them would select the ‘get it from store within one hour’ option when made available to them. An option like this would allow customers to meet a team member faster, complete their transaction within an hour and walk out with their purchase right away.
This is exactly what KNOWTHM’s SmartQueue**, Instant service appointment tools (ISAT), is offering and will be essential for any retail experience in the future. Not only does it work seamlessly with your online platform to offer consumers the option to purchase within an hour in-store but will also significantly reduce wait times. A perfect solution where now even the smallest wait time will feel like a huge inconvenience to shoppers. Offering an immediate appointment to purchase or a visible yet virtual queue managed by their smartphone, consumers will feel informed about their retail experience and in turn more satisfied. More importantly, increasing customer satisfaction will aid brands on their mission to improve their Net Promoter Score within this new, impatient retail world.
* Customer experience – A study about instant gratification, KNOWTHM, Feb. 2021
** SmartQueue also offering appointment-based customer service