Customers Prefer Good Value to Fast, Friendly Service; 4 Facts About How We Shop
Few would dare insinuate that efficient, friendly customer service is anything less than a cornerstone of an effective shopping experience. At fast-food and fast-casual restaurants, for example, there are indications that quality service has a more pronounced effect on the customer experience than even the taste of the food.
But thanks to the impact of high gas prices and economic uncertainty on purchasing habits, other factors relevant to the customer experience maintain their positions proudly above friendly, knowledgeable and/or fast service as the most significant drivers of retail shopping allegiance.
A mistaken conclusion should not be made—customer service remains quite important, with only 10% discounting its influence on shopping habits, according to a new study by Nielsen Media Research’s "Shopping & Saving Strategies Around the World." But when it comes to identifying the biggest reasons customers shop at given retailers, 61% say "good value" is "highly influential," while 58% give that label to "lowest prices overall." By comparison, only 40% give the "highly influential" tag to "friendly & knowledgeable" personnel, while 38% offer such praise for "short/fast" checkout.
That "good value" ranks above "great sales and promotions," let alone variables related to customer service, is particularly logical when buying groceries in the current climate of economic caution. Customers, especially those in North America and Europe, are more likely to make "stock up" trips than quick-replenish or sale-driven grocery buys. Insofar as they are looking to make less trips to the store (due to the inhibitor of high gas prices), they are going to build their shopping preferences around the stores that provide the best bang-for-the-buck on big-basket purchases. As a result, they may have to overlook stores with great one-off sales or closeout-pricing (even though they prefer buying ‘the sales’ to buying from value retailers when possible) in order to assure their overall purchase is of optimal value.
From a customer service standpoint, it means they cannot be too picky—customers might not want to be shunned, disrespected or mistreated, but they also might not be willing to trade away great product value for a pampering experience.
Though evidence that value trumps all in the shopping experience provides a clear, actionable insight on which superstores and supermarkets can assemble their pricing strategy, it is not the only noteworthy trend in shopping. Here, we analyze five facts from Nielsen’s "Shopping" study:
Good Value Matters as "Browsing," Rewards Cards Possess Limited Relevance
As noted, customers label "good value" as the most influential quality when determining their reason for shopping at a given store. "Browsing," interestingly, is the least popular—only 12% find browsing to be "highly influential" on their shopping, while 39% completely dismiss its relevance.
In recent earnings statements, such as those from Rite-Aid and Discover Financial, "rewards cards" have received credit for driving business. Interestingly, customers largely dismissed the role a "customer loyalty card program" plays in shaping shopping habits; 28% called it highly influential, while 34% said it had no influence.
The store’s offering of fresh produce notably mattered more than a "high quality meat department" and a "variety of freshly prepared foods."
Quality is King—But Let Us Buy in Bulk
Rising commodity prices, expectedly, take a toll on customers who command the greatest possible value from their purchases. But when they inevitably rear their head on retail pricing, customers would prefer the quality stay intact.
That does not mean customers will accept price increases with open arms—as long as they have leverage, they will not. But to the extent that they will need to compromise in the face of rising raw materials costs, customers would rather buy their goods in bulk (and let the volume discount keep the price down) than pay the same total cost for an equivalent number of goods of a slightly-inferior quality.
36% of customers, in fact, would prefer the bulk option, compared with 18% for "new, smaller sizes at lower price points," 12% for "modestly" reduced product package sizes and 10% for a decrease in the magnitude of sale prices. Only 6% would accept consistent pricing amid a slight decrease in product quality.
Those from North America and Asia-Pacific were most attached to the bulk philosophy, although customers from all regions ranked it as the best possible option.
People (Especially American and Chinese Customers) Love Coupons, But Some People Really, Really Love Them
Customers might rely on overall value rather than sale prices when selecting their retail destinations of choice, but that does not mean promotional frugality is dead. Customers definitely use coupons.
That is particularly true in the United States of America, where between 66% of customers reported using coupons (higher than the 65% figure for North America and 48% overall number).
Interestingly, 70% of coupon purchases came from just 13% of households that ever use coupons, a demographic sample best described by Nielsen as "big spenders across the total store…young, more affluent and [who] have large households."
China, too, is very associated with coupon purchases—67% reported using coupons in the world’s most populous nation.
North America Customers are Mixed on Innovation in Shopping Technology
The retail shopping experience is not perfect, but customers, notably North Americans, remain lukewarm on some proposed alternatives to the sometimes-slow and inefficient shopping process.
Asian-Pacific and Middle Eastern/African customers love the idea, but North Americans remain unsold on online grocery shopping. Of those surveyed, a whopping 77% say of Asian-Pacific customers say they are willing to take advantage of online shopping. That number is only 20% for North Americans.
Of the other regions, only Europe joined North America in its skepticism of online grocery shopping as a valuable solution (35% were likely to take advantage).
Though support was not resounding outside of Asia-Pacific, all global customers are more likely than not to try hand-held scanners when they go grocery shopping. The solution aims to improve the checkout process and minimize wait times in a manner more effective than the critically-panned "self checkout" systems.