What motivates single and omni channel shoppers?

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Table of Contents

1. Key Findings
2. Introduction
3. The purchase journey is online AND offline, not online VS offline
4. The dynamics of Single Channel and Omni Channel Path to Purchase
5. Omni channel shopping behavior by category
6. Key influencers among Single Channel Online Shoppers
7. Key influencers among Single Channel In-Store Shoppers
8. Key influencers of webrooming behavior among shoppers
9. Key influencers of showrooming behavior among shoppers

Key Findings

  • Customers no longer think in terms of online OR offline, but online AND offline. As a result, we need reevaluate the point of sale from the the perspective of the entire customer journey.
  • 60% of US customers in 2014 are single channel shoppers. 39% of US customers start their search and end with purchase online with no trip to the retail store. 21% of US customers start their search and end with purchase in store without accessing online services in between.
  • An omni channel shopper is someone whose purchase journey includes both online and offline touch points. 40% of US customers in 2014 are omni channel shoppers.
  • 20% of US customers start their research online then buy in a store. They may or may not engage in additional research in store before purchase. This behavior is generally referred to as webrooming.
  • When customers start their research in store then buy online with or without additional online research, it’s called showrooming. 14% of US customers have engaged in showrooming.
  • The top categories where US customers combine online and offline research are consumer electronics (70%), toys (66%), apparel (58%), and home appliances (57%).
  • The categories with lowest incidence of omni-channel shopping are cleaning products (14%), OTC medications (15%) and food beverages (15%).
  • 75.1% of US online shoppers prefer to research online and shop online without any offline research because online allows the convenience of 24/7 shopping.
  • 72.4% of US online shoppers prefer shopping online over visiting the store because they have an option to deliver the product to a preferred location.
  • 63.9% of US online shoppers did not visit a retail store during the shopping journey because the product they wanted to buy could only be purchased online.
  • 52.8% of US online shoppers say that they have a greater variety of options when shopping online compared to the retail store.
  • 69.5% of US shoppers who bought a product from the store without online research say that they wanted to try the product before purchase.
  • 49.5% of US shoppers who followed an offline only path to purchase say that simpler return policies for offline purchase make them buy in a store instead of online.
  • 44% of US shoppers prefer to purchase offline because they want to make sure the product quality meets their requirements and expectations.
  • 74% of US shoppers who had engaged in webrooming said that protecting personal information was one of the reasons they picked buying from a store instead of online.
  • 54% of US shoppers who had engaged in webrooming said they were worried about possibility of online fraud upon review of the retailer or brand’s previous history in fraud prevention.
  • 73% of 18-29 year old US customers engage in showrooming compared to 48% of all US adults 18 and above.
  • Among shoppers who researched in store and online before they decided to buy online, the top two reasons given were not being ready to make the purchase during the store visit (64%) and waiting to do additional research after the store visit (62%).
  • 61% of US shoppers did not want to carry the item home making them either return from a store visit and order online.

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Introduction

The customer purchase journey has drastically changed in the last five years thanks for mobile and online technologies.

Consumers, today, move seamlessly between online and offline touch points. They can start their journeys online to discover brands, move offline to eliminates options that do not fit their criteria, come back online to find more information that helps them make a decision, and finally purchase either online or offline.

Shopping is no longer restricted to the store but can also happen at homes, workplaces, bus stand queues and restrooms. However, store visits are still relevant and help customers address underlying emotional needs around product fit and quality.

The moment of truth in the customer’s purchase journey happens when they purchase the product. While this may seem like a small transactional moment to brands and retailers, it is a significant one for customers who have to not only decide how to pay but also where to pay. Is it going to be online or in store?

Customers expect brands and retailers alike to provide them with the option to buy online and in store. It’s not a question of which one a brand should offer. The challenge is to understand why customers pick online or in store purchase methods.

In this briefing we look at how online and offline paths to purchase complement each other and the key factors that influence a customer’s decision to buy online or offline.

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The purchase journey is online AND offline, not online VS offline

A key concern for most retailers and brands is whether customers prefer to buy their products online or in stores. The concern stems from a belief that online and offline are two separate channels in the customer’s mind.

Most marketers assume that customers overall prefer buying online because it’s more convenient. Some customers prefer buying in stores because they want further assurance on size, quality and other factors.

The assumption is reflected when surveys ask customers whether they prefer online or in-store purchase methods.

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44% of US customers say that online – via desktop or laptop – is their number one preferred method of purchasing products. 7% of customers prefer tablets and 4% prefer smartphones above any other purchase methods. Overall 55% of US customers prefer to buy products online instead of visiting a store.

In comparison, 41% of US customers say they prefer to purchase products in a physical store above all else. The remaining 4% prefer to buy products via catalogs – order using a phone and/or send mail.

While the data from this survey points out that online is the overwhelming winner, the survey question wrongly assumes that all customers stick to a single channel when buying products. In other words, it assumes that all customers who search online end up buying online with no visits to the store and customers who search in store end up buying in store with no online visits.

This assumption is increasingly inaccurate in a world where customers are showrooming (search in store then go buy online) and webrooming (search online then go buy in store) among several other new shopping behavior. Customers no longer think in terms of online OR offline, but online AND offline. As a result, we need reevaluate the point of sale from the perspective of the entire customer journey.

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The dynamics of Single Channel and Omni Channel Path to Purchase

A single channel shopper is someone whose purchase journey is limited to one and only one channel i.e. online or offline.

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60% of US customers in 2014 are single channel shoppers. 39% of US customers start their search and end with purchase online with no trip to the retail store. 21% of US customers start their search and end with purchase in store without accessing online services in between.

An omnichannel shopper is someone whose purchase journey includes both online and offline touch points. 40% of US customers in 2014 are omnichannel shoppers.

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20% of US customers start their research online then buy in a store. They may or may not engage in additional research in store before purchase. This behavior is generally referred to as webrooming. In this path to purchase, customers only visit the store once – to buy the product. All pre-purchase research is carried out online.

When customers do the opposite i.e. start their research in store then buy online with or without additional online research, it’s called showrooming.

Showrooming has largely been covered in market research and popular media as a threat to retailers. However, only 14% of US customers start their research in a store and then buy online.

Increasingly people who purchase products online are picking it up offline i.e. from a store or another location. In 2014, 6% of US customers will choose the pick up from store option when they buy online.

The omnichannel experience shows that customer path to purchase is highly fragmented. Customers don’t seem to mind going back and forth between online and offline channels, because it helps them optimize their purchase decision. Online and offline channels are not rivals, but complement each other.

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Omni channel shopping behavior by category

Omni channel shopping is high in categories where shopping frequency is less and driven by seasonal events such as back to school or holidays.

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The top categories where US customers combine online and offline research are consumer electronics (70%), toys (66%), apparel (58%), and home appliances (57%). Products in these categories are most likely to be gifted during birthdays or anniversaries.

The above categories are value driven purchases. Consumers attach values related to identity and social status on smartphones, laptops, toys, clothes and home appliances. They are personally driven to invest time and effort to conduct thorough category wide research before making a purchase decision.

Consumers are least likely to follow the omni channel path in categories that are shopped more frequently out of everyday necessity.

The categories with lowest incidence of omni-channel shopping are cleaning products (14%), OTC medications (15%) and food beverages (15%). Products in these categories are purchased to fulfill personal needs.

The above categories are habitual purchases. Consumers fall into the habit of either buying the same brand cleaning product and grocery items for themselves or their family over time or cherry picking among brands in these categories making online and offline research irrelevant.

Categories with a high incidence of omni channel shopping- especially consumer electronics, toys, and apparel – also boast an online community of enthusiasts. There is a plethora of brand relevant online content from experts, bloggers, haulers and fans in each of these categories for consumers to go through. The availability of research content makes omni channel shopping possible in these categories.

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Key influencers among Single Channel Online Shoppers

Convenience is a big factor that drives US shoppers to forgo store visits completely and follow the online only channel. The #1 convenience factor consumers attach with online shopping is the ability to shop at their own convenience.

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75.1% of US online shoppers prefer to research online and shop online without any offline research because online allows the convenience of 24/7 shopping.

The flexibility to have the product delivered not only to one’s own home or office, but also to a friend or family member as a gift attracts shoppers who want to avoid the hassle of store visits.

72.4% of US online shoppers prefer shopping online over visiting the store because they have an option to deliver the product to a preferred location.

67.2% of US online shoppers chose to stick with online throughout their purchase journey because it allowed location-independent ordering. In other words, they could order a product irrespective of what city or state they lived in. The same cannot be said for in store shopping because the city one lives in decides what stores are available for shopping.

Exclusive online availability or an out of stock status among offline retailers is another key reason US shoppers stick with the online only path to purchase. 63.9% of US online shoppers did not visit a retail store during the shopping journey because the product they wanted to buy could only be purchased online. 52.8% of US online shoppers say that they have a greater variety of options when shopping online compared to the retail store.

Price also plays a role in a US shopper’s decision to forgo retail visits during the shopping journey. 57.3% of US online shoppers do not visit retail stores because of lower online prices for the products they intend to buy. 45.3% of US online shoppers say that price comparison is easier online.

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Key influencers among Single Channel In-Store Shoppers

US consumers pick the offline only path to purchase mostly due to emotional reasons such as gaining assurance on product fit and addressing worries around product quality.

Assurance before purchase – being able to see or even try the product before purchase – is a key reason US consumers mostly choose to give up online research and stick with the offline only path to purchase.

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69.5% of US shoppers who bought a product from the store without online research say that they wanted to try the product before purchase.

Despite the assurance gained from store visits consumers still worry about having to return the product after purchase. 49.5% of US shoppers who followed an offline only path to purchase say that simpler return policies for offline purchase make them buy in a store instead of online.

Another big consumer worry is the product quality. 44% of US shoppers prefer to purchase offline because they want to make sure the product quality meets their requirements and expectations.

While some consumers find online prices cheaper, others are turned off by high delivery costs for online purchases. 49.1% of US shoppers who did not visit any online sites during the purchase journey say that they chose offline stores because the shipping costs for online purchases had been high in previous experience.

In addition to high delivery cost, the length of delivery periods for online purchases also turns of US consumers who end up going the offline route. 32.1% of US consumers who picked offline over online path to purchase say that long delivery periods were a key reason behind their choice.

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Key influencers of webrooming behavior among shoppers

While customers who forgo online touch points completely are driven by emotional factors of fear and worry, those who conduct research online and/or offline before making the purchase in store are driven by value based factors such as online privacy, local origin of products and brand’s commitment to environmental & social causes.

The top reasons that drives US shoppers to make their final purchase in a store despite having researched online is their concern over online privacy and fraud.

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74% of US shoppers who had engaged in webrooming said that protecting personal information was one of the reasons they picked buying from a store instead of online.

Additionally, 54% of US shoppers who had engaged in webrooming said they were worried about possibility of online fraud upon review of the retailer or brand’s previous history in fraud prevention.

25% of US shoppers were worried that brands and retailers would use their personal information to send them unwanted offers and marketing material.

Consumers who cared about the products origin also chose to buy in retail stores. 45% of US shoppers bought from a store because they wanted to buy something that was made in the USA while 29% focused on local sourcing i.e. making sure the inputs for the product including labor was from their community or city.

A good portion of webrooming customers are influenced to purchase from the store due to the brand or retailer’s commitment to social and environmental causes.

35% of US shoppers who had engaged in webrooming were influenced by the retailer or brand’s commitment to providing sustainable products or packaging whir 31% were influenced by their commitment to corporate social responsibility.

28% of US webrooming shoppers were influenced by the fact that the retailer or brand was using sustainable materials in their stores and buildings.

25% if US webrooming shoppers were influenced by the brand or retailer’s commitment to providing organic products.

US shoppers who webroom are less likely to be influenced by lower prices, offers and convenience factors. Instead they are willing to let go of conveniences offered by online shopping and fulfill deeper value based needs with their purchase decision.

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Key influencers of showrooming behavior among shoppers

Before we look at the key factors that influence showrooming among US shoppers, let’s look into who the showrooming consumers are.

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Showrooming is greatest among young US customers 18-29 year olds. 73% of 18-29 year old US customers engage in showrooming compared to 48% of all US adults 18 and above.

The increased likelihood of young people to showroom leads many to believe that young shoppers do so because they are looking for cheaper options.

However, among shoppers who researched in store and online before they decided to buy online, the top two reasons given were not being ready to make the purchase during the store visit (64%) and waiting to do additional research after the store visit (62%).

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Showrooming shoppers are emotionally not ready to commit to the purchase when they visit a store. They need more time to do further online research and make up their minds.

Convenience is also a key reason that drives US shoppers to showroom. 61% of US shoppers did not want to carry the item home making them either return from a store visit and order online.

In a different scenario but having the same need, 60% of US shoppers who engaged in showrooming were buying a gift that they wanted to directly ship to the recipient. It was easier for them to ship it to a different address when ordering online than have to purchase then visit the post office or courier service to ship the item.

Lack of appropriate items in the store also plays an important role in driving showrooming behavior. 55% of US shoppers bought online after visiting a store because the store didn’t have the size, color or model they wanted. 54% say that thee found the selection online to be better compared to the options available in store.

51% of US shoppers who engaged in showrooming said that lower prices were a key influencer. While that’s still a high enough number to be considered a major factor, it ranks as eighth in a list of key showrooming influencers highlighting the fact that low online prices are one of the key drivers and not the only key driver.

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