See below for our retail research work with The Wharton School of Business
THE 2015 CUSTOMER EXPERIENCE RISK STUDY REVEALS BILLIONS AT RISK FOR RETAILERS FROM NEGATIVE CX
It may seem counterintuitive, but retailers should welcome the irate shopper who vents her frustration in an animated scene on the sales floor. That’s because it’s the mistreated customer who walks out the door in a silent huff who places the most revenue at risk, according to a collaborative study of dysfunctional retail touchpoints conducted by LoyaltyOne and Verde Group with Professor of Marketing and Psychology, Dr. Deborah Small, at the Wharton School of the University of Pennsylvania.
The March 2015 survey shows that approximately half of 2,500 U.S. consumers polled reported experiencing a problem on their last shopping trip. Of those customers, 81% decided not to contact the retailer about the issue. Among these silent shoppers, 32% said they were unlikely to recommend the retailer to friends and family, putting these shoppers at-risk of decreasing their spend with the retailer.
By comparison, the study shows that shoppers who did notify retailers of their poor experience and had their problem completely resolved were 84% less likely than silent shoppers to be at risk of decreasing their spend.
“The results are a resounding confirmation that poor customer experiences have a considerable negative impact on shopper spend and attrition which can run into the billions,” says Dennis Armbruster, LoyaltyOne Consulting Vice President and Managing Partner. “We’re ushering in a new era of customer experience measurement vital to retailers looking to make even more informed decisions.”
Building on its leading behavioural analytics solution, LoyaltyOne Consulting has partnered with The Verde Group, a leading customer experience research consultancy. Verde’s proprietary Revenue@RiskTM analysis will use experience impact modeling to identify the specific customer experiences most damaging to customer loyalty behaviors and prioritize them according to impact on revenue and market share.
Retailers should take note of the importance in identifying specific customer experiences most damaging to customer loyalty as billions of dollars are at risk. Below is the ranking per category:
- Mass merchandisers are putting 25% of potential revenue at risk
- Apparel retailers are putting 16% of potential revenue at risk
- Department stores are putting 15% of potential revenue at risk
- Drugstores are putting 12% of potential revenue at risk
- Grocers are putting 11% of potential revenue at risk
“Our methodology precisely measures the impact of ineffective customer touch points. Insight around the effects of poor customer touch points can help retailers reduce the risk of negative customer experiences, while also enabling them to proactively design experiences that positively influence spend, visit frequency and basket size,” says Paula Courtney, President of Verde Group.
Click the following infographic to learn more:
The Multi-Channel Shopper
North American retailers are investing hundreds of millions of dollars to deliver an integrated retail brand experience across channels. But definitive learnings on the requirements and behaviors of the multi-channel shopper are in short supply. This new research study conducted by Verde and the Wharton School of Business will profile the characteristics, preferences and behaviors of the “multi-channel shopper” vs. the “single channel shopper” and provide new insights on channel strategies retailers can use to grow multi-channel shopping behaviors.
Discovering “WOW” – Great Retail Shopping Experiences
This study, which is the sixth in Verde/Wharton’s series of retail experience studies, surveyed 1,006 North American shoppers to explore what constitutes “WOW” shopping experiences – those retail interactions that surprise and delight the customer, and that build long term loyalty to a retailer. Specifically, it explored: How do shoppers define great retail experiences? How frequently do they occur? Do they vary by gender, age, country or store type? Which great experiences matter most to loyalty and a store’s bottom line? Findings include detail on the impact of “WOW” experiences on shoppers depending on criteria such as age and gender. Additionally, the study outlines the five pillars of a great shopping experience, and what retailers must do to create them.
The Shopping Mall: A Study on Customer Experience
Based on responses from 917 telephone interviews conducted in the fall of 2008. Study covers problems encountered by shoppers when shopping within a mall environment with focus on the drivers of satisfaction and loyalty pertaining to the mall itself, as opposed to those drivers associated with individual stores. Findings include detail on shopping patterns and preferences of mall shoppers, mall characteristics that build shopper satisfaction and loyalty, aspects of the mall experience that drive shoppers away and damage market reputation, and how shopper mall experiences vary by type of mall (enclosed or open air), shopper age, gender and employment status, history of visits to a given mall and time spent shopping. Concludes that “Discovery” related problems—those that render a mall less interesting to its shoppers—are most damaging to mall loyalty, traffic and market reputation
He Buys, She Shops:Gender Differences in Retail
Based on responses from 1205 telephone interviews conducted in the fall of 2007. Study covers problems encountered by shoppers and their impact on key market behaviors, with particular emphasis on gender differences in the shopping experience. Findings include detail on problem impact on likelihood of purchasing items from the company over the next year, negative word-of-mouth and positive referrals. Includes analysis of “Sales Associate Archetypes” and the competencies necessary for Sales Associates to build loyalty and satisfaction. Provides detailed breakouts by purchase categories (e.g. apparel, electronics, home improvement), gender and age. Concludes that women are more engaged with the shopping experience than men with loyalty dynamics more dependent on the quality of sales associate interactions, whereas male loyalty is more dependent on product and shopping efficiency.
“The Sales Associate”
Third annual study of retail dissatisfaction, conducted in conjunction with the Baker Retailing Initiative at Wharton Business School. Based on responses from 1000 telephone interviews conducted in the Spring of 2007. Study covers problems encountered by shoppers and their impact on key market behaviors, with particular emphasis on problems associated with Sales Associates. Findings include detail on problem impact on likelihood of purchasing items from the company over the next year, negative word-of-mouth and positive referrals. Special analysis of “Sales Associate Archetypes” and the competencies necessary for Sales Associates to build loyalty and satisfaction. Provides detailed breakouts by retail categories (e.g. mass merchants vs. specialty stores), gender, age and region (Northeast, South, Midwest, West). Concludes that Sales Associate issues are more detrimental to retailers than Store issues as measured by shopper satisfaction, loyalty and negative word-of-mouth.