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Consumers interested in technology, but retailers still must deliver on basic elements of the shopping experience
Nov. 20, 2000
BLOOMINGTON, Ind. -- A study released today (Nov. 20) by Indiana University's Kelley School of Business and KPMG LLP, a professional services firm, finds that consumers have definite views on what they are looking for in the ideal shopping experience -- both online and in the store -- and more complex technologies are not at the top of their wish list.
The findings are revealed in "Creating the Ideal Shopping Experience: What Consumers Want in the Physical and Virtual Store," a study conducted in June among 2,120 people nationwide. The research measures consumers' acceptance of technology and offers insights on how consumers want to shop.
The IU/KPMG shopping study found that when shopping online, consumers must have accurate product and pricing information, convenient and secure ordering, order tracking, reliable delivery and accessible customer service. In retail stores, shoppers want knowledgeable and courteous sales help, competitive prices, fast checkout and convenient payment options.
There are several shopping features that some consumers would prefer not to have. Consumers had the strongest negative reactions to personalization options that make product recommendations based on a customer's preference profile.
For example, 21 percent of shoppers disliked having a handheld scanner tell them which products match their personal profile. Also, 36 percent of respondents preferred not to have in-store prices that change daily based on stock levels and competition.
"Consumers tell us they are not interested in technology for its own sake," said Raymond Burke, the E.W. Kelley professor of business administration at IU. "People want the basics in their ideal shopping experience, and they are only interested in technology to the extent that it makes shopping faster, easier and more economical."
Mark Larson, national partner-in-charge of KPMG's retail practice, added, "Today's consumers have more choice than ever before -- in stores, brands and channels. That's why retailers need to consistently deliver the right value proposition to their customers -- across all shopping channels. Technology can be a very helpful tool in that process, but to create value, successful retailers will know how and when to use it in the shopping process."
Consumers said there are several "must haves" in the online shopping experience. In addition to knowing the prices of products sold online, 64 percent wanted to know the prices at the closest retail store. Fifty-seven percent of online shoppers also wanted access to product specifications and warranty information.
When shopping online, 57 percent of respondents felt that a Web site should have expert ratings of product quality. The overwhelming majority of Web shoppers, 79 percent, also said they must have toll-free telephone access to customer service, and 63 percent wanted the option of placing an order by calling a toll-free number.
"Consumers place greater emphasis on having detailed, objective product information when shopping online because they have no physical interaction with the product," Burke said. "The fact that such a high percentage of online shoppers want toll-free access to customer service tells us that the ability to connect with a knowledgeable salesperson, regardless of the channel shopped, is a key element of the ideal shopping experience."
When shopping in-store, 53 percent of consumers said that the store must provide knowledgeable, helpful sales assistants, and 52 percent reported that stores must have in-person or telephone customer service.
However, the study also revealed that consumers do have an interest in several in-store technology applications. Much of this technology is focused on delivering pricing information.
Fifty-five percent of shoppers felt that retailers must or should provide electronic shelf labels that are always accurate and current; 57 percent wanted electronic signs displaying daily and hourly promotions, 61 percent wanted kiosks providing electronic coupons, and 63 percent would like handheld scanners that can perform price checks.
People also were enthusiastic about technologies that allowed them to shop from a greater selection of products and order items that are sold out. Fifty-five percent of shoppers would like to use kiosks to order out-of-stock items, while 52 percent would like to use handheld scanners to check for color, styles and sizes and place orders from an extended inventory.
"Clearly, consumers' desire for knowledgeable sales help is an issue for retailers," Larson said. "Today's tight labor market is impacting the retail industry's ability to deliver on this critical component of the ideal shopping experience. As the IU/KPMG study points out, savvy retailers will recognize that the right technology can help deliver on customers' needs, especially when it comes to pricing and product information."
The IU/KPMG study revealed that a majority of consumers want to use multiple channels when shopping.
Eighty-two percent of respondents preferred to use more than one channel to learn about new products; 77 percent, to search for product information; 74 percent, to compare and evaluate alternatives; and 63 percent, to purchase and pay for products. Fifty-nine percent of consumers would like the option of receiving merchandise through the mail or a store visit and 39 percent would like to be able to return products through both channels.
Consumers were far less interested in using multiple channels when shopping for frequently purchased goods such as groceries, and health and beauty care products.
To learn abut new products, consumers had an almost equal preference for a retail store (76 percent) and the Internet (74 percent). Consumers preferred to visit a retail store to purchase and pay for merchandise (91 percent) and return unsatisfactory items (89 percent). On the other hand, they were most enthusiastic about using the Internet to search for product information (90 percent) and compare and evaluate alternatives (83 percent).
Other key findings concerning retail technology included:
• Seventy-six percent of consumers want click-and-mortar retailers to provide online information on a local store's inventory.
• Over half of consumers surveyed (53 percent) felt that retailers with click-and-mortar operations should provide them with the ability to place a 24-hour courtesy hold on products in local stores.
• Technology applications are rated highest when they make shopping more convenient or provide much-needed product information.
KPMG LLP, an accounting, tax and consulting firm, is the link between business and technology, providing objective business advice of uncommon clarity that helps clients achieve market-leading results. KPMG LLP is the U.S. member firm of KPMG International. KPMG International's member firms have more than 103,000 professionals, including 7,000 partners, in 159 countries. KPMG's Web site is http://www.us.kpmg.com
IU's Kelley School of Business is among the premier schools of business and offers a wide variety of programs for undergraduate and graduate study. The Kelley School is home to the Center for Education and Research in Retailing, a leader in the application of technology to retail education and research through the Sears Learning Lab. The Kelley School is also host to the Customer Interface Lab, a state-of-the-art facility for investigating how consumers interact with new retailing technologies. Learn more about the center on the Web at http://www.kelley.iu.edu/retail
(George Vlahakis, IU, 812-855-0846, gvlahaki@indiana.edu or Jessie Ristic, KPMG, 201-505-3475, jristic@kpmg.com)