NRF study says customers dig retail tech
Customers are finding that retail technology is making the shopping experience better on mobile, in stores and online, according to a new study by the National Retail Federation (NRF).
The study found that 80 percent of consumers believe retail technologies and innovations have improved their online shopping experience, as reported in Just Style. Sixty-six percent said that technology improved their in-store experience and 63 percent said that it had improved their experience shopping via mobile. Technologies that indicate if a product is in-stock, aid in price comparison, provide reviews, make finding products easier and let people try out products before they buy them all generate significant interest from consumers. Solutions that remove the uncertainty from shopping are major drivers in customers selecting retailers and brands.
Between 80 and 90 percent of respondents rated in-app store navigation, smart dressing rooms, augmented reality, virtual fit and virtual reality as retail solutions they would try again.
The increasing appreciation of retail technology across mobile, online and physical retail channels could be a response to a number of trends. In the past few years there has been:
- An increase in the willingness of customers to try out technology and install retailer specific mobile apps;
- A generation that grew up with a baseline of technological comfort joining the workforce and becoming consumers in charge of more of their own purchases;
- A better understanding on the part of retailers about how consumers want to utilize technology to interact with a retailer;
- An increasing number of use cases for which technologies like AR and VR have proven effective;
- Increased appreciation among consumers for newer omnichannel order fulfillment options like BOPIS;
- Expanded use of in-store technology in both large stores and boutiques to provide entertaining shopping experiences;
- Broader adoption of mobile checkout solutions.
Customers report a level of satisfaction greater than 60 percent for solutions such as mobile payment, BOPIS and self-checkout, according to the NRF study.
Discussion Questions
DISCUSSION QUESTIONS: What is driving the changes in consumer sentiment about retail technology? Do the numbers indicate retailers need to use technology to provide a good customer experience or is there more going on than that?
Poll
BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Doug Garnett
President, Protonik
Consumers are becoming more savvy and technology is getting better/easier to use – it’s a perfect combination.
This shouldn’t come as a surprise, since retailers have been working hard on improving what and how they implement technology for decades. The numbers suggest that consumers are more willing to use technology but, as we all well know, technology is not a panacea. Technology can’t make up for a poor store operating model, disengaged staff or a un-compelling product offering. I believe that retailers do know that technology can help deliver a better customer experience, but effectively implementing the right technology is the real challenge.
Yes. But it’s more than consumers becoming more savvy and the technology evolving for the better. The role of the store manager is more demanding and complex than ever — they need to be (and are) more adept at using the tools they’re given. Retailers shouldn’t adopt technology for technology’s sake, or because they assume their customers will like it. Retailers need to be wary of technologies without proven ROI and meaningful improvements to customer experience. Any technologies that are hard to implement, have long implementation horizons, or otherwise distract from the customer experience should be avoided. The best technologies may be those customers are never even aware you’re using.
Yes, I totally agree Heidi. As I noted, effectively implementing the right technology is the real challenge.
As this was behind a paywall I don’t see their methods for the study and so it’s hard to comment but we just did a survey with NetSuite/Oracle which was exactly the opposite with responses from more than 1,200 consumers and 400 retailers.
Today’s shopping journey, whether online or off, is enhanced with technologies that make the experience seamless. Shoppers appreciate tech that adds value, as opposed to tech that doesn’t. Just remember to keep it simple, intuitive and effective.
Consumers, across all age groups, are becoming more comfortable using technology and younger generations, Millennials and Gen Z, have grown up using technology. According to a BRP Consumer Survey, Digital Consumers (18 to 37 years old) are more likely to shop at a store that offers technology services than at a store that doesn’t. When compared to Traditional Consumers (38+ years old), Digital consumers are two to three times more likely to shop at retailers with technology services.
What does this mean for retailers? It is imperative to know what your customers want and respond accordingly.
First and foremost, consumers of all ages are much more comfortable using technology. It has been amazing for me to watch my over 60 aged friends start talking apps and I have found it is largely due to grandchildren. The next piece is that retailers have learned to listen to what their customers want and give them tools that improve the shopping experience. It’s not just another way to market! This is a winning combo in my mind and worth my 2 cents. They get it!
I’m sure some Baby Boomers use technology because of their grandchildren, but most have adapted to new technologies because it makes their lives easier. We’re not digital natives but we’re not dead.
I think we need to be careful here.
I have no doubt that some technologies have made shopping easier; but many of these are basic and perform much-needed functions such as stock checking, price checking, reserve and collect, and finding things in store.
Retailers should not take these findings to mean that consumers like any bit of technology. They don’t! There is a lot of technology that is gimmicky, glitchy and doesn’t really solve a problem. And retailers need to think through what is needed and focus on executing the essentials well.
Technology is also no replacement for getting the everyday basics of retail right. Stores, products, human customer service, pricing – none of those things has diminished in importance as technology has become more significant.
I agree with Neil. How many times have we seen retailers tout some new technology they plan to implement as we ask ourselves, “Gee, did they ever talk to a customer?”
My favorite question!
I’m with Neil. Technology isn’t a replacement for getting the everyday basics of retail right, and it never will be. Technology is a tool meant to make the experience better and the frontline’s job easier.
Any retail technology (and other technology, too) that really makes the consumer’s life easier will be attractive to the consumer. Of course we always will have consumers who want to be on the leading edge of technology adopters. Some will watch, see and then adopt, and some will say no thank you.
There is no doubt that consumers are becoming more comfortable using technology everywhere. Look at new cars today and the features they have to assist in driving the vehicle from safety features to conveniences. That said, however, there still is a fine line of what consumers choose to use because they like it or because they have to, and that’s where retailers need to be careful. Asking a customer to use their phone or a kiosk in the store to see if the merchandise is in stock or to answer a question may sound like a great idea, but that type of thinking will not create an outstanding customer experience, nor will it lead to upselling the customer or adding on to the sale. These factors matter to retail, and as we continually add more technology to replace the “human” selling techniques and not merely enhance it, we run the risk of leaving customers dissatisfied and not spending what they might have when engaged by a well-trained store associate. Technology has a place, it’s fun and in many ways provides excellent conveniences, but it will never replace the human smile and the ability to make a customer feel appreciated and wanted.
Consumers are becoming more tech-savvy and as they discover areas where technology helps them, they become more accepting of it. It doesn’t hurt that a new tech savvy consumer is now a full blown shopper. The BRP Consumer Study we did in December indicated that more than half of the consumers surveyed feel that new shopping tools and technology are an important factor in choosing a store. Many consumers, especially younger generations who have grown up with the Internet and mobile phones, expect technology to be a part of the shopping environment. Technology allows them to direct their own experience faster and more effectively.
Unfortunately the technology is still not ubiquitous as I learned yesterday shopping for a baby’s carseat that I needed immediately. None of the major retailers had a store inventory capability on their website and my in-store and call-in experience was a disaster across five major retailers. Opportunity is there for those with just a smidgen of foresight.
Technology needs to solve a business problem. That problem could include customer facing applications or it could solve a problem that ultimately enables a customer but the customer doesn’t necessarily see it. If a retailer starts there, the likelihood of success is far greater. Many technologies have been adopted because of the consumer essentially “pulling” the retailer into it vs. the retailer “pushing” it out as many consumers have been on the cutting edge of tech adoption in other areas of their lives – e.g. the seamless checkout was really defined by the likes of Uber.
These statistics seem to be up because retailers have jettisoned many of the truly silly retail tech approaches they started with.
That said, I’m quite skeptical of the depth shown here. Dressing rooms? Online fits? Customers have incredibly little experience with these — so they’re likely imagining perfect tech which will never exist.
It’s good to see retailers beginning to get beyond “if it’s tech it must be good.” Let’s now interpret this survey with the same caution.
In my experience consumers don’t care about technology they care about outcomes — the customer jobs to be done, the remarkable stories to be told. Technology is a means to an end.
After 20+ years of online shopping, retail technologies have done much to improve the “physicality” of digital shopping. Quality in-stock information, BOPIS, fast delivery, all mechanics of retail. Retailers have yet to invest in the individual “human” time-consuming experience of having to sort through thousands of SKUs to hopefully find what they set out to buy. In soft goods, 3 percent conversion speaks for itself. 35 percent to 45 percent return rates speak for themselves. The trends listed in this survey are more of the same: sound bites. Finding what “you want” online is still a HUGE pain point yet to be solved. Retailers require their customers to invest time to sort through thousands of SKUs with no guarantee of success. This is the real customer experience, after 20+ years of online shopping.
Consumers have been way ahead of retailers and brands on the technology adoption curve. There’s good reasons why in enterprise computing, the term consumer-grade is used to describe superior user experience.
No doubt about it, technology is a crucial ingredient in any customer experience scenario. However, applying technology without understanding how it potentially changes the customer relationship is folly. Leaders need to come in a more holistic package as managers, sociologists, and anthropologists on top of being tech savvy. The art of asking the right questions will become more important in the years ahead as we navigate the age of Artificial Intelligence.
There is a nice convergence of consumers becoming more tech savvy and technology getting easier to use. With all the new tech available, it’s easy as retailers to think that it’s the technology that’ll provide the next big wave of growth. But we can’t lose sight of why we’re here as an industry: to meet the needs of human beings. And what motivates human beings is new, positive and engaging experiences with the world around us. All these technologies are not a goal. They are only a means to creating those meaningful human experiences.
Digital retail technology focuses an electron microscope on inventory availability issues. Retailers must now finally get control over this discipline — especially at the store level to support search-ahead and click & carry shopping.
Shoppers like mobile apps, and they are becoming more adept at using them for many purchase situations, buy back-orders, out-of-stocks, and item substitutions seem somehow more egregious when digitally magnified.
As for the rest — e-fitting rooms, AR/VR, and friction-less payments — they all amount to zero if the desired product isn’t available for purchase at the moment of truth.
If digital tech is applied as a veneer covering an ancient retail infrastructure it will likely fail. If it is the face of a sound, modern, dependable retail operation, it will succeed.
There is a risk of reading too much in studies like this. The study states the results are based on surveying 2,926 adult consumers (age 18+) between April and May of this year. No details are given on the demographic breakdown of those consumers. Also, many of the data points are specified as “of those consumers who used the technology and said they would use it again” — which means when you see that 88% of those consumers would use a digital “smart” fitting room again, you have to ask, how many say they would use it if offered but have not yet tried it? The report says 57% have not tried it but would like to. Is that enough of a response to warrant every apparel retailer to add smart fitting rooms to their stores? Probably not enough of a data point because the savvy retailer will want to know if that 88% of consumers purchased something they otherwise wouldn’t have because of the smart fitting room.
Will the fitting room conversion rate increase with this experience? Will the average transaction size increase? And will those customers that say they want to use it again come back and want to try on more items and buy more items, therefore increasing their lifetime customer value? I know there are other studies and data points that can answer these questions, but not in this report! So, reader beware!
This is a classic case of behaviours associated with Gen Z migrating to older generations. In addition, as tech gets easier to use, people want to adopt it more.
As technology improves, so does the user experience and the convenience factor. Over time, these value drivers will become table stakes for retailers and those that do not keep up with the trend will be seen to be at a “disadvantage.” Technology will not displace or downgrade the importance of the value drivers around product, selection, quality etc. However, ease of doing business will help improve conversions from consideration and browsing all the way to adding to cart/basket and in that sense revenues will go up.