Retail shopping is a key indicator of economic health, making it of high interest to investors, shareholders and the financial technology sector. Trends for in-store versus online shopping are analyzed, consumer behavior is tracked, merchandise is studied to determine top sellers – but do we know WHY exactly consumers shop ‘til they drop and WHAT keeps them coming back for more? Because after all, the answers to those are key in keeping our economy chugging along.
Why We Love Retail Shopping
Let’s consider the movie, Confessions of a Shopaholic, the Green Scarf scene, for some answers to why consumers to shop. When the main character (and shopaholic) Rebecca sees a beautiful green scarf on a mannequin as she walks by a high-end store, it draws her into the store as if she is in a trance. Her conversation with said mannequin pushes all of the right emotional buttons in Rebecca, and soon, the once preposterous idea of yet another purchase turns into euphoria as the green scarf must become hers.
Rebecca. Rebecca, you just got a credit card bill of $900. You do NOT need a scarf.
Mannequin. Then again, who needs a scarf. Wrap some old jeans around your neck. That will keep you warm. That’s what your mother would do. The point about THIS scarf, is that it would become part of a definition of your psyche. It would make your eyes look bigger.
Rebecca. It would make my haircut look more expensive.
Mannequin. You’d wear it with everything.
Rebecca. It would be an investment.
Mannequin. You would walk into that interview confident. Poised. The GIRL in the GREEN scarf.
Rebecca. The green scarf please!
Cashier. Good choice. That will be $128.
Whether is it to cure a common case of boredom or to satisfy the urge to purchase something (anything!) fabulous, “retail therapy” has its benefits. A 2013 study by TNS Global on behalf of Ebates.com found that more than half of Americans admit to engaging in “retail therapy” and further research found that 62% of shoppers had purchased something to cheer themselves up and another 28% made purchases as a form of celebration.
The “In-Store” Retail Shopping Experience is Still Key
A retail purchase is often tied to the emotions of the shopper, and successful stores play into their consumer’s emotions. According to Joseph Demeri, CEO of Exclusive Retail Interiors, people need a reason for walking into a store. The way a store looks from the outside, and what a customer sees, hears, and smells when they go inside the store, greatly affects the retail experience.
“A consumer’s relationship with a product represents a real culture. The way a customer associates and connects with a brand has a direct correlation to purchases. If stores make the retail experience special for their customers, if they make it unique, if they connect with a customer’s sense of sight, sound and, yes, even smell, people will buy more. And, getting customers to buy improves the retailer’s bottom line.”
In-store shopping provides consumers an instant emotional gratification, as purchased items, like Rebecca’s green scarf, can be worn as soon as the sales transaction is complete – who hasn’t worn their just-purchased pair of shoes home from the mall?
In fact, many “Ecommerce-only” retailers, including giant Amazon, are opening physical stores, with Amazon’s first in Seattle in late 2015 and there are plans to open more. Why the shift? Retailers want to provide a more personal shopping experience, reduce shipping costs and fully integrate the offline and online experience.
Mobile and Ecommerce are Shopping “Appetizers”
In today’s times, where nearly everyone has a smartphone and a few minutes to spare, online shopping and even browsing has somewhat of a national pastime for Americans, and there are many reasons WHY. Unlike a unique outing to the mall, online shopping can be executed absolutely anywhere. And as 2016 is being proclaimed to be the year of the mobile shopper, more consumers are browsing, researching and making their purchases online.
However, the retail e-commerce market which is expected to reach $2.5 trillion by 2018, still only represents less than 10% of the global retail market.
Consumers may be using their smartphones and PC to become acquainted with the goods and sales before heading to a physical store.
“For the past several years, the story around retail stores was ‘showrooming,’ in which stores were places to display items for online purchase,” Steven Barr, PwC U.S. retail and consumer practice leader, said in a statement. “However, this year’s survey results reveal that the online shop has also become a showroom where shoppers research and compare prices for later, in-store purchases.”
Omni-Channel Options Lead to the Final Purchase
While consumers may prefer to make their purchases in store for the instant gratification and savings on shipping, they rely on other channels to get their information. Mobile is still key. While less than 10% of consumers surveyed by PwC make purchases on their mobile phone, it is a vital tool in the purchasing process.
“While many retailers are beefing up their mobile shopping efforts, it remains more of an instrument to get to the point of buying a product, rather than a tool for the actual purchase, according to the study. About half of those surveyed in the U.S. have researched products on their mobile phones, while nearly the same percentage have used them for price comparisons.”
Omni-channel can include Ecommerce, mobile, point of sale, call center and even – yes – social media options! Imagine purchasing your favorite scarf via Facebook. It now can be done. However, like mobile, researchers still see this mode of shopping in its infancy and as a stepping stone to the in-store purchase.
“Social media is also playing an increasingly important role in the shopping process for consumers. Even though only 4 percent of U.S. consumers have purchased items via social media, 36 percent said their interactions with brands on social media has led them to buy more from these brands.”
The form that retail shopping will surely continue to evolve and expand as new forms of purchasing avenues are introduced. One thing, though, is certain – companies that want the almighty consumer dollar need to guard their corporate brand their customer fiercely. That’s where Bluefin comes in, we provide PCI-validated Point-to-Point Encryption (P2PE) solutions for every POS purchasing channel and tokenization and transparent redirect for the Ecommerce channel – helping our clients bring back their customers time and time again.
Because after all, the age-old thrill of the impulse purchase will never go away, whether it’s a green scarf, an expensive bottle of wine or a new Ferrari (ok, now we are really dreaming at Bluefin).