2011 Shopper Experience

Survey
Steven Skinner
June 2011

Vice President Cognizant Business Consulting

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2011 Shopper Experience Study

Second Annual Shopper Experience Study Joe Skorupa

Group Editor-in-Chief RIS News

jskorupa@edgellmail.com joeskorupa@twitter risnewsinsight@twitter RIS News @Facebook RIS News @LinkedIn www.risnews.com

To download full study: www.risnews.com/research

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2011 Shopper Experience Study

Methodology North America

2,427 shoppers in U.S. and Canada 70% female to 30% male to mirror influence in buying decisions Age groups are split into four large segments with a slight bias toward baby boomers Income group breakout matches the overall population picture

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2011 Shopper Experience Study

Methodology - Global

1554 shoppers in Singapore, Hong Kong, UK and China

69% female to 29% male Age groups biased toward the younger segments Income groups biased towards the lower segments based on the lower per capita incomes Japan not covered due to timing of their natural disaster Global aspects of survey not covered in todays presentation

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First Things First

How well do you know Generation Y?

Yes, the winner gets a very nice door prize!

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What We Learned

The Shopping experience is becoming disaggregated

Retailers must teach the new ways of shopping

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What We Learned

The future of shopping is upon us

20th Century Shopping Easy to brush aside shopper complaints Variability of pricing not known or understood You were the only source of information Everything was time-boxed Everything is seen and touched Task workers Dumb in-store assets 21st Century Shopping The whole world knows instantly

Full and instant access to all your offers

Independent third parties put offers together

Everything is 24 x 7
Virtual shopping and socialbased decision making Knowledge workers

Interactive in-store assets

Focus on fundamentals

Focus on fundamentals

Retailers must re-integrate the shopping experience

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2011 Shopper Experience Study

What is the shopper experience?

Research Shop Transact

Post Sale

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Research

Indiana Jones
We do not follow maps to buried treasure and X never, ever marks the spot. Indiana Jones

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Research

What did we learn?

Social Media is not the dominant driver of decision making

In the box still dominates

Retailer mobile solutions seemed to regress in preference Web-based out-of-store research is preferred Coupons, coupons, coupons

Carefully understand the social media hype

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Research

Traditional methods (at least from the last 10 years) still hold sway
Prior to making a purchase decision, what step are you most likely to use to ensure you have all the relevant information
Web Research (PC) Manufacturer Website Family & Friends Coupons.Com Shopping Comparison Site
12% 6% 5%
0% 5% 10% 15% 20% 25%

24% 20% 17% 15%

Smart Phone Research

Social Networking

Shopper internet research dominates, but

Social media lagged across all study segments

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Research

Whats on the box is still important

If each of the following were available, which would be your preferred method to receive product information
From better information on the product package
From signs or cards on the store shelves From an informed store associate Through a dynamic display that provides product Through review publications such as Consumer Reports By reading online customer feedback on the store site or third-party social media platform By scanning the product with your personal mobile device
0% 10% 20%

66% 61% 57% 33% 31% 27% 24%

30% 40% 50% 60% 70%

Generation Y skews high on mobile usage

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Large growth from 2010, but still lags

Research

And the preference for in-store information has increased year over year
If each of the following were available, which would be your preferred method to receive product information
From better information on the product package

2011
From signs or cards on the store shelves

2010

From an informed store associate Through a dynamic display that provides product

Preference, not usage

Through review publications such as Consumer Reports By reading online customer feedback on the store site or third-party social media platform By scanning the product with your personal mobile device

Preference for Technology-assisted service regressed year over year

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Research

Theres no overwhelming preference to use mobile methods to conduct research

If a retailer offered the following services for a mobile device, indicate how likely you would be to use them on a scale of 1 to 10
Coupons Product and price lookup Ability to instantly use loyalty program Product comparisons Store locator Ability to place an order View your status/points in the store loyalty Ability to receive location, personalized or
1 2 3 4

5.9 5.3 5.3 5.3 5.2 5.1 5.0 4.7

5 6 7 8 9 10

But momentum is certainly growing from last year

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Research

Have shoppers been turned off by the retailer mobile experience to-date?
If a retailer offered the following services for a mobile device, please indicate how likely you would be to use them using the 10-point scale
Coupons Product and price lookup Product comparisons Store locator Ability to place an order View your status/points in the store loyalty program
1 3 5

5.9 7.0 5.3

6.6
5.3 6.0

2011
5.2 6.2 5.1 5.9 5.0 5.6
7 9

2010

This was a startling statistic from the survey

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Research

But as with all things retail, you need to know who your customer is
If a retailer offered the following services for a mobile device, indicate how likely you would be to use them on a scale of 1 to 10
4.6

Coupons
3.7

5.3

6.3 5.9

7.3 7.0

Product and price lookup Ability to instantly use loyalty Product comparisons Store locator Ability to place an order View your status/points in the Ability to receive location,
1 2 3

4.7

4.3 4.9 3.9 4.7 3.9 4.6

5.7 5.7 5.8

6.4 6.7 6.7

Emerging Elders Baby Boomers Gen X Gen Y

4.2 4.7 5.5 3.8 4.4 3.6 4.2

4 5

6.1 6.2

5.5

5.1 6.0
6 7 8

When do you chase Generation Y behavior & attitude?

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Research

What you may not have known

Time is money - higher incomes prefer web research Your mom reads the newspaper 40% of females use when shopping for groceries Internet is best, but word of mouth a close second for apparel info Discount/deal sites preferred to geo location sites for all groups

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Shop

Stephen Wright

I went to a general store but they wouldnt let buy anything specific Stephen Wright

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Shop

What did we learn?

In-Stock Position is King The Basics Still Rule

Shoppers Want Technology-Enabled Associates

Cross-channel Price Inconsistency Is an Irritant Poor Associate Knowledge

Shopper sophistication is increasing rapidly

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Shop

Dislike of channel price differentiation growing

Which of the following experiences do you dislike most when shopping in a store?
Out of Stock Slow Checkout Store Assoc With Poor Knowledge No Cash Refund Diff Price (Store vs Online) Diff Promo (Store vs Online) Not Accept Return without Receipt Not Accept Return from Another No Refund for Online Purchase
18% 13% 12% 11%
0% 10% 20% 30% 40% 50% 60% 70% 80%

73% 67% 47% 30% 28%

Price differentiation makes theoretical sense, but

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Shop

Generation Y is even more sensitive to price inconsistency

Which of the following experiences do you dislike most when shopping in a store?
72% 77% 72% 72% 66% 69% 65% 67% 61%

Out of Stock

Slow Checkout

Emerging Elders Baby Boomers

Store Assoc With Poor Knowledge

50% 43% 37% 20% 21% 34% 38%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Gen X Gen Y

Diff Price (Store vs Online)

Are we creating disloyal generation Y customers

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Shop

Execution issues indexed higher than all others

Which of the following experiences do you dislike most when shopping in a store?

you get to the cash register, it rings up the regular price, or a different price

85%

Store is difficult to navigate through -- too cluttered, and/or with poor access to aisles

73%

Poor promotional signage no clear way to know what is on sale

69%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Shopper expectations are increasing each year

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Shop

Shoppers are telling you how to fix the poor associate knowledge problem
In general, which of the following would you most like to see improved among store associates?
Ability of store associates to match competitive online prices Improved customer service skills enabled by technology More store associate engagement in the aisles with check-out processing capabilities Better electronic access to product information, inventory location and ordering Better product knowledge enabled by smart phone, tablet technology and digital signage More multi-lingual store associates to support your local area
0%

68%

64%

58%

53%

27%

9%

10%

20% 30% 40% 50% 60% 70% 80%

Knowledgeable assisted sales drive transaction size

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Shop

What you may not have known

Emerging Elders have almost twice the dislike of unknowledgeable store associates than Gen Y

Gen Ys do their homework 38% dislike difference between store and on-line price
Facebook tied with Groupon, at least for the Gen Ys Personalized store experience more important for men than women Women have a lower tolerance than men for poor store service Older shoppers consistently have higher expectations of store associates

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Transact

I've never felt like I was in the cookie business. I've always been in a feel good feeling business. My job is to sell joy. My job is to sell happiness. My job is to sell an experience. Debbi Fields

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Transact

What did we learn?

Mobile Payments are not a shopper priority but in Europe and Asia Pacific it is!

Coupon management is a huge sore customer pain point

Slow check-out remains an enigma

Europe and Asia are driving a new transactional model

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Transact

Time is money, for you and your customers

Which aspect of the check-out process at a store do you dislike?

The wait in line

56%

Slow or inattentive cashiers

48%

Products without stock numbers having to

43%

A barcode that does not work at check-out

39%

0%

10%

20%

30%

40%

50%

60%

Probably nothing new here

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Transact

Mobile Payments not ready for prime time

Which aspect of the check-out process at a store do you dislike?
Not being able to use a personal mobile device to checkout
0%

5%
10% 20% 30% 40% 50% 60%

How likely would you be to pay using a personal mobile device

2.5 3.1 3.1 4.0 4.2 4.6 5.2 4.7
1 3 5 7 9

Emerging Elders Baby Boomers Gen X Gen Y

2011 2010

Standards and customers in US are not ready

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Transact

Yet preferences in other countries suggest its coming

How likely would you be to pay using a personal mobile device

China

7.7

Hong Kong

6.8

Singapore

6.8

UK

4.2

North America

3.7

Research alert! There is a global version of this.

5 6 7 8

US-Based Global retailers need a mobile payments strategy

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Transact

Bad shopping experiences drive higher profit. Shouldnt we feel bad about that?
Which aspect of the check-out process at a store do you dislike?

Getting the manufacturer discount by having to mail in the rebate coupon after purchasing the product

52%

0%

10%

20%

30%

40%

50%

60%

Can you think of a bad experience at an Apple store?

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Transact

Shoppers want simple coupon redemption and no paper

If a retailer offered the following new or alternative payment methods, how likely would you be to use them?

Coupons/gift cards Pay using a mini store loyalty card that attaches to your key ring

8.3

5.7

PayPal or other third-party online services that allow payments to be made through the Internet)
-wallet service with pre-filled out credit authorization Pay using a personal mobile device
0 2 4

5.3

4.2

3.7

10

Digitizing coupon management is the next frontier

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Transact

Everyone wants a better coupon management system

How likely would you be to pay using alternative coupons/gift cards

Emerging Elders

8.0

Baby Boomers

8.4

Gen X

8.4

Gen Y

8.4

Fast check-out, happy customers. Seems reasonable.

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Transact

What you may not have known

No refund, how big a deal? lowest dislike of all choices Level of income has little bearing on like/dislike of mobile methods Emerging Elders have almost twice the dislike of a price check than gen Y Gen Ys more sensitive to wait in line than Emerging Elders, yet more accepting of self checkout Men more likely than women to pay using mobile devices or 3rd party services

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Post Sale

Give your clients the earliest delivery consistent with quality - whatever the inconvenience to us. - Arthur C. Nielsen

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Post Sale

What Did We Learn?

Cross-Channel Fulfillment is now Table Stakes Mobile commerce lags Nothing beats a live voice or person A bad experience is now communicated to thousands

Post-sale execution is even more critical to loyalty

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Post Sale

Multi-Channel is now expected by shoppers

Which store service offerings do you value 1st and 2nd
Ability to purchase a product in the store and have it delivered to your home at no extra charge Ability to automatically redeem a retailer or manufacturer coupon Ability to purchase a product online and pick it up in the store Ability to purchase a product online, have it delivered to your home, and return it (if needed) to the store Ability to purchase a product in the store and return it (if needed) using online procedures Ability to purchase a product via a personal mobile device and pick it up in the store Ability to purchase a product via a personal mobile device, have it delivered to your home, and return it (if needed) to the store
0%

57% 46% 43% 36% 9% 6% 3%

10% 20% 30% 40% 50% 60%

Mobile Commerce not yet demanded however

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Post Sale

When things go wrong shoppers still want to talk to a live body

If a retailer provided access to customer service/product representatives how likely would you be to use this service
Phone assistance Text/Call to receive Live Associate Text assistance Video assistance
1 2 3 4

6.4 5.1 4.6 4.2

5 6 7

When you have an issue in-store, which means of communication are you most likely to use?
Ask to speak with the Store Manager the retailer's website or mobile site
5.6 6.2

6.8

Post comments to your personal social networking network (i.e. friends and family) Post comments on retailer pages within social networking sites (i.e. Facebook, Twitter)
1 2 3 4

4.2 4.0
5 6 7 8 9 10

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Post Sale

Generation Y uses newer methods to connect

If a retailer provided access to customer service/product representatives how likely would you be to use this service
6.4 6.4 6.3 5.1

When you have an issue in-store, which means of communication are you most likely to use?

Phone assistance Text/Call to receive Live Associate assistance Text assistance

Ask to speak with the Store Manager Send an email to the retailer through the retailer's website or

6.1 6.8

Gen Y Only
5.9 4.6 4.8 4.2
1 3 5 7 9

6.2 6.2

All Shoppers

Video assistance

customer service number

5.2 5.6

Gen Y Only All Shoppers

Post comments to your personal social networking network (i.e. friends and family)
Post comments on retailer pages within social networking sites (i.e. Facebook, Twitter)
1 3

5.0 4.2

4.7

4.0

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Post Sale

What you may not have known

Cash is king, at least for women - More likely to want a cash refund than men Gen Y more likely to try alternative customer service contact methods, but phone is still #1 Older shoppers quicker to go to the store manager, but younger shoppers not that far behind Gen Y will make their displeasure more widely known via Facebook, Twitter and other sites

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Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.

General Patton

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The 10 Megatrends we highlighted last year

Taking Off
Taking the Store to the Shopper
Shopper Demand for Consistent Cross-Channel Experiences Drives Retailer Organizational Integration Distributed order management Integrates the Retailer Social Media and Product Development Collide The Death of the Task Worker Generation Y Changes the Behavior of All Other Generations

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The 10 Megatrends we highlighted last year

Still Emerging
Sales and Product Information via Mobile Phone Mobile Shopping (Finally) comes of age Death of POS becomes a possibility Real SKU Rationalization Takes Hold

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A Final Thought
A good plan violently executed now is better than a perfect plan executed next week.

Tech-assisted associates & coupons leap to the planning front.

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About Cognizant
A leading provider of information technology, consulting, and business process outsourcing services
With more than 50 global delivery centers and over 110,000 employees*, we help clients transform core processes for greater flexibility, higher efficiency and lower costs.

Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000 and Fortune 500. We are also ranked among the top information technology companies in BusinessWeeks InfoTech 100, Hot Growth and Top 50 Performers.
*as of March 31, 2011

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Thank you
If you would like the detailed Global Shopper Experience Study Please contact: Rachel Cosby at rachel.cosby@cognizant.com

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