TextileFuture is presenting in today’s issue of the NEWSLETTER a worldwide survey, executed by Salesforce Research, and of around 10000 consumers, in order to compile the latest information on consumer behaviour around the globe. The drawn conclusions you may compare with your own shopping habits.
Here starts the feature:
Third Connected Shoppers Report by Salesforce Research
For this third edition of the “Connected Shoppers Report,” Salesforce Research surveyed over 10000 consumers worldwide to discover:
• How retailers, brands, and online marketplaces differentiate in a crowded retail landscape
• What drives shopper loyalty
• How retailers can compete as shopping moves to emerging digital purchase points
• The evolving role of the physical store
• How shoppers will browse and buy during the 2019 holiday season
Data in this report is from a blind survey conducted June 14–July 2, 2019, that generated 10614 responses. Survey respondents are from Asia Pacific, Europe, North America, Latin America, the Middle East, and Africa. All respondents are third-party panelists (not limited to Salesforce customers). See page 47 for detailed respondent demographics.
Due to rounding, not all percentage totals in this report equal 100 %. All comparisons are made from rounded numbers.
Throughout this report, we analyse trends impacting the following types of sellers:
Retailers
Companies that sell goods from multiple brands, such as Walmart, Woolworths, Tesco, or Carrefour
Brands
Companies that manufacture and sell products under the same name, such as Nike, Apple, UNIQLO, or Samsung
Online marketplaces
Websites that sell goods from multiple brands, retailers, and individual sellers, such as Amazon, eBay, Alibaba, or Etsy
We also examine survey results across four generations of customers:
• Silents/baby boomers: born 1920–1964
• Gen Xers: born 1965–1980
• Millennials: born 1981–1996
• Gen Zers: born 1997–2001
Executive Summary
To anyone paying attention, it’s no surprise that retail is in the midst of a revolution.
But the story of retail transformation can’t be boiled down to stores versus ecommerce. To win sales — let alone loyalty — retailers, brands, and online marketplaces must understand and navigate an increasingly complex ecosystem of consumer expectations, preferences, and channels that are anything but static.
In an era of constant connectivity, hyper- personalized engagement, and products catered to increasingly niche segments, shopping today looks nothing like its former self.
Amid monumental shifts in business and operating models — all enabled by digital transformation — consumers increasingly rely on the following digital channels for browsing and buying:
• Retailers’ websites and apps from the likes of Walmart, Carrefour, and Woolworths command more than a quarter (26 %) of online sales
• As direct-to-consumer (D2C) business models take off, websites or apps from brands like Tory Burch, Columbia, and Shiseido take credit for nearly one-fifth (18 %) of online shopping
• Online marketplaces such as Amazon, eBay, and Alibaba represent almost half (47 %) of online shopping
In a time when “buy now” buttons beckon wherever shoppers go online, other digital channels can’t be ignored: WeChat, Instagram, Pinterest, and other emerging touchpoints for transactions now garner 9 % of online purchases.
Eighty-six percent of shoppers buy from retailers, brands, and online marketplaces. So what makes them choose one option over another in this high-stakes battle for wallet share?
Understanding why consumers choose each shopping option also requires a look at how their preferences change at different stages of the purchase journey.
The First Purchase
The physical store remains the preferred place to pick up a new product. When a shopper pops into their local Target or Tesco for a jug of milk, ample opportunity awaits in each aisle to stumble upon a new laundry detergent or soda. Stores are also the perfect place to try on new merchandise and gauge its quality with a tactile experience.
The Repeat Purchase
Yet only one-quarter of shoppers return to the store to buy a product again – online marketplaces are the most popular destination for product replenishment, although replenishment purchases are more evenly distributed across channels. Repeat buyers no longer need to see an item in person to verify they like it, so they’re taking advantage of a plethora of shopping destinations to get the best price and most convenient fulfilment options.
Today, retail is more than a transaction at a checkout counter. Rather, it is a full spectrum of activities — including research and discovery, browsing and buying, receiving service, and becoming a brand advocate. The way consumers approach this range of activities has changed significantly — and become part of everyday life.
Only 30 % of consumers think they’re spending more time shopping now than they did a year ago, perhaps due to more frictionless experiences like mobile or one-touch payments.
As the broad variety of shopping activities are further ingrained in everyday life, consumer behavior shows four key shopping transformations:
• Discrete to embedded: Consumers no longer need to decide “I’m going shopping today.” They can shop anytime, anywhere with a tap of their finger or a voice command.
• Linear to fragmented: Shopping now takes place across myriad digital and physical touchpoints.
• Analog to digital: Stores are digitizing their offerings and, in the case of some retailers, empowering associates to deliver connected and personalized experiences. For example,
Apple associates help customers with iPads and proprietary in-store apps.
• Product to experience: As product categories become commoditized, resonant shopping experiences — like connections to animal rights causes in a Lush store or personalised serums from Kiehl’s — are paramount.
How can brands and retailers differentiate themselves in an increasingly complex landscape? Nearly eight in 10 consumers are more likely to buy from brands with a loyalty program — by far the top draw for wallet share. But retailers are challenged to turn their commodified loyalty programs into truly exclusive ones.
Case in point: Shinola’s Foundry program cultivates a VIP club by requiring registration through associates and offering early access to new products.
Special merchandise and events matter, too. More than half of shoppers are drawn to brands and retailers that offer limited-edition or customized products (54 %) or exclusive shopping events (51 %).
These preferences are even more pronounced among younger generations. Seventy-two percent of Gen Z consumers are more likely to buy from brands or retailers selling limited-edition or customized products. Fifty-three percent say the same for unique product collaborations with artists, athletes, or celebrities.
How can brands and retailers differentiate themselves in an increasingly complex landscape? Nearly eight in 10 consumers are more likely to buy from brands with a loyalty program — by far the top draw for wallet share. But retailers are challenged to turn their commodified loyalty programs into truly exclusive ones.
Case in point: Shinola’s Foundry program cultivates a VIP club by requiring registration through associates and offering early access to new products.
Special merchandise and events matter, too. More than half of shoppers are drawn to brands and retailers that offer limited-edition or customized products (54%) or exclusive shopping events (51%).
These preferences are even more pronounced among younger generations. Seventy-two percent of Gen Z consumers are more likely to buy from brands or retailers selling limited-edition or customized products. Fifty-three percent say the same for unique product collaborations with artists, athletes, or celebrities.
Earning a purchase amid so many options is difficult enough. But fostering true loyalty — and even love — among demanding consumers is challenging on a whole new level. When recalling traits of their favorite brands, shoppers focus on tailored engagements on their terms. Amid the top five traits of shoppers’ most-loved brands,
#1 was catering to their unique needs, while #5 was truly understanding who they are. Another study found that 69 % of shoppers expect companies to understand their needs and expectations, but 56 % view companies as generally impersonal (“State of the Connected Customer,” Salesforce Research, June 2019)
Bridging this gap between expectations and reality may bring a competitive edge to retailers that treat shoppers as individuals rather than broad segments.
Consumer-retailer relationships are strengthened when consumers feel understood and special. Exclusive shopping experiences and promotions are a valuable way for brands to build loyal (and lucrative) connections.
Shopping used to be simple: Go to a store or a website and make a purchase. Today, nearly one in 10 purchases occurs on emerging digital purchase points — channels completely separate from retailers’ and brands’ owned properties.
The days of merely pulling consumers into owned physical and digital spaces are over. Shopping is increasingly about pushing brands into the daily lives of consumers, wherever they prefer to engage.
We refer to the channels at the hypothetical fringes of brand and retailer properties as “shopping at the edge.” This term represents an emerging paradigm where consumers get inspired, make purchases, and receive service on third-party platforms without even engaging brands directly. These digital destinations include social media, messaging platforms, voice assistants, and other intermediaries.
With Gen Zers being 3.5x more likely than baby boomers to purchase on emerging digital purchase points such as messaging apps and voice assistants, shopping at the edge is poised to become the norm over time. Over half (55 %) of shoppers already purchase products directly from an app.
These days, shoppers are looking beyond mobile to the next buying frontier. While only 4% of shoppers use gaming consoles to buy products today, four times as many (16 %) are interested in using a gaming console to shop. This is more acute among Gen Zers — 7 % currently use consoles to make purchases, yet 25 % expressed interest in doing so in the future.
The proliferation of digital touchpoints has led the average consumer to use eight different channels to communicate with companies.* Here’s a look at which touchpoints resonate at each stage of the shopping journey.
Discovery and evaluation
Shoppers That Use the Following Channels Across the Customer Journey: Search engines, social media feeds, and influencers are popular ways for shoppers to get product inspiration outside a brand’s properties. For 70% of Gen Zers, social media is a preferred place to discover and evaluate new products.
Buying
The majority of shoppers still turn to trusted channels, like physical stores and websites, to transact. However, a significant portion have already adopted newer technologies like mobile wallets (29%) that remove friction along the shopper journey.
Service
While traditional channels like stores and phone calls
are still common (62% and 53% of shoppers use these, respectively), shoppers now expect a variety of service options.
The younger the shopper, the more service channels they turn to. Nearly half of millennials and Gen Zers use websites and apps for service, and one-third use chatbots.
Consumers today are faced with a veritable smorgasbord of purchase paths. Retailers and brands have direct control over some of the fastest-growing purchase avenues, namely via their own websites and apps. However, over one-tenth of shoppers plan to experiment with newer purchase options like voice assistants (18 %), livestream video (15 %), and visual search (13 %) over the next 12 months.
Generational differences reveal clues to future retail transformations as younger shoppers gain more purchasing power. Members of the silent and baby boomer generations are more likely to stick with traditional means of shopping, as expected. However, all other generations — from Gen Xersto millennials and Gen Zers — are more likely to adopt new paths to purchase like mobile wallets, messaging apps, and social media. Perhaps surprisingly, Gen Z is not leading the adoption of all emerging touchpoints. Voice assistants, video chat, chatbots, visual search, and livestream videos enjoy more popularity with Gen Xers and millennials than with younger cohorts.
Even as ecommerce soars, shoppers haven’t forgotten their beloved brick-and-mortar stores.
In the wake of retailer bankruptcies and downsizing — major U.S. retailers closed 5524 stores in 2018* — 49 % of consumers say their shopping routines have been significantly affected by store closures.
Despite headlines heralding the end of the store and the reign of digital, stores still have their literal and figurative place. Touching and feeling merchandise remains critical, ranking as consumers’ top reason to shop in a physical store. And when even one-hour delivery isn’t fast enough, a trip to the closest store wins. Getting merchandise immediately is shoppers’ third most common reason to shop in-store.
Retailers are reinventing their physical footprints to meet consumers’ needs. Consumers say stores still function as hubs of discovery, experience, and fulfillment in their lives, even as the role of the store evolves.
The Discovery Hub
Product details may be a mere Google search away, but 81 % of shoppers still turn to brick-and-mortar locations to discover and evaluate new products.
These in-store browsing and discovery sessions are a boon to retailers: 62% of shoppers say that when they shop at a physical store, they tend to buy more than they initially intended.
That’s not to suggest discovery happens exclusively offline. Today’s shopper is an expert multitasker, examining products in person while also researching them online via their mobile phones. Stores that bridge physical and digital worlds — for example, by using geolocation to send a coupon to a shopper’s phone once they step inside a store — are a step ahead of the competition.
The Experience Hub
Shopping has never been only about meeting utilitarian needs. Walking the aisles of a store is inherently social and, often, fun.
Consumers, especially Gen Zers, seek out stores that offer unique experiences — not just products and checkout lines. Fifty-one percent of Gen Z shoppers have attended a pop-up store, while 42% have participated in an experience-driven social event or demo inside a store.
In the digital era, the store is a unique environment where brands can curate every element of the customer experience and create meaningful, in-person relationships.
Examples of prime retail experiences abound: Canadian apparel retailer Roots offers a lounge in its Magnificent Mile shop in Chicago featuring local startups and a customization workshop. Similarly, Shiseido’s scented art installation in Singapore and Lululemon’s in-store yoga classes keep fresh experiences at the forefront. Even online sellers like Amazon and Rent the Runway now turn to brick-and-mortar to deliver memorable engagement.
Today’s stores also serve the role of fulfillment center to bridge online and offline worlds. The majority of shoppers have taken advantage of this in three ways.
Shopping while returning: Shoppers may not intend to buy more products when making a return, but that doesn’t mean they don’t do just that — 67% admit that they ended up purchasing something else when returning an item to a store.
Click and collect: Two-thirds of millennials have placed online orders for pickup in-store (a service also known as BOPIS- buy online, pickup in-store – or click and collect). Click and collect is becoming the norm among omni-channel retailers globally, including Cortefiel and Pets At Home.
Endless aisle: Over half (52%) of shoppers have arranged for a store’s out-of-stock product to be shipped to them — a practice that helps retailers optimize inventory and salvage sales that would be lost otherwise. Disruptors like Bonobos, whose physical stores function purely as showrooms and whose sales are shipped to shoppers’ homes, take this model to a new level.
Many consumers have a phone in hand while they’re walking around a store. The mobile device’s impact on in-store behavior is hard to overstate, with three-quarters of Gen Z shoppers reporting that they’ve researched products via mobile device while in-store and over a quarter using them to bypass the register. But despite notable innovations like mobile wallets, many stores aren’t evolving to match shoppers’ mobile mindsets
Geolocation technology provides a particularly big opportunity for retailers to transform the mobile-store interface. Fifty-five percent of shoppers like to receive offers or other experiences based on their location — such as discounts via push notifications when they’re near a store — but less than one-third say they’ve had such an experience. Stores have a long way to go before they become as mobile-first as their consumers.
Engaging shoppers in the personalized and unified manner they expect requires data — and lots of it. Luckily, today’s systems of engagement, along with advanced capabilities like artificial intelligence, provide the necessary data and the ability to make it actionable.
The majority of shoppers are comfortable exchanging their personal information as long as it’s used transparently and beneficially — such as for serving tailored offers or providing seamless connections between channels and devices.
But with opaque and even disingenuous privacy policies now being the norm, the majority of shoppers doubt that companies are holding up their end of the bargain.
Transparency in how shoppers’ data is used is critical not only for gaining their trust, but for gaining a competitive advantage.
Seventy-seven percent of consumers are more loyal to companies that are transparent about how their data is used.*
As society increasingly confronts its environmental crises, consumers are taking a critical look at the impact of their purchases. Fifty-six percent of shoppers say that sustainability and ethical business practices matter more now than they did a year ago.
Retailers and brands catering to younger generations are under particular pressure to reduce their environmental footprints. Both millennials and Gen Zers are more likely than older consumers to be more concerned about product origins and sustainability than a year ago. Gen Z shoppers are up to 17 % more likely than silent/baby boomer shoppers to have increased environmental concerns in a given product category.
Shoppers are slightly more concerned about the sustainability and origins of consumable food and self-care products than they are about apparel and luxury goods. As companies like Lush, Everlane, and Whole Foods promote their goods and earth-friendliness, and as companies like H&M pledge to go climate-positive, leading with values will be another differentiator at the edge of shopping.
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Alpaca
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Associations
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Augmented Reality
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Automotives
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Collaborations
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US-based textile companies join forces to fill the nation’s PPE gap https://textile-future.com/?p=56217
CHEMLOGIS and SANITIZED AG: New strategic sales partnership for the Sanitized® antimicrobial polymer additives in Mexico https://textile-future.com/?p=56252
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Companies
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Oerlikon Second-Quarter and Half-Year 2020 Results OECD annual inflation picks up to 1.1 % in June 2020 https://textile-future.com/?p=56118
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McKinsey Charts of the past week https://textile-future.com/?p=56328
Cotton
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WTO members discuss cotton development assistance, impact of COVID-19 on Cotton Trade https://textile-future.com/?p=56298
India Grain and Cotton latest update https://textile-future.com/?p=56311
Data
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OECD annual inflation picks up to 1.1 % in June 2020 https://textile-future.com/?p=56137
U.S. PMI® at 54.2 %; July 2020 Manufacturing ISM® Report on Business® https://textile-future.com/?p=56159
Government support measures for households buffer the economic impacts of COVID-19 https://textile-future.com/?p=56240
U.S. Job Growth Slowed in July, Signaling a Loss of Economic Momentum https://textile-future.com/?p=56301
OECD CLIs continue to strengthen from crisis-low in all major countries https://textile-future.com/?p=56355
Denim
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J Brand cracks the code to denim comfort https://textile-future.com/?p=56295
EU
EU Commission opens in-depth investigation into the proposed acquisition of Fitbit by Google https://textile-future.com/?p=56208
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Farm Trade
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Fashion
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Fibres
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Filters
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Future Retail
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Marketing
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Motorcycles
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Robotic
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Sporting Goods
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Sustainability
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Tween Line
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Vietnam
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Webinars
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Parks Associates complimentary Webinar on TV’s Journey to the cloud (August 25, 2020) https://textile-future.com/?p=56260
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