Brands are putting customer loyalty at risk due to a disconnect between their physical and eCommerce experiences, a new research report by PFS has found. The report, titled ‘Overcoming the Physical Disconnect: How Retailers Can Maintain Customer Loyalty in an Omnichannel World’ has revealed that retailers, forced to rapidly scale their eCommerce offering by the pandemic, are falling short when it comes to replicating tangible in-store elements digitally.
This has led to 80% of all respondents confirming they miss at least one aspect of the traditional shopping experience while perusing online, while 35% of respondents overall admitted that have had such an unsatisfactory shopping experience with a previously trusted brand this past year, that they have gone on to look elsewhere.
Meanwhile, almost a quarter of consumers (net 23%) agree that online stores either don’t do enough to engage with them, or that they only want their money and don’t care about their satisfaction. To establish the full extent of this disconnect and how retailers can respond as the flagship store moves online, PFS surveyed 2,000 UK consumers about brand loyalty in an increasingly digital era and how this may have evolved throughout the pandemic.
The barriers to brand loyalty
Perhaps inevitably, the most missed facets of the in-store shopping experience include being able to physically touch products (43%), and to test certain items (41%) for suitability across aspects such as size or colour. Whilst retailers have responded to these shortfalls with the rise of online tools such as FAQ pages and website chatbots, it would seem these attempts to elevate brand loyalty aren’t quite hitting the mark. In fact, 21% of respondents reported that online customer service is still not as good as in-store assistance.
It is important to recognise, however, that customer loyalty isn’t just based on the point of sale. Slow delivery (18%), a lack of available stock (17%) and difficult returns processes (14%) were all listed as potential factors behind reduced interest in using a previously preferred brand. A net total of 88% reported at least one fulfilment factor that could or already has made such an impact. These contributing factors could well be responsible for 63% of Gen Z consumers (born between 1994-2001), 46% of millennials (born 1980-1993), and 35% of all respondents admitting that they had endured such an unsatisfactory shopping experience with a previously trusted brand, that they have since looked to shop elsewhere.
Forming new brand connections online
To build greater loyalty online, brands need to act fast to strike a chord with customers. And it seems that fulfilment is set to be a key differentiator. According to the findings, in net agreement percentages, more than one-third (37%) of consumers would prefer to choose how their product is packaged; 64% would be more loyal to brands who provide them with delivery timeframe options; 52% would prefer to shop with companies that help them to minimise their carbon footprint; 49% would prefer to shop with a brand that provides packaging that can be repurposed in some way, and; 70% more generally expect online retailers to minimise packaging.
Compared to the 37% figure who would prefer to choose how their product is packaged, 44% of Gen Zs contributed to the total. The option of buying and returning in-store, or to use click and collect when online shopping, was also 6% more popular for this age group (43%) than the overall total of net agreements (37%). To keep up with these future shoppers, retailers must ensure that all of these boxes are being ticked, simultaneously, to guarantee long-term brand connections.
An omnichannel future based on experientialism
Whilst the last few months have been turbulent, the reopening of the high street will be the true test for online brands when it comes to loyalty. Whilst 39% of consumers agree the safety measures implemented in-store should continue after lockdown, as many as 40% of consumers still claim that their loyalty will revert to retail brands that have a high street presence in COVID’s aftermath.
However, this might not last for long. Once the dust settles on our high street homecoming, more than one-third (34%) expect to return to online shopping after the initial buzz has died down. The role of the high street will instead be based on experientialism. Following the expectations of the Gen Z contingent, in particular, more than one-third (37%) expect retailers to offer more of an in-store ‘experience’ than they did before lockdown. More than half (51%) of that influential Gen Z group expect shops to become more of a space for browsing in the future.
Christophe Pecoraro, Managing Director of PFS Europe, comments, “whilst the flagship store has moved online, this does not spell the end for the high street. What we’re more likely to see is a challenge to the physical stores’ core functions. What our data tells us is that we are heading towards an omnichannel future based around in-store experientialism, in support of online points of sale.”
“This will see a demand for offerings such as buy online, pick-up in-store models (BOPIS) or buy online, ship from store, to bridge the gap between the two channels. Omnichannel optimisation is how retailers should be looking to establish loyalty in the new world. By converting physical stores into browsing locations, to try, to test, and ‘to experience’, they’re more likely to meet future demands built around a hybrid offering. Underpinning and critical to the success of this transition will be an effective fulfilment strategy and intuitive distribution network that can flexibly support this future of retail,” Christophe concludes.
PFS commissioned research agency, Arlington Research, to survey 2,000 UK consumers about brand loyalty in an increasingly digital era and how this may have evolved throughout the pandemic. They were asked about shopping experiences, what’s missing, and their thoughts on the future relationship between physical and online retail.
Nationally representative interviews were carried out with adults aged 18+, with nationally representative quotas set on gender and age at a country-wide level. Fieldwork took place between 4-8 March, 2021.
The full report can be downloaded here.