"That's all your house is: a place to keep your stuff while you go out and get more stuff!" -- George Carlin
Consuming goods. Buying stuff. In a word: shopping. Myrtle Beach-based advertising agency The Brandon Agency has called it "America's new favorite pastime." (The "new" part is debatable, but "favorite"? Definitely!) And yet, for many of us, there's a big problem with the shopping experience -- and it's the subject of a new poll out of Gallup.
Polling some 12,055 adults nationwide last Christmas shopping season, Gallup discovered that about 1 in 3 (35 percent) of us are doing more of our shopping online than we did a year ago. But the more "stuff" we buy online, the less satisfied we become with the shopping experience.
This is contrary to what you might expect -- that familiarity with a store's website layout, and the ability to save a shipping address and credit card number for later use, would ease future transactions and make for a smoother and smoother shopping experience the more times a shopper visits a site. In fact, the opposite seems true. Familiarity with a website instead breeds contempt!
Comparing two sets of shoppers, one comprised of "retail customers overall" (online and offline) and a second group that shops online more often than the norm, Gallup found that the second group is 1 percentage point less "fully engaged" with a retail brand -- and could be as much as 7 percentage points more "actively disengaged."
This suggests that even if a shopper likes a particular brand in theory, exposure to the online shopping experience is unlikely to make said shopper like the brand any more. But it could well make the shopper like the brand less.
That's how much shoppers dislike the online shopping experience.
What Companies Want
Why is this important to the companies selling the brands to the consumers? In a nutshell, because "fully engaged" shoppers are much more profitable to a company than run-of-the-mill customers. Shoppers who have a "strong, positive emotional attachment to a company" (i.e., are "fully engaged") tend to spend more on, and produce more profits for, that company. (About 24 percent more, according to Gallup.)
That alone argues in favor of a company making an extra effort to engage its customers. But how?
What Shoppers Want
Curiously, the answer isn't that companies should offer to sell more "stuff" to consumers, or even sell them better stuff. Rather, Gallup's research shows that "service is more important to customers than products."
View all Courses In particular, Gallup notes that the customers it's talked to demand "the same type of personal, convenient service they receive at a storefront" when shopping online. That's not easy to accomplish in a remote shopping transaction, but Gallup says that by offering "live chat sessions with company representatives" and "personalized recommendations" of things to buy, an online store can better mimic the storefront experience.
The demand for the same service both online and offline also suggests companies should make an effort to "align online and storefront channels." Says Gallup, "retailers must deliver a seamless online and in-person experience." Otherwise, if a company offers one line of products online, for example, and another in store (or one level of service online, and something better in store), a customer might see no reason to patronize the company's online business at all. Customers might instead choose a consistently reliable service such as Amazon.com (AMZN) whenever shopping online.
But what's the No. 1 most important thing a store can do to improve the online shopping experience, and win shopper loyalty online? Gallup data shows that "problem resolution" is absolutely key. It seems that, even 15 years into the new millennium, shoppers are still deathly afraid of buying stuff online only to find they don't like it and have to figure out how to return it (or fear they'll never get it at all).
Turns out, smoothing over delivery problems, and making online shopping as easy and hassle-free as in-store shopping, is perhaps the single most important thing a company can do to ensure its brand value doesn't suffer from the online experience. What's more, says Gallup, "Retailers that perfect their customer service gain a significant competitive advantage over retailers who focus most of their efforts on delivering the latest and greatest products."
Better service, better profits. It's really as simple as that.
While generally in agreement with Gallup's findings, Motley Fool contributor Rich Smith thinks Gallup might have missed a couple of points for improvement. Namely, more free shipping -- and free shipping on product returns, too. He has no position in any stocks mentioned, but The Motley Fool recommends and owns shares of Amazon.com.