Solving the mystery of the non-buying consumer
By Dan Chester - Aug 14th 2017, 11:14
With retail and mall traffic down, it's more important than ever to improve conversion metrics, but find it difficult to understand why people visit a store without buying. These "store nonpurchasers" (SNPs) represent a huge chunk of traffic to a store — accounting for up to 50 percent of visitors, according to recent ForeSee research.
As one specialty store leader stated: "If we could close the store non-purchaser gap by even 1 to 2 percent, it could result in tens of millions of additional revenue every year." So, what's the answer? How do you discover why a purchase wasn't made during a visit to your store?
Understanding customer Intentions
The first step is understanding the difference between two types of non-purchasers: customers who go in-store intending to purchase merchandise and customers who don't. There are a wide variety of reasons why a customer intending to purchase something didn't follow through, including items not in stock, unable to find an item, difficulty locating an associate, extremely long checkout lines, etc. These customers represent lost sales because they wanted to purchase merchandise in-store but couldn't.
And then there's the sort of shopper who visits a store without intending to purchase. Traditionally, the assumption would be that these customers aren't interested in spending money with that retailer. But that would be a very uninformed assumption or almost a guess. These customers may only be visiting a physical store for research prior to making a decision to purchase something using another channel (aka showrooming), like a store's website or mobile app.
If retailers want to find what we call "true conversion" rates, they must first distinguish between these two types of SNPs, otherwise, they risk artificially deflating conversion numbers and wasting money on initiatives that are ineffective. Companies who are measuring success or failure based on conversion rates in any given channel are oversimplifying a fairly complex customer journey. Connecting with your mystery shopper Store leaders seeking to connect with SNPs are forced to make do with a variety of methods that only provide a portion of customer data and require expert juggling of metrics and insights that could be wildly off base.
Some of those solutions include:
• Traffic counters – These don't tell you who or why a customer is visiting your store.
• Store receipts surveys – Do a good job of capturing purchase information, however, data collected is only on those who purchased.
• Store kiosks – Can be expensive and typically produce a low sample of responses.
• Exit surveys – Also costly and restricted to episodic collection of responses.
• Mobile location tracking/beacons/in-store video – In-store heat maps of how customers shop, which isles they and do not go down, where in the isle they pause or engage with a product, etc., but this behavioural data doesn't get to the root causes of why they walk out.
Retailers can identify and survey digital shoppers who recently visited a store to help determine why they didn't make a purchase. This focused information — collected at specific points in the journey — helps retailers identify and prioritize addressable issues, such as inadequately stocked product options, confusing display layouts, or inadequate associate training.
Analysing multiple touchpoints can also reveal the true intentions of some SNPs. When we asked shoppers who did not make a purchase why they didn't do so, a majority of them said it wasn't because there was something wrong, but because they did not have purchase intent, to begin with. This finding is important; it shows that retailers need to be able to deliver an store experience that delights window shoppers, who simply returned to look at latest styles and products, not necessarily to purchase.
If retailers begin using a new strategy to better understand store non-purchasers, they will be able to close the conversion gap -- bring in additional revenue, and increase brand loyalty. Understanding what drives store non-purchasers must become a top priority for store leaders. And if closing the gap even 1 to 2 percent is potentially worth tens of millions in revenue, it's worth it. © 2017 Networld Media Group, LLC.
Zara to introduce augmented reality displays to its stores
16/03/2018 - 09:50
Zara is set to introduce augmented reality displays from April as part of efforts to lure millennials into its stores and increase footfall.
AI set to revolutionise consumer and retail sectors
15/03/2018 - 10:16
Almost a third (32%) of consumers surveyed globally by PwC plan to buy an AI device including robots or automated assistants, with retailers watching closely as ‘voice commerce’ develops in the home.
Understanding RCS and why it matters to marketers
13/03/2018 - 10:54
Text messaging is a staple in communication that allows marketers to connect to virtually every consumer’s phone.
3 ways companies can reinvent themselves in the Digital Renaissance
08/03/2018 - 14:55
The Renaissance was a period of renewal and passion, with the invention of the Gutenberg printing press allowing citizens to communicate quickly to a wide audience. Today, technology is driving fast, sweeping changes across the globe, altering the way business is done while taking unprecedented leaps forward at a breakneck pace.
Why product data is key to superior customer experience
06/03/2018 - 16:02
Most retail marketers would argue that the secret to effective sales is creating an outstanding customer experience. From investing in UX design and customer relationship management software to training customer service staff, frontline marketers know that every consumer touch point is critical to creating a compelling brand experience.