Straight From NRF: Want Your Share of $100 Billion? Build Customer Trust
As I’m sure most of you know, Jon Stine presented this morning at NRF on the results of his fourth “Catch ‘Em and Keep ‘Em” survey, which is a highly respected study done each year to identify how shoppers are responding to retail technologies. As a followup to his NRF Big Ideas session, I’d like to reproduce here Jon’s blog on his findings and thoughts. Thank you, Jon!
Want Your Share of $100 Billion? Build Customer Trust
By Jon Stine
Trust. It’s a powerful human emotion that often drives our behavior. The level of trust, or lack thereof, between a retailer and its customers can literally make or break the business. Given the importance of trust, many retailers are asking: How much do customers trust retailers? What are the benefits of increasing trust? How do retailers gather the information needed to provide the personalized experiences many customers want, while maintaining and even building trusted relationships?
These questions are especially important given the critical juncture at which we find ourselves—the convergence of people, process, data, and things called the Internet of Everything (IoE).
To help retailers build customer trust in an increasingly digitally connected world, Cisco Consulting Services surveyed 1,174 consumers in its fourth annual Digital Shopping Behavior survey.* From a behavior perspective, shoppers are becoming more digital. In fact, eighty percent of respondents are what we call Digital Mass shoppers—people who research, browse, and purchase digitally. Within this group, Über Digitals, who almost always use a smartphone to shop, increased from 11 percent last year to 18 percent this year. Clearly, your customers are digital.
Before we discuss “how,” it is important to understand “why.” Our research showed $100 billion of IoE value was available for retailers in the United States to capture in 2013 by offering more personalized shopping experiences. If you missed your share, don’t worry. This number is expected to increase slightly in 2014. Realizing this value, however, isn’t easy.
When it comes to trust, retailers are starting from a low base. When asked, “How much would you trust these companies/institutions to protect your personal data and use it to provide something you value?” respondents ranked retailers second to last, at 31 percent—behind government agencies (37 percent), and ahead of Internet companies (18 percent).
Even so, shoppers want personalized experiences. When asked, “Which personalized experiences do you prefer?” respondents ranked promotions via touch-screen or smartphone first (Digital Mass: 46 percent; Über Digitals: 53 percent). This was followed by personalized products, personalized shopping lists, and personalized service.
So, how do we solve this dilemma between a lack of trust and the desire for personalized shopping experiences, which require the collection of personal information? For answers, let’s look at a few of the research findings.
- Shoppers want personalized offers that are easy to use – Most people want to receive personalized offers via email at home. This suggests that shoppers — even Über Digitals — start the shopping process while they are in their home environment. The vision of in-store offers may simply not be in sync with the reality of shopper decision making and in-store behavior.
- Shoppers are willing to share information – Both Digital Mass and Über Digital shoppers are willing to share past purchase history and basic personal information (name, age, etc.) with retailers to receive a more personalized shopping experience. Topping the list of acceptable information for retailers to use are time spent in the store, location in the store, and products you try but don’t buy.
Based on our experience working with many of the world’s leading retailers, there are three key takeaways and actions when it comes to building trust:
- Shopper trust must be earned. Retailers can do this by delivering a clear data policy and making the benefits of providing personal information transparent and easy to understand.
- IoE is already here. To capture your share of the $100 billion value at stake, develop a strategic plan that takes into account the information above.
- Über Digitals are too important to ignore. Selling to these shoppers requires an architecture and infrastructure that can support their increasing expectations for connected, digital shopping experiences.
To gain even more insights into developing trust in an IoE world, take a look at:
* This year’s Cisco Consulting Digital Shopping Behavior survey includes responses from 1,174 consumers who are representative of the United States broadband population by age, income, and region. It is the fourth in a series of popular “Catch ‘Em and Keep ‘Em” studies by Cisco Consulting Services.