Commentary

Price Trumps Brand Loyalty

According to the 2017 Edition Of The Consumer Trends Report from Kibo Commerce, retailers and manufacturers know having an omnichannel strategy is table stakes for delivering seamless, connected customer experiences. Forrester finds that 71% of US business influencers and decision-makers ranked the improvement of their customer experience as their top initiative in 2016, ranking higher than growing revenue and other traditional goals like reducing costs.

“While many organizations have omnichannel plans or implementations in progress, says the report, this year’s report explores the pulse on consumer behavior, desires, and trends to help business decision-makers determine and understand how to best move forward with omnichannel initiatives. Most specifically, this year’s survey revealed the following:

  • 94% of consumers do research online before visiting a store
  • 81% of consumers said they have looked up inventory on a retailer’s website before visiting the store and 80% are less inclined to visit a store if a website does not provide current product availability
  • 92% of consumers reported interactive content influences them to make a purchase. In the past six months, 93% of consumers have reviewed product ratings before purchasing an item
  • 57% of consumers reported that most of the time loyalty drove their purchasing

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But, the survey found that consumers still value their pocketbooks over brand loyalty for their purchases. In fact, 70% of consumers say price is the most important factor when making purchases online, with product brand being the second most important factor, influencing 12% of consumers, and retailer brand the third most important factor at 6%.

Product pricing and cost of delivery are the two most important factors that drive consumers to make purchases with rival retailers versus a retailer they are loyal to. Specifically, 68% of consumers say the most important factor for going elsewhere is finding a lower price and 42% of consumers say the second most important factor would be finding a less expensive delivery option.

Factors Driving Consumer Purchases

  • 70% Price
  • 12% Product brand
  • 6% Retailer/Website brand
  • % Online shopping experiences
  • 3% Delivery options
  • 2% Speed of Delivery

Consumers don’t look at online and in-store as different channels, says the report. Instead, they use them in conjunction, with a significant 94% of consumers stating that they do research online before visiting a store. Consumers are utilizing encyclopedia-like research for in-store inventory to verify a desired item is actually in stock on shelves before making the trip to a store. In the last six months, 81% of consumers said they have looked up inventory on a retailer’s website before visiting the store, and 39% expect to see that store inventory online.

One would expect rewards, members-only promotions, and point cards to significantly drive consumer purchases, says the report. Appreciating customers and rewarding them for being loyal is a strategy merchants in all industries have significantly invested in over the years.

This year however, consumers indicated that interactive content reigns on the path to purchase, influencing 92% to complete their purchase. While interactive content is the highest contributor for influencing a sale, the second major influencer is the product page itself. According to the research, two specific elements on the product page make the biggest impact on consumers:

  • PRODUCT REVIEWS
  • 82% of consumers are influenced to complete their purchase thanks to product reviews.
  • In the past six months, 93% of consumers have reviewed product ratings before purchasing an item
  • INVENTORY AVAILABILITY
  • Having quantity of an item displayed influences 64% of consumers to complete their purchase

Concluding, the report says that consumers are expecting online and in-store as one cohesive experience, no matter how prepared retailers and branded manufacturers are to deliver it.”

To review the complete KiboCommerce report, please visit here.

 

 

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