CINCINNATI--(BUSINESS WIRE)--The latest LoyaltyOne consumer research tells U.S. retailers that customer service mistakes made with Cyber Monday online shoppers could lead to significant in-store sales losses in the 2015 holiday gift-buying season.
In LoyaltyOne’s October 2015 nationwide survey of 1,019 American consumers, nearly half (47%) of Cyber Monday shoppers indicated they’ll be reluctant to make an in-store holiday season purchase from a retailer with whom they have an unhappy online experience on the Monday after Thanksgiving.
When asked: “If I have a poor experience shopping online at a retailer’s Cyber Monday, I would still shop at the retailer’s physical store,” 30% of survey takers wouldn’t commit one way or another, 12% said they were unlikely to shop in-store and 5% said they were very unlikely to shop in-store.
Cyber Monday online shoppers represent a significant portion of overall holiday season shoppers. Nearly eight out of ten LoyaltyOne survey respondents (78%) said they plan to make Cyber Monday purchases. In the youngest end of the millennial demographic, 18-24 year-olds, the rate of Cyber Monday shoppers skyrocketed to 93%. Notably, a retail study conducted earlier this year by LoyaltyOne with Verde Group, a customer experience research consultancy, and the Wharton School showed that 14% of shoppers experience at least one online problem when they shop.
Consumers indicated in this month’s LoyaltyOne survey that a negative in-store experience would have a somewhat less deterrent effect on their online shopping behavior. When asked: “If I have a poor experience at a retailer’s store location, I would still do my holiday shopping at that retailer’s on-line store,” 22% were neutral, 11% said they’d be unlikely to shop online with the retailer and 3% said they’d be very unlikely to shop the retailer online.
In another key finding from the latest survey, American consumers seem to have relegated to the history books the notion that there is intrinsic value to trudging to the store to touch and hold just the right item purchased for the magic gift exchange moment. When asked about the statement: “I’d be reluctant to tell friends and family that I purchased a gift online or through a mobile device,” 83% of consumers said they disagree or strongly disagree.
Even more emphatic, 88% of survey takers said they disagree or strongly disagree with the sentiment that gifts bought online are NOT as heartfelt and sincere as gifts bought in a physical store.
Still fashionable and valued by shoppers, apparently, is the encounter with the charming, knowledgeable, perhaps sympathetic in-store sales person. Eighty-three percent of consumers said they agree or strongly agree with the statement: “I think a salesperson who is exceptional can give a store an advantage.”
“We know that a poor experience can have a negative impact on shopper spend. This study shows that the online purchase itself is a high-risk touchpoint,” LoyaltyOne Vice President Dennis Armbruster said. “Retailers that fail to reduce the risk of an unhappy Cyber Monday experience could pay a crossover price in the form of lower in-store sales this year.”
“On-line shoppers react to different problems than those who shop in-store,” Verde Group President Paula Courtney said. “The value of an online shopper to a retailer is more negatively impacted by problems associated with the lack of free shipping, or issues with returns,” she said. “Online shopper value also is damaged when rewards cards or coupons cannot be used online, when sales or specials are only available in the store, and when shoppers cannot use their preferred credit card or payment type online.”
In other key results from LoyaltyOne’s online holiday-shopping customer experience survey:
- Drone delivery of holiday gifts is slow to take off with consumers, with 22% saying they would choose drone delivery, if it was available, to get an online purchase faster, versus 55% who said they’d be more comfortable with traditional shipping methods and 23% who said they had no shipment method preference
- Well over half of consumers (69%) said that if a retailer couldn’t guarantee the delivery date of an online purchase, they’d cancel the order and place the buy with an online competitor.
Millennials (18-34 years old) demonstrated once again they march to the beat of a different drummer boy. Here are some of millennials’ sharpest contrasts with the general population (18 to 65 and over):
- 48% of 18-24 year-olds and 33% of 25-34 year-olds chose drone delivery
- 25% of 18-24 year-olds and 27% of 25-34 year-olds said they’d be reluctant to tell friends and family they purchased their gifts via smartphone, versus 17% of the general population
- 45% of 18-24 year-olds and 42% of 25-34 year olds said that if notified their gift purchase wouldn’t be delivered on time they’d wait for the retailer to fulfill the order, versus 30% of the general population.
The LoyaltyOne survey results are based on an online survey in October 2015 of 1,019 American consumers. The margin of error is +/- 3% at the 90% confidence level.
LoyaltyOne is a global leader in the design and implementation of coalition loyalty programs, customer analytics and loyalty services for Fortune 1000 clients around the world. LoyaltyOne’s unparalleled track record delivering sustained business performance improvement for clients stems from its unique combination of hands-on practitioner experience and continuous thought leadership. LoyaltyOne has over 20 years history leveraging data-driven insights to develop and operate some of the world's most effective loyalty programs and customer-centric solutions. These include the AIR MILES Reward Program, North America's premier coalition loyalty program; a majority stake in European-based BrandLoyalty, one of the largest and most successful campaign-driven loyalty marketers outside of the Americas.