CHALLENGE:
What defines great retail experiences, according to shoppers? Which great experiences deliver most to customer loyalty and to the bottom line? Do great experiences happen very often? It turns out “Brand Experience” drives loyalty, but is infrequently delivered.
How they researched it:
1,006 online interviews were completed in May, 2009, with a 60:40 proportional split between U.S. and Canadian shoppers who have purchased products at a retail store in the last 6 months, and weighted to match census data for age, region and gender. The operational definitions of what constitutes “great shopping” or its drivers were not provided in the executive summary. The Verde Group, in partnership with Wharton and Retail Council of Canada conducted the research.
What happened?
35% of consumers report having a great shopping experience within the previous 6 months, another 18% have had a great shopping experience at some point in their shopping lives, while 29% report never. Of those who have had a great shopping experience, a large majority will “definitely intend to return” the next time they need something similar, and most will “definitely recommend” the store to four to five friends and associates on average. A huge drop in intention to return occurs when a great shopping experience was not encountered.
Of those who have had a great shopping experience, most report multiple drivers to that experience, which can be aggregated to five categories. But only two of the categories drive loyalty. “Brand experience” has by far the most meaningful impact on shopper loyalty, followed by “Engagement.” Brand experience is defined as “Exiting store design, consistently great product quality, making customer feel they’re special and that they always ‘get a deal.’” Engagement is defined as “Being polite, genuinely caring and demonstrating sincere interest in helping, acknowledging and listening. Retailers frequently do a job at delivering “Engagement,” but do poorly at delivering “Brand Experience.” Canadian shoppers crave excitement substantially more than U.S. shoppers.
Hard to impress: Shoppers over 60 years of age are harder to impress, requiring a large number of great shopping elements before inferring a great shopping experience. Gen Y and young Gen Xs are less likely to develop loyalty just because of a great shopping experience.
The easier targets: Men will tell half again as many of their friends about a great shopping experience, compared to women. But women are more likely to translate their experiences to loyalty.
Why managers should care:
This study should be viewed as one of many that are trying to define what constitutes “experience marketing.” This is one approach to establishing a brand. A trend in retailing in the advent of the product branded store, such as those implemented by Apple, American Girl, Nike, and others. These product branded stores have quickly become retail icons. Where are the other specialty stores? Is there a photo experience store? A hardware experience store? A floral experience store?
Can you help?
Comment back by sharing your experiences with creating are examples of a specialty store “Brand Experience.”
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