- Retail brands aren't delivering the ideal online experience
- Fully engaged customers are likely to recommend the brand
- Even online, service matters more than products
For many consumers, online shopping isn't all it's cracked up to be.
Sure, consumers are becoming increasingly active as online shoppers, with more than one-third (35%) of American adults doing more of their shopping online than they were a year ago. This compares with just 10% who are doing more of their shopping in brick-and-mortar stores than they were last year. And as more consumers shop using mobile apps and websites, clothing retailers are aggressively expanding their digital platforms to keep up with today's changing consumer preferences, increasing the opportunities for consumers to engage with their brand through multiple channels.
But Gallup finds that most retailers are falling short of delivering the ideal online experience because when it comes to engaging customers who are shopping online, service is more important to customers than products.
Before retailers move to expand existing channels or create new ones, such as mobile apps and social media, they need to examine the customer experience they're currently providing online. Getting the online experience right provides retailers a significant opportunity to increase customer engagement and to grow their business.
Online Retail Customers Are Less Engaged
Customer engagement has strong ties to business performance, and when retail clothing brands can fully engage their customers, they gain a substantial return on their investment. Gallup's 2014 meta-analysis across various industries, countries and organizations shows that customers who are fully engaged -- who a have a strong, positive emotional attachment to a company -- represent an average 24% premium in terms of revenue and sales, profits, share of wallet, brand preference and consumer well-being. Actively disengaged customers, in sharp contrast, represent a 19% discount in those measures. Though these actively disengaged customers have a strong attachment to the company, it is negative.
When it comes to engaging customers, the digital world presents a unique set of challenges for retailers. Customer engagement is largely an emotional experience, and it can be difficult to create emotional connections through websites or apps. Customers can easily become frustrated or annoyed with technology, and brands often struggle to provide the same level of service online as they do offline.
Gallup analysis shows that the more a customer shops online, the more likely he or she is to become antagonistic toward a brand. Among retail customers overall, about one in six (17%) are fully engaged, while the majority are indifferent (58%) or are neutral and don't care, while one in four are actively disengaged. In contrast, about one in three customers (32%) who shopped online more often and shopped the same or less offline are actively disengaged, while about half (53%) are indifferent and 16% are fully engaged.
Retailers who successfully engage their online shoppers reap significant benefits, especially as more shoppers continue to migrate to these channels. Fully engaged online customers are more likely to have positive brand perceptions, a higher likelihood of repurchase and a higher likelihood to recommend the brand to others. The question for retailers is how can they engage this growing group of customers?
Service Trumps Products
Most online brands tend to be highly focused on their products. And customers do care about what clothing and accessories are available to them -- and in what colors, sizes and materials. But when it comes to engaging customers, nontangible aspects of their online experience matter the most, particularly service.
According to Gallup's analysis, online shoppers' engagement depends more on service attributes such as problem resolution and providing great customer service than on product attributes such as providing good quality for the price and offering a wide variety to choose from. And Gallup found problem resolution to be the top factor driving customer engagement. Retailers that perfect their customer service gain a significant competitive advantage over retailers who focus most of their efforts on delivering the latest and greatest products.
Improving the Online Experience
The physical store is still the engine of most retailers' business and continues to drive the majority of their revenue. Even online powerhouses like Amazon.com are experimenting with opening brick-and-mortar stores. But consumers show no signs of slowing their online purchases, pressuring traditional clothing retailers to ensure that their e-commerce platforms meet customers' expectations.
According to customers, most retailers have significant work to do to improve their online and mobile shopping experience. There are three strategies retailers can focus on to fully engage their customers online:
- Emphasize service. When shopping online, customers expect the same type of personal, convenient service they receive at a storefront. Yet Gallup analysis shows retailers are falling short on this key factor. To improve the customer experience online, retailers should provide easy access to live chat sessions with company representatives and a tool to answer frequently asked questions. They should also offer personalized recommendations and take extra steps to individualize the shopping experience for their customers.
- Align online and storefront channels. Online shopping may be gaining in popularity, but brick-and-mortar stores show no signs of disappearing. Customers will continue to shop online and offline, reinforcing that retailers must provide them an aligned experience both online and in person. Merely focusing on digital solutions will not be enough to fully engage customers; retailers must deliver a seamless online and in-person experience. Customers want a consistent brand experience across all channels.
- Get it right -- the first time. A 2013 Gallup analysis of the online customer experience showed that 82% of customers used online or mobile channels to shop for or research a product, while 72% used them to compare different products or services -- but only 34% of customers actually made a purchase through these channels. Though customers might not be buying products through brand websites, they may be visiting them many times before making an in-store purchase. Clothing retailers must ensure that their digital platforms are engaging customers from the get-go because this initial experience is crucial in leading them to a future purchase.
Amy Adkins contributed to the writing of this article.
Results are based on a 2014 Retail Clothing and Accessories Gallup Panel Web study completed by 12,055 national adults, aged 18 and older, conducted Nov. 14-Dec. 1, 2014. The Gallup Panel is a probability-based longitudinal panel of U.S. adults who Gallup selects using random-digit-dial phone interviews that cover landline and cellphones. Gallup also uses address-based sampling methods to recruit Panel members. The Gallup Panel is not an opt-in panel and panel members do not receive incentives for participating. For results based on this sample, one can say that the maximum margin of sampling error is ±1 percentage point, at the 95% confidence level. Margins of error are higher for subsamples. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
Learn more about how the Gallup Panel works.