The News: Recent research from the IBM Institute of Business Value points to low levels of satisfaction with in-store retail shopping experiences. Online only fared a bit better with those surveyed. However, consumers are open to the use of AI to smooth out and personalize their experience. More information on this research can be found on the IBM website.
How Are People Feeling About Their Retail Experience? Not Great …
Analyst Take: In yet another example of the experience disconnect between what consumers want and the experience they are getting, IBM’s biennial consumer research, “Revolutionize Retail with AI Everywhere: Customers Won’t Wait,” the data points to dissatisfaction with both in-store retail and online shopping experiences. Only 9% of consumers surveyed say they are content with in-store and 14% content with online shopping.
Consumer Preference and Dissatisfaction: In-Store and Online Realities
Seventy-three percent of surveyed consumers prefer physical stores, but as mentioned, only 9% are satisfied with their in-store experiences. Those surveyed report that product variety was an issue, with 37% saying they would like more variety. Also, 26% desired more information about product and 26% wanted checkout to go faster. Interestingly, those shopping in a physical store were also combining the experience with digital, using mobile apps while shopping. Sixty-five percent of consumers reported doing this, emphasizing the need for a digitally integrated approach.
Online shopping, though widely adopted, is not immune to criticism, with two-thirds of consumers facing challenges such as difficulty finding desired products (36%), inadequate product information (33%), and difficult return processes (33%).
The Use of Technology to Smooth Out and Improve the Experience
Consumers express a strong interest in AI technology to enhance their shopping experiences, with 59% expressing a desire for AI applications during their shopping journey. The opportunity to use AI for personalization has always been a compelling area for CX and using it in retail is no exception. And people are open to it. More than half (52%) said they would be interested in receiving information, advertisements, and offerings from stores that are relevant to their specific interests. However, retailers must be careful about how they approach this. Forty percent of consumers want more control over how their data is being used by companies, and 44% want to know how their data is being used.
Consumers are also willing to give AI a try to research products, find better pricing, ask questions and resolve issue. One area of AI that is not shining so brightly in retail right now is with current AI assistants. Only about one-third of consumers report satisfaction and even worse, 20% were so disappointed that they would never use a virtual assistant again.
Other than AI, consumers were intrigued with the potential use of AR and VR during their shopping experience, being open to trying it out for shopping, redecorating their home, researching products, and for wearable products.
Payment Options
With economic uncertainty at the front of many people’s minds, it is not surprising that a variety of payment options are desired. Consumers seek payment options that provide added value and flexibility. Over half (55%) of respondents are looking for expanded payment choices, including digital wallets and peer-to-peer payment apps, and this inclination is even more pronounced among Gen Z (66%) and Millennials (65%). A significant portion (46%) express a desire to pay for purchases through installment plans, while an even larger majority (69%) express interest in utilizing loyalty or rewards points.
Key Takeaways
These were not encouraging numbers on retail experience satisfaction and the issues raised were a combination of operational and CX issues. As 2024 gets underway and CX practitioners review strategy, a few items really stand out:
- A review of payment policies. There are many parts of a customer journey and many contributors to a feeling of brand loyalty. That last piece, paying, is not one that may have gotten a lot of attention from CX teams, but it will be an important strategy piece this year.
- Continued dissatisfaction with AI assistants. A good example of “do not offer something unless it is actually going to fix a problem, not cause one.” I am reminded of the adage to use the right tool for the right job. Many retailers must choose their technology tool carefully.
- Do not forget the mobile experience and make sure this experience is integrated with the physical. That 65% number of using the mobile while shopping is pretty high, and I suspect it will keep climbing
- Focus on the use of AI to solve an actual problem a customer has, not as a wow factor.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
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Author Information
As a detail-oriented researcher, Sherril is expert at discovering, gathering and compiling industry and market data to create clear, actionable market and competitive intelligence. With deep experience in market analysis and segmentation she is a consummate collaborator with strong communication skills adept at supporting and forming relationships with cross-functional teams in all levels of organizations.
Sherril holds a Master of Business Administration in Marketing from University of Colorado, Boulder and a Bachelor of Arts in Psychology from Rutgers University.
