Retailers Offering a “One Size Fits All” Shopping Experience Will Lose Customer Loyalty

Shoppers Are Turned Off by Unhelpful Employees, a Disorganized Store and No Differentiation in Services, Products or Atmosphere, According to a New IBM Survey

SOMERS, NY—(MARKET WIRE)—05/24/2005—Retailers will lose shopper loyalty unless they differentiate themselves in the eyes of consumers, according to a new IBM Survey of American shoppers. Those surveyed say lack of distinction in services, products and store atmosphere, as well as unhelpful employees, all top the reasons why they take their business elsewhere.

Retailers offering the same level of service and the same products as other retailers turn off more than half of all shoppers who have no customer loyalty to specific retailers, according to the IBM Survey. Forty-three percent of all respondents don’t like retailers that have employees who are not helpful. Shoppers also tend to stay away from retailers that look and feel the same (46 percent) and have disorganized stores (31 percent).

As for the reasons that shoppers do chose specific retailers, store location and price aren’t the only reasons they cited. According to the IBM Survey, consumers prefer retail stores where they are recognized as individuals, products are easy to find, and the employees are knowledgeable. Eight out of 10 shoppers (81 percent) are loyal to certain retailers rather than others, citing helpfulness of employees (34 percent) and a well-organized store (32 percent) as key reasons for going back.

When asked what technology would most improve the retail experience, almost three-quarters (71 percent) of consumers surveyed asked for technology systems that can tell them exactly which products are available—thus avoiding the need to track down a sales associate. In addition, 64 percent of consumers said they would be drawn to retailers with scanners that could identify fresh produce and generate price tags to speed checkout, while 59 percent prefer retail stores equipped with intelligent shopping carts that give personalized offers and discounts while walking the store aisles. Almost half (48 percent) said they prefer retailers that offer self-checkout.

“Consumers are clearly telling retailers that they want a personalized and interactive shopping experience. They want immediate access to promotions based on past purchases and loyalty, as well as precise details on product availability or items that are out-of-stock. They also want helpful sales associates, fast service and a store that is easy to shop, sometimes even more than they want low prices,” said Joseph Gagnon, Global Leader of IBM’s retail consulting practice.

“Virtually all of today’s leading retailers are evaluating emerging technologies such as self checkout, intelligent shopping carts, guided selling and interactive product displays to meet consumer requirements for convenience, speed and easy access to information on product details, discounts and personalized offerings,” he added. “All of these technologies are available today and promise to help make shopping more efficient and enjoyable for everyone.”

Sixty-eight percent of respondents prefer shopping in retail stores with price scanners that confirm prices before checkout.
 
Forty-five percent of shoppers said that an interactive touch screen with product information on the wall or shelf next to merchandise displays would most likely encourage them to shop at specific retailers.
 
Thirty-nine percent of shoppers say a “smart cart” for wirelessly ordering deli items while shopping store aisles would drive them to a specific retailer. The cart alerts the shopper once the order is ready for pick-up.
 
Half (50 percent) of shoppers said that getting a personalized offer or coupon geared to their lifestyle and purchasing history would encourage them to shop at specific retailers.

Twenty-six percent prefer to shop in stores where they can receive alerts about sales for products that fit their personal lifestyle needs while shopping store aisles.
 
The IBM survey of American consumers shows that 91 percent prefer stores that are easy to shop, allowing them to check off items on their lists with minimum time and effort. As more and more retailers offer multiple customer touch points for convenience—whether through the Internet, call center, kiosk or physical store—a majority of consumers (64 percent) cited the shopping experience becomes easier once they are recognized as individuals.

Today, more than ever before, Americans rely heavily on technologies such as the Internet, personal digital assistants (PDAs), and cell phones to communicate with one other, and make their lives more organized and efficient. Shoppers familiar with the benefits of the Web and other technologies such as wireless devices, expect retailers to offer hi-tech ways for them to find out loyalty card information, product details, and if items are out-of-stock. In fact, more than half of all survey respondents (58 percent) said they want retailers to adapt as their needs and expectations change over time.

ORC International conducted this survey last month on behalf of IBM. A total of 1,000 telephone interviews were conducted with American adults age 18 and older. The IBM survey of shoppers’ opinions is being released in conjunction with a more detailed IBM Study by the IBM Institute for Business Value on “The Customer Centric Store,” which suggests ways retailers can address consumer issues build a truly customer centric shopping experience.

IBM Retailing Survey on the Customer Centric Store 5.24.05