A study of 46,000 consumers who shopped with a single US retailer has determined omnichannel shoppers spend more and are more loyal than their store-only or online-only counterparts.
In a challenging marketplace omnichannel is a core tenet of many traditional retailers’ strategy to counter falling foot traffic and online competitors.
- Which-50’s second Digital Magazine edition – Connected Cars is now available
Investments in omnichannel strategy are underpinned by the belief that providing a seamless shopping experience in brick-and-mortar stores and through a variety of digital channels will generate more value for the business.
Researchers put that assumption to the test, studying the shopping behaviour of just over 46,000 customers who made a purchase during the 14-month period from June 2015 to August 2016 with an unnamed US retailer which operates hundreds of stores. The respondents were asked about their shopping journey with the retailer, focusing on which channels they used and why.
Attaining metrics around the omnichannel customer journey is tricky, it takes more work to match up all the touchpoints than to look at point of sale or online receipts, as customers move between online and stores.
The key results were published in The Harvard Business Review, in an article authored by Emma Sopadjieva and Beth Benjamin, researchers at SaaS customer experience company Medallia, and Utpal Dholakia, professor of marketing at Rice University in Texas.
The first insight from the research is that omnichannel shoppers make up the bulk of the customers surveyed. “Of the study participants, only 7 per cent were online-only shoppers and 20 per cent were store-only shoppers. The remaining majority, or 73 per cent, used multiple channels during their shopping journey,” the authors wrote.
Omnichannel shoppers spent an average of 4 per cent more on every shopping occasion in the store and 10 per cent more online than single-channel customers, according to the study.
The research found the more channels a customer uses, the more valuable they are.
“Even more compelling, with every additional channel they used, the shoppers spent more money in the store. For example, customers who used 4+ channels spent 9 per cent more in the store, on average, when compared to those who used just one channel,” the authors wrote.
Conducting research on the retailer’s own site or sites of other retailers before entering a store led to 13 per cent greater in-store spending among omnichannel shoppers.
“This finding goes against the grain of the conventional wisdom that spur-of-the-moment, impulsive shopping bulks up the topline of traditional retailers. Instead, our findings suggest that deliberate searching beforehand led customers to greater in-store purchases.”
Omnichannel shoppers were also deemed more loyal. “Within six months after an omnichannel shopping experience, these customers had logged 23 per cent more repeat shopping trips to the retailer’s stores and were more likely to recommend the brand to family and friends than those who used a single channel.”
The authors issued a caveat with the research: although omnichannel shoppers with that particular retailer are more valuable, the omnichannel strategy may not necessarily be the reason driving shoppers’ behaviour.
“Whether such customers were loyal and engaged with the retailer to begin with or whether the richer, multi-touchpoint shopping experiences of its omnichannels led them to spend, return, and advocate more remains an open question,” the authors wrote.
The authors conclude: “Traditional retailers with physical stores will do better not only by leveraging the power of the online world, but by synchronizing the physical and the digital worlds to provide shoppers with a seamless, multi-channel experience that online pure plays simply cannot match.”