Understanding consumer requirements is key
The blurred boundaries between online and in-store shopping
The best strategies to engage shoppers are built on an in-depth understanding of how consumers make purchasing decisions, both online and in-store, says Gareth Paterson, head of retail services at Nielsen SA.
Paterson says it’s important to offer touchpoints that are suited to people’s specific requirements and resonate in their lives. However, getting this right often means blurring the boundaries between online and in-store.
His observations are based on findings revealed in Nielsen’s latest global study: “What’s in-store for online grocery shopping – omnichannel strategies to reach cross-over shoppers.” The research was conducted in 63 countries and analysed consumer behaviour in terms of attitudes towards online shopping and what they will buy online versus what they buy in-store. The results showed that in emerging markets, SA included, a “bricks-and-clicks” approach will set the tone for the future of retail in the country.
What supports these findings is that when SA respondents were asked what goods they buy online, they listed items such as books, music, stationery, tickets and travel, as well as fashion, IT and mobile goods. On the other hand, fresh produce and packaged grocery food, pet food and medication still require a visit to the store. Moreover, while consumers do buy fashion online, they still buy more clothing from physical shops.
There are ways retailers can address consumer hesitancy to purchase fresh produce and groceries online. According to Paterson certain activation strategies can encourage online purchase. These include a money-back guarantee if the product does not meet expectations and offering the same product free of charge the next time the consumer makes a purchase online. Personalisation is effective, as consumers respond well to services where they can request items according to their specific needs, such as certain cuts of meat, or off-season produce, reveals Paterson.
While in-store remains the preferred method for consumers to buy items such as groceries, fresh produce and health-related purchases, Paterson says online shopping is growing in popularity as an option, particularly within the millennial market.
To encourage more consumers to purchase online, retailers need to address their concerns about the safety of their personal information, as well as what will happen if they aren’t satisfied with the products they have purchased online or if there are products that don’t get delivered. Solutions here include same-day replacement, free delivery above a minimum spend or on certain days, and the ability to track the progress of deliveries online.
The research concludes that online shopping offers consumers more options with access to increased products and services, and that people are starting to embrace this idea. However, Paterson stresses that retailers need to know their customers – what their needs are, how and what they buy online versus in-store – and then use these insights to create touchpoints to provide them with a more effective shopping experience. Omnichannel strategies, he says, are the way forward.
The big take-out: Nielsen’s latest research into consumer behaviour in terms of online and in-store shopping has revealed that emerging market shoppers use both platforms for different reasons and that an omnichannel approach is best for the retail environment. Understanding consumer requirements is key.