Following the 2006 holiday shopping season, consumers said that influences such as the internet, peer recommendations, and instant feedback via text messaging increasingly helped determine where they shopped and what they bought, according to a US consumer survey by IBM.
While price remained a key factor with 70% of consumers, 53% of the 1,000 consumers surveyed said they used the internet to compare product features and prices across retail outlets. Advertising influenced a little over one-third (36%) of purchasing decisions.
Friends and family continued to influence buying decisions for 24% of consumers, with 10% reaching out to friends and family via text messages as they shopped to get input or share information about products.
According to IBM, catering to such well-informed and connected consumers could provide a way of differentiating themselves in the competitive retail marketplace. IBM's study, entitled 'Turning shoppers into advocates: The customer focused retail enterprise', suggests transforming traditional retail business models by putting consumers at the centre of their strategies and operations - in essence, becoming truly customer-centric.
"Retailers understand the need to have stores create efficiency in their supply chains and innovate in their merchandise offerings," said Fred Balboni, global retail industry leader for IBM Global Business Services. "But the next generation of growth in the industry is going to be defined by the retailer's ability to overlay the customer dimension onto those strategies. Shoppers' expectations of service are very high and retailers who can attract and establish loyalty with their most profitable customers will reap the rewards."
IBM's report details a number of core capabilities that retailers can embrace in their quest to become customer centric, among which is the need to develop what IBM terms "Associate Commitment" to better satisfy retail customers.
The importance of having motivated employees was reflected in the IBM holiday survey findings, in which 50% of consumers indicated that they avoided specific retailers during the 2006 holiday shopping season because of unhelpful employees. At the same time, 72% of consumers cited "helpful and knowledgeable associates" as being the number one characteristic of those retailers that had provided them with excellent service during the holiday shopping season.
IBM also identified multichannel execution - seamless coordination across all the ways customers can buy products - as another important capability for retailers. Multichannel convenience is important to customers as 84% reported that they prefer to shop at retailers that have streamlined processes between online and physical stores.
Other core capabilities cited as essentials in IBM's report include customer insight, tailored offers, and personalised dialogues. These are considered priority areas by consumers, with 89% agreeing that they want stores that understand how they shop today but that can also adapt to their needs as they change over time. Furthermore, 84% said that one way to meet their expectations is with products and services customised to their individual preferences.