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The Connected Retail Customer Journey and Digitalisation

An unrecognisable market?

Today’s customer journey has distinctly changed from a decade ago. Technological advancements in connectivity, online platforms and connected devices have created new consumer groups and more complex interactions. Retailers are having to reassess and relearn what’s driving customers’ behaviour across digital and physical channels. 

Modern retail selling takes a combined approach that intuitively blends digital and material engagements. With the rollout of 5G and the Internet of Things (IoT) facilitating even faster data transmission, change and innovation are set to accelerate. Understanding how these new consumer groups react differently to online and in-store tactics is key to making the most of the opportunities in retail.

The COVID-19 pandemic has naturally sped up these trends and will continue to impact consumer behaviour even as lockdown measures ease. 

Digitalisation has also changed the purpose of physical stores. Successful retailers recognise that in-store experiences have to evolve to include technology and digital touchpoints alongside traditional infrastructures. Stores need to become immersive, multi-channel experience environments, promoting loyalty over single transactions.

“Online retailing forecast to rise to 50% of non-food spending by 2030”

 

Understanding the connected customer

This research intends to show what all  these changes mean for the industry. How the journey really plays out, from both sides of the till, and how connectivity is experienced differently by our customers. 

In Part One of the report, we’ll identify the three types of connected customers and their behavioural characteristics. In Part Two, we’ll show you each stage of the connected customer journey in detail, and explore the behaviours that our customer groups typically display. 

Throughout the report, we’ll talk about some of the ways that retailers are approaching these challenges in practice, and how technology can be used to help you attract, engage and sell to the modern, connected customer.

 

We identified three key groups based on the value they placed on being connected:

Type 1

Connectivity Assumptive - Stated that they had a relatively low appreciation of being connected online. Customer characteristics: This group accounts for about 10% of consumers. They are more likely to be aged between 16 and 24 with a slight bias towards being male. 

Type 2

Connectivity Acknowledgers - Stated that they had a medium appreciation of being connected online. Customer characteristics: This group accounts for about 30% of consumers. They are more likely to be aged between 24 and 39 and have an even gender split. 

Type 3

Connectivity Appreciative - Stated that they had a relatively high appreciation of being connected online. Customer  characteristics: This group accounts for about 60% of consumers. They are more likely to be over 40-years old and  from the most affluent households. This type are mostly female, with the most uneven gender split.

 

The rise in digital technologies

The rise in digital technologies means more routes for customers to interact with retailers. We found, for instance, that 84% of consumers had browsed, researched or bought a retail product on a connected device in the last 12  months.

Compare that to just 10 years ago, when less than a quarter of adults owned a smartphone.2 Technology has  transformed our buying behaviour, even for those who have little appreciation of being connected itself. 

Most customers do see connectivity as overtly important: nearly two-thirds (62%) feel that being connected is ‘very’ or ‘extremely’ important to their lifestyle. Indeed, over a third of consumers agreed with the statement ‘I can’t live without my smartphone’. The most common uses were socialising and shopping.

“84% of consumers had browsed, researched or bought a retail product on a connected device in the last 12 months”

 

A Paradox

Classifying the retail audience by the appreciation they tell us they have for connectedness gives us a unique but paradoxical understanding of the role of technology in their lives. For example, consumers who appreciate being connected the most are generally older. This is partly because younger consumers are ‘digital natives’. Having grown up with access to smartphones, wifi and the internet, their adoption of new technologies is more frequent, and comes more naturally. Because of this, they perceive less importance in the building blocks that make these technologies work, instead taking the basics of connectivity for granted.... [download the report to read the full section].

 

The Connected Customer Journey

The customer journey involves five stages of interaction between consumers and retailers.

Stage 1- Awareness: where consumers initially discover retailers/brands and their products and services in all the different  channels.
Stage 2 - Research: where shoppers consider products in more detail (e.g. reading product reviews, comparing alternatives, service levels and price).
Stage 3 - Purchase: where shoppers make decisions about different payment options, promotions and decide the most appropriate channels to purchase goods.
Stage 4 - Fulfilment: the stage at which retailers work to get products into the hands of consumers. Shoppers make decisions about how they want to receive their purchases/orders (e.g. direct from in-store, click and collect or home delivery).
Stage 5 - Service and returns: the post-sales experience, where retailers work to resolve any issues from the purchase and fulfilment stages (e.g. product enquiries, warranty issues, refunds, returning unwanted items).

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