Half would buy more through chatbots and IoT
Written by Hannah McGrath
More than half of shoppers (51 per cent) say they would buy more frequently if they could shop via chatbot and 41 per cent would be more likely to spend through a smart speaker device, according to a new report.
A survey of over 5,000 shoppers and 500 retailers, carried out by payment service Adyen and 451 Research, found that failure to meet customer expectations of technology, payments and in-store experiences have cost the retail industry an estimated over €16.3 billion in lost sales over the past 12 months.
However, despite increasing consumer appetite for chatbots and so-called ‘conversational technologies’, the report found that retailers have yet to embrace them.
Just 23 per cent of retailers said they currently allow customers to shop via a chatbot such as Facebook Messenger, with the same percentage saying orders can be placed via speaker devices.
“The emergence of voice-activated smart speakers brings an entirely new dimension to the shopping experience. By using a smart speaker, customers can buy something quickly and easily without having to look at a screen, enhancing their ability to multi-task,” the report read.
UK shoppers led the field in being open to the idea of shopping via social media channels, with 66 per cent of those surveyed saying they would be comfortable using Facebook Messenger, WhatsApp and Snapchat to browse and place an order.
Respondents from Europe who Adyen defined as ‘spendsetters’- tech savvy younger shoppers aged 25 to 34 - also had specific demands when it came to the technology used in their retail experiences, with 65 per cent being more likely to remain a loyal customer if they were able to check whether an item is available online before going to the store.
Meanwhile, when it comes to returns, 44 per cent of all respondents said that they would prefer to mix channels by returning online purchases in store, rising to 48 per cent of 25 to 34 year olds. Sectors that had most to gain from the omnichannel mix, where online purchases can be returned to a physical location, were: fast fashion retailers (39 per cent), beauty (27 per cent) and luxury (26 per cent).
More than half (51 per cent) of tech-forward shoppers said they would like to be able to scan a store-branded app in order to make purchases at the checkout, while 57 per cent said they would be more likely to shop if stores followed the Amazon Go model of ‘just walk out’ frictionless payments processed through mobile apps.
The report’s authors suggested that using technology to provide omnichannel stock checks, offer personalised recommendations and reduce friction at each stage of the journey could foster greater loyalty and improved conversion rates.
Queuing was judged by online shoppers to be a major downside of shopping in store, with 41 per cent saying it was their chief gripe, and nearly two out of every five shoppers saying anything more than a five minute wait was too long.
In the final stage of the purchase journey, 34 per cent of 25 to 34 year olds said they would increase their loyalty to a retailer if they were offered ‘one-click’ payment options, rising to 53 per cent of all online shoppers.
However, retailers are lagging behind customer expectations when it comes to payment options: only 35 per cent of retailers surveyed said they offered a one-click service on their digital channels, while just 28 per cent offer 28 per cent mPoS systems enabling customers to pay anywhere in the store.
Despite this, 41 per cent of retailers said that ‘cutting edge’ payments options are a priority for their business – a figure that prompted Adyen to warn that convenient and contactless payment options such as Apple Pay and Google Pay are “critical” to the customer experience, evidenced by the 88 per cent of UK users who said they were comfortable using contactless.
The report warned that £ 1.1 billion in potential sales had been lost over the past 12 months as a result of retailers not offering customers’ preferred payment methods.
“Retail is being redefined from a transactional relationship to a more nuanced relationship between shoppers and the devices they use to buy the products and services they want,” the report concluded.
“This has led to a dramatic shift in the balance of power between many retailers and their customers. Shoppers today place a higher value on experiences, not prices and products.”