Study Reveals Consumers’ 2016 Holiday Shopping Expectations

Consumers’ 2016 Holiday Shopping Expectations | 2

Consumer Expectations Are High for the 2016 Holiday Shopping Season

With the 2016 holiday shopping season right around the corner, Radial partnered with CFI Group to discover what matters most to consumers this year. We

surveyed 500 retail shoppers in the areas of ordering, fulfillment and delivery, and customer service to reveal their holiday shopping expectations and give

retailers a roadmap to meet those expectations.

It’s no secret that today’s omnichannel shoppers want options that balance cost, delivery methods, and speed. With customer experience being the number

one metric for measuring success in today’s retail environment, which services are critical for retailers to provide a great consumer experience, drive customer

loyalty, and increase revenues?

That’s what we intended to find out when we conducted our 2016 Holiday Outlook Survey,* and some of our findings may surprise you. What shouldn’t

surprise you is the importance today’s “anytime, anywhere, anyhow” shoppers place on retailers meeting their expectations and how quickly they will take their

business elsewhere when retailers fail.

*Except where noted, all data was compiled from Radial and CFI Group’s Q2 2016 survey of 500 consumers as part of our annual Holiday Outlook Survey.

Consumers’ 2016 Holiday Shopping Expectations | 3

When customers are browsing your eCommerce website, they expect you to display the availability of products in-store. When asked how discovering a product is out-of-stock on a retailer’s website would affect their shopping behavior, 81 percent of respondents said they would be likely to shop on a competitor’s site instead. Only 5 percent said they would be not at all likely to shop elsewhere, illustrating how important it is for retailers to keep products readily available for holiday shoppers—regardless of where they are in the chain. In fact, 73 percent of consumers are more likely to visit a retailer’s local store if it provides in-store product availability information.1 Inventory visibility enables retailers to eliminate out-of-stock scenarios, giving store management, store associates, and connected consumers an accurate, real-time view of product availability data. Real-time inventory accuracy is essential for improving the overall shopping experience for customers, boosting conversions, and increasing loyalty.

When they’re deciding whether to place an order online, 91 percent of respondents said they would be willing to spend more to qualify for free shipping. This fact should inform your free shipping threshold as we head into peak season, enabling you to squeeze as much profit as possible out of each online order.

When it comes to paying for their order, consumers expect your payment process to be fast, smooth, and frictionless. If you mistakenly flag a legitimate customer’s order as being fraudulent, you risk losing that customer for life. Eighteen percent of respondents said they’ve had an order wrongly identified as fraud and, of those shoppers, 22 percent will never do business with that retailer again and 57 percent will think twice about placing an order. If you don’t have a sophisticated fraud management system in place, now’s the time to implement the tools and strategies you need to stop fraudsters while not turning away good customers.

Card-not-present (CNP) fraud has been steadily increasing since the EMV shift last October, and retailers will have their hands full trying to thwart fraudsters during the holiday season. Fighting CNP fraud can be very challenging—especially during the holidays—so you should evaluate the readiness of your in-house fraud investigation team and decide whether it makes sense to outsource fraud prevention to experts who leverage machine learning and human intelligence as part of a comprehensive, efficient, and data-driven fraud solution.

ORDERING

Consumers Want Inventory Visibility and a Frictionless Payment Process

of consumers will shop your competitor if a product is backordered or out-of-stock.

81%

Consumers’ 2016 Holiday Shopping Expectations | 4

The post-purchase experience is where you win or lose customer loyalty—especially this holiday season when consumers expect both in-store pickup and at-home delivery to be fast and easy. Seventy-eight percent of shoppers will choose in-store pickup to avoid increased shipping rates, making this omnichannel fulfillment option popular with consumers and retailers alike. Eighteen percent of respondents said they prefer in-store pickup to get their order immediately, while 53 percent said they choose this method to save on shipping costs.

Regardless of the reasons why consumers choose in-store pickup, retailers need to have the technology and processes in place to meet their expectations. And, let’s be honest: in-store pickup is an unforgiving option, so retailers need to be prepared. When the consumer enters the store to pick up an order she purchased online, that order needs to be ready and in a convenient location for the customer to find. If it isn’t, not only will the customer never use the service again; she will stop shopping with the retailer altogether. While unforgiving, in-store pickup is also a great opportunity for retailers to drive additional foot traffic and revenue, as 40 percent of shoppers will purchase additional items when they come to the store to pickup their online orders.2

Although omnichannel fulfillment continues to grow, most eCommerce buyers still prefer to receive their orders directly. Eighty-seven percent of respondents want their order shipped directly to them, and they are very particular when it comes to delivery times. Seventy-one percent of consumers expect their orders to arrive within five days, which becomes

more critical for consumers and harder for retailers during the exponentially higher demand during the holidays. Seventeen percent of respondents expect delivery within two days, and only 10 percent are willing to wait 7-10 days for their orders to be delivered.

If you provide a low-cost shipping option, however, consumers become more patient, with 89 percent of respondents willing to wait 5-10 days for delivery. Regardless of cost, 90 percent of respondents choose a delivery option that ensures their order arrives within seven days of ordering, with 23 percent choosing expedited shipping. There’s a balance that every retailer needs to find between speed and low-cost options for customers with the best ways to leverage their own costs while increasing delivery speed. It’s no small feat, but it’s certainly doable. Retailers can achieve this by optimizing their fulfillment operations, driving efficiency and automation to speed up picking and packing, and partnering with best-in-class providers for shipping options and costs.

On-time delivery is even more imperative to shoppers during the holiday season. In fact, 51 percent of respondents said they would stop doing business with a retailer if their order arrives later than the promised delivery date. Sixty percent want their order to be delivered in one shipment versus being split up, so your omnichannel operations need to be in sync to meet that expectation as well—which means having cross-chain inventory availability.

FULFILLMENT & DELIVERY

Consumers Want Orders Quickly Using Their Favorite Fulfillment Method

Consumers’ 2016 Holiday Shopping Expectations | 5

Consumers want options, convenience, and speed when they contact customer service, and they especially want to help themselves. Eighty-three percent of respondents said they will choose to get their questions answered on their own, making a robust self-service application a critical component of your customer service strategy for the holiday shopping season. Self-service saves customers time, increases satisfaction and loyalty, and reduces your operational costs—freeing up agents to handle more complex issues.

And while customers will reach out to service centers for a variety of reasons, nearly half (48 percent) will contact customer service regarding shipping and delivery issues, with another 27 percent calling to get product information,

13 percent for questions about returns, and 11 percent to place an order. While live chat is gaining in popularity—25 percent of respondents will use this channel to get assistance—more than half (54 percent) of consumers will opt for the phone when they need help during the holiday shopping season.

Although only 2 percent of respondents said they will use social media when they have questions about a holiday order, they expect retailers to respond quickly when they do. In fact, 70 percent of respondents expect retailers to respond to a social media inquiry within the same day, with 27 percent expecting a response within a few hours. This means that you need to have service agents who are focused on social media monitoring, have the knowledge to respond to inquiries, and know how to deal with negative issues on social. Fast and helpful interactions on social media can help boost sales, satisfaction, and loyalty, as well as lead to positive reviews customers share with their followers. Of course, customers will share their bad shopping experiences as well, with 77 percent of respondents saying they are likely to post their negative experiences on social media.

CUSTOMER CARE

Consumers Want Convenience, Speed,and Self-Service Options

of shoppers contact customer servicefor shipping and delivery questions.48%

© 2016 Radial, Inc. or its subsidiaries. All rights reserved. Radial and its logo are trademarks of Radial, Inc.

As we head into the hectic holiday shopping season, make sure every aspect of your customers’ shopping experience meets their rising expectations. By optimizing your ordering, fulfillment and delivery, and customer service operations, you can drive sales, increase revenues, and build loyalty during the holidays and beyond.

Sources

1. Lazarus, Stuart. “Omnichannel Retail: Trends From the Holiday Shopping Season,” Signal. December 11, 2015. http://www.signal.co/blog/omnichannel-retailing/

2. Thau, Barbara. “Why digital dominates the retail sales story this holiday season,” RetailDive. October 29, 2015. http://www.retaildive.com/news/why-digital-dominates-the-retail-sales-story-this-holiday-season/407936/

© 2016 Radial, Inc. or its subsidiaries. All rights reserved. Radial and its logo are trademarks of Radial, Inc.

Radial is the leader in omnichannel commerce technology and operations, enabling brands and retailers to profitably exceed retail customer expectations. Radial’s technical, powerful omnichannel solutions connect supply and demand through efficient fulfillment and transportation options, intelligent fraud, payments, and tax systems and personalized customer care services.

Hundreds of retailers and brands confidently partner with Radial to simplify their post-click commerce and improve their customer experiences. Radial brings flexibility and scalability to their supply chains and optimizes how, when and where orders go from desire to delivery. Learn how we work with you at www.radial.com.

Or contact us: sales@radial.com 1-877-255-2857

Founded in 1988, CFI Group delivers customer experience measurement and business driver analysis from headquarters in Ann Arbor, Michigan and a network of offices worldwide. The founding partner of the American Customer Satisfaction Index (ACSI), CFI Group uses patented technology and top research experts to help companies maximize return-on-investment by analyzing every aspect of the customer experience, identifying key business drivers, benchmarking performance, interpreting results, and recommending key areas for business improvement. For more information, visit www.cfigroup.com.