We’ve all heard that today’s empowered consumer demands seamless and consistent experiences, but new research from CI&T indicates that these expectations are higher than ever. As a result, brands and retailers have had to up their game for their omnichannel strategies to ensure they have the new features and functionality that consumers require to find the best products at the best price.
The 2024 Connected Retail Report includes a survey of 1,012 U.S. consumers of all ages, races and genders, as well as an assessment of digital retail strategies across various product categories. At the center of the research was a narrative around the economy and the impact of inflation. For example, while 49% of respondents said they shopped the same amount in 2023 as they did in 2022, 43% believed that they ultimately spent more money.
“We have these inflationary pressures that have really been wearing on consumers,” said Melissa Minkow, Director of Retail Strategy for CI&T and author of the report in an interview for the Retail Remix podcast. “Because of that, we put a lot more emphasis on questions around the economic environment and the role that that plays on consumer shopping behaviors. We wanted to take a really disciplined look at the channels consumers are using, why they choose these channels at different times and how the economy impacts these decisions as well as the brands they shop in general.”
Most notably, 80% of consumer respondents said the economy slightly or significantly changed their shopping habits. Some of the most notable behavioral changes include:
- 70% said they are trying to spend less overall, focusing primarily on lowest-cost items;
- 18% said they are focusing more on value, buying higher-quality products in the hopes that they will last longer; and
- 13% said they find themselves spending more because their salary has increased.
Consumers Demand Stellar Experiences, No Matter the Price Point
Up to 81% of respondents said they prefer to shop at retailers who have both online and offline channels, with price being the primary driver on where to shop. Historically, consumers have had varying expectations of these channel experiences based on category or price point — for example, if they were visiting a dollar store they would not expect top-notch service experiences.
This has clearly changed: the CI&T survey found that 71% of consumers expect all retailers to provide an equally impressive shopping experience, regardless of price. Far fewer respondents (56%) said that more expensive product assortments would lead them to have higher expectations.
“We had so much price sensitivity shining through as a big core theme for what drives channel decisions,” Minkow said. “But simultaneously, what was fascinating was consumers did not have lowered expectations of these retailers…and most of all, they wanted better experiences everywhere.”
However, the definitions of a “good experience” did vary slightly depending on the channel. Although consumers said higher prices were a key reason they would decide not to shop at a retailer, both online and in a physical store, website navigation (40%) and bad return policies (34%) were the “breaking points” for online shoppers. Conversely, consumers said they were more likely to abandon an in-store shopping experience if the store was too far away (42%), if the space was messy (39%) and if it took too long to shop because of long lines (38%).
Will 2024 be the Year of the Mobile App?
With consumers confirming that they prefer to shop with retailers that have both online and physical stores, CI&T decided to dig deeper to understand which channels had the best overall experiences. When asked to rank the brand journeys they found to be most enjoyable, 38% said shopping via smartphone, while slightly fewer (35%) chose shopping in-store and even fewer choosing shopping via desktop (28%).
Minkow was especially surprised by this result, considering how much more robust most desktop experiences are. In most instances, consumers also were more likely to use their smartphones (either via app or mobile site) to participate in commerce-related activities. However, there were some areas where desktop experiences clearly won, such as: conducting thorough research for future purchases (56%) and opening several retailer sites to compare their offerings (54%).
“I think it really comes down to the fact that, even if you have a laptop in front of you, your smartphone is something that you’re so used to having in your hand at all times,” Minkow said. “It’s intuitive and almost lodged in your psyche to reach for it when you want something. I think that’s just how consumers are thinking today — it’s habitual.”
These innately “mobile-first” behaviors spotlight a clear gap in retailers’ priorities, especially as it relates to mobile apps, but they also point to opportunities for differentiation. Consumers even shared what they want from retailers’ app experiences:
- Access to better prices (57%)
- Exclusive benefits, such as free shipping and services (51%);
- Access to exclusive products (41%); and
- A better overall experience (28%).
“When I did the retailer audit, I found that a lot of them are extremely basic and don’t have those fun, exclusive benefits that consumers are seeking, like the styling services or gamification, which makes [these apps] more fun and engaging,” Minkow said. “I would highlight those as the biggest opportunities, especially because we saw that the smartphone is the preferred platform. And yet, on average, consumers said they were only using one to three retailer apps. Consumers want to use these apps, but they’re not inclined to because not many retailers are creating a distinctive reason for why they should.”
Want to get deeper insights into the CI&T report, including which brands and retailers stood out in Minkow’s analysis? Stay tuned for her interview on the Retail Remix podcast.