Study: Long checkout lanes cost retailers billions
Deena M. Amato-McCoy
Retailers that fail to deliver digitally influenced in-store experiences, especially at checkout, could lose out on sales — and in a big way.
Over the last 12 months, 86% of consumers have left a store due to long lines, resulting in purchases at a different retailer or no purchase at all. This equates to approximately $37.7 billion lost in potential sales. An additional $1.1 billion in potential sales are lost when retailers don't support their customers' preferred payment methods, according to data from payments platform provider Adyen.
There is a shift among consumers who are transitioning from price points to experiences. This transition is being driven by consumers called “spendsetters.” Comprised of one third of all consumers and 52% of Millennials, this group that loves to use digital technology, and tends to be early tech adopters.
While 42% of this group prefers to shop online, 45% believe brand is important and are willing to pay a premium for the experience. This is why 86% of spendsetters have left a store due to long lines.
Spendsetters also expect convenience in-store, which they define as a fast, easy and frictionless experience. They are comfortable using digital wallets (80%), and 75% would shop more in-store with a "just walk out" payment experience. Meanwhile, 69% would shop more in-store with shorter lines and direct shipping of out-of-stock products.
More personalized experiences would also encourage this group to stay loyal to a brand. For example 57% said the ability to check if an item is available online before going in-store would increase their loyalty to a retailer, while 53% prefer a store with a mobile loyalty program.
Spendsetters would shop more with personalized product recommendations and coupons based on location (72%), and 61% want personalized experiences based on past purchases and preferences, according to data.
They also want to interact with brands on their terms, such as using a store-branded app to pay onsite (59%). They would also increase their online shopping frequency if they could use a chatbot with personalized recommendations (53%), and access marketplaces (80%).
Keeping a keen eye on these shoppers, retailers are already re-evaluating their business models. For example, 67% already see an increase in customers using their mobile phones in-store for coupons, payments and product information, and 64% see a need for associates to use mobile devices to better assist customers. Meanwhile, 46% of retailers are considering cashless stores.
These factors are especially evident across luxury brands compared to other types of retailers, such as this across beauty, fashion, hospitality. For example, 85% of luxury retailers see an increase in customers using their mobile phone for shopping in stores (such as with coupons, payments, product information). Meanwhile, 74% are considering cashless stores that only accept cards and digital payment.
"The lines between the physical and digital shopping worlds are dissolving," said Roelant Prins, chief commercial officer at Adyen. "Retailers need to cater to shoppers by offering fast, easy and frictionless ways to pay so there are minimal lines and offer personalized recommendations and in-store deals. In other words, experience is key."