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Study: Retailers leave money on table due to lack of personalized service


Disappointing shopping experiences are costing brick-and-mortar retailers serious money.

Stores left about $150 billion in potential revenue on the table in 2016 by failing to offer shoppers personalized in-store shopping experiences. Shoppers would increase their in-store spending by 4.7% — if they received better, more personalized service from retailers.

That’s according to TimeTrade’s “State of Retail 2017” survey. Previous TimeTrade surveys of retail executives consistently report that they believe their stores do provide customers with personalized shopping experiences. But consumers see things differently. About half of this year’s survey respondents (49%) said they “never” or only “sometimes” receive what they consider to be personalized service.

In fact, 70% of the time they shop they can “never” or only “sometimes” find a sales associate when they need assistance.

This disparity is financially damaging for retailers. For example, 71% of consumers said they sometimes or always abandon dressing rooms and leave stores if they can’t obtain help with sizes or color, among other factors. Conversely, 88% said that when helped by knowledgeable associates they are “somewhat likely” or “extremely likely” to make the purchase.

When asked what is most valuable when shopping in a retail store, respondents cited prompt service, personalized experiences and smart recommendations. To improve service, 64% said they would like to schedule in store appointment (from any device) with a retail associate at a time most convenient to them.

This should be a wake-up call for some retailers, especially as 82% of respondents said they still do half or more of their shopping in physical stores (excluding grocery stores). Moreover, 70% said they planned to do the same in 2017, with 14% saying they would increase the amount of shopping they do in-store. Even when an item is available online — as well as in a nearby store — 75% of respondents said they preferred to buy from the physical store, the study said.

“Just imagine the positive financial impact on brick-and-mortar retailers if revenue jumped by 5%,” said Gary Ambrosino, CEO of TimeTrade. “Right now, retailers’ revenue projections and stock prices are under pressure as the landscape continues to change. A renewed focus on providing shoppers with a better, more personal in-store experience would go a long way toward stemming the tide of defection to competitors and online sellers.”

Personalization is especially important among the millennial generation, especially as they enter their earning and spending prime. Almost half of them (47%) do 75% of their shopping in stores vs. online, and 29% always start shopping online and go in-store to complete the purchase.

Those helped by a knowledgeable associate are extremely likely to make purchases (58%), and nearly 70% said they would pay more for products or services they had a highly personalized in-store experience. This could include personal assistants/shoppers (45%), beacon technologies (31%), and wait-time displays or text/email updates when their turn is near (29%), the study said.

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