Retailers and shoppers out of sync on the value of physical stores, Klarna warns
Retailers have misjudged the omnichannel shopping experience that shoppers want and according to a new report from Klarna, which reveals that 75% of retailers think their omnichannel capabilities are sophisticated but half of Klarna users feel they lack consistency between websites and stores.
In its report "Owning Omnichannel: winning at clicks and bricks", Klarna uncovers the potentially damaging disconnect between what shoppers want from their omnichannel shopping experience and what retailers think shoppers want.
With nine in 10 (89%) Klarna shoppers using multiple channels to search and spend, it’s unsurprising that three in four retailers (73%) are looking to increase their investment in omnichannel strategies – with an 8.16% average expected increase in spend. However, faced with high consumer expectations, retailers could be in danger of misplacing investments and alienating consumers with 60% of shoppers saying that a poor experience on any channel will make them less likely to shop again with a brand.
When it comes to shopping in physical stores, the research highlights that physical retail is still an important channel, even for digital savvy shoppers – with half (51%) of Klarna users shopping at retailers’ physical stores. However, some retailers misjudge the extent to which shoppers value in-store offerings.
Shoppers are nearly twice as likely to value seeing and feeling items they’re buying in real life (88% Klarna shoppers vs 45% retailers). Meanwhile, half (49%) of shoppers value being able to visit showrooms and see items in store, but pay online – whereas only 32% of retailers think this adds value for customers. Moreover, retailers consider human sales assistants to be more important than they are, with only 26% of customers saying they add value to their in-store experience, compared to 36% of retailers.
Retailers also fail to fully appreciate the importance of a smooth, easy experience when shopping online. 84% of Klarna shoppers say they value autofill functionality online, but only 33% of retailers think this adds value to the shopping experience. Klarna found that only 45% of retailers believe one click payments or check out adds significant value for their consumers, whilst 65% of shoppers report this to be one of the most important aspects of their online shopping experience.
“Today’s consumers shop across a multitude of channels, from brands’ websites and physical stores to social networks and search engines – and they expect a smooth and consistent retail experience whatever channel or touchpoint they are engaging with. So, it’s promising to see that retailers recognise the importance of having a great omnichannel retail experience," said Alex Naughton, Head of Klarna UK & Ireland.
But, if they’re to see a return on their omnichannel investment, they need to ensure they avoid any disconnect and fully understand shopper priorities. It’s clear in-store shopping is still incredibly important for consumers, so retailers should look at how they can make their stores a more experiential, cultural space that inspires shoppers.”
Despite the clear mismatches between retailer and shopper expectations, there are encouraging signs that retailers are on the right track. With 76% of shoppers valuing the ability to check stock levels in-store via a website or app, Klarna found that 49% of retailers already offer this, with another 38% planning to introduce this over the next year.
Meanwhile, three quarters of shoppers (74%) say flexible payment options add value to their shopping experience, and, while just 50% of retailers currently offer this, a further 34% plan to introduce this in the next 12 months.
“The pandemic acted as a cruel catalyst for a retail sector already battling competition from online brands whilst suffering upward only rents, rates and taxes," said Retail Futurist Howard Saunders.
"Lockdown reminded us exactly how much we need our local high streets, not just for access to ‘stuff’ but as a means of feeling directly connected to our communities."