A rebound in big-ticket purchases has been accompanied by several important trends, according to Synchrony’s most recent Major Purchase Journey Study. The biennial study reveals that the in-store experience is still critical, as the vast majority of major purchases are still made in the store and interactions with the sales associate have a significant impact on the purchase decision. In addition, financing options and payment plans have become even more important over the last two years.
For the past decade, Synchrony has surveyed the U.S. population about its research journey to making major purchases. For this latest study, we surveyed nearly 4,000 Synchrony cardholders and non-cardholders who made a purchase of $500 or more in the past six months across a dozen categories. The latest findings indicate that retailers need to re-evaluate their omnichannel commerce and customer experience strategies heading into 2022 to support these shifting trends.
While it’s not surprising that online purchases have increased during the pandemic, 25% of shoppers made big-ticket purchases without ever entering a store. Mobile usage throughout the purchase journey is also up significantly, with 76% of consumers using mobile devices to research products and make purchases.
But don’t write brick-and-mortar’s obituary just yet. Roughly 65% of respondents agreed that the in-store experience is an essential part of retail shopping, and that the salesperson plays a role in making the final product decision. This was particularly true in automotive, furniture, and home furnishings. Immediate product availability, COVID-19 safety precautions in place, and a good virtual shopping/user experience all help influence a big purchase.
Research-Before-Purchase Trends
Synchrony’s research indicates that, for some purchases at least, consumers are employing a hybrid strategy. For big-ticket purchases, many shoppers are still visiting local retailers as part of their shopping journey, for research and price comparisons. In-store is important for that “touch and feel” experience: looking at television screens side by side or opening a refrigerator door and peeking in. However, there is a trend toward online behavior in the research process. In fact, 45% of consumers have an increased comfort level making large purchases online without touching or seeing an item in person.
Consider these big-ticket purchase journey trends: 39% conducted online research before making a large purchase, 80% of those surveyed started their research online, and 60% conducted in-store research. The result? Sixty-five percent of respondents made an in-store purchase. Meanwhile, 57% of respondents think in-person retailers made them feel safe regarding COVID-19 concerns.
Generations: Divided, But Not Always
The survey also showed that mobile capabilities and virtual shopping are more important to younger consumers, while older consumers place greater importance on product protections and assurances. Where do shoppers conduct their online research? Retailer websites, Amazon, mobile applications, and social media. Retailers, take note: across generations the most important factors in making large purchase decisions are retailers standing behind their products, offering a mobile-enabled website for easy research, and offering a good virtual shopping/user experience.
Financing Takes Center Stage
The survey also uncovered important consumer financing preferences. Nearly half of consumers, or 49%, said the pandemic made them more likely to use financing options to make their big-ticket purchases, with 36% more likely to seek alternative financing options. The study also found that:
- Most consumers research financing options online, primarily via the retailer’s website. However, more consumers are going directly to the financial institutions’ website over time
- Mobile credit applications are on the rise as applying through a sales associate continues a downward trajectory
- Primary reasons for applying for financing in-store have to do with it being part of the check-out process and the overall ease of use
- Privacy and convenience are the primary drivers of applying for financing online
Access to Credit Drives Incremental Retail Spend
Shoppers continue to see great value in using credit cards, with purchase protection and rewards being important factors. Of those surveyed, 56% of shoppers use credit cards so they don’t have to pay right away and 70% use credit cards because their purchase is protected. Of note, about one third of those surveyed would walk away from making a purchase if financing weren’t available.
What does this mean for retailers? As retailers evaluate the landscape in 2022 and beyond, they need to take the changes in their customers’ major purchase journey into account. That includes better understanding how customers are using mobile channels for research and purchases. Also, retailers need to better comprehend the importance of financing and when and where to offer it to customers making large purchases. Retailers that address these trends will gain a competitive advantage and happier customers.
Ronda Slaven is VP of Market Insights for Synchrony