A year ago, it seemed inevitable Amazon would take over the world. Industry watchers predicted retailers like Best Buy and Target, with their overhead of physical stores, would soon lose the ecommerce battle. After all, consumers increasingly visit big-box retailers to ‘showroom’ – or try products – then go online to buy the same products for less.
But pundits who predicted the death of traditional retail clearly spoke too soon. The Holiday Preview Customer Feedback Index report from OpinionLab shows retailers gaining ground against etailers, including Amazon and other ‘everything’ sites like Overstock and QVC.com, as well as top vertical players such Fab.com, Nasty Gal, and One King’s Lane. In Q3 2013, the overall customer feedback index for etailers fell by 18%, compared to the three months prior.
Retail roars back
It seems retail executives took the dire predictions about their industry seriously and made big changes to reverse the tide. In the last 12 months, retailers such as Target, Best Buy, and Walmart introduced a host of innovative, omnichannel initiatives to bring customers back into stores. From ‘match any online price’ offers and same-day in-store pickup, to tablet-equipped sales clerks and location-aware mobile coupons, retailers have turned their stores into assets – instead of albatrosses. Stores are once again on the bleeding edge of retail innovation, turning shopping into an experience, instead of just a transaction.
Retailers are winning on flexibility, convenience, and service. According to OpinionLab’s Functional Mean Ratings, which were released as part of the latest Customer Feedback Index report, omnichannel retailers outperformed their e-tail competitors in five out of seven categories. In particular, bricks-and-clicks retailers scored higher than pure play ecommerce brands in two key areas: checkout and service & support. Customers gave retailers high marks for in-store pickup options that do away with shipping fees and long waits to receive deliveries, as well as convenient in-store returns.
During Q3 2013, retailers scored a functional mean rating (FMR) of 3.69 out of 5 for checkout, while etailers scored just 3.2 – reflecting customer preference for flexible omnichannel forms of in-store fulfillment, including ship-to-store, pay-in-store, and same-day pickup. Retailers have done a particularly good job with installing well-located, in-store pickup counters staffed by employees who know the website inside-and-out. These pickup points not only allow customers to bypass the traditional checkout line, but also to interact with knowledgeable staff members who can provide additional information about online purchases, as well as suggest complementary products.
In fact, customer service was another strong point for retailers in Q3. Customers gave retailers a FMR of 2.47 for service & support, while they rated etailers just 2.29 in the same category. Anyone who has boxed up goods to return to an etailer, and then waited weeks to be refunded, can see the appeal of simply returning goods directly to a local store such as Target or Gap for an immediate refund. During the third quarter, consumers even rated retailers slightly higher than etailers in the categories of homepage, search, and products – three areas where etailers have historically clocked strong performance.
A strong retail holiday
These gains show retailers have a strong chance to come out on top this holiday season. Those that can turn their stores into experience hubs offering multiple ways to pay and pickup, as well as top-notch customer service and mobile apps, will come out on top this holiday season. The omnichannel advantage is real and growing.
Walmart is a great example of a retailer that’s getting omnichannel right. The company offers three different types of in-store fulfillment at special pickup counters; reserve online and pay in-store with cash; ship-to-store; and same-day store pickup.
Walmart is also experimenting with fun store experiences, from lockers where customers can pick up their purchased goods, to tablet-toting employees who can look up products online and checkout customers anywhere on the store floor. Walmart is also offering lots of great mobile shopping opportunities, from scannable product barcodes that bring up product info and reviews, to instant mobile coupons and product locator apps that let customers find what they’re looking for in their own local stores.
It’s not time to call the death of ecommerce just yet. According to the Customer Feedback Index, etailers still received higher marks than retailers in ‘account’ and ‘information’ categories, showing that customers appreciate that online-only stores make it easy to get product information and manage account details such as credit cards, purchase history, and shipping addresses. But, this holiday, etailers should at least stop resting on their laurels – because retail is coming back in a big way.
Jonathan Levitt is Chief Marketing Officer at OpinionLab.