State of Consumer Behavior 2022
A Word From Our CEO
“When we released our first annual State of Consumer Behavior report in January 2020, we found that 55% of consumers preferred to shop in person if they had a choice. Despite all the ominous forecasts about the purported death of brick-and-mortar, there were still consumers out there who placed great value on the in-location experience.
However, the pandemic changed that, as many stores were forced to close for long periods of time, or revamp their operations in order to continue serving their customers safely. Yet throughout the pandemic, we’ve seen pre-existing consumer trends like touchless checkout, buy online/pick up in-store, and virtual assistants—many of them highly disruptive—accelerate faster than anyone could have foreseen.
Over the course of 2020 and most of 2021, coaxing consumers into brick-and-mortar businesses wasn’t just difficult, but actually wasn’t possible. Regulations forced many businesses to close their doors while many more consumers were afraid to leave their homes even where stores remained open.
Yet in our second annual State of Consumer Behavior report, published in January 2021, we found that 46% of consumers still preferred to shop in-store rather than online when given a choice — meaning that customers were still eager to get back to brick-and-mortar locations once it was safe to do so again.
One year later, we’re now excited to release the findings from our third annual survey on the State of Consumer Behavior. We hope you find it useful as you prepare your organization to thrive in the future of brick-and-mortar retail!”
— Bobby Marhamat, CEO, Raydiant
Key Findings
In-store shopping remains a preference for many consumers. Shoppers’ tastes were divided nearly evenly between in-store and online shopping, with 44.4% of consumers preferring to shop in-store.
Appealing experiences remain the primary driver of in-store shopping. The largest segment of respondents—27.6%—cited the allure of in-store experiences as their primary reason for shopping in stores.
Shoppers’ tolerance for poor in-store experiences remains low. 54.6% of respondents have abandoned a brand because of a single bad in-store experience.
Addressing supply challenges must be a priority for brick-and-mortar establishments in 2022. For 31.9% of consumers, product selection and variety are the greatest factors in the quality of an in-store experience.
Consumers have provided the recipe for how stores can win their business. Shoppers suggest exclusive in-store deals, fun experiences, and top-notch customer service as ways to attract their business.
Who We Surveyed: Methodology and Participant Demographics
In order to provide greater context around these findings, here are more details on who we surveyed and the methodology used. Starting on (Survey date), we surveyed (who we surveyed). The survey was conducted online via Pollfish using organic sampling. Learn more about the Pollfish methodology here.
Now, with context around who our respondents were, let’s take a closer look at what we uncovered.
Part 1: Comparing Brick-and-Mortar with Online Retail
Though brick-and-mortar and online commerce are complementary features of many organizations, it’s vital to maintain healthy comparisons between the two. You’ve invested heavily in your stores, and you want shoppers to experience them. If consumers trend too far towards online-only shopping, it becomes difficult to recoup investments in your stores.
We found that consumers are generally split when it comes to their preference of online versus in-store shopping. Despite the conveniences of online shopping, brick-and-mortar is hanging tough. We needed to know, though, why consumers prefer either in-store experiences or online shopping.
44% of consumers prefer to shop at physical locations
44.4% of consumers said they generally prefer to shop in-store, while 56.6% prefer to shop online. These figures underscore how competitive online-first sellers have become, but also hints at the essential nature of brick-and-mortar—despite unprecedented challenges, brick-and-mortar is the preferred option of nearly half of all shoppers.
Still, these results demanded greater context.
Top 5 Reasons Why Consumers Prefer Shopping Online
Even the most ardent fan of brick-and-mortar has ordered something online—if only a book from Amazon. When you order anything online, you do so for a reason, whether it’s speed, convenience, or to obtain a hyper-specific product. Consumers told us that they generally shop online because:
Online shopping is available 24/7 (18.3%)
Online shopping doesn’t require them to leave the house (17.2%)
Discount codes and tools are readily available when shopping online (14.9%)
Online shopping better caters to those with health and safety concerns related to COVID (12%)
Shopping online is faster than in-store shopping (10.5%)
These responses are consistent with what we know about online shopping: it’s convenient, fast, and easy. For those who don’t need a product today and are short on time, online shopping may be especially appealing. For many consumers, though, these benefits don’t necessarily equate to a better shopping experience.
Top 5 Reasons Why Consumers Prefer Shopping In-Person
The 44.4% of consumers who prefer shopping in a store do so because:
They enjoy the experience of shopping in a store and visiting a physical location (27.6%)
They like to see and touch products directly before purchasing (24.7%)
They don’t want to wait for delivery (11.9%)
They don’t want to pay shipping costs (10.8%)
Local retailers offer unique products they can’t find online (5.3%)
The appeal of shopping in a physical store boils down to one thing overall: experiences. The experience of being in a sensory-rich location, outside of the house, amongst touchable, try-on-able products still carries great weight with many consumers.
Summary
Online and in-store shopping aren’t engaged in a zero-sum game. The fact is, the typical shopper utilizes both online and in-store shopping options. Even so, every sale counts.
Brick-and-mortar organizations must fully embrace the reasons why consumers frequent their stores—primarily, to have experiences they can’t get online. From in-person customer service to eye-popping product displays, brick-and-mortar must play to its strengths.
So we asked consumers, just how well is brick-and-mortar delivering the experiences you seek?
Part 2: The State of In-Store Shopping—As Told by Consumers
It’s not enough for brick-and-mortar retailers to assume that, once they’re established with sizable foot traffic, that they can simply rely on that and their physical presence in the community for future sales. With each passing year, brick-and-mortar organizations must ask themselves: What are we doing well, and where can we improve?
Only consumers can provide the most insightful answers to these questions.
35% of respondents said customer service has gotten better over the past 12 months
In-store service providers had every reason to slip in 2021. Labor shortages reduced staff and burdened those who were present with even more work and responsibility. Supply disruptions forced employees to come up with new ways of apologizing for factors outside of their control. COVID restrictions still continued to shift access to physical locations, with adjusted hours, safety protocols, and distancing.
And yet, 34.6% of consumers said that the customer service they receive while visiting a physical store actually improved over the course of 2021, outpacing the 22.4% of consumers who said customer service regressed. 43% felt customer service stayed the same, despite the impacts mentioned above.
Brick-and-mortar organizations seem to understand how important both traditional and non-traditional customer service is as a differentiator between in-store and online commerce. Brick-and-mortar organizations that believe unstable market conditions are a valid excuse for poor customer service are sorely mistaken.
48% of customers have replaced physical store products with an online item
When asked if they’ve replaced products they’ve previously purchased regularly at physical stores with an online competitor’s products, 47.7% said they have. This statistic could be taken as a critique of brick-and-mortar organizations. Perhaps it shouldn’t be.
We know that consumers shop online differently than they shop in stores. While someone might be inclined to stock up on gel pens and other small, niche, non-urgent items online, they’re generally less likely to order a couch or blouse—items that they generally prefer to feel and experience before purchasing—from a digital retailer.
Customers ordering products online that they once purchased in-person doesn’t necessarily mean that they’re shopping in stores less often. It simply means that they’re purchasing certain items online. The key for brick-and-mortar retailers will be to determine which items customers are ordering online, and factoring those decisions into inventory management strategies.
29% of consumers are switching brands more often than ever before
When asked their frequency of changing brands today, 50.1% said that they switch brands about the same amount as usual. However, 28.9% said they’re switching brands more often today than ever before. You can view this statistic one of two ways:
A significant number of shoppers whose loyalties you currently hold could be gone in an instant, or;
A significant number of shoppers whose loyalties you don’t currently possess are completely attainable.
In either case, it’s clear that the potential impact of a great or poor customer experience is immense. With so many shoppers willing to change brands, every single brand interaction matters.
55% of consumers have stopped purchasing from a brand because of a single bad in-store experience
You read that correctly: More than half of all shoppers (54.9%) will abandon your brand because of one single poor in-store experience. To many shoppers, there is no such thing as a second chance. And with so many buying options available today, can you really fault them?
Summary
Based on our findings, consumers are changing brands frequently, are intolerant of poor experiences, and are shifting more items from their handwritten shopping list to their Amazon shopping cart. So what explains brick-and-mortar’s bounceback in 2021?
For one, brick-and-mortar organizations continue to understand the importance of experiences. By providing creative, comforting, free, and generally positive in-store experiences, brick-and-mortar continues to evolve in stride with changing consumer tastes.
Part 3: The Impact of a Positive Experience
The consumers we surveyed are clear: when it comes to shopping in a store, the reason they do so isn’t convenience or even necessarily price. It’s the ability to have an experience that sets in-store shopping apart. In an era where momentum seems to be shifting ever-further towards convenience, the value of great in-store experiences is at an all-time high.
77% consider the in-store customer experience to be either “important” or “very important”
How important is the in-store experience to consumers? 33.5% said their in-store experience is important to them while 43.5% said it’s very important to them.
Meanwhile, only 3.5% shoppers said the in-store experience is “unimportant.” If in-store experiences are so critically important to your shoppers, they need to be even more important to you.
Positive in-store experiences don’t just create goodwill with your customers. One positive experience translates directly into repeat business.
83% of consumers are more likely to return to your store after a positive in-store experience
We’ve already established that more than half of shoppers will not return to your store if they have a negative experience. We see, then, that with 82.8% of consumers saying that they’re likely to return to a store after having a positive experience, the relative success or failure of your in-store experiences is arguably the single most important factor influencing your organization’s bottom line.
63% of shoppers will spend more per visit when they have a positive in-store experience
Additionally, for 63% of respondents, a positive in-store experience means that they’re likely to spend more during that visit. Repeat business? Check. More money spent per visit? Check. There may not be any other metrics that better show the value of positive in-store experiences than these two.
Investing in in-store experiences isn’t just good for your customers—it’s good for business.
63% of consumers will support your brand online if you provide a positive in-store experience
We live in an age where omnichannel retail is increasingly not an option, but a prerequisite for success. We found that success in one channel can fuel success in another, as 62.8% of consumers say that when they have a positive in-store experience, they’re more likely to purchase from that brand online, too. It might seem paradoxical at first, but the data is clear: if you want to boost online sales, investing in your stores is one way to do so.
By providing positive experiences through all channels, you have the ability to secure the consumer’s business whether they’re inclined to shop online or in-store.
83% of consumers will likely tell others about a poor in-store experience
Word travels fast among consumers, for better or worse, and those who have a negative in-store experience are either somewhat likely (30%) or very likely (53.2%) to tell others. This organic PR has the capacity to not just negatively affect brand perception, but to directly impact your foot traffic and sales. Whether this word-of-mouth campaign serves as a benefit or detriment depends on the quality of your in-store experiences.
Summary
We’ve laid the groundwork of consumer tastes and explained how impactful good (or bad) in-store experiences can be for your business. Now, consider the criteria consumers seek when they’re experience-hunting.
Part 4: What Makes a Positive In-Store Experience in 2022
At this point, you know that experiences matter, considering the impact they can bring to your revenue and your brand. But what, exactly, makes a positive experience, from the consumer’s perspective? That’s the key, isn’t it?
3 Factors That Define Positive In-Store Experiences
Consumers identified three factors as most definitive of a positive in-store experience:
With supply chain issues rocking retail in 2021, product variety comes at a premium. Retailers who can gain an edge through strong inventory management systems and data-driven insights will garner consumer loyalty in 2022.
The good news: customer service and clever store organization are far less vulnerable to forces beyond your control. Take advantage of this.
3 Factors That Influence Which Stores Consumers Visit In-Person
Consumers are most likely to shop at brick-and-mortar locations that offer:
High-quality service also remains an important factor in consumers’ shopping decisions. Retailers who can combine these objective consumer demands with sensory- and entertainment-focused experiences stand a great chance of success in 2022.
5 Ways to Bring More Consumers Into Your Locations
It’s a question that every brick-and-mortar organization wrestles with: How do we get more feet into our stores? According to consumers, you can capture their attention by:
Consumers want something from your stores—deals, items, experiences—that they can’t get anywhere else.
Part 5: Preparing For the Future
At Raydiant, we consider ourselves experts in the field of brick-and-mortar. We’re far from the only experts in this space, though, and we’re constantly looking to our peers for insights and innovations.
We’ll conclude with actionable takeaways that organizations with brick-and-mortar locations can put to work in 2022. Here’s a round-up of 10+ expert insights from leading brick-and-mortar retail executives and leaders.
Neil Saunders, Managing Director, Retail, GlobalData
Retailers need to give consumers clear reasons to shop with them. Although people are out spending, they are also becoming more discerning and choosy about where they shop.
Equally, they’re much more conscious about getting value for what they spend.
This may sound obvious, but so many retailers still don’t execute with the customer in mind: they don’t get the basics right, they don’t innovate enough, and they aren’t compelling enough. That’s not going to cut it in 2022.
Shep Hyken, Customer Service and Experience Expert
Retailers must understand they are no longer compared to direct competitors, but instead to the service and experience that the best-in-class brands deliver.
Look at companies you enjoy doing business with outside of your industry. Is there something they are doing that you aren’t, but can implement in some form into your business?
If you can, you’re giving yourself a competitive advantage that your competition hasn’t yet discovered.
Carol Spieckerman, President, Spieckerman Retail
In 2021, the balance between online and brick-and-mortar shopping was somewhat restored, yet the rush to online was unstoppable. The pandemic hasn’t just encouraged shoppers to shop online, it has acclimated shoppers to buying more categories sight-unseen. Despite spotty shipping delays and out-of-stocks, the convenience of online shopping is hard to beat. Even so, consumers have also become accustom to having options. Convenience and choice are tightly linked so retailers must continue to offer a range of convenience options or risk losing shoppers to competitors.
The good news is that a slew of third-party providers have stepped in to support retailers’ last-mile offerings. Retailers don’t have to build everything themselves so there really is no excuse for not providing choices to shoppers.
Julia Raymond Hare, Editor In Chief, RETHINK Retail
Retailers need to continue exploring what their consumers’ value as a collective and, when possible, as individuals. Retailers who focused on building trust throughout the pandemic, and often before, are coming out ahead of the competition.
Consumers today are more likely than they were, say 5 years ago, to give their favorite retailers grace when it comes to minor inconveniences like a product being delayed or out-of-stock. But the latter only rings true if the consumer has a relationship with that retailer, has been delighted by that retailer many times before, and feels the retailer aligns with their personal values. You might argue that the concept of loyalty is starting to resurface.
Richard Kestenbaum, Co-founder and Partner, Triangle Capital, LLC
There are two important changes that happened in 2021. The first was supply chain delays and the second was inflation. We saw consumers willing to settle for the products they can get and willing to pay more for it. In the short-term, it means that brands and retailers need to keep more inventory on hand and build flexibility into their warehousing/distribution so that they don’t stock out.
The other trend is that consumers will accept higher prices now. Those are both short-term fixes and likely not to endure in the long-term but they will be important for getting through the next year or two.
Melissa Gonzalez, CEO at The Lionesque Group and Principal at MG2
Increased adoption of technology by consumers, pushes us to be creative and more agile when thinking about the role of the store. Stores are no longer “just a place to buy things” – online shopping is making that easier and more accessible.
However they are a destination to build and foster human connection, to deliver superior customer service, to immerse customers in the community of the brand and more. Technology needs to be our tool to add efficiency and scale, in a way that compliments the intangibles we can provide in a physical space.
Lynn Xu, Chief Retail Solution Officer, Clobotics
Online shopping is great in many ways but also tricky to navigate.
For sure sites are built to get consumers to buy more with smarter and smarter AI to calculate who you are and what you may want.
Sustainability means going out more to support your neighborhood supplier, keep the community alive while enjoying the convenience of technology. Every convenience comes at a cost eventually.
Neha Singh, Founder and CEO, Obsess
The metaverse is going to ultimately function like a modern-day mall, where consumers can hang out in different virtual environments and participate in activities with others via their digital avatars. To make the most of the metaverse opportunity, brands need to build experiential e-commerce into their budgets today and create three- to five-year plans for their AR/VR initiatives.
Forward-thinking brands and retailers are already creating immersive e-commerce experiences that are currently hosted on their own sites, but that will live across metaverse platforms in the coming years. They’re creating their own visually unique virtual stores, islands and planets where consumers can discover and interact with their brand and products and partnering with gaming platforms to test demand for virtual products and NFTs. Executive decision makers need to think organizationally about virtual selling and create line items for these AR and VR experiences to ensure they provide the engaging, social and intuitive online shopping experience that consumers want.
Jason Goldberg, Chief Commerce Strategy Officer, Publicis and Host of The Jason & Scot Show
2021 was a year where retailers struggled just to delivery the basic digital customer experiences that consumers now expect. 2022 it’s going to be a lot more about the quality and robustness of those experiences. It won’t just be enough to offer curb-side pickup, now retailers will compete on the service level for curbside pickup (wait-time, inventory accuracy, convenience).
2022 is also going to see the costs of digital customer acquisition continue to go up (as privacy changing force more advertising dollars to a small set of walled gardens), and more brands competing for the same customer. That’s going to require marketers to shift from success criteria focused on transactions to success criteria focused on customer lifetime value. The first step for brands that want to get ahead of this trend is starting to implement their own customer lifetime value metrics, and get their arms around their own data.
Attila Kecsmar, CEO and Co-founder, Antavo
Over the years, loyalty programs have become standard practice across all industries. But as customers’ shopping behavior is changing, companies need to step up their game. Loyalty programs need to be unique, behavior-based, and full of personalized value in order to deliver the desired effect. Companies need to move beyond rewarding customers for spending money, and instead offer experiential rewards or enhance their loyalty program with gamification elements, like an online treasure hunt or a prize wheel. According to Antavo’s Global Customer Loyalty Report 2022, 65.2% of those not offering experiential rewards stated that they plan to introduce this feature within the next three years.
Today’s customers want to be engaged outside of the buying cycle as well. They desire richer experiences and more valuable rewards. The goal should be to develop an emotional bond with customers.
Sarah Assous, CMO, zoovu
Don’t be afraid to have a conversation with your shoppers (don’t hide behind the ‘counter’, help shoppers proactively). Stop making assumptions about what your buyers may want and start asking questions. The technology to engage in conversations with customers is readily available and has proven success. Leveraging this technology enables businesses to:
Increase shopper confidence through tailored needs-based recommendations, which increase likelihood to convert and reduced returns
Get access to behavioral and product data which can be analyzed to make buying experiences better every time (especially when AI is leveraged to drive conversations & product discovery)
Unlock powerful zero-party data to drive better paid advertising tactics and SEO strategies and increase marketing budget efficiencies without the need to rely on third-party cookies to drive brand awareness and click-through rates.
Gwen Morrison, Partner, Candezent Advisory
The past year can be summarized by three words: Innovation, Automation, and Integration. The shopper evolved in terms of embracing technology as they were often isolated. So the adaption of tech-enabled commerce accelerated more rapidly as retailers raced to serve their customers with contact-less options
Looking ahead, shoppers are willing to interact with technologies such as facial recognition, voice assistants and personalized services that require more data capture, if they experience tangible benefits.
The opportunity is to integrate these in ways that provide more value for the customer and empower employees.
Amanda Watts, CEO and founder, Rito
Covid has pulled forward secular trends: ecommerce, food delivery, telehealth and other forms of digital commerce all accelerated in 2020 during the lockdowns. Penetration of these categories continued in 2021. This is leaving less occasions for in-person commerce. But those remaining occasions matter more. They’re now events! Going to the grocery store instead of using Instacart is a choice to opt for the sights and smells of fresh produce. We choose to sit down at a restaurant instead of ordering in because it’s an experience. We opt to shop in person instead of on Amazon because we want the expert eye of that trained sales associate.
Savvy service and retail businesses recognize that while traffic might be down, ticket and basket sizes – and consumer expectations – are up! Customer experience needs to match these heightened expectations. More than ever, managers need to make sure their whole team is providing top-notch service. At the same time, the job market has never been together. So these same managers must ensure that their employees feel valued and engaged. No longer can feedback come only when things go poorly. Employees expect – and deserve – feedback when things go well. The good news: this creates a virtuous cycle. Happy employees stay in their positions longer, getting better at their job, and, therefore, providing better customer service.
Joanne Heyob, Senior Vice President, Operations Strategy & Design, WD Partners
Retailers need to rethink where they are located. Retail stores are NOT a thing of a past—where they are located has way more importance than ever before. Provide consumers with smaller, more convenient locations with endless aisle capabilities. Consumers WANT to shop so retailers need to be where consumers live.
It needs to be an experience with a compelling assortment. Pick up only locations (or dark stores) for big box stores in local neighborhoods are something that should be tested more often. Consumers have built loyalty and trust with their products and are looking for convenience with easy pick up and delivery to home. If I was a retailer today, I would be thinking how can I get closer to my consumer. Our research showed that 88% of consumers want to shop local so I think it could really be a big win for retail.