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Capgemini Report Finds Digital Consumer Engagement is Important and Growing, Questions Role of Social Media in Shopper Journeys

September 26, 2014

There is a constant drumbeat in support of omni-channel experiences when it comes to retailers looking to use the latest technology to seamlessly integrate the physical and virtual worlds to provide shoppers more compelling experiences. This is certainly an inexorable trend, but according to the release of the second edition of consulting firm Capgemini global report on such matters, “Digital Shopper Relevancy Report”, there are some surprises that retailers literally and figuratively need to take stock of.

In fact, as the headline says the report, which surveyed over 18,000 digital shoppers from 18 countries about their online retail habits, reveals that consumers consider social media a less important part of their customer journey – from awareness, through to post-sale activity – compared to two years ago. However, on the flip side it also found that smartphone shopping has grown in importance over the same period. It highlights that the Internet is now globally the preferred channel to inform retail decisions (over all other channels, including stores), with 75 percent of consumers saying it was important or very important to shopping research.

This is not to say that social media is not important when it comes to customer consideration. It does say that retailers need to have a pragmatic approach when it comes to getting the right mix of digital engagement to drive results.  In short, while we are all familiar with the term, “buyer beware!” sellers need to beware as well.

Has social media been overhyped?

According to the report, compared to 2012, less importance is being placed on following retailers on social media (such as Twitter and Facebook), finding out about new products through blogs, and participating in online retail customer communities.

The bottom line, as shown in the graphic from the report, is the physical store experience continues to remain dominant. Global shoppers indicate not only a decline compared to two years ago, but also that social media is less important to the shopper journey compared with conventional retail store experiences, web, smartphone, email or the use of technologies in-store. 

Source: Capgemini Digital Shopper Relevancy Report (Click to enlarge)

Kees Jacobs, Global Digital Proposition Lead, Capgemini Digital Customer Experience noted: “Despite the surge in Facebook’s ad revenues and marketing innovations like Twitter’s new ‘Buy’ button, there is definitely a question mark over where and how ‘social’ fits into the shopper journey. Social media is most relevant in the ‘awareness’ and ‘choice’ phases of shopping journeys (which is especially the case in fashion) but much less in ‘transaction, delivery and post-sales’. Our report suggests that retailers still have work to do at every stage of the purchasing journey in order to make social media play a useful, valuable role in buying a product or service.”

The numbers are interesting. The survey shows that when carrying out retail transactions:

  • 72 percent of shoppers see the store as important or very important compared to 67 percent for the Internet.
  • Only 14 percent of shoppers strongly indicate that physical stores have become less important for them.
  • I the future, the majority of shoppers (51 percent) say they will spend more money online than in-store.
  • In addition to the smartphone’s ubiquitous growth, in-store digital interactions (e.g., via kiosks) are popular among shoppers, suggesting that the introduction of more technology into retail stores would be a welcome shift for the consumer.

There are additional nuggets worth reviewing in the report as well regarding shopper preferences by country, and consumer distrust that their personal information is not being used in an appropriate manner by retailers. 

As Brian Girouard, Vice President, Capgemini Consumer Products, Retail and Distribution Sector, explains: “It is clear that a combination of data privacy concerns and apathy toward poorly targeted advertisements in the early days of online marketing has turned consumers in mature markets off personalized offers. Companies need to be more transparent and intelligent than ever about how they engage with customers in order to retain the trust of mature markets and ensure that they don’t squander the exciting momentum in high-growth markets.”

Other key findings cited by the authors include:

  • Sector-wise, the fashion industry has registered a 9 percent growth in online purchasing preference, suggesting that apparel companies have made significant strides when it comes to engaging consumers across digital channels
  • There is an expectation that the online price will be lower than in-store or even in catalogues: 72 percent agree or strongly agree. This is consistent across all markets
  • 65 percent expect the option of ordering direct from brand manufacturers to increase in the coming years. 53 percent also expect an increase in ordering direct from the manufacturer via an app
  • The traditional contact center continues its slow decline in importance across all parts of the buying journey, perhaps most surprisingly post-purchase. A third (30 percent) rates it ‘not at all important’ in tracking an order, and a quarter see it adding little value when seeking help with a new product
  • In terms of future innovation, shoppers agree that QR codes4 (45 percent), Internet of Things e.g., intelligently connecting devices such as ‘smart’ fridges (44 percent) and Wearable Devices such as Google Glass or Apple Watch (42 percent) will grow in importance in the shopping journey.

Girouard concludes: “As customer profiling has become more complex, it’s very challenging for retailers and consumer companies to agree on the right strategy to engage their customers online. Most companies are already on their ‘digital journey’ in some shape or form. However, many are uncertain whether they are truly addressing the changing needs of their consumers, the right priorities or the right initiatives.”

A lesson to be drawn from the study can be summarized as falling into the category that just because you can does not mean you should, and that having a customer-centric approach that is nuanced to take into account how they wish to be interacted with digitally is not just about checking off a list of capabilities.  Getting it right to achieve optimal results really is all about adopting to what the customer wants and expects and not about merely using technology in an attempt to kill/overkill  with a perception of kindness.

Edited by Maurice Nagle