A global report by Capgemini reveals consumers consider social media a less important part of their customer journey – from awareness, through to post-sale activity – compared to two years ago, suggesting that the social media hype in the consumer goods and retail sector has not materialised.
The second edition of the global Digital Shopper Relevancy Report, which surveyed over 18,000 digital shoppers from 18 countries to provide insight into the changing nature of shoppers’ online retail habits, shows that conversely, smartphone shopping has grown in importance over the same period. The report also highlights that the internet is now globally the preferred channel to inform retail decisions (over all other channels, including stores), with 75% of consumers saying it was important or very important to shopping research.
Social media: 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 responses of global shoppers indicate not only a decline compared with the study two years ago, but also demonstrate 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.
Kees Jacobs, global digital proposition lead, Capgemini Digital Customer Experience, said: “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 physical store still reigns for point of sale – particularly in mature markets – for now
Capgemini’s survey shows that for point-of-sale the physical store is still the favoured destination for global shoppers, but only just, with the Internet trailing slightly. When carrying out retail transactions, 72% of shoppers see the store as important or very important compared to 67% for the Internet. Only 14% of shoppers strongly indicate that physical stores have become less important for them. However, in the future, the majority of shoppers (51%) say they will spend more money online than in-store. In addition to the smartphone’s ubiquitous growth, in-store digital interactions (eg via kiosks) are popular amongst shoppers, suggesting that the introduction of more technology into retail stores would be a welcome shift for the consumer.
Digitally-savvy, high-growth markets
The research reveals that high growth markets all show a significantly stronger preference for digital technologies than mature markets. For example, when it comes to searching for product information, doing price-comparisons and purchasing products, Brazil, Mexico, India and China all place a much greater importance on the smartphone, social media and in-store technology than all of the mature markets polled. This represents a huge opportunity for brands present in, or expanding into, these regions. High-growth markets are also significantly more interested in receiving personalised offers and recommendations, with India (46%), Mexico (40%) and Brazil (38%) rating them as ‘extremely important’. This is in stark contrast to the equivalent statistics for the UK (13%), France (15 per cent) and Germany (24%).
Distrust over use of personal data particularly in mature markets
Globally, over a third of consumers feel they currently are not being provided with clear information from retailers on how their personal data is going to be used. Personal expectations regarding retailers are low: one in four consumers do not expect their favourite retailers to know their history to provide better service, particularly in Canada, Finland, Netherlands and Sweden. While half do trust their favourite retailers to use their personal data responsibly, a third does not agree to their social media data being used by retailers, particularly in the Nordic countries.
Brian Girouard, vice president, Capgemini Consumer Products, Retail and Distribution Sector, said: “It is clear that a combination of data privacy concerns, and apathy towards poorly targeted advertisements in the early days of online marketing, has turned consumers in mature markets off personalised 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.”