A perceived lack of trustworthiness is increasingly pushing consumers back into physical stores, researchers have found, but many retailers are letting this opportunity pass them by.
According to the Australian Consumer, Retailer and Services (ACRS) Consumer Retail Trust Index 2018, produced by Monash University Business School, Aussies may be surprised to know that big supermarket chains are among our most trusted retailers.
Pharmacies also ranked highly for trustworthiness, as did sporting goods retailers and computer/technology sellers.
Consumers also found that department stores, as well as retailers selling homewares, clothing/accessories and footwear could also be relied upon.
Yet it seems that you can put a financial price on trust, with discount variety and department stores among the nation’s least trusted brands, along with those operating solely online.
“Surprisingly, despite the e-commerce and online shopping boom, the least trusted retail sector was online-only retailers who were rated well-below their retail counterparts,” said Paolo De Leon, research consultant at the school’s Department of Marketing.
Most interestingly, though, is that what builds trust is not actually uniform across all types of retailers, the researchers found.
Common factors you would expect as the basis for building trust with shoppers were all present – employees, store presentation, product quality and communications – but each carried different weight depending on the sector.
For example, consumers strongly value information security when it comes to supermarkets. Clothing retailers, meanwhile, need to focus foremost on their communications and products.
“Trust varies greatly by retail sector. Brands and retailers need to know their trust drivers and which trust levers to pull, as it’s only after that point that an effective trust-building strategy can be developed,” senior research consultant Dr Eloise Zoppos said.
In-store trounces online
The researchers found that the convenience and potential cost savings offered by online retailers are not enough to retain customers’ loyalty.
Around 65 per cent of shoppers said they prefer to use bricks and mortar stores “most of the time”, compared with just 18 per cent preferring to do the bulk of their shopping over the web.
“There is a return to the importance of customer experience at physical stores. Human touches and the sensory experiences of a store visit is increasingly important, particularly with millennials – who prefer to spend more money on experiences than on material things,” said Monash Business School Department of Marketing managing director Dr Rebecca Dare.
“Shoppers miss the customer experience of physical stores; ‘real life’ connection with other people, touching things and trying them on is not an experience you get online.”
Dr Dare said the Australian results reflect the experience of retailers overseas.
“Nearly 80 per cent of shoppers in the USA purchased more than half of their items in-store in 2017,” she said.
Combine best of both worlds
The figures provide impetus to retailers to embrace the so-called “omnichannel” experience for their customers, whereby physical and online stores operate seamlessly together.
“Australian retailers need to understand that customers want the experience that the physical store can bring. Retailers just need to provide it,” Dr Dare said.
It backs data from a senior executive at Myer that showed a clear financial return from offering an integrated experience, with “omnichannel” customers on average spending 2.5 times more than those shopping exclusively through a single channel.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
Ask the Experts: Business assets and liability after separation
By Anneka Frayne
Anxiety in the workplace
By Staff Reporter
Managing ‘sleeper issue’ of directors’ GST risks
By Jim Koutsokostas