Retail experience critical to consumer patronage
Think one bout of bad customer service will have little effect on a consumer's decision to shop at that retailer in the future? Think again. A recent proprietary study conducted by the Chicago headquarters of Frankel, a brand marketing agency, determined that consumers' continued patronage of a retailer is highly dependent on the occurrence of negative experiences while shopping. And with the increasing competitive pressure to move brands and product, such data is a large determinant of which retailers will sell now—and which will continue to sell later.
Based on the premise that the store is a medium and the most effective way to reach and communicate with customers, Frankel commissioned a study to examine shoppers' experiences in the retail environment and how those experiences relates to purchases and future store loyalty. A total of 3,228 shoppers (representing 15,000+ shopping visits) responded to the mail panel study, which asked them to report their shopping behavior and experiences during the November/December 1997 time period—two of the heaviest retail shopping months of the year.
The study classified respondents' shopping incidents into three categories: "critical," where a negative experience kept a customer from returning to a store; "marginal," where the shopping experience was unsatisfactory, but the customer would return to the store; and "satisfactory," where the shopping experience was satisfactory and the customer would visit the store again.
While the majority of shoppers experienced no unsatisfactory shopping experiences (65 percent), more than 35 percent experienced marginal or critical incidents in the retail environment—or approximately 15 percent of total shopping visits. The result? Nearly one in 10 respondents switched retailers after a critical incident, indicating that from a revenue and customer loyalty perspective, there is room for improvement.
On average, 73 percent of the shoppers visiting a store made a purchase, emphasizing that there is a distinct relationship between the satisfaction rating for a retailer and purchasing rating at that same retailer. In fact, the reported rate of purchases increases with the quality of shopping experiences—consumers will only purchase at a rate of 42 percent after experiencing a critical incident experience versus an 82 percent purchasing rate with a satisfactory shopping experience.
"Unlike advertising or promotion, the retail environment represents a different type of brand contact for the consumer," says Jim Lucas, director of planning and research at Frankel and head of the Critical Incidents study. "Not only are many choices made in the retail environment, but also it represents the end of a long process of trying to get customers to make a purchase. To get them that far, and to have a marginal or poor experience, is truly neglecting important revenue opportunities."
The occurrence of critical/marginal incidents does vary across retailers and classes of trade, however. Interestingly, retailers where single big-ticket purchases are the norm, such as consumer electronics stores, had the highest levels of reported critical/marginal incidents, while more frequented stores, including mass merchandisers, department stores and bookstores, had the lowest occurrence of these negative experiences. "Customers need and expect more from unfamiliar retail environments where they are not as knowledgeable about the products they are purchasing. Add this to higher priced items, and you'll have a higher degree of scrutiny," Lucas says.
The study suggests there is a financial basis for providing satisfactory shopping experiences. Thus, Lucas emphasizes the importance of both short-term and long-term "recovery strategies" to maintain customer loyalty - and to salvage sales in the process. For example, retailers can "make good" with customers by strengthening areas that shoppers view as controllable,. such as slow service and bad customer service. In addition, by developing long-term, proactive strategies which that address issues such as store environment, selection, etc., retailers will maintain a sense of retail trust and satisfaction with their clientele.
Frankel conducted the Critical Incidents initiative to gain a better understanding of the importance of retail satisfaction as it relates to retention. The survey was mailed to randomly selected individual households between December I, 1997, and January 5, 1998.
How early is too early for Christmas?
Should the holiday season be limited to the last six weeks of the year, or is anything after the fFourth of July fair game? According to a Maritz AmeriPoll, Americans are fairly evenly split over when exactly 'tis the season to be jolly.
Nearly 1,000 people were polled and asked to rate on a 1 to 5 scale (where 1 is not at all annoyed and 5 is extremely annoyed) how much it bothers them to see stores displaying holiday merchandise before Halloween. A full 40 percent say they get extremely or very annoyed when stores and catalogs trot out the Yyuletide trappings before most people have even finished carving their Halloween jack-o' -lanterns.
But 37 percent, who say they are not at all annoyed, are on the other end of the scale (giving their reactions a 1 rating) eagerly awaiting the rush of the holiday shopping crowds and displays of tinseled trees and plastic Santas. About 7 percent rate their distaste as somewhat annoyed and the remaining 14 percent are neutral.
One identifiable trend is that the older you get, the more annoyed you are with the ever-earlier arrival of Christmas retailing. Just 25 percent of respondents age 18-–24 get extremely or very annoyed, compared to 41 percent of people over age 65. Maritz AmeriPoll is conducted by St. Louis-based Maritz Marketing Research.
No time for breakfast
Breakfast is said to be the most important meal of the day, but it is the meal most often skipped by Americans (55 percent). It's also the easiest meal to prepare and the shortest one to eat: 38 percent of respondents to a TeleNation poll conducted for BSMG Worldwide said they spend five 5 to 10 minutes eating breakfast; 33 percent take 10 to 20 minutes and 16 percent allot five minutes or less.
Cold cereal with milk is the food of choice for 40 percent of respondents; 14 percent dig into a plate of bacon and eggs; 8 percent eat bagels with butter or cream cheese; and 5 percent indulge in hot cereal. And 12 percent consider coffee and/or juice to be ample breakfast fuel.
Americans are too busy taking showers and getting dressed to spend too much time in the breakfast nook, it seems. Those are the activities both men and women said they spend the most time on in the morning. TeleNation is a national telephone survey conducted by Arlington Heights, IlL-based Market Facts.
Environmental concern rises in good times
According to the Rutgers/ERA Packaging & The Environment Research Group Study, conducted by Environmental Research Associates, Princeton, N.J., more adults rate the environment as "extremely serious" than in years past—which is not surprising in a time of economic prosperity. On the other hand, fewer adults feel the environment is continuing to degrade. There is, however, increasing top-of-mind concern over global warming issues, which is, presumably, in part due to increased political and media attention to these issues and the recent unusual weather patterns.
As seen in prior waves of this study, a small percentage of Americans consistently rate the environment as the single most important issue facing the country. However, the percentage of Americans who consider the environment an "extremely serious" issue has increased recently. 1997 , a year of strong economic performance, saw the highest percentages of adults rating the environment as "extremely serious" (25 percent) in half a decade (both in wave nine and this wave), compared to 1992, when 22 percent of adults rated the environment as "extremely serious."
Pollution, most notably of air and water, continues to be the most pressing environmental issue. Another area of significant concern, however, is atmospheric change issues (e.g., global warming and ozone depletion). Once again, this is likely due to more extensive media coverage of these topics. These are rated as the next most pressing.
Packaging related issues such as waste disposal and natural resource depletion are relatively less important than top-of-mind environmental issues to Americans.
Attitudes regarding the direction of the quality of the environment are also changing. There appears to be a recent trending of these attitudes back towards those reminiscent of 1993 and 1994. A plurality of adults (nearly four 4 in 10) rate the quality of the environment as "staying the same." However, among those who do see changes, more see the environment getting worse than see it getting better.
Litter is a significant issue to many adults. When asked about the amount of litter in their community compared with three years ago, close to four 4 in 10 adults report there is less. Bottles and cans are the types of litter most commonly reported by adults. Fast-food containers and various types of paper litter are also commonly reported. According to respondents, litter is most commonly seen in cities. Adults report seeing litter most on city freeways or highways, in city business districts and city residential streets.
Trash dumped or washed into waterways and oceans is seen as the most common source of litter in respondents' communities. Motorists and pedestrians, specifically, are rated as significant sources of litter.
For the most part, teenagers and young adults are blamed for littering. Apathy and laziness are considered the prime culprits behind littering by adults. Being too lazy to discard trash is considered the primary reason people litter, by a wide margin. People being "too busy to find a trash receptacle" and travelers or visitors who don't care about a community that is not their own are also noted as reasons for litter.
When asked directly about their own littering, being lazy is also the most common reason given. However, a significant portion of adults (four 4 in 10) claim they have never littered and so did not provide a reason for ever doing so.
Adults clearly consider not littering an individual responsibility. The vast majority of adults feel that peopIe who improperly discard materials that become litter are more responsible for litter in the community than manufacturers of the products and packaging that become litter. Similarly, adults feel, for the most part, that individuals are responsible for paying for litter cleanup rather than the government or manufacturers.
Adults consider clean-up programs such as "Adopt-a-Highway" the most effective approaches to reducing litter. Educational programs are also considered "extremely effective" by a significant portion of adults. Higher fines are considered "extremely effective" by a significant portion as well, but this same approach is deemed not effective by even more adults.
Much of the clean-up effort today seems to be related to children. Volunteer programs through schools and Scouts, for example, or households with children are seen as the most likely to volunteer for clean-up programs. Adults feel that educational programs should be aimed at children to influence their parents and anti-littering messages should stress the benefits to children of a cleaner community.
Messages which that were considered effective overall, but less so, include: encouraging people to take pride in their community;, communicating that fish and wildlife are harmed by litter;, and that people who litter will be heavily fined. Adults were generally not particularly receptive to messages involving a celebrity in an anti-littering campaign.
Nearly half of respondents report they remember seeing, in the past year, an advertisement or commercial asking people to stop other people from littering. Residents of the South Central and South Atlantic regions are most likely to recall such peer pressure oriented ad campaigns.
Nearly as many adults, four 4 in 10, report that in the past year they have asked someone they saw littering to stop. Adults with children in the household are especially likely to report having used peer pressure to try and stop people from littering.
Most adults feel that people are negatively impacted by litter in the places where they live and work. A strong majority agree that employees prefer to work in areas without litter problems and residents prefer to leave areas with litter problems. Fewer respondents, but more than half, agree that employers prefer to leave areas where litter is a problem and that criminals are attracted to such areas.
Volunteering for a litter clean-up program is relatively common, according to respondents. One-quarter report that they, or some other member of their household, has participated in a volunteer litter clean-up program in the past year. Again, children seem to play a large role. Adults with children in the household, along with environmental activists and more affluent adults are most likely to report participation in such programs.
According to respondents, arms of the government such as a municipality or a school most commonly organize litter clean-up programs. However, such diverse organizations as volunteer organizations, religious groups, and businesses, are reported as sponsoring these programs too.
Donating money and time to environmental, conservation, and wildlife groups is relatively common among Americans, according to respondents. Four out of 10 adults report making monetary contributions to such groups and close to one-fifth report volunteering their time. These findings are consistent with prior waves of this study.
Men seek diversity, women seek improved fitness from sports
The name of the game is diversity. When it comes to the most popular sports for men, they have an array of interests. The most recent study by the Sporting Goods Manufacturers Association (SGMA), North Palm Beach, Fla., indicates that men are equally interested in team sports, leisure pursuits, and fitness activities. Women of the '90s are attuned to fitness and sports. Six of the top 10 activities for women are fitness-related. This information has been abstracted from a study conducted by American Sports Data, Inc. This annual study tracks participation in 65 different sports and activities.
Promotions scared off new fast-food customers
Meal Monitor, a food service monitoring program of Consumer Aptitudes, Inc., a Glencoe, Ill., research firm, has revealed that McDonald's recent Beanie Babies promotion both attracted and scared off new customers at the same time. The Meal Monitor service reported that sales at McDonald's increased approximately 70 percent during the first two weeks of a recent Beanie Babies promotion, and that the chain was able to maintain its core group of regular customers while simultaneously attracting infrequent patrons. A full one-third of customers during the promotional period were not regular McDonald's visitors.
However, according to Consumer Aptitudes, the promotion also prompted negative reactions from some customers, possibly compromising its success. "There is no doubt that the Beanie Baby promotion was unprecedented in its ability to drive short-term volume," says Paul Weaver, Consumer Aptitudes vice president. "But once the promotion ended, the new customers did not return to McDonald's."
Meal Monitor data showed that consumer ratings for order and wait times, overall satisfaction and meal value declined during the promotional period. Weaver explained that the crowds were a double-edged sword, accounting for dramatic sales growth, but also causing customers to develop negative opinions of McDonald's.
"Restaurants have very few opportunities to bring infrequent customers through their doors," says Rich Maturo, president of Consumer Aptitudes. "Once they do, it's imperative that they find a way to entice these individuals to return. There is no doubt that the Beanie Baby promotion attracted non-regular customers, but McDonald's failed to give them a reason to return."
Maturo notes that McDonald's did not use the opportunity to accompany its Beanie Baby promotion with menu promotions targeted to its infrequent customers. "Our data show that the non-regular customer tends to be more health-conscious," he says. "McDonald's could have pushed its healthy menu items, like salads and broiled chicken sandwiches, to encourage these customers to come back after the Beanie Baby promotion was finished."
Data collected by the Meal Monitor service is interpreted by Consumer Aptitudes for its clients to provide them with insight on individual consumer purchase behavior on a restaurant and menu -item level. This information is used to develop and track marketing and promotion strategies, to plan menu items and evaluate new product introductions. The data on McDonald's Beanie Baby promotion was gathered as part of a study for another client.
Internet users make demanding customers for credit services
While Internet users represent a large market for credit (mortgages, auto loans, and credit cards), they can also be demanding customers, according to new data reported by Cybercitizen Finance and released by New York-based Cyber Dialogue in conjunction with Booz-Allen & Hamilton. Cybercitizen Finance identifies 4.6 million Internet users—"cybercitizens"—that have already applied for at least one loan product on-line, and 11.9 million Internet users that intend to apply for some type of credit on-line within the next 12 months.
Cybercitizens are less loyal to their present bank than their off-line counterparts. Only 43 percent of cybercitizens interested in a mortgage believe that choosing their existing bank is an important consideration. "You can imagine the opportunities for non-traditional brands to compete for customers," says Mark Esiri, CEO of Cyber Dialogue.
The Internet provides fantastic opportunities for consumers to comparison shop for financial services. "Thirty-nine percent of cybercitizens that have purchased a home in the past 12 months used the Internet to compare rates," Esiri says. "Financial institutions must compete on more than price - interacting with customers and building a trusted brand should be one of the key elements of every organization's marketing strategy."
Credit cards provide an additional arena for both traditional and non-traditional institutions to compete for Internet users. Already, more than 3.7 million cybercitizens have applied for a credit card on-line. As they do with loans, cybercitizens are often looking for the best credit card deals – 44 percent of cybercitizens who use a credit card at least once per month have acquired a card in order to lower their interest rate or yearly fees, versus 33 percent of comparable non-cybercitizens. Cybercitizen Finance recommends that credit card issuers select affinity groups to whom they can market credit cards and cross-sell investment products and services. "Cybercitizens with credit cards are much more likely to be interested in on-line stock trading and investment advice," Esiri says.
Cybercitizen Finance is based on in-depth interviews with 1,000 Internet users and 500 non-users. Respondents were asked about their on-line and off-line financial services usage. The survey was fielded in the second quarter of 1998 and data is accurate within ±3.1 percent at the 95 percent confidence level.