Spurred by COVID-19, consumers are buying like crazy online, generating double-digit online sales gains at many retailers and brands through spring and summer.
But that doesn’t mean consumers are loving the digital experience. The more time and money spent online, the more they lose patience with the level of service provided by digital marketers, encounter problems and become less loyal to any one brand.
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That’s a key finding from research released today by the Wharton School’s Baker Retailing Center and WisePlum, a customer experience insights platform that helps managers determine where to invest in the customer experience to increase sales.
As Paula Courtney, chief executive officer of WisePlum, said, “Consumers are less forgiving and needing more from retailers during the global pandemic.”
According to Thomas S. Robertson, Joshua J. Harris professor and professor of marketing at the University of Pennsylvania’s Wharton School, “We are seeing brands looking for ways to improve customer experience; however, our research shows there is still a lot of friction in the experience and the pandemic has made this worse. Customers are experiencing more issues with their online shopping experience, proving that not all retailers are suitably prepared for this digital shift.”
Customers are often complaining about stock availability and inventory problems, with “no in-store availability” topping the list of grievances.
The Wharton/WisePlum research involved two surveys, before and during the pandemic. Five thousand consumers from Feb. 4 to 23, and then 2,535 consumers from May 13 to 20, were polled. Consumers were asked about their most recent retail purchase experience, excluding grocery, liquor and prescription drug purchases.
The research suggests “a true boomerang effect” of loyalty reward programs. While to some extent they insulate retailers from damaging brand loyalty when consumers experience “friction” while shopping, reward programs themselves can add friction to the experience. The research showed that 47 percent of customers report being part of the retailer’s loyalty program, with members experiencing more problems due to higher engagement than nonmembers.
“The global pandemic has intensified issues for consumers and calls for retailers to carefully explore their offerings while staying focused on the fundamentals of customer experience,” said Robertson.
“In our second study, we noticed that while customers generally experience similar issues, the economic damage associated with friction is now higher,” said Courtney. “And customers are significantly less loyal to retailers in a time when retailers are themselves struggling to survive.
“Consumers have spoken and they’re looking for more from their retailers, proving to be less forgiving compared to pre-COVID-19,” added Courtney.
Among the key Wharton findings, consumers who experienced problems shopping online were 35 percent less loyal than those who were problem-free. Sixty-six percent of customers reported at least one problem on their last shopping trip in the second survey, up from 60 percent reported in the study done before coronavirus lockdowns.
Jen Jackson, vice president of customer success for contact center solutions at Lifesize, explained some of the frustrations consumers are experiencing. She said call center hold times have ballooned by as much as 34 percent, and “escalations,” meaning those calls sent up the chain of command, have skyrocketed by more than 68 percent. Lifesize, a cloud communications company that recently merged with Serenova, has a focus on improving the operations and services of contact centers (also known as call centers) and making communications with consumers more efficient.
“Contact centers have had a rough year, but we have a lot of ways to help them service their customers,” said Jackson.
She recommended providing consumers with communication options including video, chat and e-mail in addition to phone calls. “Contact centers have to enable customers to be able to interact in ways that work best for them and make it easier to resolve the issue.” Offering various ways to communicate as well as offering callbacks takes some of the burden off the call queues and wait times. Jackson also said contact center workers can handle multiple inquiries simultaneously utilizing chat or e-mail. “The issue is how easy are you to reach for help and do you allow consumers to communicate in a way that makes sense to them. The whole idea is to make good use of consumers’ time,” said Jackson.
As COVID-19 moved 80 percent of call center agents to work-from-home environments, the pandemic “has put customer service reps under pressure they’ve likely never experienced before,” said Jackson.
According to Wharton, consumers increased online shopping by 37 percent; the appeal of loyalty benefits stayed mostly the same before and midway through the pandemic, and customers who attempted to return an item experienced a problem 69 percent of the time.
According to an online study commissioned by PayPal and conducted by Netfluential in July, 35 percent of college students plan to spend more on back-to-school; 35 percent will spend the same as last year; 20 percent will spend less, and 5 percent don’t know either way.
The study also showed that 40 percent of parents of students in kindergarten through grade 12 plan to spend more this year on b-t-s than last year; 45 percent will spend the same, and 11 percent will spend less, leaving 4 percent unsure.
The study polled 600 college students and 1,200 parents of K-12 students in July across the country, including 600 parents of elementary school students; 300 of middle school students, and 300 parents of high school students.
First-year college students will spend $732 on average, compared to $444 among K-12 parents, according to PayPal and Netfluential.
Those figures appear less bullish than what the National Retail Federation forecasts for b-t-s. NRF predicted that parents with children in elementary through high school plan to spend an average of $789.49 and that college students and their families expect to spend an average $1,059.20. The spending increases for b-t-s will be due to consumers buying technology and home furnishings to facilitate learning at home, reducing their budgets for b-t-s apparel, which costs far less than hard goods.