The Commonwealth Bank’s Retail Therapy Study - a first for CommBank - ‘looked at the emotional and rational drivers behind customers’ perfect in-store experiences, revealing inefficient customer service (68%) and queuing (53%) as two of the biggest contributors to a poor “retail therapy” experience.’
The Bank says that with 75% of those surveyed using a credit/debit card as their primary payment method, the study indicated that cash is no longer king and digital is fast becoming the norm. Half would avoid a store if they have to wait to make a payment.
Of course, you’d have to imagine that plenty of people would disagree with the sentiment that ‘cash is no longer king,’ but the report suggests what the report suggests and we did ask the bank about it, as you’ll see in our interview below.
Continuing on with the stats that were released, CommBank says that ‘just under half (47%) of survey respondents believe retailers that use the latest technology are more in tune with their needs as a customer, with a further 74% suggesting they would stay loyal to a business that offers personalisation.’
Claire Roberts, Executive General Manager, Local Business Banking, Commonwealth Bank, said: “Technology is reshaping the relationship between consumers and businesses. As more and more customers expect to be using the latest technology in store, those businesses not adopting new payment methods will be left behind.
“With recent advances in technology now available to businesses of any size, small and medium retailers have a new opportunity to transform point-of-sale and in-store experiences to drive sales and encourage greater customer loyalty through repeat business.”
There are plenty more stats from the report listed below, but first, here are a series of questions posed to Roberts via email and answer in the same medium:
1. So, onto the research. Everyone loves a bit of retail therapy – well, as long as they have the spare funds or a credit card at the ready to indulge in it – so tell us about the new research. Is this a first for CBA or a long running study?
The Retail Therapy Study focuses on in-store customer behaviours and what motivates people during the purchasing process.
The Study – a first for CommBank – is also a platform for us to help educate businesses on the importance of using technology to get the edge on competitors, retain customers and drive business success.
2. What are some of the headline findings from the research? We’ll go into more detail shortly but what are the attention grabbers?
There were three key insights that came out of the Retail Therapy Study.
Firstly, businesses need to embrace digital payments as the new norm.
Secondly, the modern consumer has a need for speed and technology is crucial in creating smooth in store experiences.
Thirdly, personalisation – from remembering a customer’s name to being able to split the bill – drives loyalty and customer retention. At the end of the day, customers want to know that you value them.
3. What about the use of technology and the latest payment methods in stores – what are these?
As more and more customers expect to be using the latest technology in store, those businesses not adopting new payment methods will be left behind. Albert from CommBank is a leading-edge payments tablet device paving the way for the enhanced in store experience.
A recent update to the device means it is now the world’s only device to take payments as well as access front-end point of sale and back-end processing systems of businesses as well.
4. What are some of the other major findings to emerge from the research, and what picture do they paint for consumers, businesses and the banking sector?
Another major finding from the research was that the psychological process behind deciding to purchase is a complex one that businesses need to understand better to successfully reach consumers.
To achieve retail therapy, businesses need to reduce customer effort and friction. In a retail environment we are, at times, overwhelmed by choice. This leads to choice paralysis, which in-turn leads to avoiding purchase decisions and buyer’s remorse.
The study shows that businesses need to work harder to help customers make informed, confident choices by providing personalised and relevant information during the retail experience.
5. So, how do you think payment systems will continue to evolve over the next few years? Are we headed for a cashless society as is planned for some Scandinavian countries and even South Korea, which wants to be cashless by 2020?
There is still a role for cash to play in society – even by 2020 – however, it is undeniable that technology is reshaping the consumer-business relationship, and one of the most prominent examples of this is the shift from cash to card.
This latest research shows that three out of four (75%) people use credit/debit cards as their primary payment method when shopping or dining.
But it goes further than that, because technology is now also linked to consumer trust in a business. Almost half (44%) of those surveyed agreed that they’re more likely to trust a business that incorporates the latest technology.
6. What does this mean for those who believe ‘cash is king’?
Cash still has a role to play in business. What’s important to understand is that technology is now just as crucial to business success. Embracing innovative solutions like the mobile payments tablet Albert - which also provide businesses with customer purchasing and demographic data and trends - allows outlets to better understand their customers, their marketplace and investigate through the data how improved brand loyalty can be achieved.
That ended the emailed questions and answers - now onto the rest of the findings as released by CommBank.
The study also revealed the impact of a negative in-store experience on consumer purchasing:
- 75% of Australians said they would leave a store if they can't easily access help/guidance/information
- 72% won’t buy from a store if they can’t easily find a product they want
- 50% will avoid a business if they have to queue for payment.
Dr Johann Ponnampalam, Deakin University behavioural scientist, said the findings speak to the human tendency to avoid friction. “Much of our daily life involves habitual, autopilot behaviour. When in this mindset, we crave faster, simpler, easier service interactions and when we don’t receive them, we experience friction which often leads to us avoiding purchasing altogether.
“Our lives are more complex than ever before and consumers have an abundance of choice. In a retail environment, we are, at times, overwhelmed by choice. This leads to choice paralysis, which in-turn leads to avoiding purchase decisions and buyer’s remorse. The study shows that businesses need to work harder to help customers make informed, confident choices by providing personalised and relevant information during the retail experience,” he said.
CommBank also states that ‘customers are calling for personalisation – more than half (58%) of those surveyed believe retail businesses should do more to personalise their shopping experiences.
More below, please read on.
CBA’s Claire Roberts added: “Embracing technology allows businesses to better understand their customers, their marketplace and investigate, through data insights, how brand loyalty can be achieved. This in turn generates connections with customers that strengthen loyalty programs and with 84 per cent of Australians more likely to buy from a store they feel connected to, this is a telling trend.
“Technology can power loyalty.”
The bank noted that one leading-edge payments device that is paving the way for this enhanced in-store ‘retail therapy’ experience is Albert, which Roberts mentioned above, and is ‘the world’s only device to both take payments as well as access front-end point of sale and back-end processing systems of businesses.’
Roberts concluded: “At the end of the day, consumers want a smooth retail therapy experience and technology delivers that. When there are affordable solutions such as Albert in the marketplace, there is no reason for businesses to generate unnecessary friction and demand cash-only spending.”
Coupled with Albert’s flexible payment options, mobility and bill splitting functionalities, CommBank adds that ‘apps such as Daily IQ and Kounta get to know their customers through their spending patterns so they can improve customer service in-store from interactions with staff through to POS and payment.’
Key findings from the report include:
- 75% of people use credit/debit cards as their primary payment method when shopping / dining in-store (this has become the preferred payment method with cash (66%), PayPass / PayWave / Tap&Pay (49%) and digital wallets (6%) also surveyed.)
- 47% of Aussies like to use technology when shopping to make their experience more efficient
- 78% of people want it to be easy to split bills when shopping
- 74% of shoppers say that queueing makes their shopping experience more stressful
- When paying the bill, 65% of people feel anxious / pressured if they get asked to tip by a waiter / staff member. Whereas 46% feel less anxious / pressured to leave a tip if prompted by an electronic payment terminal
- 69% of people hate not being able to split the bill
- 77% of people find it awkward when one person has to pay for everyone because they can’t split the bill
- People most commonly feel their retail therapy is ruined by inefficient customer service (68%)
- 77% of shoppers are more likely to return to a retail store that offers loyalty programs or customer offers
- 84% of shoppers are more likely to buy from a business they feel connected to
- When paying, 84% of shoppers like to make use of loyalty / rewards programs
- 82% of shoppers are likely to spend more in a store when they feel like a valued customer
- 74% of people will stay loyal to a business that personalises their experience
Most important ‘retail therapy’ requests:
- More efficient customer service (57%)
- Less time spent queuing (56%)
- The ability to split bills (43%)
- Flexible payment options (43%)