On 26 October 2020 we surveyed 2,000 US consumers about their shopping behaviors in stores and online during Covid-19 and unveiled some interesting insights for luxury retailers.
Our insights show that most consumers are avoiding luxury retail stores as a result of health concerns caused by the Coronavirus. The insights show that getting too close to other people and waiting in lines inside and outside of stores are key customer concerns that are costing luxury retailers revenue opportunity across multiple channels, both before and during the pandemic. The survey suggests that luxury retailers who combat these challenges by using digital tools to choreograph their customer experience will see significant business case benefits through improved omni-channel sales, greater loyalty and advocacy amongst some of the highest value customer groups: younger generations and higher earning households.
Who normally visits luxury retail stores outside of the pandemic and how often?
Before Covid-19, 62% of the shoppers within our survey said they visited luxury stores. 12% said they did so often, 22% said they did so sometimes and 28% said they did so rarely.
Younger age demographics are 4 times more likely to visit luxury retail stores often and 2 times as likely to visit sometimes. Baby Boomers are almost twice as likely to never visit luxury retail stores as Millennial and GenZ customers.
Unsurprisingly, there is a clear correlation between higher earning households and the likelihood of visiting luxury retail stores often and in general.
Consumers from higher income households are almost 3 times more likely to visit these stores often and twice as likely to visit sometimes than those in the lowest income group.
Men are more likely to visit luxury retail stores than women.
Customers are visiting luxury retail stores less as a direct result of the Coronavirus outbreak….
As a result of the Coronavirus outbreak, 60% of luxury retail customers are visiting these types of stores less than before. A third (31%) are visiting them the same as before. Only 8% of customers are visiting these types of stores more than before.
In addition to being their lowest level of visitors outside of the Coronavirus, Baby Boomers are the most likely to reduce their visits to luxury retail stores during the Coronavirus outbreak. On the other hand, half (56%) of Millennial and GenZ customers have reduced their visits.
33% of these younger generations are continuing to visit luxury retail stores as much as they did before and 11% are visiting more than before. Very few Baby Boomers are visiting these types of stores more than before.
In addition to being the largest visitor group outside of Covid-19, higher household income groups are the least likely to reduce their visits to luxury retail stores as a result of the Coronavirus outbreak.
Only 51% of consumers from higher income households are reducing their visits to stores, and 19% are visiting luxury stores more.
This perhaps suggests a widening economic gap created by the Coronavirus pandemic in that the higher income groups are disproportionately less financially impacted by the crisis.
Throughout our survey we found that women are more cautious and concerned by the health impact of the Coronavirus outbreak than men.
Why are customers avoiding luxury stores
We asked customers why they were avoiding stores in general and found that health concerns are the main reason, with 81% of consumers stating this to be the case. This was followed by an increased use of online shopping (51%) and financial concerns (36%). All age groups are increasing their use of online shopping channels equally.
Financial concerns and, interestingly, environmental consciousness has proved greatest amongst younger generations of consumers.
The fact that GenZ consumers are 2x more likely to avoid stores for environmental reasons than Baby Boomers is something luxury retailers need to become increasingly aware of, as it will effect the way consumers shop as they increase in spending power.
A number of brands are even bringing sustainability offerings into their product range/store environment. For example, Burberry has become carbon neutral across 85% of its sites and is procure 83% of its total energy from renewable sources, and has also reduced emissions in its supply chain by more than 1600 tonnes of carbon.
What concerns people about shopping in stores in the Coronavirus era?
When it comes to visiting stores, customers’ biggest concerns are other people not wearing masks (56%), getting too close to other people (55%), touching products that other people have touched by other people (45%) and having to wear a mask (28%).
A quarter (24%) of customers are concerned about having to wait in lines inside or outside of stores.
These insights suggest that luxury retailers who address these top concerns and prioritize customer health could increase customer confidence and drive more footfall to their stores.
How lines effect luxury retail sales before and during the Coronavirus
With wait lines proving to be one of the top concerns for customers when visiting stores during the Coronavirus era, we wanted to find out more about how lines impacted customer behavior and why it was a problem.
Our report found that not only are customers visiting stores less because of the pandemic, but when they do visit stores they are less willing to line up, even compared to before the pandemic.
Outside of the Coronavirus outbreak:
Retailers of every type are losing revenue as a direct result of lines, particularly from some of their key customer groups (younger generations and higher household income groups).
85% of customers have avoided entering stores or have walked out of stores without buying anything because of lines and waits for service: 14% said they would do so “often”, 33% said “sometimes’ and 35% said “rarely”.
GenZ, Millennial and GenX age groups were the most likely to avoid entering stores or walkout of stores without purchasing because of lines and waits for service.
Higher household income groups were also more than twice as likely to say they have left stores “often” because of wait lines and waits for service than those in lower income brackets.
During the Coronavirus outbreak:
The lost revenue caused by wait lines is further exacerbated, particularly amongst the key customer groups.
- Half (53%) of customers say they are even more likely than they were previously to avoid entering stores or to walkout of stores without buying because of lines and waits for service; 25% said they were much more likely and 28% said they were more likely.
- Interestingly, Baby Boomer and GenX consumers were more likely than Millennial and GenZ age groups to avoid entering a store or to walkout without buying something during the Coronavirus outbreak because of lines.
- Higher income households are also more likely than other household income groups to be deterred by waits as a direct result of the Coronavirus outbreak.
- Men are also slightly more likely than women to walkout during the Coronavirus outbreak because of waits.
Do lines have a long-term impact on luxury retailer sales?
To add to this challenge, our survey showed that not only do retailers stand to lose immediate revenue opportunity due to long waiting experiences, but they also lose out on future repeat visits and resulting revenues;
- 66% of consumers agreed with the statement that “A long waiting experience would make me less likely to return to a retailer”. 30% strongly agreed and 33% somewhat agreed.
- GenX and Baby Boomers were the most likely to agree with the statement.
- Again, and unfortunately for retailers whose stores are prone to lines, higher household income groups were 1.5 times more likely to agree that a waiting experience would deter them from returning to a store.
Why are wait lines such a big concern to customers?
With wait times proving to severely impact immediate and long-term potential luxury retail revenues, the second part of our survey focussed on understanding how customers felt their experience could be improved.
To help luxury retailers to understand how to improve their waiting experience to minimize the revenue and loyalty loss caused by lines, we asked shoppers what most concerned them about waiting in line in the present period and found that health and lack of comfort are the biggest reasons consumers dislike the experience:
- Contracting Covid-19 was the top concern amongst 47% of consumers.
- This was followed by being uncomfortable standing too long (35%)
- Not knowing how long you have to wait (34%) and wasting time (28%) were also top concerns.
These insights suggest that customers most dislike lines because it makes them feel out of control, uncomfortable and like they are wasting time. Luxury retailers could allay these concerns by using virtual wait line systems and appointment booking solutions, as this would allow them to offer safer, more comfortable and informed waiting experiences that don’t waste customers’ time.
How long customers are prepared to wait for service within luxury retail stores…
When asked how long customers are willing to wait in luxury stores we found that:
A quarter (24%) will only tolerate a wait of up to 3 minutes. 16% will wait between 3-7 minutes and 15% will be willing to wait between 8 and 10 minutes. In total, this means that more than half of luxury shoppers (55%) will only wait up to 10 minutes for service.
These insights demonstrate that the wait time does not need to be long before significant revenues can be lost. This is particularly important in luxury stores because the nature of their high value products means that serving customers can take a long time and so waits for service can easily form.
Interestingly, despite being more likely to walkout without buying anything and less likely to return to the store if they are forced to wait, Millennial and GenZ customers have a higher mean wait time threshold than older generations when it comes to waiting in lines at luxury stores. They are more patient of longer waits, though less tolerant and also, more personally insulted if a wait exceeds their expectations.
Luxury retail wait time is similar to lingerie and phone store retailers.
How do customers want their experiences to be managed within luxury stores…
To understand how Qudini can help our luxury clients at this important time, we sought to understand which of our five key Retail Choreography tools customers wanted to see within luxury retail stores to better manage their experience. So we surveyed customer opinions on:
- Virtual wait line systems: To manage store capacity and to enable customers to line up virtually using their phone or through a host with a tablet.
- Appointment scheduling software: To enable customers to schedule store visits and in-person service or virtual service 24/7 from any channel.
- Contactless collection check-in: To enable customers with online orders to check-in when they arrive at store so that store teams bring their order to them outside of the store.
How do customers want their experiences to be managed within luxury stores…
Customer priorities of these tools specific to luxury retail stores were as follows:
For Millennial and GenZ customers:
1. Virtual appointments (45%)
2. Contactless online order collections (15%)
2. Virtual wait line systems (15%)
3. Store appointments (14%)
4. Store with host app (13%)
For Baby Boomer customers:
1. Virtual appointments (31%)
2. Store appointments (10%)
3. Virtual wait line systems (10%)
4. Store host with tablet (7%)
5. Contactless online order collections (6%)
Consumers earning between $100 and $300k where the most likely to want Retail Choreography solutions from all retail types.
Male consumers were slightly more interested in each solution than female consumers. This suggests that for luxury retailers primarily targeting male consumers, there’s an even greater business case for investing in these in-store experience tools to drive sales. While the insights also indicate that luxury brands could attract more men to their offerings by offering virtual appointments.
When asked why customers would find virtual wait line systems and appointment booking software useful within retail stores during the pandemic, it was clear that most customers felt the solutions could alleviate their health concerns, alongside their concerns around wasted time, poor weather conditions, lack of information and fair process.
What impact would using these solutions have on luxury retail customer spend, advocacy and loyalty?
The survey responses also indicate that luxury retailers who use any of these five solutions to choreograph their customers’ experience stand to gain significantly through improved revenues and brand relationships across channels.
On average across different types of stores, customers rated the usefulness of these different Retail Choreography solutions in the following order:
1. Virtual appointments (45%)
2. Virtual wait line systems (20%)
3. Contactless pickup (20%)
4. In-store appointments (18%)
5. Hosts with tablet (18%)
The survey responses also indicate that any retailers who use any of these five solutions to choreograph their customers’ experience stand to gain significantly through improved revenues and brand relationships across channels. The solutions would positively impact consumers’ interactions with retailers in one or more of the following ways:
- 46% would be more likely to buy something in-store and 47% would also be more likely to shop with the retailer online – indicating that using digital tools to choreograph their customer experience will enable any retailer to increase their overall omni-channel revenues with up to half of customers engaging with these services.
- 50% would be more likely to visit the retailer in the first place – showing all the solutions can help retailers to drive and retain store foot traffic.
- 53% would be more likely to return again and 51% would be more likely to tell their friends about the retailer – indicating that all the solutions can help retailers to improve customer loyalty and advocacy amongst more than half of their customers to ultimately attract more customers to their brand.
- 54% would feel safer and happier and 54% would think better of the retailer – demonstrating that all the solutions can help brands to improve their relationships and relevance amongst customers.
- 48% would be more likely to choose the retailer over their competitors – demonstrating that Retail Choreography solutions can hugely help brands to improve their brand relevance and to win out against competitors.
The survey insights showed the powerful business case benefits for Retail Choreography tools within luxury retail
Our survey found that customers are more likely to find Retail Choreography tools useful within luxury retail stores.
All this confirms what we all instinctively know to be true – customers want retailers to use digital tools to improve their experience, and they will be driven to spend more and to engage more across a retailer’s entire omni-channel offering in return.
The significantly greater interest in Retail Choreography tools suggests they may have wanted these kinds of tools all along and that Covid-19 will prove to be a catalyst for a new era of omni-channel retailing as retailers realize the powerful business case benefits behind offering such tools.
To further add to the business case benefit of using Retail Choreography solutions within luxury retail and the conclusion that Covid will prove to be a catalyst for a new era of omni-channel retailing where lines are eliminated and in-store or virtual appointments and curbside pickup become the norm.
Overall, our survey shows that a long wait time is more likely to deter consumers, especially younger consumers and those from higher household income groups, from visiting stores or returning in the future. To combat this, the insights show that Retail Choreography tools offer a powerful antidote, as these same demographics are also the most likely to be driven to purchase in-store and online across a retailer’s channels, and the most likely to return again as a result of a retailer’s use of digital tools to choreograph their experience.
Improving luxury profitability and driving lasting brand relevance
These insights show that both during and outside of the Coronavirus, luxury retailers have much to gain by using Retail choreography solutions to manage lines, to offer in-store and virtual appointments and to provide contactless pickup services.
Our many case studies with leading luxury retailers have also shown the same. For more information on how we can help your brand take a look at our customer success stories or get in touch with our team for a demo at info@qudini.com
