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New IBM Report Reveals Consumer Shopping Preferences

Findings Reveal How Customers Fill Their Baskets, Why Shoppers Change Channels and the Shifting Age Demographic of the Multi-Channel Consumer

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ARMONK, NY - 30 Sep 2008: IBM (NYSE: IBM) today announced the findings from a survey of nearly 4,300 U.S. and UK consumers that revealed insights into consumer behaviors, preferences and expectations around how they shop, and how they make purchasing decisions across multiple retail channels including in-store, Web, mobile and catalog.

The study, titled "Understanding Consumer Patterns and Preferences in Multi-Channel Retailing," examines factors retailers need to consider when evaluating multi-channel initiatives. Multi-channel retailing, the act of selling products across a variety of channels including in-store, Web, mobile and catalog, continues to be a leading business strategy adopted by retailers today. The report ranks the most commonly shopped products across multiple channels, highlights the features and functions consumers value while shopping, and explores the reasons why shoppers are quick to shift their loyalty to specific retailers across multiple channels. The product categories that were evaluated include Consumer Electronics, Apparel/Accessories & Footwear, Home Improvement, Pharmaceuticals, Sporting Goods, Groceries and Home Decor.

Research estimates that nearly 40% of retail sales will be influenced by the Web and by cross-channel in 2012. In 2007, cross-channel shopping accounted for $510 billion or 20% of total retail sales and by 2012, that number is projected to be over $1.1 trillion, representing growth of an estimated 17.3% compound annual growth rate (CAGR) for all retail categories. ("The Web's Impact on Cross-Channel Sales," Forrester Research, June 2007).

In light of this growing trend, retailers are seeking deeper insights into how to maximize the multi-channel experience and build customer advocacy so they can successfully evolve with customers' needs over time. "Since multi-channel is still an area of discovery for many, retailers are looking for guidance around how to navigate the process to inspire greater loyalty among customers and drive increased profitability across the business," said Fred Balboni, Global Retail Industry Leader, IBM. "To realize the desired gains, retailers need to understand the factors that are really driving consumers to shop."

Key findings of the report include:
Top multi-channel product category: Consumer electronics purchases emerged as the most frequently shopped product category among multi-channel shoppers. Apparel/Accessories & Footwear, Home Improvement/Do-it-Yourself and Appliances came in as the next most popular product categories. The report also revealed that in the U.S., Apparel/Accessories & Footwear and Grocery have the greatest percentage of impulse purchase decisions per basket. In the UK, the grocery market had the highest number of impulse purchase decisions per basket, as well as the largest percentage of impulse shoppers.

Preferred shopping experience: Over 75 percent of shoppers cited that they prefer shopping "Online to Store" followed by "Store to Online" (7+ percent) and "Online to Call Center" (3+ percent) across all product categories -- these combinations were nearly identical for U.S. and UK consumers. Based on average basket size, consumers in the U.S. spent the most on purchases made between the "Online to Call Center" channels. On the flip side, consumers in the UK spent the most between the "Online to Mobile" segments.

Profile of multi-channel shopper: In the U.S., the age group with the greatest percentage of multi-channel shoppers (those who are defined by shopping once a month or more) is 18-24 years; in the UK, core multi-channel shoppers are slightly older between 25-34 years.

Switching Loyalties between Channels and Retailers: Between 46-50 percent of all shoppers in the U.S. and the UK admitted to switching loyalties to retailers as they shopped across different channels. Overall, most consumers cited price as their primary motivation for change, followed by convenience and product availability.

About the Study
The findings of this report are based on a survey of nearly 4,300 U.S. and UK consumers from the U.S. and the UK. The population included a wide range of demographics (gender, age, family status) comprising equal numbers of men and women, with an above average national income.

For more information on additional findings from the study, please e-mail iibv@us.ibm.com.

About IBM
For more information about IBM, please visit www.ibm.com.

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