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The Digital Divide Is Hurting Retail Sales More Than You Think, Studies Find

What drives shoppers crazy? Websites that are as slow — and the digital divide that keeps retailers from offering the cutting-edge technologies and experiences that consumers demand.

Those are the findings from two just-released surveys peering into the minds of both consumers and the retail executives tasked with delivering on evolving shopper expectations.

Customer experience optimization firm Eggplant polled 3,200 individuals in the U.S. and the UK to uncover sentiments toward website speed. It found that a sluggish site is worse than one that crashes or won’t work at all — which could be why Amazon still managed to log record sales despite a chaotic start to Prime Day last week. Just how damaging is an underperforming website? Seventy-three percent of customers across both countries would flee a business with a site that’s not as a speedy as expected, Eggplant found.

“This goes to show that when it comes to business performance, slow websites are a silent killer,” Dr. John Bates, Eggplant CEO, said. “This is especially true in an age of instant gratification — the two-second attention span and quick social media retaliation at anything less than full performance.”

Most Americans (79 percent) described a slow site as even more frustrating than one that fails altogether, and 60 percent would jump ship to a rival. On top of that, 59 percent admitted that a poor web experience would ding the brand’s reputation in their eyes, while just 23 percent felt the same way about a non-working website — pointing to the importance not just of site functionality but site speed, Eggplant noted.

“Today, speed, connectivity and an outstanding user experience are critical to ongoing business success, and while customers will forgive and forget the odd bug, crash, or period of site maintenance, they will not tolerate a site that doesn’t move at the speed they’ve become accustomed to,” Bates added.

“With retailers already preparing for the holiday shopping season, we urge them to make sure they analyze and optimize every element of their online presence to make sure it is running as efficiently as possible,” Bates continued. “As the research has shown, a slow website will drive consumers away, negatively impacting the health of the business.”

The digital divide

“The digital divide in retail is growing, as over 75 percent of retail shopping traverses the digital realm, but less than half of retailers deliver on the most important digital capabilities that customers desire,” BRP principal Brian Brunk said.

Though smartphones and other mobile gadgets are the “primary catalyst” influencing the shopper experience, very few merchants are taking full advantage of what these devices enable before and during the in-store retail journey, BRP SVP and practice lead Ryan Grogman noted.

In polling 1,212 consumers and 60 retail leaders, BRP uncovered a misalignment between shopper and merchant priorities. For example, a majority (65 percent) of consumers said they’d be more inclined to shop with a retailer that pushed mobile offers and coupons to their device when in or around a store, and yet just 8 percent of surveyed retailers engage with shoppers this way.

Perhaps because retailers like Amazon, H&MZara and Nike have already experimented with augmented reality (AR), almost half (48 percent) of those polled by BRP said they’re interested in this technology that helps them experience products in a virtual environment — though overall just 15 percent of merchants offer AR experiences.

Even customers’ desire for a better returns process remains underserved by technology. More than two thirds of shoppers (68 percent) would gravitate toward a retailer that offers automated returns. A mere 8 percent of merchants have returns automation enabled, though interestingly enough, 37 percent believe it would have a positive impact on their business, according to BRP.

Retailers do understand that the right technology can help them to narrow the digital divide and better serve their constituents. BRP said they’re piloting or planning for a number of initiatives, including mobile POS (50 percent), adding in-store functionality to their mobile apps (44 percent), contactless payment (38 percent) and RFID deployments (32 percent).

As with any project, budget — or lack thereof — can be the biggest obstacle standing in the way of greater technology enablement. BRP found the “return on experience” that increases customer value to average 25 percent across generational cohorts, though Millennials (32 percent) and Gen Z (29 percent) would respond more strongly to retailers’ digital investments. Billion-dollar retailers would add $260 million to the bottom line as a result of executing a customer-centric, digitally enabled experience in stores, BRP found.

“Retailers must transform and quickly close the digital gap to remain relevant with their customer,” Brunk said.

Editor’s Note: This story was reported by FN’s sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.

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