News, Education and Events Decoding Digital Payments & Fraud

News, Education and Events Decoding Digital Payments & Fraud

Omnichannel Customers ‘More Valuable’ to Retailers than Online or In-Store Only: Report

Omnichannel Customers ‘More Valuable’ to Retailers than Online or In-Store Only: Report

For traditional retailers, as their customers move increasingly to online channels, omnichannel has been seen as a way to compete with online-only behemoths like Amazon. A new study of consumers confirms these retailers are on the right track. Researchers from Rice University’s Jesse H. Jones Graduate School of Business and customer-experience software provider Medallia tracked the behavior of 46,000 customers of one national retailer over 14 months and found 73 percent of its customers used more than one of the chain’s channels. Twenty percent were in-store shoppers only and 7 percent only shopped at the anonymous retailer’s online offerings. Of the three, researchers found, omnichannel customers were more valuable.

“After controlling for shopping experience, [omnichannel shoppers] spent an average of 4 percent more on every shopping occasion in the store and 10 percent more online than single-channel customers,” the authors wrote in Harvard Business Review discussing their findings. “Even more compelling, with every additional channel they used, the shoppers spent more money in the store. For example, customers who used 4+ channels spent 9 percent more in the store, on average, when compared to those who used just one channel.”

The researchers warned that such customers may have been loyal and engaged with the retailer to begin with and that the richer, multi-touchpoint shopping experiences may not have caused the increases reported. But, “we can say from our study that omnichannel shoppers are more valuable to the retailer with confidence.”

According to the report, getting a seamless shopping experience right—including leveraging physical stores—can help in the effort not only to compete, but to thrive in an increasingly digital world. Merchants understand the value, although surmounting the leadership, technology, payment and reporting challenges continues to delay full implementation.