Analytics, Mastercard Advisors

The Omnishopper: The Only Person Who Matters for Retailers

The Omnishopper - MasterCard AdvisorsYou will find no shortage of excellent, well-researched and well-intentioned advice on the world of omnichannel retailing. For example, online mobile commerce is exploding. We know that. Mall stores are evolving. Online marketplaces are gaining momentum. In-store technology is continuing to gain traction.

Let’s not forget the only real driver of the omnichannel world. It’s the customer. It’s the customer who is considering a constant stream of new information, new products and yes, new channels. We would like to suggest that although channel strategy is important, it will never be as important as customer strategy. In that spirit, we have just completed a global profile of what that customer looks like, how she thinks and how she shops. Meet the omnishopper.

Experience and Possession

MasterCard has recently completed a global study of the omnishopper and found that today’s consumer transcends channels. She is not interested in “stuff”—either she doesn’t remember what life was like pre-2008, or she does so with a shudder. She is interested in the experience of shopping and possession. While hardly oblivious to price, price is only one ingredient in what adds up to a satisfying retail experience. Quality, brand, value—and a pleasing and even entertaining path to purchase are what are important to her.

Omnishoppers have become accustomed to ecommerce, but they’re not devoted exclusively to it. Even if ecommerce holds concerns for 59 percent of omnishoppers, they understand what ecommerce is for. And that understanding is what’s behind what many regard as ecommerce’s stall-out at about 7 percent of total retail volume.

Through much of this year, there has been a good deal of heat and noise in the press, and, for that matter, when retailers talk to each other, about the supposed underperformance of ecommerce. We at MasterCard say, ”Don’t be afraid of this number: understand it.”

First of all, not everything is so dire for ecommerce when sliced by category. Fully 48 percent of electronics and appliances were sold online in July 2015, according to MasterCard SpendingPulse, with 23.5 percent of apparel moving through the online channel during the same period.

Shrinking Store Visits

But for the omnishopper, the path to purchase leads more and more to the stores on Main Street and in the mall—the venues that continue to provide her with the experience she wants.

The thing is, that list of stores is dwindling. The more she shops online, the more the omnishopper narrows her choice of stores to visit.

This was perhaps the most arresting result of market research MasterCard conducted to find out what the omnishopper is thinking, and how retail CMOs can place their next bets by anticipating her next move.

By startling margins, MasterCard discovered, first from a look at its anonymous and aggregated transaction-based insights, and later by asking a robust sample of the U.S. consumer base, the more sites omnishoppers visit online, whether to research, price or buy, the fewer stores on Main Street they are predisposed to visit. So ecommerce has taken on the role, in concert with other forces—the continuing impact of the financial crisis on consumers’ attitudes toward their money, and the resulting focus on experience—of sharpening consumer choice.

MasterCard transaction data indicate that between 2010 and 2014, 53 percent of U.S. consumers were visiting fewer sites and stores, with unique merchants per active account falling 13.5 percent from 28.4 stores to 24.6 stores. Meanwhile, they are visiting more ecommerce sites, both for researching and buying. So the downward trend is driven almost exclusively by their sharpened focus, afforded by the internet, once they’re interacting in the physical world.

Loyalty Versus Commitment

This is not to say that consumers have become more loyal. They’re not there yet, and, if retailers don’t do their work, they’re in danger of losing the chance to ensure something better than loyalty—what MasterCard is calling commitment.

Two years ago, the great fear stalking the corridors of retail was showrooming: the prospect of frictionless shopping on the Internet driving prices down as far as they could go, with stores serving simply as test-drive facilities.

Something like the opposite has happened. Ecommerce is not a race to the bottom. While some goods and services (the latter, in some cases, of necessity: think of digital music) are taking share online, both by category and in bulk, the store continues to attract consumers for service, for socializing and, perhaps most surprising, for inventory.

She Wants It Now

The last named is a critical point. More than safety, more than security, consumers are demanding selection and availability both online and in-store. Fully 73 percent of U.S. consumers surveyed told us their biggest frustration with shopping was “items not in stock.”

Online or in-store, the omnishopper wants what she wants when she wants it.

This goes to the heart of the omnishopping phenomenon (it is nothing less). Retailers can thrive only by concentrating on the omnishopper herself and the way she uses channels, devices, technology and indeed her own savvy as means to an end—in short, the path to purchase ending in a satisfying experience, as much as the purchase itself in a box with a receipt. This also is the way to obtain her commitment—a commitment based on trust to deliver merchandise swiftly, safely and in a digital and physical environment that the consumer finds welcoming.

Analysis of category spend is all very well: it would be foolish to know that nearly half of electronics in the U.S. move through the online channel and not adjust floor planning accordingly, for example. But it’s just as important to realize that each category has a shifting equation of device, channel, geography, research, purchase, spend and planning—and that this equation is a result of the consumer’s own understanding of her needs in this new environment. When she finds those needs met, she will commit.

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