How Understanding Consumer Values Can Drive Retail Growth
- Merchants can help improve customer acquisition, conversion, and retention by understanding the role customer values play in purchasing decisions.
- Combining an understanding of customer values with data helps retailers meet shopper expectations.
- Sophisticated shoppers are increasingly demanding a seamless shopping experience that spans multiple digital and physical touchpoints.
The survival of today’s retailers depends on many factors, but in an era where consumers find most brands to be “easily replaceable”, meeting consumer expectations plays a vital role. You’d be hard-pressed to find an organization that doesn’t rely heavily on understanding and leveraging the demographics and psychographics of their customers. But it’s equally important to consider the role that customer values play in purchasing decisions.
Since values often drive decisions, consumers buy based on an emotional reaction more than they realize. Understanding consumer values can be beneficial for marketers whose success is increasingly measured by acquiring, converting, and retaining new customers, but who may struggle to meet customer expectations.
By layering existing data with an understanding of consumer core values, marketers can uncover valuable insights that enable targeted messaging and customer experiences on a more human level.
With this new perspective in mind, PayPal commissioned a survey* of five global markets to better understand the shared values of their more than 426 million global users and the impact these values could have on brand preference and desired shopping experiences.
When presented with 56 core human values to choose from, survey results showed that across all five regions (US, UK, DE, FR, AU), PayPal consumers ranked the safety, experiences and loyalty in their top 10. As merchants seek to create more impactful connections with consumers and develop that coveted stickiness that drives loyalty and repeat purchases, it’s important to think outside of demographics and psychography as the only way to obtain consumer information.
Why safety comes first
Two years ago, only 17.8% of global sales came from online purchases. This number is expected to reach 21% in 2022, a 17.9% increase in e-commerce market share over two years. It’s no surprise that the past two years have accelerated the growth of digital commerce. However, the growth of e-commerce is also leading to an increase in fraudulent activities online.
When making a purchase, buyers want to know that their personal and financial information is protected. PayPal research shows that 79% of US consumers say they need to “trust their financial information is secure” when shopping online. Additionally, more than half (52%) of PayPal customers say they’re more likely to buy online if PayPal is available, and more than 80% are more likely to make a first-time purchase if PayPal is available. propose.
“By simply offering a reliable payment method, merchants can be more likely to drive conversions and keep buyers coming back again and again,” said Marcy Campbell, senior vice president of professional services at PayPal. “PayPal is one of the most trusted brands in the world, and that trust is transferable to the retailer.”
Customer experience is key
The journey matters and if merchants don’t deliver the shopping experience customers want, they risk losing the sale, along with a loyal customer. It’s no surprise, then, that “experiences” were also ranked among the top 10 core values of PayPal consumers, according to the Valuegraphics survey.*
“Merchants need to focus on showing where their customers are, whether that’s in-store, online, on mobile or on social media,” Campbell said. “They need to invest in the experience, not just the transaction.”
When the experience is unsatisfactory, most customers do not return. PayPal research shows that 80% of shoppers stop using retail sites with bad experiences.
Merchants need to create a seamless experience that allows shoppers to interact with the product. “Product presentation is important and giving customers options at the time of decision rather than the time of purchase is increasingly important,” Campbell added.
At Pressed, a retailer of cold-pressed juices and plant-based foods, creating the right experience often revolves around a conversation between store associates and customers. “What we’re trying to do in our retail stores is really educate the customer about the product and make it less of a transaction and more of an experience,” said Blaine LaBron, the company’s vice president of digital marketing. .
“On the technology side, our goal has always been to first educate the consumer, and then once they’ve decided what they want, get them out there as soon as possible,” he said. he adds. “We know everyone has really busy schedules.”
To improve the experience, the company offers alternative payment methods — such as QR codes, PayPal, and Venmo — for customers who want them. “The idea here is for customers to buy the way they want,” LaBron said.
This applies to both online and in-store purchases. For online transactions, Campbell recommends placing payment options next to a product offering, not just on the checkout page. “81% of Millennials and Gen Z Buy Now Pay Later users decide which payment method to use before checking out,” she said.**
A loyalty strategy
Loyalty is the third core value that retailers should focus on.
The value of a loyal customer is endless. Repeat purchases, word-of-mouth promotion, ease of adoption of new products. They could even be considered an extended part of your marketing team. In fact, a Harvard Business Review study found that it costs retailers five to 25 times more to acquire a new customer than it does to maintain and grow an existing relationship.
To maximize value with customers, retailers must design seamless experiences that engage consumers at relevant touchpoints, as well as design customer loyalty programs that recognize and value repeat customers.
According to McKinsey, customer expectations are high: 71% of customers prefer personalized communication and 76% get angry when they don’t receive it.
“We have product offerings like Store Cash, which allows a merchant to identify a PayPal user and provides them with incentives to return to their website if they haven’t made a purchase,” Campbell said. “We’ve seen an increase in PayPal sales when businesses offer Store Cash via email and in-app.”
For Pressed, working with PayPal allows the company “to innovate without worrying about things like collecting payments, especially in a changing space,” LaBron said.
For retailers, innovation should revolve around a basic guideline, Campbell said. “Put yourself in the customers’ shoes. Buyers want a relationship, not a transaction,” she added. “Anything you can do to create that sense of connection will make a difference and help increase sales, build loyalty and drive your brand forward.”
Watch the video below to learn more about how Pressed creates a valuable customer experience.
Find out how PayPal solutions can help improve customer experience and build loyalty.
* Valuegraphics, commissioned by PayPal, December 2021-January 2022. Valuegraphics conducted a survey of a total of 6,750 PayPals, located in the United States, Germany, France, United Kingdom and Australia, to identify the securities that have an impact on their decisions.
**TRC online survey commissioned by PayPal in April 2021 of 5,000 consumers aged 18+ in the US, UK, Germany, France and Australia (among millennials and Gen Z BNPL (18-40), US (n=222), UK (n=269), DE (n=275), AU (n=344), FR (n=150)
This post was created by Insider Studios with PayPal.