Customer inspiration: An opportunity for the retail trade with "saving" consumers

While in 2016 27.8% of the Swiss population would like to save in the future, this figure rose to 39.3% in 2023. A remarkable increase, which is also reflected in the negative development of consumer sentiment of the State Secretariat for Economic Affairs SECO. 

"The increased propensity to save among consumers is forcing many retailers to take action," says Thomas Rudolph, Director of the Institute of Retail Management (IRM-HSG). Often this means more discounts and thus, a loss of margin. A newly published study by the IRM-HSG underlines the role of customer inspiration in ensuring that shops remain economically successful even in challenging times. If consumers feel inspired, this has a positive impact on their shopping behaviour. Across all retail sectors surveyed, inspired customers visit significantly more shops (+92%), visit more departments (+70%) and buy more products (+79%) at higher prices (+105%) than planned. This also has an impact on the average purchase amount. The average purchase amount is higher for inspired customers than for less inspired consumers in all the sectors studied. Another finding: Inspired customers are more loyal to retailers (+34%).

Who is open to inspiration?

Certain customer groups are more open to inspiration than others. Experiential shoppers, in particular, are interested in new, inspiring offers. Regarding demographic characteristics, younger target groups and women show a higher interest in inspiration across industries. A well-orchestrated omnichannel strategy can help to successfully inspire customers. For example, retail companies that reach their customers through more than one touchpoint are the most successful. Social media, special offers, and sales staff as points of contact could greatly increase their importance in inspiring consumers.

Three examples: Media Markt, IKEA and Zalando inspire customers the most

The mean value of customer inspiration in the purchase phase, measured on a scale of one to seven, is 3.72 in 2023. This corresponds to a value just below the scale’s midpoint and indicates that the potential of customer inspiration in the Swiss retail industry is still considerable. Media Markt (4.09), IKEA (4.02) and Zalando (4.01) inspire their customers the most in the purchase phase. Food retailers inspire below average, as examples Lidl Switzerland (3.45), Migros (3.35) or Coop (3.23). 

Purchase regret: too much inspiration is bad for business

Professor Rudolph warns against exaggeration: “Retailers must not promise more than they can deliver.” However, this is not always successful. 12.7% of inspired customers regret their last purchase. Among non-inspired customers, the figure is only 3.3%. The return rate also increases when inspiration is exaggerated. 15.5% of inspired customers return at least one product. For non-inspired customers, the figure is only 8.8%. Therefore, customer inspiration should address relevant customer needs with convincing and comprehensible services.

Conclusion: The results of the study point to the increasing importance of customer inspiration in economically difficult times. A well-orchestrated inspiration management can help not only to strengthen customer loyalty but also to compensate to some extent for the loss of margin due to exaggerated price promotions.

Information on the study

The "Customer Inspiration Study" in Swiss retail is a long-term study which was conducted for the first time in 2012. In 2023, the sample consists of a total of 1393 consumers in the food, consumer electronics, sports and leisure articles, furniture and furnishings, fashion and textiles and cosmetics sectors in German-speaking Switzerland (survey period: February 2023). The University of St.Gallen is responsible for the 2023 study: Prof. Dr. Thomas Rudolph, Prof. Dr. Marc Linzmajer, Matthias Eggenschwiler and Andreas Hauschke. The companies Boost Group AG, ALDI SUISSE AG and Retail Capital Partners AG supported the data collection of the study without influencing the conception and interpretation of the data.

The detailed study results, a free reading sample, and further information can be found at:
www.handelsliteratur-hsg.ch/

Image: Adobe Stock / Sondem