Social media is most used resource for high spenders

According to a new report from TD Bank that reveals the purchasing habits of today’s shoppers, millennials are the most brand-loyal consumers.

Consumers today have a much wider range of choices for shopping today compared to years prior, making the millennials’ loyalty a much-needed commodity in the luxury world. TD Bank's Retail Experience Index also showed that 73 percent of consumers today plan on making a large purchase, alluding to U.S. consumers becoming more comfortable with spending again.

"We're encouraged to see that consumers are making major purchases again and feeling confident about the economy overall," said David Boone, executive vice president and head of U.S. partnerships and shared services at TD Bank. "We expect consumer spending to increase steadily throughout 2018, so retailers should re-evaluate how they are engaging with customers and determine if they're providing experiences that encourage purchasing across all channels."

TD Bank surveyed 1,021 U.S. shoppers for the index.

Shopping statistics
Consumers aged 18 to 34 were more likely to shop online, with 41 percent claiming they do so often. However, only 26 percent of Gen-Xers and 17 percent of baby boomers claim to frequently shop online.

But while bricks-and-mortar may be struggling to gain traction in today’s turbulent retail environment, it will never disappear, as 51 percent of respondents say they shop in-store “all the time.”

Luxury brands rank near the top in a number of categories including live-chat and in-store technology. Image credit: Michael Kors, fall 2017

Retailers and brands need to astutely focus on customer interaction, as this is still a major driver of sales today. For instance, 66 percent of consumers who bought a major purchase at a physical location sought out help from a store associate.

Social media and blogs were the resources most used for research by consumers who purchase high-end or expensive items, priced over $2,000. About 32 percent of high spenders leveraged these outlets while only 21 percent of standard shoppers did.

However, those that bought big-ticket items in stores were much less likely to purchase on their first visit, with 23 percent doing so. About 40 percent of all consumers did purchase an item during their first visit to the store.

Millennials have been categorized as the most loyal with 69 percent of millennial survey takers claiming they always or often purchase from the same brand when it comes to a significant purchase.

Millennials look to loyalty

Only 58 percent of Gen-Xers and 56 percent of baby boomers claimed the same. The millennial age group is most loyal to a brand when it comes to their electronics or music equipment such as smartphones or headphones.

Consumers are using apps to take advantage of exclusive promotions or deals, as well as to shop during off hours and bypass the crowds.

Additional insight
Amazon and online shopping experiences continue to threaten bricks-and-mortar, with the number of store closings in the first half of this year outnumbering all of those that closed last year.

Many retailers are relying on discounts instead of sporadically offering them throughout the year for holidays and events to help attract shoppers in today’s tumultuous retail environment. However, ecommerce is continuing to move forward with sales in the first quarter increasing by 15 percent year-over-year (see more).

Anticipating what the bricks-and-mortar store of the future will look like is on the mind of every marketer, but to best understand where retail is headed, one must look back at the evolution of in-store customer experience.

In-store experience has undergone many changes since the 1800s and as bricks-and-mortar retail evolved, so have consumer behavior and expectations. Today, omnichannel advances, an approach that emphasizes retail technology to better customer experience, are all the rage, and the role of sales associate, long seen as a pillar of in-store information and recommendations, has been enhanced by digital tools (see more).

"We understand the challenges faced by millennials today. They're debt-averse and price-conscious for good reason,” Mr. Boone said. “As more millennials begin to start families and buy homes, retailers have an opportunity to earn brand loyalty by providing smart pricing, flexible payment options and valuable loyalty programs.

“In fact, we think that providing value and flexibility is what will keep these customers coming back in the long-term.”