Retailers and technology companies regularly conduct and consult consumer research to prepare for tomorrow’s retail challenges. Among current research findings, consumers are shifting to cashless transactions and showing a greater penchant to rent versus buy products.
A survey of more than 1,000 U.S. consumers found that the majority (62%) carried less than $20 cash on hand, according to the 2014 Future of Retail report from Walker Sands Communications. The study revealed that only one in four had used cash to pay for something in the 24 hours preceding the survey, 43% hadn’t used cash in the last three days and 23% hadn’t paid cash in the past week. In addition, 5% of consumers said they never use cash and will not shop at merchants that only accept cash.
“It’s clear that consumers are shifting away from carrying cash in favor of more convenient alternatives,” the report indicated. “This presents an opportunity for retailers to capture a larger share of the purchase cycle and drive consumers back to their mobile apps by offering mobile payment capabilities.”
However, only 8% of consumers currently use mobile passbook-type apps for check out, suggesting that many of the apps are not well developed, according to the study. “There’s a wealth of opportunity for retailers ― and technology companies ― who are able to take advantage of this gap in the market and provide convenient ways for consumers to go cashless.”
Shoppers Open To Renting Tools, Books And Electronics
Renting products instead of buying also is on the rise, the study noted, and is expected to grow 46% across categories over the next year. Books (16%), consumer electronics (8%) and tools (7%) were among the items consumers most preferred to rent versus buy.
“One in three Millennials said they would be open to renting a product instead of making a purchase in the next year,” said Tory Patrick, Retail Technology Practice Lead at Walker Sands, in an interview with Retail TouchPoints. “Younger generations were also most likely to say they wanted to rent to save money.” Older generations, in addition to not needing the product after use, said they would rent to “try a new service or product.”
Across generations and categories, the study showed growth in product rentals to increase “exponentially” during 2014, as the chart below indicated:
“Successful retailers in 2014 and beyond will provide alternatives to the traditional shopping experience that more closely reflect consumer preferences,” said Patrick. These include “catering to the more cashless society; developing programs to drive loyalty among younger consumers who aren't looking to make major investments; and creating alternative payment applications that make these processes easier.”
The 2014 Future of Retail study of U.S. consumers also found that:
- 95% had purchased from Amazon in the past year;
- 80% were more likely to purchase products online if offered free shipping;
- 78% interacted with brands on social media to acquire coupons and promotions;
- 64% had used their mobile devices to research products while in a brick-and-mortar location;
- 62% shopped online at least once a month; and
- 59% would be more likely to shop at a store offering self-checkout via a mobile device.
In addition, if offered free returns, consumers were twice as likely to spend more than $1,000 on a product online without seeing it first.
Overall, study results “demonstrated the need for retailers to invest in flexible technology strategies that can fluidly evolve with changing customer preferences and the retail atmosphere,” Patrick said. “As consumers continue to shop in new and changing ways, retailers who can find a way to appeal to these trends will see major returns on investments in 2014 and beyond.”