Nearly three-quarters of Americans are shopping again, reinforcing how much consumer spending is on the rise, according to research released today by TD Bank.
TD Bank’s Retail Experience Index found 73 per cent of consumers surveyed spent $500 or more on a single purchase within the last year. The bank polled 1,021 Americans to better understand what today’s consumers look for in their retail experiences, including buying behaviors, paths to purchase and shopping preferences.
“We’re encouraged to see that consumers are making major purchases again and feeling confident about the economy overall,” said David Boone, EVP 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.”
As expected, the Retail Experience Index found that Millennials are more likely to shop digitally than any other age group. Forty-one per cent of consumers ages 18-34 shop online “all the time” compared to just 26 per cent of Gen-Xers and 17 per cent of Boomers.
The study revealed consumers still prefer the brick-and-mortar experience, with slightly more than half (51 per cent) of respondents citing that they shop in-store “all the time.” Furthermore, 66 per cent of those who made a major purchase in-store asked a sales associate for help, revealing how important customer interaction remains to the shopping experience.
The Index revealed trends about big spenders or those who spent more than $2,000 on a single purchase, including their research patterns and reliance on social media. Of consumers who conducted research before making their purchase, high spenders were more likely to leverage social media and blogs (32 per cent compared with 21 per cent of shoppers overall) and retailers’ mobile apps (23 per cent compared with 12 per cent of shoppers overall) for research.
Big spenders who made a purchase in-store were also significantly less likely to buy the item during their first visit. On average, 40 per cent of all consumers made a purchase during their first visit compared with just 23 percent of big spenders.
When looking at the future of retail, shopping directly on retailers’ mobile apps is gaining traction among consumers. The survey found that one third (34 per cent) of respondents frequently use a mobile app when shopping. Consumers cited the top benefits for using this channel as the ability to shop during off hours (52 per cent) exclusive in-app promotions, coupons or discounts (51 per cent) and no lines or crowds (48 per cent).
When it comes to factors that impact retailer selection pricing tops the list, however the importance of online shopping is underscored by the number of respondents who prioritize free shipping. Top retailer factors/offerings prioritized by consumers:
- Pricing/sales: 89 per cent
- Selection of products/merchandise: 88 per cent
- Free shipping: 79 per cent
- Convenience/seamless purchase experience: 72 per cent
The survey revealed that Millennials (ages 18-34) are the most brand loyal, with 69 per cent indicating that they “always” or “often” choose the same brand when making a major purchase. This is compared with 58 per cent of Gen-Xers (ages 35-54) and 56 per cent of Boomers (ages 55+) who say the same.
Out of twelve common product categories evaluated in the index, Millennial respondents were more likely to choose the same brand always or often when making major purchases in nearly every category compared with Gen X and Baby Boomers.
Categories where Millennials lead in brand loyalty:
- Electronics/music equipment
- Luxury/high end fashion and accessories
- Wearables (google glasses, smartwatch, AI goggles, etc.)
- Sporting goods/fitness equipment
- Outdoor power equipment
- Power sports/water sports
“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.”
Additional highlights from the TD Bank Retail Experience Index are available at www.tdpartnershipprograms.com/retailexperienceindex.