The “New” Rules of Customer Engagement in a Contracted Economy

Those of you working the very front lines in the retail sector know the realities of operating in this new, new economy. And frankly, we are entering un–chartered waters as we now must market and merchandise to a new type of customer motivated by not just price but something much deeper—fear.

As Paco Underhill, the renowned retail consultant and author of “Why We Buy: The Science of Shopping” noted in his recent interview with Time, today’s consumer is “dazed and confused” and is making the decision to purchase or not to purchase based on fear of the unknown—will I have a job tomorrow? Will my credit card company shrink my credit line? Will my retiree benefits continue to be provided by my employer? It is the culmination of these true “life” issues that are ruling whether a consumer’s entire cart makes it to the check out, or if it’s abandoned mid-way through the shopping experience.

The fear driving the consumer mindset is one that we cannot directly control but one that online retailers may help ease by providing content tools to help consumers make informed purchase decisions. Brand new research we released this week with JupiterResearch and Bazaarvoice clearly proves that online shoppers value peer-influenced content almost as much as the web sites where they actually purchase products. And while peer-influenced content—including personalized product recommendations—is highly valued by all consumers, it is much more relevant to shoppers with tighter pocketbooks who are more reluctant to spend. It helps them feel confident that the purchases they are making are the right ones because their shopping peers are validating their decisions.

The Jupiter study found that nearly half of online shoppers (48%) plan to spend less this year but a majority (61%) of those reluctant to make certain purchases can be positively influenced by what Jupiter calls “Content Connectors”—shopping resources based on peer-input. The ultimate in peer-influenced content, personalized product recommendations, are considered useful by seven out of ten online shoppers who plan reduced spending in the coming year.

The message for online retailers is clear: we cannot hold out for an improved economy and a return to higher consumer spending. Even when growth returns, consumer behavior will most likely lag behind the growth curve. In response, merchants must align all their resources to capture and influence the consumers they do reach, using the tools and methods available to them to hold onto these shoppers. By neglecting to add tools that reassure the new, increasingly hesitant consumer, retailers risk customers visiting another site where they can obtain the content connectors to feel confident in their purchase decisions. Given the results of this study and the realities of this new, new economy, in the coming months, retailers should:

Bridge the Gap: Marketers must examine the customer shopping experience between the front door and the checkout to ensure shoppers are getting the information and “content connection” to increase confidence in purchase decisions.

Engage with Shoppers: Taking a page from Paco Underhil’s book, “Why We Shop: The Science of Online Shopping,” online retailers should pay close attention to the “Rate of Interception” – that is the level of interactivity a shopper has with the content, tools and resources on a web site which, according to Underhill, in the offline world generate higher sales and loyalty among customers. Introducing interactive elements to encourage consumers to engage with merchandise and product selection will encourage shoppers to stay and shop – rather than jump off to another competitive site.

Be Social: Assist consumers with their spending reluctance by personalizing their online shopping experiences with “peer” based shopping tools including the “Three R’s”: Recommendations, Ratings and Reviews.

Be Transparent: Help consumers overcome their spending reluctance with clearly stated customer service options, flexibility in multi-channel shopping and better returns and guarantee policies.

Online-retail industry analyst Patti Freeman Evans of Forrester Research will be joining executives from Bazaarvoice and richrelevance at two upcoming events to present and discuss the findings in further detail; the New York event takes place March 3rd, and the San Francisco event on March 26th. For more information please visit

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