Shoppers Stay Close to Home

Retail stores that offer consumers value on the items they want can draw those customers away from stores they would otherwise frequent, according to a new survey by KMPG LLP. The study found that the greatest motivators among consumers were price (32 percent), selection (27 percent), and convenience (22 percent).

"Consumers voted with their feet. They buy what they want when it's offered at a fair price and close to home," says John Rittenhouse, national partner in charge KPMG's operations risk management practice. "Four in 10 consumers spent more in a different store this year than they had in the past, with the 18-to-34 age group most likely to make such a change, and half of those who shopped in a different store said selection was the primary motivator for the change."

The country is largely "overstored," Rittenhouse says, so customers were less likely to travel beyond their own neighborhoods unless drawn by specialty items. Additionally, customers quickly left stores that didn't have items in stock and were more likely to go to a store that they expected to have a specific item than to travel to a general purpose retailer, he says.

"This also suggests that retailers may be better off targeting customers within a few-mile radius of their store locations rather than broadcasting a wider marketing net," he says, adding that geographic marketing with direct mail or cable television could provide a better return for the advertising dollar than mass marketing.

A surprising finding was that customer service didn't seem to matter much to respondents, nor did the physical store facility. Rittenhouse surmised that customers still want service but they don't want salespeople in the aisles promoting purchases. The study found that only 2 percent of those surveyed said a store's staff influenced their choice of where to shop. Additionally, store facilities have improved from a year ago, so there are few that are so bad or so good that they were likely to affect a customer's decision.

"Particularly interesting is that Internet shopping included all age groups up to 65, with 53 percent of consumers making Internet purchases," Rittenhouse says. "People with incomes over $75,000 were twice as likely to use the Internet compared with people with incomes under $30,000. The Internet continued to attract the most desirable customer, as the higher the income, the more the likelihood to buy on the Internet."

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