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Report: E-tailers beat omnichannel peers in customer satisfaction

BY Dan Berthiaume

Chicago — Pure-play e-tailers are doing a better job in satisfying their customers overall than omnichannel retailers, but omnichannel retailers have an edge in select functional areas like checkout. According to results of the mid-year Customer Feedback Index (CFI) from OpinionLab, e-tailers had an average CFI score of 481, compared with a CFI average of 457 for omnichannel retailers.

However, omnichannel retailers still beat e-tailers in functional mean ratings for individual aspects of customer service, such as home page, service and support, products and checkout. Meanwhile, customers were more satisfied with e-tailers in the functional areas, including search, account and information. Interestingly, both subsets of the retail sector covered by the report had overall CFI scores below the industrywide average of 557.

Individual retailers that scored exceptionally well in the CFI include Guitar Center, whose CFI score of 570 is among the best of all omnichannel retailers, and Newegg, whose CFI score of 645 outperformed the e-tail average by 34%.

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FINANCE

Dunkin’ Donuts Q2 profit doubles

BY Marianne Wilson

Canton, Mass. — Dunkin’ Brands Group, parent of Dunkin’ Donuts, beat Wall Street expectations by more than doubling its second-quarter profit. The company reported a profit of $40.8 million for the period ended June 29, up from $18.5 million a year ago. The year-earlier period included a $20.7 million increase in a litigation reserve.

Revenue increased 5.9% to $182.5 million from $172.4 million. U.S. same-store sales rose 4% at Dunkin’ Donuts shops and improved 1.6% at Baskin-Robbins shops.

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News

CashStar Retailer Roundtable focuses on digital discounts and disruption

BY Dan Berthiaume

By combining offers with other retailers or entities, retailers can avoid being victimized by the “adverse selection” of consumers who simply look for the largest discount they can find at a given time, Alex Rampell, CEO and co-founder of offer-based payment platform TrialPay, told attendees at the recent Retailer Roundtable event sponsored by digital gifting platform CashStar.

“Offering a massive discount just gets people to go elsewhere for a bigger discount,” said Rampell. “Those consumers do not develop into loyal customers.”

However, by enticing consumers who fit a retailer’s customer profile with combined offers, such as a promotion from Whole Foods that provided a free month’s subscription to the New York Times, retailers can help eliminate customers who only want a low price.

In addition, Rampell said digital gift cards can serve as an effective and traceable online inducement for consumers who are searching for a product that they can only buy offline, such as a fast food burger.

“Clicks on a banner ad for burgers don’t matter,” stated Rampell. “But a gift card proves its effectiveness.”
Rampell said an above-average online offer of a gift card to an established good customer can produce a click-through rate of more than 30%, compared with the .02% click-through rate of a typical banner ad.

In addition, Denee Carrington, senior analyst for Forrester Research, told attendees that mobile commerce is a bridge connecting the digital and physical worlds. Although today mobile commerce only accounts for 8% of e-commerce sales, which only account for 9% of all retail sales, she said retailers need to focus on it for a simple reason.

“Mobile enables access to the big prize,” said Carrington.

According to Carrington, Forrester data shows that U.S. mobile commerce will reach $90 billion in sales by 2017 and mobile commerce will reach a hockey stick-shaped point of inflection in 18 months, with adoption of in-store and proximity mobile commerce increasing at a 140% annual compound growth rate.
“Digital disruptors will tear down and rebuild every industry,” said Carrington.

In the case of mobile retail, Carrington advised the use of value-added mobile services, such as coupons, enhanced product information, open payment and loyalty rewards, to help reap the benefits of the digital disruption mobile commerce will cause. She also advised that these services can be proprietary and do not have to be offered in partnership with a third party.

As an example, Carrington cited a mobile advance ordering system Jamba Juice is piloting in some California stores.

“Order ahead services help you predict future traffic and provide a better customer experience,” Carrington said.

There will not be a single technology that dominates the digital wallet space, said Carrington, although she agreed with other speakers that there will be a general shift away from hardware-based solutions. She concluded her presentation with some advice for retailers who want to successfully launch digital wallet applications.

“Swiping a card is quick,” said Carrington. “A digital wallet has to offer a better, more convenient alternative. The potential benefits must outweigh all barriers. Retailers who play an active role in creating a viable digital wallet business model, including e-gift and m-gift cards, will win.”

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