Motorola 2009 Retail Shopper Study

RETAIL SHOPPER STUDY An International Study of Shopper Attitudes and Behaviors

March 2010

Retail Shopper Study 1

OVE R VIE W An international research study sponsored by Motorola measured retail shoppers’ satisfaction and behavior in 11 countries during the 2009 holiday shopping season. The Retail Shopper Study also examined current and emerging technologies in the retail industry and their impact on shopper satisfaction and spending behavior. This study provides some key insights into customer dissatisfaction, abandonment behaviors, and attitudes related to the use of technology in the shopping experience. A number of regional and retail segment trends were discovered.

The study reflected the tough economic conditions in 2009 with 7 in 10 surveyed shoppers reported planning to spend either the same or less than in the previous year. Major sources of dissatisfaction uncovered were: lack of availability of coupons and in-store help and slow checkouts. Surveyed shoppers sought more coupons and discounts in 2009 and a large number were willing to abandon purchases if coupons and discounts were unavailable. The impact of purchase abandonment was most notable in North America, where the percentage of respondents who were dissatisfied and decided not to buy an item doubled from 2008 figures to just over 40%.

The use of mobile technologies in the shopping experience seemed to be increasingly relevant. The majority of respondents reported a better experience when store associates were equipped with mobile devices. Nearly two-thirds of Gen Y shoppers reported utilizing their mobile phones to assist their shopping while in the store. This percentage decreased slightly with each age bracket. All age segments cited interest in next-generation retail technologies, demonstrating the growing consumer demand for real-time information as a means of making better informed shopping decisions.

B AC K G R OUND: R E T AIL S HOP P E R S TUDY This year’s annual study covered a larger geographic area than the previous year’s study and explored attitudes and behaviors related to shopping technologies.

More than 4,530 shoppers throughout the US, Canada, UK, Germany, France, Italy, Spain, Mexico, Brazil, India and China completed the survey from November 25 to December 20, 2009. Thus study was conducted through Motorola research partners e-Rewards (the largest invitation-only online research panel) and global market information and insight group TNS (which sourced consumers from Ciao-Greenfield online panels). All respondents were between the ages of 18 and 65 and were categorized into three generational groups. Women comprised 53% of the sample and men, 47%. Respondents were not aware of Motorola’s sponsorship of this research.


Exhibit 1. Key Shopper Demographics

The survey was designed to probe shopper behavior and measure shopper satisfaction across various retail segments. Key metrics used to gauge satisfaction included appearance of displays, availability of coupons and discounts, ease of finding correct prices, merchandise availability, level of store associate assistance and duration of checkout. The study also examined attitudes related to shopping technologies including price checkers/information kiosk, handheld mobile computers, smart carts, interactive dress assistance, mobile loyalty programs, mobile payment and mobile location-based comparison shopping.


S P E NDING AT TITUDE S Over 70% of the international shoppers surveyed declared a flat or declining 2009 holiday budget. Nearly 36% planned to spend approximately the same amount as they did during last year’s holiday shopping season; 34% planned to spend less in 2009 than in 2008. Alternatively, 30% planned to spend more than last year. Q: “How does your spending plan this holiday season compare with your spending during the holiday season last year?”

Exhibit 2. 2009 YoY Retail Holiday Season Spend Plans

Although, it appears that spending attitudes have stabilized as compared to 2008 in the United States, Canada and the United Kingdom. The study showed less of a downturn in spending from 2008 to 2009 than there had been between 2007 and 2008. There was an 11.2% drop in the number of those planning to spend less than the previous year, as compared to the 2008 survey, while 9.4% more planned to spend about the same as the previous year. Q: “How does your spending plan this holiday season compare with your spending during the holiday season last year?”

Exhibit 3. Holiday Shopping Season Spend – North America & United Kingdom


With over 80% of those surveyed planning to spend 38.7% more than in 2008, the most positive outlook was clearly in the Asia Pacific region. Latin American shoppers also expressed a more liberal budget than their North American and European counterparts, with nearly 47% planning to spend more. Latin American and Asia Pacific respondents were, on average, younger than North American and European respondents. Q: “How does your spending plan this holiday season compare with your spending during the holiday season last year?”

Exhibit 4. 2009 Holiday Shopping Season Spend by Region

North American shoppers held back more than any other region, with 43.4% planning to spend less than in the prior year; though 46.3% planned to spend about the same. The number of shoppers planning to decrease spending was still fairly significant in Latin America (32.9%) and Europe (28.7%). Conversely, only 7.0% of the Asia Pacific respondents figured to spend less in 2009 than in 2008. Q: “How does your spending plan this holiday season compare with your spending during the holiday season last year?”

Exhibit 5. 2009 Holiday Shopping Season Spend by Region


S HOP P E R S ATIS F AC T ION Based on combined ratings of “coupons/discount availability,” “in-store help,” “time spent waiting,” “availability of in-stock items,” “ease of finding correct prices,” and “appearance of the displays,” the most satisfied shoppers were those from North America and the Asia Pacific region — both with 67% measuring “somewhat satisfied” to “very satisfied” with their in-store shopping experiences. Europeans and Latin Americans reported the lowest levels of satisfaction, measuring 59% and 60% respectively. In fact, more than twice the percentage of Europeans measured “very dissatisfied” (7% as compared to 3% and 2%). Q: “Please rate your overall satisfaction with each of the following aspects of your shopping experience over the past four weeks.”

3%

3%

7%

9%

10%

12%

21%

19%

24%

21%

20%

2.4%

2.6%

2.7%

1.6%

0.9%

37%

36%

40%

33%

41%

27%

31%

20%

26%

26%2%

3%

9%

10%GLOBAL

North America

Latin America

Europe

APAC

Very dissatisfied Somewhat dissatisfiedIn between Does not apply / Does not matter to meSomewhat satisfied Very satisfied

Exhibit 6. Shopper Satisfaction Overall – by Region

Shoppers expressed the lowest satisfaction levels with discounts and coupons: with only 49% reportedly satisfied. Satisfaction levels were also below par for availability of help in the stores (57%), and time spent waiting in line to pay or check out (60%). Q: “Please rate your overall satisfaction with each of the following aspects of your shopping experience over the past four weeks.”

4%

5%

12%

13%

24%

25%

21%

8%

3%

2%

29%

34%

36%

20%

23%

24%

6% 13%Availability of couponsand discounts

Availability of help in thestores

Time spent waiting in lineand pay/check out


Exhibit 7. Shopper Satisfaction Levels – Key Aspects


Conversely, shoppers were most satisfied with the appearance of displays (76%) and the ease of finding correct pricing (76%). Q: “Please rate your overall satisfaction with each of the following aspects of your shopping experience over the past four weeks.”


2%

1%

9%

5%

19%

18%

17%

1%

0%

1%

41%

42%

42%

28%

32%

34%

2%6%

Availability of the items Iwanted in stock

Ease of finding correctprices

Appearance (neatness) ofthe displays

Exhibit 8. Shopper Satisfaction Levels – Key Aspects

When satisfaction levels on these shopping experience aspects are broken down by retail type some interesting insights can be gained. Levels of dissatisfaction with availability of coupons/discounts were highest across all retail types, except grocery stores. Another particularly low level of satisfaction seems to exist in regards to clubs and mass merchandisers: less than 50% of respondents were satisfied with the availability of help in those retail storefronts. Toy stores faired poorly overall, with less than 70% of shoppers satisfied across all aspects. Q: “Please rate your overall satisfaction with each of the following aspects of your shopping experience over the past four weeks.”

Exhibit 9. Shopper Satisfaction Levels – by Retail Type


AB ANDONME NT OF P UR C HAS E S A shopper who is not satisfied at a store is likely to abandon that purchase. Just over 70% of surveyed shoppers left a store without purchasing everything they intended to buy. This resulted in an average loss of US$109 per abandoned purchase as measured in local currency equivalents. Worldwide, shoppers abandoned clothing store purchases more than any other, with department and electronics stores — and to a slightly lesser degree, grocery and book/music stores — ranking lower. Levels of unfulfilled purchases were highest in Asia Pacific and Latin America, where the study sample was younger. Q: “Did you leave without buying everything that you were looking for or wanted from any of the stores where you shopped in the past two weeks?”

Exhibit 10. Abandonment Rationale – by Retail Type


Of the six reasons posed for abandonment of purchase, stock outages rated the most likely with high price following. Unlike the other regions in which these two reasons were much more likely than the others to account for abandonment, shoppers in Latin America and Asia Pacific cited a similarly high likelihood of abandoning a purchase for all reasons posed.

Q: “What were the primary reason(s) for leaving the store without the item(s) that you wanted?”

Exhibit 11. Abandonment Rationale – by Region

The most common reasons for purchase abandonment, across all retail types, were price and availability. In Exhibit 10, the rate of abandonment reported was highest for clothing store purchases, with department and electronics coming in second. Focusing in on those three retail types in Exhibit 12, the most likely reason (often twice as likely) for abandonment was the high price and lack of coupons and discounts, and to a slightly lesser degree lack of stock. The most striking finding was that just over 50% of those who reported leaving a consumer electronics/computer store with unfulfilled purchases did so because of a lack of coupons or discounts. Q: “What were the primary reason(s) for leaving the store without the item(s) that you wanted?”

Exhibit 12. Abandonment Rationale – by Retail Type


In general, after a respondent shopper abandoned a purchase the most likely action was to buy the same item at another store (33.7%). This was even more likely with Latin American respondents (45.8%) and Asia Pacific respondents (43.5%).One striking finding was that 40.8% of North American shoppers who abandoned a purchase decided not to buy the item altogether, instead of selecting an alternative channel. Q: “What did you do to find and finish purchasing these items?”

Exhibit 13. Abandonment Rate Impact – by Region

Shoppers left an average US$109 in unfulfilled or abandoned purchases due to dissatisfaction, out of stocks, or lack of discounts or coupons. In all but two countries, India and Mexico, the value was over $100 per shopper. Q: “Approximately what was the total value of the item(s) that you abandoned at each of the stores where this happened?”

Exhibit 14. Abandonment Rate Impact – by Region


E ME R G ING T E C HNOL OG IE S US E D F OR S HOP P ING On average, worldwide, more than half of the responding shoppers used mobile phones for in-store holiday shopping activities. Gen Y shoppers were nearly twice as likely (64%) as more mature shoppers (33%) to utilize their mobile phones for in-store shopping-related activities. Q: “Did you use your mobile phone for any shopping activities during the past two weeks?”

51.4%

33.2%

50.1%

64.0%

Global AverageBoomers Gen XGen Y Exhibit 15. Mobile Phone Shopping Activity – by Age Group

Of Internet-related activities, shoppers were most likely to use their phones to compare prices or features and reviews. The most significant difference between how the generations used their mobile phones for shopping was that Gen Y shoppers were 6.5 times more likely than Baby Boomers to use their mobile phone to acquire coupons and other special offers.

Q: “Did you use your mobile phone to do any of the following shopping activities during the past two weeks?”

Exhibit 16. Mobile Phone Shopping Activity – by Age Group


When reviewing the same activities by region, the highest occurrence of shopping-related mobile phone use was reported by shoppers in Asia Pacific and Latin America.

Q: “Did you use your mobile phone to do any of the following shopping activities during the past two weeks?”

Exhibit 17. Mobile Phone Shopping Activity – by Region

Showcasing the gap between generations in regards to their attitudes towards technology is the disparity between Gen Y and more mature Gen X and Boomer shoppers in the acceptance of emerging technologies. This was evident when it came to intelligent changing rooms, comparison-shopping and loyalty account access via mobile phone, and self-activated shopping agents.

Q: “Which of the new technologies listed below do you think would improve your shopping experience?”

Exhibit 18. Emerging Technologies Impact – by Age Group


Regionally, respondents in Asia Pacific were most receptive to more futuristic in-store retail concepts such as self-activated shopping agents and holographic sales assistants. Q: “Which of the new technologies listed below do you think would improve your shopping experience?”

Exhibit 18. Emerging Technologies Impact – by Region

When in-store associates were equipped with mobile retail technologies, such as two-way radios and handheld mobile computers, surveyed shoppers reported a better experience due to the impact of these devices (59% and 56% respectively). Q: “How did the device(s) used by the store associates affect your satisfaction with your shopping experience?”

60.8%58.8%

57.3%

54.8%

52.1%

56.0%

62.3%

54.6% 55.0%

59.1%

55.9% 56.6%

Walkie-talkie/ 2-way radio Handheld mobile computer Tablet computerGen Y (Millenials) Gen X Boomer Generation Total

Exhibit 18. Customer Experience Impact – by Age Group

% of shoppers reporting improved experience with staff using devices


K E Y T AK E AW AY S Retailers worldwide are recognizing the increased demand and benefits of mobility within their enterprises. Using mobile technologies to enhance the shopping experience and increase associate effectiveness offers multiple benefits that contribute to increased customer satisfaction and thus sales. The Retail Shopper Study gathered feedback from shoppers in 11 countries and the key takeaways from this research study include:

• While spending attitudes have stabilized compared to 2008, 7 in 10 surveyed shoppers still planned for flat or declining holiday budgets in 2009. Nearly 4 in 10 shoppers surveyed planned to spend the same in 2009 as they did during the holiday shopping season a year ago; 34.4% planned to spend less this year.

• Reflective of the tight economic climate, shoppers were dissatisfied with the availability of coupons. Only one-half reported satisfaction with the availability of coupons and discounts. Satisfaction levels were also below par for availability of help in the stores (57%) and time spent waiting in line to pay or check out (60%).

• More than half of consumers utilized mobile phones for in-store holiday shopping activities. The usage and impact of mobile shopping technologies exploded in 2009 as shoppers turned to their mobile phones for activities spanning multi-channel comparison shopping, peer feedback, product info and couponing.

• In-store associates equipped with mobile in-store retail technologies provide a better customer experience. Surveyed shoppers reported a better customer experience due to the impact of two-way radios (59%) and handheld mobile computers (56 %).

C ONT AC T F OR MOR E INF OR MATION Motorola’s Enterprise Mobility business connects people to information when and where they need it – helping to transform businesses and improve the customer shopping experience. Motorola provides an unrivaled technology platform and application partner network, enabling seamless enterprise mobility inside and outside the four walls of a retail environment from the loading dock to the warehouse to the store floor. The company’s end-to-end solution portfolio offers retailers a comprehensive infrastructure comprised of wireless networks, two-way radios, mobile computers, self-service kiosks, bar code scanners and RFID technology. Retailers worldwide continue to turn to Motorola to improve associate productivity, maximize supply chain efficiency and enhance the customer shopping experience. By leveraging Motorola’s enterprise mobility solutions, retailers can offer self-service shopping assistance, item-level product tracking for greater inventory visibility and quicker checkout times. More importantly, the technology helps retailers increase associate productivity and streamline sales processes, improving a store’s ability to increase sales.

For more information about the Retail Shopper Study or Motorola products and services, please visit www.motorola.com.

AB OUT MOTOR OL A Motorola is known around the world for innovation in communications and is focused on advancing the way the world connects. From broadband communications infrastructure, enterprise mobility and public safety solutions to high-definition video and mobile devices,

http://www.motorola.com/�


Motorola is leading the next wave of innovations that enable people, enterprises and governments to be more connected and more mobile. Motorola (NYSE: MOT) had sales of US $30.1 billion in 2008. For more information, please visit www.motorola.com.

Motorola, Inc. www.motorola.com

The information presented herein is to the best of our knowledge true and accurate. No warranty or guarantee expressed or implied is made regarding the capacity, performance or suitability of any product. MOTOROLA and the Stylized M Logo are registered in the U.S. Patent and Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2010



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Motorola 2009 Retail Shopper Study