Survey insights for UK luxury retailers: how consumers want to shop during Covid-19

Raj Sangha
by Raj Sangha

On 25 September 2020 we surveyed 2,000 UK consumers about their shopping behaviours in stores and online during Covid-19 and unveiled some interesting insights for luxury retailers.

Our insights show that most consumers are avoiding luxury retail stores as a result of health concerns caused by the Coronavirus. The insights show that getting too close to other people and queuing in stores are key customer concerns that are costing luxury retailers revenue opportunity across multiple channels, both before and during the pandemic. The survey suggests that luxury retailers who combat these challenges by using digital tools to choreograph their customer experience will see significant business case benefits through improved omni-channel sales, greater loyalty and advocacy amongst some of the highest value customer groups: younger generations, higher earning households and women.

 

 

Who normally visits luxury retail stores outside of the pandemic and how often?

Before Covid-19, 57% of the shoppers within our survey said they visited luxury stores. 6% said they did so often, 20% said they did so sometimes and 31% said they did so rarely.

Younger age demographics are more likely to visit luxury retail stores often and sometimes. Baby Boomers are twice as likely to never visit luxury retail stores as Millennial and GenZ customers.

Unsurprisingly, there is a clear correlation between higher earning households and the likelihood of visiting luxury retail stores often and in general.

Consumers from higher income households are 3 times more likely to visit these stores often and more than twice as likely to visit sometimes than those in the lowest income group.

Women are just slightly more likely to visit luxury retail stores than men.

 

 

Customers are visiting luxury retail stores less as a direct result of the Coronavirus outbreak….

As a result of the Coronavirus outbreak, 62% of luxury retail customers are visiting these types of stores less than before. A third (33%) are visiting them the same as before. Only 5% of customers are visiting these types of stores more than before.

In addition to being their lowest level of visitors outside of the Coronavirus, Baby Boomers are the most likely to reduce their visits to luxury retail stores during the Coronavirus outbreak. On the other hand, half (56%) of Millennial and GenZ customers have reduced their visits.

38% of these younger generations are continuing to visit luxury retail stores as much as they did before and 6% are visiting more than before. Very few Baby Boomers are visiting these types of stores more than before.

In addition to being the largest visitor group outside of Covid-19, higher household income groups are the least likely to reduce their visits to luxury retail stores as a result of the Coronavirus outbreak.

They are half as likely to reduce visits as all other income groups, 43% are still visiting luxury stores the same as before and a quarter (25%) are visiting more.

This perhaps suggests a widening economic gap created by the Coronavirus in that the higher income groups are disproportionately less financially impacted by the crisis.

Throughout our survey we found that women are more cautious and concerned by the health impact of the Coronavirus outbreak than men. These results match our findings by showing that women are 22% more likely to visit luxury retail stores less than before.

 

How customer avoidance of luxury retail stores compares to other store types…

On average, 64% of people said they were avoiding all store types where possible, so the percentage of customers avoiding luxury retail stores matches this average.

Luxury retail stores are less avoided by their customers than those those selling general non-luxury fashion products such as fashion/apparel stores, shopping malls, department stores and shoe stores.

However, due to Covid-19, luxury stores are more avoided by their customer base than stores selling products to support customer’s basic food, health and day-to-day needs, such as; grocery stores, pet stores, pharmacies, banks, health food stores and opticians.

Customer behaviour within luxury stores is most similar to customer behaviours within jewellery, lingerie and make-up and skincare stores.

 

Why are customers avoiding luxury stores

We asked customers why they were avoiding stores in general and found that health concerns are the main reason, with 69% of consumers stating this to be the case. This was followed by an increased use of online shopping (41%) and financial concerns (31%). All age groups are increasing their use of online shopping channels equally.

Financial concerns and, interestingly, environmental consciousness has proved greatest amongst GenZ consumers and lower household income.

The fact that younger generations are 3x more likely to avoid stores for environmental reasons than Baby Boomers or GenX customer is something luxury retailers need to become increasingly aware of, as it will effect the way consumers shop as they increase in spending power.

A number of brands are even bringing sustainability offerings into their product range/store environment. For example, Burberry has become carbon neutral across 85% of its sites and is procure 83% of its total energy from renewable sources, and has also reduced emissions in its supply chain by more than 1600 tonnes of carbon. Prominent luxury department store retailer, Selfridges, has announced plans to reduce carbon emissions by 15% next year.

 

What concerns people about shopping in stores in the Coronavirus era?

When it comes to visiting stores, customers’ biggest concerns are getting too close to other people (54%), other people not wearing masks (52%), touching products that other people have touched (43%) and queuing (36%).

A quarter (25%) of customers are concerned about having to wear masks themselves, half that of those concerned about others not wearing masks.

An additional 25% are concerned about the idea of having to queue outside of stores and 18% are concerned about queuing inside of stores.

These insights suggest that luxury retailers who address these top 4 concerns and prioritise customer health could increase customer confidence and drive more footfall to their stores.

 

How queues effect luxury retail sales before and during the Coronavirus

With queuing proving to be one of the top concerns for customers when visiting stores during the Coronavirus era, we wanted to find out more about how queuing impacted customer behaviour and why it was a problem.

Our report found that not only are customers visiting stores less because of the pandemic, but when they do visit stores they are less willing to queue, even compared to before the pandemic.

Outside of the Coronavirus outbreak:

Retailers of every type are losing revenue as a direct result of queues, particularly from some of their key customer groups (younger generations and higher household income groups).

83% of customers have avoided entering stores or have walked out of stores without buying anything because of queues and waits for service: 10% said they would do so “often”, 38% said “sometimes’ and 35% said “rarely”.

GenZ and Millennial age groups were the most likely to avoid entering stores or walkout of stores without purchasing because of queues and waits for service.

Higher household income groups were also more than twice as likely to be deterred by queuing and waits for service than those in lower income brackets.

During the Coronavirus outbreak:

The lost revenue caused by queuing is further exacerbated, particularly amongst the key customer groups: younger generations, higher household incomes groups and women.

 

Do queues have a long-term impact on luxury retailer sales?

To add to this challenge, our survey showed that not only do retailers stand to lose immediate revenue opportunity due to long waiting experiences, but they also lose out on future repeat visits and resulting revenues;

 

Why is queuing such a big concern to customers?

With wait times proving to severely impact immediate and long-term potential luxury retail revenues, the second part of our survey focussed on understanding how customers felt their experience could be improved.

To help luxury retailers to understand how to improve their waiting experience to minimise the revenue and loyalty loss caused by queuing, we asked shoppers what most concerned them about queuing in the present period and found that health and lack of comfort are the biggest reasons consumers dislike queuing:

These insights suggest that customers most dislike queuing because it makes them feel out of control, uncomfortable and like they are wasting time. Luxury retailers could allay these concerns by using virtual queuing and appointment booking solutions, as this would allow them to offer safer, more comfortable and informed waiting experiences that don’t waste customers’ time.

High value consumers are also more likely to take queues personally:

The fact that these groups take queuing so much more personally (almost as an insult to them from the brand) suggests why they are both more likely to walkout of a store without making a purchase because of a queue and are also less likely to return to a store where they experienced a queue.

The fact that these valuable groups are so much more personally insulted by a need to queue shows that retailers need to work harder to minimise queues if they want to retain the long-term affection of these customer groups.

 

How long customers are prepared to wait for service within luxury retail stores…

When asked how long customers are willing to wait in luxury stores we found that:

A quarter (23%) will only tolerate a wait of up to 3 minutes. 17% will wait between 3-7 minutes and 17% will be willing to wait between 8 and 10 minutes. In total, this means that more than half of luxury shoppers (57%) will only wait up to 10 minutes for service.

These insights demonstrate that the wait time does not need to be long before significant revenues can be lost. This is particularly important in luxury stores because the nature of their high value products means that serving customers can take a long time and so waits for service can easily form.

Interestingly, despite being more likely to walkout without buying anything and less likely to return to the store if they are forced to wait, Millennial and GenZ customers have a higher mean wait time threshold than older generations when it comes to waiting in queues at luxury stores. They are more patient of longer waits, though less tolerant and also, more personally insulted if a wait exceeds their expectations.

Our survey found that customers are slightly more tolerant of waits for service within luxury stores than they are in other stores.

Luxury retail wait time tolerance is similar to that of other stores selling high value products such as car dealerships and travel agencies. This sits just below other stores ranked as most important to customers for their ability to fulfil their basic needs and health needs: grocery stores, estate agencies.

 

 

How do customers want their experiences to be managed within luxury stores…

To understand how Qudini can help our luxury clients at this important time, we sought to understand which of our four key Retail Choreography tools customers wanted to see within luxury retail stores to better manage their experience. So we surveyed customer opinions on:

  • Virtual Queuing Systems: To manage store capacity and to enable customers to queue virtually using their phone or through a host with a tablet.
  • Appointment Scheduling Software: To enable customers to schedule store visits and in-person service or virtual service 24/7 from any channel.
  • Contactless Collection Check-in: To enable customers with online orders to check-in when they arrive at store so that store teams bring their order to them outside of the store.

How do customers want their experiences to be managed within luxury stores…

Customer priorities of these tools specific to luxury retail stores were as follows:

For Millennial and GenZ customers:

1. Contactless online order collections (14%)

2. Virtual queuing systems (12%)

3. Store appointments (10%)

4. Virtual appointments (7%)

 

For Baby Boomer customers:

1. Store appointments (3%)

2. Virtual queuing systems (3%)

3. Contactless online order collections (10%)

4. Virtual appointments (2%)

Overall Millennial and GenZ customers are 4x more likely to find these solution useful. This pattern for was common across most retail industries.

Consumers earning between £50k and £100k where the most likely to want Retail Choreography solutions from all retail types. Those earning upwards of £100k were more likely to want virtual queuing and store appointments.

Female consumers were slightly more interested in each solution than male consumers with the exception for virtual appointments. This suggests that for luxury retailers primarily targeting female consumers, there’s an even greater business case for investing in these in-store experience tools to drive sales. While the insights also indicate that luxury brands could attract more men to their offerings by offering virtual appointments.

When asked why customers would find virtual queuing and appointment booking software useful within retail stores during the pandemic, it was clear that most customers felt the solutions could alleviate their health concerns, alongside their concerns around wasted time, poor weather conditions, lack of information and fair process.

 

What impact would using these solutions have on luxury retail customer spend, advocacy and loyalty?

The survey responses also indicate that luxury retailers who use any of these five solutions to choreograph their customers’ experience stand to gain significantly through improved revenues and brand relationships across channels.

This is particularly prevalent amongst Millennial and GenZ customers where an average of 77% state that the solutions would positively impact their interactions with retailers in one or more of the following ways:

 

Could Covid-19 be a catalyst for a new era of omni-channel luxury retailing?

Our survey found that Millennial and GenZ customers are 3-4 times more likely to find Retail Choreography tools useful within luxury retail stores.

When compared with Baby Boomers across all types of retail stores, these younger generations also report that if a retailer used such tools to manage their experience, they would be:

All this confirms what we all instinctively know to be true – Millennial and GenZ customers want retailers to use digital tools to improve their experience, and they will be driven to spend more and to engage more across a retailer’s entire omni-channel offering in return.

The significantly greater interest in Retail Choreography tools from younger generations suggests they may have wanted these kinds of tools all along and that Covid-19 will prove to be a catalyst for a new era of omni-channel retailing as retailers realise the powerful business case benefits behind offering such tools.

To further add to the business case benefit of using Retail Choreography solutions within luxury retail and the conclusion that Covid will prove to be a catalyst for a new era of omni-channel retailing where queues are eliminated and in-store or virtual appointments and curbside pickup become the norm.

 

 

The survey insights showed the powerful business case benefits for Retail Choreography tools within luxury retail

Our survey also showed that, when compared with their lower household income peers, higher household income groups were 1.6 times more likely to be driven to buy something online or in-store as a result of a retailer using these tools.

21% said they were more likely to make an in-store purchase and 19% were more likely to shop with the retailer online, compared with 12.5% of those from lower household income groups.

Overall, our survey shows that a long wait time is more likely to deter younger generations and those from higher household income groups from visiting stores or returning in the future. To combat this, the insights show that Retail Choreography tools offer a powerful antidote, as these same demographics are also the most likely to be driven to purchase in-store and online across a retailer’s channels, and the most likely to return again as a result of a retailer’s use of digital tools to choreograph their experience.

 

 

Improving luxury profitability and driving lasting brand relevance

These insights show that both during and outside of the Coronavirus, luxury retailers have much to gain by using Retail choreography solutions to manage queues, to offer in-store and virtual appointments and to provide contactless click and collect pickup services.

Our many case studies with leading luxury retailers have also shown the same. For more information on how we can help your brand take a look at our customer success stories or get in touch with our team for a demo at info@qudini.com

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