As more consumers buy and shop online, research conducted by Synchrony Financial found that when it comes to making a large purchase — of more than $500 — the “journey” of that purchase from product research, comparison, decision and final purchase has contracted in recent years.
Which means retailers need to have their web sites up to date and easy for consumers to engage while on that journey. Here, Bart Schaller, executive vice president and chief marketing officer at Synchrony Financial, explained the implications of the company’s fifth Annual Major Purchase Consumer Study, which surveyed over 2,700 respondents making purchases in a variety of categories from appliances and electronics to eyewear and fine jewelry.
WWD: Your research showed that the “major purchase journey” is declining. For a retailer, what are some of the implications of this?
Bart Schaller: The path to making a major purchase is evolving and the average number of days spent on research has steadily declined, dropping from 80 days spent in 2014 to 68 days in 2015 and 63 days in 2016.
As major purchase shoppers become more decisive, influenced by the amount of information they find online during their research process, it is important for retailers to have a strong online presence. Making it easy for shoppers to find the information they are looking for during their search can help ensure a retailer is part of the major purchase shopper’s consideration set and stays top-of-mind throughout their journey.
In the Fifth Annual Major Purchase Consumer Study, nearly 68 percent of all shoppers surveyed report visiting a retailer’s web site when conducting research, more than 60 percent used search engines, over half also visited the manufacturer’s web site and approximately 40 percent referenced review sites.
WWD: The research also showed more consumers using their mobile devices while shopping. From a financial transaction perspective, how can retailers respond to this?
B.S.: Retailers need to ensure their web sites are mobile optimized, at a minimum. Ensuring a consistent brand experience across all channels is important to drive conversion and customer satisfaction considering: Eighty-five percent of major purchase shoppers surveyed started their research online; 70 percent also conduct in-store research, and nearly half (49 percent) used a mobile device during their journey.
Some considerations for retailers in leveraging the mobile experience include: Can shoppers easily find the payment and financing information they are looking for on my mobile web site? Is it easy for shoppers to apply for credit on my mobile web site? Should I create a retail app where shoppers can pre-load their credit card information like a digital wallet? Have I enabled my POS or terminal to accept mobile wallets?
WWD: You also note that a large number of consumers researching the financial options prior to entering a store. For a retailer, how can they best leverage this behavior?
B.S.: Knowing that the consideration timing is shorter for major-purchase shoppers today, it’s important for retailers to have a strong online presence and effectively integrate credit and financing offers early and often throughout their web sites, including in search engine results. In this year’s study, 72 percent of major purchase shoppers who researched financing did so on their desktop/laptop, and 60 percent of all major purchase shoppers decided on payment method before entering the store to buy.
Other research conducted by Synchrony in 2016 shows that retailers who integrate credit messaging on the home page, product pages, shopping cart and checkout pages see a higher rate of engagement on their site. In addition to the shopping pages, retailers can designate a credit landing page where the card benefits such as promotional financing can be clearly explained with links to apply online. A higher percentage of respondents who are not Synchrony Bank cardholders (43 percent) reported awareness of financing options compared to last year (36 percent), indicating retailers are better integrating credit information across multiple channels.
WWD: What role can promotional financing play in the shopping experience and/or conversion rate of online shopping?
B.S.: Promotional financing plays an important role in the shopping experience. While 82 percent of respondents made their major purchase in-store, 18 percent made their purchase online, up from 13 percent last year. Among Synchrony cardholders surveyed, 78 percent said they “always” seek promotional financing when making a purchase and 90 percent confirm that special promotional financing makes larger purchases more affordable.
For consumers, promotional financing can help make their purchase more manageable, spreading out payments over time. For some it provides the extra spending power to purchase what they really want.
For retailers, promotional financing can help: drive web site traffic when mentioned in search results; build incremental ticket size (cardholders spent about 30 percent more than non-cardholders), and close the sale (47 percent of Synchrony Bank cardholders said they would not have made the purchase or would have gone to another retailer if financing wasn’t available).
More than half (59 percent) of major purchase shoppers who are not Synchrony Bank cardholders say they would consider financing if it meant they could bring the product home the same day.