Sondra Sneed
The bounty of mobile-based gadgets with endless features, specs, and wireless jargon can be overwhelming for most consumers.
“Each mobile device we profile has over 300 discrete characteristics that determine its design, capabilities, and performance,” says Doug Overton, VP Analysis & Consulting at UK-based WDSGlobal. He says that while many of these characteristics will be “of little consequence” to the consumer, 43 are relevant to your customers in their buying decisions.
“That translates to 43 individual pieces of jargon that a consumer must understand to make an informed purchase,” Overton illustrates.
What’s most important about these 43 items he says, is that they need to satisfy a consumer’s “technological and lifestyle requirements.” To put these characteristics into perspective, he says that an automobile purchase incorporates roughly 21 purchasing decisions, a laptop PC has 17, and a GPS navigation unit warrants fewer than 11. “However, unlike the purchase of a car or PC, the mobile-device-consumer is often prepared to make impromptu retail purchasing decisions with little or no serious, prior investigation.”
It is little wonder then, that many mobile consumers make ill-informed purchasing decisions resulting in buyer remorse.
According to Overton, WDSGlobal recently sponsored mystery shopper campaigns in Europe. These campaigns show that up to 58% of mobile retailers fail to gather the bare minimum lifestyle or even technical requirements a customer needs before a retailer makes a product recommendation. In many cases, he says, this can be attributed to deficits in retailer training, experience, or policy. And while his numbers don’t reflect the American retail model, by most estimates they can’t be any better, if not worse.
Overton says that the problem is not solely about retailer ethics or education.
“Many customers prefer to purchase spontaneously without accepting any guidance from the store’s staff,” he says. While these ‘DIY’ customers can easily be viewed as ‘quick win’ sales for the retailer, there exists a strong case for helping them to “qualify” their decision before completing a sale. Often during a “qualification process”, consumer misconceptions can be uncovered to guide the retailer, Overton recommends.
The sales agent can then steer a customer’s choice toward a more appropriate product.
But how does a consumer’s misguided purchase signal a problem for the retailer?
Overton says that a customer who makes an unfitted purchasing decision won’t associate the problem with the features of the product, but instead experience an “unfulfilled and frustrated” ownership problem that they’ll blame on the store. “In many of these instances” he says, “customers will look to return the product under a variety of pretences in order to secure a refund or alternative replacement.”
WDSGlobal operates contact centers that retailers use to filter and mitigate the volume of products that are returned as No Fault Found (NFF). The company’s statistics from NFF customer care lines provides insight into the scale of the buyer remorse problem. “Up to 63% of devices registered for a return have no discernable faults,” Overton informs. “With supply/return channel costs in administration, refurbishment, logistics and customer services approaching $70 per unit, a figure which when extrapolated, is costing the global mobile industry approximately $4.5 Billion every year.”
He also says that further breakdown of the trend shows 2/5 of the returns were due to services not being configured on the device, 2/5 was as a result of consumers struggling with usability, and 1/5 resulted from buyer remorse, wherein the user has made (or been advised to make) an ill-informed purchase. This is further re-enforced through an online research poll conducted by Opinion Research Corp in 2008. The poll identified that mobile Smartphones were the most returned unwanted Christmas holiday gift (21% of recipients), with users citing an inability to understand the product setup as the reason for the gift-return.
Overton concludes by saying that aside from the quantifiable industry costs of faultless returns, buyer remorse casualties are highly likely to harbour resentment for a retailer’s brand if they feel an ill-advised recommendation has been made. This resentment is likely to manifest itself in disloyalty.
Is it time for retailers to adopt a more scientific approach to product recommendation? With care taken to match product features to both the lifestyle of the user and their technical requirements could preserve the retail model. But so long as recommendations that are driven by commissions, promotions or stock availability, while satisfying short term sales targets and aspirations may be paving the way for a dissatisfied and diminishing customer base.