‘Fitting fees’ challenged as consumers shun in-store research: Report
Thursday, November 15, 2012/
Less than 5% of consumers research products in-store before eventually purchasing them online, new research reveals, suggesting there is no need for retailers to introduce “fitting fees”.
The research, from the Australian Centre for Retail Studies, is based on a survey of around 600 Australian consumers.
Only 4% of consumers surveyed said they browse in-store before buying items online at a cheaper price, diluting the argument retailers need to introduce “fitting fees”.
The concept of fitting fees is based on the assumption online shoppers use in-store resources and staff to research items before buying them online.
The survey results suggest this claim is baseless – 61% of respondents said they didn’t intend to purchase online at first, but the product they were looking for was not available in the store.
Only 17% of those who do go from store to online – or less than 1% of all respondents – intend to do so from the beginning.
“I think it was almost like a rumour that was going around the industry that this [concept of fitting fees] was coming in,” ACRS research consultant Jason Pallant told StartupSmart.
“A lot of retailers were worried that if they [offer good customer service], people will come in, use that customer service, get fitted, and then just go and buy it online.”
“We wanted to find out, how much does it actually happen? That’s where we found that only 4% of shoppers have done that.”
Meanwhile, more than half (52%) of the survey respondents only shop in-store, while 24% look online before going into a store. A fifth of respondents only shop online.
According to Pallant, retailers need to minimise “barriers to purchase”, including anything that deters customers in the research stage through to final sale.
The survey found shoppers who experience multiple barriers during the shopping process are 30% less likely to eventually make a purchase.
According to the Australian Retailers Association, consumers will purchase an estimated $41.2 billion in goods between now and December 25.
This figure represents a 3.9% gain on sales during the same period last year, according to ARA executive director Russell Zimmerman.
“We by no means expect shoppers to be beating down the doors to go Christmas shopping, especially in the early stages,” Zimmerman said in a statement.
“[However,] the figures represent growth which will see retailers hear some rings of their tills.”
Following the Reserve Bank’s decision earlier this month to leave interest rates on hold, Zimmerman said retailers are “holding their collective breath” for another rate cut in December.
“Some categories such as food and hospitality [are] buoying up the projected figures, whereas categories… such as apparel and department stores are posting less growth,” he said.
The food category is expected to take in $16.8 billion this Christmas, up 4.1% from 2011, while sales on household goods should total $7 billion (up 0.8%) and hospitality $5.5 billion (up 7%).
With regard to the states, NSW is expected to take in $12.6 billion (up 3.8%), Victoria $10.4 billion (up 3.2%), Queensland $8.4 billion (up 4.4%) and WA $5 billion (up 6.7%).
Sales should total $2.8 billion in South Australia (up 2.5%), $764 million in the ACT (up 6.9%) and $457 million in the Northern Territory (up 3.7%).
But in Tasmania, sales will be down 4.2% to $788 million.
However, Zimmerman is optimistic with regard to the Tasmanian economy, which, according to him, “is in the process of seeing new growth opportunities for both retail and tourism”.