UserTesting Pulse Report: Retail, Q4 2024

In this report

Pulse Report: Retail, Q4 2024

Retail industry insights

Discover the latest trends shaping the retail industry, from shifting consumer expectations to the rise of digital shopping experiences. Our retail-focused Pulse Report dives into how customers are interacting with brands online and in-store, highlighting key factors like convenience, personalization, and trust. Uncover the drivers behind consumer loyalty and how innovative retailers can set themselves apart in an increasingly competitive market.

These data points highlight the importance of trust, product quality, and the strategic presence of brands in both online and physical retail environments.

Ratings and reviews drive purchase decisions

The headlines may claim that AI is shaping the shopping experience, but shoppers are clear in what is moving them to purchase: the wisdom of the crowd. When it comes to what influences a shopper’s first purchase, rating and reviews are the standard, outpacing other factors.

A significant number of consumers rely heavily on product ratings and reviews when making purchasing decisions. Older demographics also show a strong preference for this information.

Consumers are finding trust in brands through authenticity, and increasingly turning to real product reviews and ratings to inform their buying decisions. Retailers should focus on gathering and showcasing genuine customer feedback. This not only helps build trust but also allows potential buyers to relate to the experiences of real users.

Ensure your review platform is easy to use, engaging, and visible across all digital touchpoints (ex: product pages, social media, and email). By making reviews highly accessible and prominent, you empower customers to make informed purchasing decisions. Consider prioritizing features like verified purchase labels to boost credibility.

Use experience research tools to understand how customers engage with your review system. Run usability tests to ensure that your feedback mechanism is intuitive and meets customer expectations. Gathering insights on how customers leave reviews, and how they interpret them, can help optimize the overall user experience, encouraging more high-quality feedback.

Make sure your best reviews and ratings are easy to find across all channels, whether on your website, mobile apps, or in physical stores. Integrate customer reviews into your digital marketing, retargeting ads, and even in-store displays to create a consistent, trust-driven customer journey.

Consumers show strong preference for brands sold in retail stores

64% of respondents are more likely to buy from a brand that is also sold in retail stores.

Direct-to-consumer brands—especially those digital-native newcomers—have had a massive impact on the retail landscape over the past decade. But consumers still value the credibility of brick and mortar. The youngest shoppers surveyed show appreciation for brands that have their own stores. However, that doesn’t mean brands should limit their visibility. Expanding across channels has its benefits, and consumers show a strong preference for brands that are also available through retailers (online or brick and mortar). The takeaway: brands that go more places are given an advantage.

An omnichannel approach that integrates physical stores, online marketplaces, and the brand’s own digital experiences provide consumers with more flexibility and purchasing options. Rather than limiting product availability to just a branded website, retailers should meet consumers where they prefer to shop, whether it’s through Amazon, Walmart, or physical retail locations.

Shoppers today are drawn to brands that offer convenience and accessibility, preferring to buy from those they can find in multiple locations rather than solely on a brand's own website. By being present on various platforms, retailers can meet consumers where they already shop, increasing visibility and potential sales. Brands that expand their presence across more channels are better positioned to gain a competitive advantage.

While a branded store can still be valuable—especially for younger demographics (40% of 18-34-year-olds)—it should complement, not replace, other channels. By ensuring that your products are easily accessible across multiple platforms, you’ll be more likely to capture different customer segments.

As consumer preferences shift toward a blended shopping experience, it’s crucial to ensure consistency across online and in-store experiences. Retailers should make it easy for customers to find products online, check in-store availability, and even facilitate cross-channel returns and exchanges.

To thrive in today’s retail environment, brands must understand how consumers engage across all touchpoints—digital, physical, owned, and third-party. Experience research platforms are essential for gathering insights into consumer behaviors and preferences, allowing brands to refine their strategies across channels. By collecting feedback from each interaction, whether online or in-store, retailers can create a seamless and consistent experience that builds customer loyalty and drives long-term growth.

Expand beyond owned channels

90% of shoppers prefer brands that can be found beyond their own website.

Limiting product availability to a single platform risks missing out on a significant portion of potential buyers. With 90% of shoppers preferring to purchase from brands available across multiple channels, retailers should prioritize partnerships with third-party marketplaces and explore physical store opportunities. Expanding into these channels not only broadens reach but also builds customer confidence.

To meet evolving consumer expectations, brands should adopt a comprehensive omnichannel strategy. Ensuring product availability on their own website, third-party marketplaces, social media platforms, and physical stores can help retailers capture the broadest customer base. By being present where shoppers prefer to engage, brands can increase visibility, trust, and ultimately, sales.

Retailers should diversify their sales channels to ensure they are capturing demand wherever their customers shop. In addition to their own websites, presence on online marketplaces like Amazon, social commerce on platforms like Instagram and TikTok, and physical retail stores are critical for building a seamless shopping experience and driving conversions across all touchpoints.

Prioritize product quality to drive retention

With product quality cited as the most important factor influencing repeat purchases (63%), brands must prioritize maintaining and improving the quality of their offerings. In a landscape where customer acquisition costs continue to rise, retaining loyal customers through superior product quality can significantly reduce churn and increase lifetime value. Executives should invest in quality control, testing, and product development to ensure high standards.

While price promotions can complement the product quality strategy, the focus should remain on consistently delivering high-quality products that meet or exceed customer expectations. Additionally, marketing efforts should emphasize the superior quality of products, as this will resonate with the majority of customers and strengthen brand loyalty.

To reinforce this approach, brands should leverage customer reviews and testimonials that highlight product quality, further building trust and credibility. Ongoing investments in product innovation and quality control will also be crucial, ensuring that offerings remain competitive and relevant in the market.

Furthermore, integrating customer feedback into product development will help brands identify and address any quality concerns quickly, fostering a continuous improvement cycle that keeps customers coming back.

To ensure product quality consistently meets customer expectations, leveraging real-time feedback is essential. Experience research platforms can help brands gather insights on product quality through tailored mobile templates designed for unboxings, first impressions upon delivery, and initial usage experiences. By capturing customer feedback at these critical moments, brands can quickly identify areas for improvement and highlight product strengths.

This immediate feedback loop not only helps brands maintain high quality but also provides valuable insights into how customers perceive their products in the crucial early stages of ownership, helping to reinforce retention and satisfaction.

Recognize and retain loyal shoppers

Are brands reciprocating the loyalty of their shoppers? Across all age groups, about half agree that brands and retailers are acknowledging their loyalty. Notably, the oldest shoppers show the least disagreement on this front.

Retailers should move beyond standard loyalty practices by focusing on personalized recognition and exclusive rewards to better acknowledge their frequent shoppers. While 56% of consumers report shopping frequently from the same brand, the 35-44 age group feels the least appreciated, signaling an opportunity for improvement. Brands should use customer insights to tailor rewards and promotions based on individual preferences, shopping behaviors, and engagement patterns.

By offering exclusive benefits such as early access to products, personalized discounts, and targeted communications, retailers can strengthen relationships with loyal customers. Additionally, consistent engagement with loyalty members through personalized touchpoints (ex: emails, app notifications, social media) will ensure a deeper emotional connection, driving increased retention and customer satisfaction across all age groups, especially among those who feel underappreciated.

An experience research platform that measures loyalty in an actionable way is crucial for understanding and enhancing these connections, enabling brands to refine strategies that deepen customer loyalty and satisfaction.

AI's role in retail experiences: bridging generational gaps in trust

So, what about AI—do shoppers buy the hype? Most do; 57% agree that AI will deliver a positive experience. But, the older the shopper, the lower the buy-in.

Retailers should leverage the enthusiasm younger shoppers have for AI by offering AI-driven personalized shopping experiences, such as tailored recommendations and automated customer service. At the same time, retailers must address the hesitancy among older customers by launching educational campaigns that highlight the reliability, ease of use, and benefits of AI in enhancing the shopping experience.

To cater to diverse preferences, a hybrid approach should be considered, offering both AI-powered and human interactions. This ensures that younger, tech-savvy shoppers can benefit from AI's efficiency, while older customers who prefer human touchpoints feel supported and comfortable.

Prioritize personalized offers to meet shopper expectations

Personalization, driven by AI, is now a shopper expectation, with personalized promotions and discounts being the most desired form. Testing the messaging and content of promotions is crucial to ensure they resonate with customers. Refining how offers are communicated across channels helps maximize their impact and relevance, leading to higher conversions.

To complement this strategy, integrating personalized product recommendations and optimizing delivery or pickup options can further enhance the customer experience. While personalizing search and filtering options is less critical, it can still improve the overall user experience for a smaller, more specific segment of shoppers.

By prioritizing personalized promotions first, retailers can meet the highest customer expectations and build a foundation for gradually enhancing other aspects of the shopping journey, ultimately boosting customer satisfaction and loyalty.