Omnichannel business models have evolved as a way to provide a unified customer experience in a world of diverse communication channels, like in-person, over the phone, online and mobile. As consumers expect more ability to learn and purchase online, the role of the physical branch location must adapt.
A good example that I heard of recently came from a radio interview with an executive from innovative beauty retailer bluemercury. She discussed how bluemercury stores go beyond selling beauty products to offer in-person services that can’t be obtained online. These services include facials, waxing, massage and instruction in applying makeup. The value add in the store visit is clear.
But what about a category like automobile insurance? More than a decade ago my firm investigated how over 2,000 consumers had recently shopped for, quoted and purchased auto insurance. Even then, a full third of consumers were using multiple channels. The most popular channel to gather information was online (66%), and the most popular channels for quoting were online and by phone. By comparison, in-person quoting and branch visits were used by less than 15% of consumers. The trend was towards increased phone and Internet and away from local office visits. Multi-channel shopping was common, and branch visits were losing relevancy.
The clear leaders in online shopping were GEICO and Progressive. Those same players have continued to gain market share since then. Toll-free and local office phone shopping found State Farm, Allstate, Progressive and GECIO as all highly competitive. In contrast, office visits were led by State Farm and Allstate, then Progressive.
While most of the consumers who shop do so thinking they can get a better rate, marketing messages were the specific trigger for 29% of shoppers. This included online marketing (14%), renewal notices (15%), direct mail (12%) and TV marketing (14%). New car purchases (11%) also triggered shopping.
Another interesting difference was between groups of shoppers. Casual Shoppers made up around 80% of consumers who felt in control of their shopping. They were already insured, fairly satisfied, and just wanted to see if they might get a better price. Casual Shoppers were much less likely to have only the legal minimum in coverage and less likely to switch carriers after shopping. By contrast, the 20% of consumers we called Motivated Shoppers might or might not have coverage, and a full 60% had switched carriers less than one year ago. While everyone likes a good price and value, from a selling perspective, the approach to Casual Shoppers should be different from the approach with Motivated Shoppers.
Today, some retail branches for insurance and banking occasionally offer seminars in money management, budgeting, retirement planning, and estate planning. And, there are typically more services available for high net worth or high value clients. But the focus is often simply on selling basic products that could be obtained online or over the phone. While insurance and financial services products can be complex and confusing, other products like term life insurance are relatively straightforward to purchase online. This presents a challenge to add value beyond the product basics for insurance and financial service brands that are committed to the physical store footprint. As we know, in an omnichannel world, simply having a branch isn’t enough.
Tags: Allstate, bluemercury, Case Study, Consumer Behavior, Customer Segments, Fashion and Beauty Marketing, Financial Marketing, Geico, Insurance Marketing, Market Research, Marketing Opportunities, Omnichannel, Online Retail, Online Shopping, Progressive, Retail, State Farm