Investments

Heading Into Holiday: Are Retailers Aligned with Consumer Expectations?

The holiday season is upon us, and with it comes endless guides for retailers and consumers for getting the most out of the holidays. With sales projected to reach $730.7 billion this holiday season, despite fewer shopping days thanks to a late Thanksgiving, it’s fair to say that there is little room for missteps, particularly in terms of the products and items being sold by retailers. 

I have written about and amplified the subject of retailer missteps, which are pretty prevalent this year. Never has there been a time where retailers have been more under the microscope for the products and goods that they sell, and the methods in which they sell them. It will be interesting to see how retailers fare this year, particularly as our recent research has shown them to still be vastly out of step with consumers on everything from inclusion to pricing, convenience, and even mobile purchasing expectations. 

You can check out our full findings here, but below I have highlighted the top 5 mind shifts retail executives should make as they ramp up for the holidays and 2020.

1)   Apologies for inappropriate items aren’t enough for consumers. You don’t have to look far to find big brands that have launched poorly planned products this year. But while retailer and brands approach recovery with a “forgive and forget” attitude, we’ve found consumers are slow to do either. A huge 92 percent of the senior retail executives we asked felt that consumers would continue to buy from their company even if they created and offered a controversial and offensive product, if they pulled it from the shelves quickly and issued a public apology. However, only 27 percent of consumers responded that they wouldn’t mind and would continue shopping at that retailer. Further, 19 percent of consumers said they would stop shopping at that retailer or brand forever, versus the five percent predicted by senior retail leaders.

2)   Retail leaders still don’t “get” how consumers are defining inclusivity. From cultural inclusivity, to extended sizing, to diversity in the workplace, retailers continue to get it wrong. For example, while cultural inclusivity, which includes modest styles, hijabs and head coverings, was ranked the least important diversity factor impacting shopping behavior by both groups, it was more important to consumers (46 percent) than to senior retail leaders (38 percent). Further, even though only 61 percent of consumers felt extended sizing was important, 82 percent of senior retail leaders said the same. Similarly, only 44 percent of consumers felt brand influencers representing diverse viewpoints were important, versus 77 percent of senior retail leaders. This could reflect the influencer fatigue and expectation of authenticity I wrote about in my recent article.

3)   Retail leaders are overvaluing the importance of mobile shopping platforms for consumers. Believe it or not, consumers are not making as many purchases on mobile devices as retailers assume. According to our research, 75 percent of senior retail leaders believe consumers are making purchases on mobile devices more than six times a month. However, only 42 percent of consumers say the same. We also found earlier this year that consumers spend more in-store than online. Retailers should not overlook the importance of store environments this holiday. Winning retailers are optimizing their store footprint and enabling shoppers to move effortlessly between their online and in-store channels to create competitive advantages with experiences, ultimately growing sales.

4)   Retailers stubbornly still think convenience is as important as low price. In the “age of convenience,” many retailers are putting muscle behind new technologies that simplify the shopping experience. However, they must be careful not to lose sight of quality items at fair prices. Last year we asked retail leaders to rank pricing against convenience and other factors and have seen little movement in the misperception. While quality remained the most important factor for both senior retail leaders (48 percent) and consumers (51 percent), a greater percentage of consumer respondents (40 percent) ranked low price of a product as important, compared to 23 percent of senior retail leaders. Of note, 23 percent of senior retail leaders ranked convenience as important, with only seven percent of consumers ranking it as important.

5)   More consumers feel retail prices are increasing in-store and online than retail leaders. Retailers and brands that adjust their price strategy can optimize revenues and profitability. Understanding the customer, and picking the winning products and pricing them right in the first place is one way to achieve this. According to our research, fifty percent of consumers surveyed believe prices of products online are increasing, compared to 38 percent of senior retailers who answered the same. Similarly, 60 percent of consumers feel that in-store prices were increasing, compared to only 35 percent of senior retail leaders.

These issues give us pause, particularly with other operational holiday headaches like shortages, backlogs, shipping wars and returns looming. But the silver bullet that can squash any concerns regarding consumer expectations is simple. Listen to the voice of the customer. Once retailers understand how their customers view the world, and their expectations for products, pricing, and purchase experience, they can more easily predict and avoid missteps and align their offerings to maximize sales.

Show More

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close