Consumer behavior has been rapidly evolving, and in light of this year’s Covid crisis, purchasing patterns have been trending even more heavily toward digital.
While the continued growth of e-commerce should come as a shock to no one given this season’s record-breaking online holiday sales, new research from First Insight shows that senior retail executives aren’t as attuned to shoppers’ developing needs as they should be. The retail product decision platform surveyed both brand leaders and consumers, and found glaring misalignments between the widespread desire to buy online and companies’ efforts to bolster their digital offerings.
This holiday season, the majority (59 percent) of survey respondents plan to patronize web-based retailers in search of gifts for their loved ones, and likely, themselves. But only about one-third (35 percent) of decision-makers said they believed shoppers would rely on e-commerce for gifting—despite the surge in Covid cases currently ravaging the nation’s brick-and-mortar businesses.
Only two-fifths of consumers plan to shop in physical stores this season, whether due to fears of infection or local store shutdowns. But the majority (59 percent) of retail leadership surveyed said they anticipate foot traffic at boutiques and shopping hubs. A shockingly small contingent of execs, at 16 percent, said they believe shoppers will exclusively surf the web for apparel, while nearly one-third of consumers said they plan to do just that. And just 11 percent believe footwear shoppers will only purchase new kicks online, while 29 percent of shoe-lovers said e-commerce will be their primary channel.
“It’s clear from our data that the consumer has changed forever, but the industry doesn’t understand how much they’ve changed,” First Insight CEO Greg Petro said in a statement. “While the industry has always trailed consumers, and has been very good at being responsive and reactive, it’s clear that consumers love to shop online.”
Recent Adobe Analytics data backs up Petro’s assertion, revealing that shoppers spent a record-shattering $10.8 billion online by the end of Cyber Monday last week. With a year-over-year spending increase of more than 15 percent, Nov. 30 became the most fruitful shopping day in U.S. history, besting 2019’s $9.4 billion record.
Petro says it’s “critical that retailers and brands begin to anticipate these shifts now,” or risk being caught flat-footed. In addition to acknowledging that online represents a preferred channel for purchasing, he added, they must also do a better job of tapping into insights about the types of products consumers are interested in buying.
Brand heads revealed themselves to be demonstrably out of touch in that arena, according to First Insight’s survey. Most retail executives told First Insight that they thought shoppers would go for luxury products (97 percent), but almost two-fifths of prospective buyers said they had no intention to shell out for pricey designer wares over the holidays.
By Petro’s estimation, that miscalculation and others could prove damning for an industry that has been hobbled by supply-chain disruptions and constrained spending for the better part of a year.
“The industry must stop responding and reacting to consumer behavior, and start anticipating it,” he said.