Inventory issues drive shoppers to competing retailers in US: Survey

Millennial consumers’ expectations are driving the retail agenda. While the industry often focuses on creating shiny new solutions, technology, and activations to appeal to Gen Z shoppers, millennials are wielding greater spending power as they advance in their careers and shop for their growing households and families, as per the AlixPartners 2024 Consumer Sentiment Index.

The survey also revealed how fashion consumers’ top shopping considerations differ from one retail subcategory to the next and found significant variances in purchase drivers.

French luxury house, Chanel resonates with consumers the most and ranked number 1 for all pillars: product, price, access, service and experience. The brand’s experiential initiatives hit the service experience sweet spot and reinforce quality and personalisation. Runners-up Louis Vuitton and Gucci scored well on white-glove service and personalisation.

In the footwear category, Nike remains the clear leader in the consumer sentiment index, with 2.5 times more respondents ranking it number 1. Hoka made the list due to strength among aging consumers.

In the young adult’s category, American Eagle (AEO) was ranked first by around 30 per cent of respondents, substantially ahead of other brands. Younger buyers value a quality experience and other opinions, including giving customers time and space to shop; communicating clearly about the brand; and scoring well in customer ratings/reviews.

Consumers across all demographics rank recycling programmes, buy now pay later (BNPL) offerings, social-media shopping and non-shopping experiences (like classes, styling sessions and customisations) as their least-important shopping consideration, with 40 per cent saying these services impact their decisions. Generationally, millennials see the most value in these services, while boomers see the least. Luxury and jewellery shoppers value these add-ons significantly more than other customers, stated the survey.

Consumers strongly value price consistency and transparency, with 85 per cent wanting to see the same prices online and in stores. Retailers must offer a cohesive omnichannel experience with consistent pricing and the products consumers expect. Today, only about 10 per cent of retailers’ online assortments are available in-store, while 82 per cent of consumers expect to find the same product across channels, revealed the survey.

Consistent fit/sizing (91 per cent), product/price alignment (90 per cent) and the best deal (90 per cent) ranked as department store shoppers’ top purchase considerations. This indicates investments in price-optimisation capabilities are necessary to prevent migration from department stores into the off-price sector. Survey respondents ranked Macy’s, Kohl’s and JCPenney as the top department store retailers.

While 80 per cent of consumers think it’s important for retailers to offer an attractive rewards programme, only 32 per cent say existing programmes make them feel like the brand understands them and 36 per cent say the programmes incentivise them to shop more often from the retailer.

“Consumers may be shopping digital channels first, but they are back in stores and incredibly frustrated when pricing is inconsistent or they can’t find in-store what they saw online—they are tired of doing the work,” said Sonia Lapinsky, partner and managing director and leader of Fashion Retail at AlixPartners.

“Retailers need to reallocate resources to what matters for consumers—nailing the seamless experience and getting the right product in the right place. It’s crucial for retailers to hit the mark this season, or consumers will take their dollars elsewhere. The Millennial generation largely entered adulthood during an economically challenging period and, as their incomes have steadily risen, so, too, have their expectations across all five major shopping pillars,” added Lapinsky.

Between June 28 and July 2, 2024, AlixPartners fielded an online consumer sentiment survey of more than 9,000 US-based consumers who had shopped at least one of nine selected retail subcategories within the prior six months (e-commerce, mass and club, luxury, jewellery, outdoor and active, department store, specialty, off price, or footwear). 

Fibre2Fashion News Desk (SG)