The report highlights the critical uncertainties retailers face as they prepare for the upcoming holiday season, emphasising the need for integrating predictive analytics with consumer insights to optimise pricing, promotions, and marketing strategies.

One of the report's significant insights is the misalignment between marketing and merchandising teams. Often operating in silos, these teams struggle to synchronise their strategies, leading to ineffective promotions and mismatched inventory levels. By sharing consumer insights on pre-season items, customer-valued products, and initial pricing expectations, both teams can better align their efforts for success. First Insight’s report suggests that by coupling VoC data with AI and predictive analytics, retailers can move from a reactive to a proactive stance.

“With rising inflation costs, retailers have much to worry about, especially whether the products they bought will be what consumers are willing to spend their money on,” said Greg Petro, chief executive officer, First Insight. “This makes it imperative for retailers to ensure their offerings align with consumer expectations.”

Retailers cited their top data and insight sources, the top three of which were either backward-looking or derived from third-party data. More than half (53 per cent) use previous seasons’ sales histories, 49 per cent use trend services and reports, and 42 per cent rely on customer comments and reviews from their websites.

The report also highlights the external pressures facing retailers, such as the impact of inflation on consumer spending and the competitive threat from online marketplaces, like TikTok Shop. With inflation cited as the number one external concern, retailers are wary of its potential to reduce consumer discretionary spending on gifts and other holiday-related purchases.

“Preparing for this upcoming holiday season presents a pivotal opportunity for retailers to rethink their strategies for future seasons,” added Petro. “By focusing on customer insights and integrating AI-driven predictive analytics, they can focus their sights on where they’re going, and not where they have been.”

First Insight’s findings are based upon a May 2024 survey executed through InsightSUITE, with responses from 104 US retail decision-makers. Responses were sorted and filtered based on role, title, company size, and retail sector. The analysis focused on feedback from merchandising, marketing, and consumer insights management at retailers and vertically integrated brands offering apparel, footwear, and home décor items. 

Fibre2Fashion News Desk (RR)