Retailers looking to tech to optimize pricing and inventory to meet consumer demands
A new Oracle Retail consumer research study found that price will be paramount this holiday season as shoppers are increasingly worried about inflated costs and tighter budgets. In response, 77% of consumers already have or plan to, shop early to ensure they can get the items they want and have more time to shop for deals. Nearly 60% of shoppers said current economic factors will cause them to spend less overall and 71% said they would consider a store financing or payment plan to cover the costs of gifts. Ultimately, shoppers are ready to hit buy if the price is right, with 47% of people noting that cost will be the main factor in moving them from a browser to a buyer.
“Next to inventory availability, price is the leading factor in how and where consumers will shop this holiday season,” said Mike Webster, senior vice president and general manager of Oracle Retail. “For retailers still dealing with the constant loop of limited inventory supplies or surpluses, getting merchandise and pricing strategies right will be make or break when it comes to managing margins and customer expectations.”
The survey polled 8,107 global consumers across 11 different countries in late September 2022, including 1,000 people in the United States. The Untold Insights survey asked consumers about holiday shopping plans and their post-pandemic retail habits.
The price is right
Some 34% of people are worried they won’t have the money they would like to spend on holiday shopping due to rising commodity prices and 36% are concerned that the gifts they want to buy will be more expensive this year. As such, shoppers are committing extra time to finding the best deal and are considering payment plans to check items off their gift list.
- 71% of shoppers said they would consider a store financing or payment plan to pay for gifts over time (25% of people said they have never used one of these plans before)
- 77% said they will shop around for more deals and discounts
- 71% said they would wait for big sales moments and store holiday sales from their favorite retailers
- 75% said they would do more price comparisons online and in-stores
- 73% said they would look to shop at more discount stores (such as TJMaxx and ROSS)
Nearly three-quarters of people (71%) also plan to wait for big retail sales moments. While Black Friday still takes the crown with 47% of shoppers planning to participate, not far behind are Amazon Prime Days (43%) and after holiday sales (30%).
Making a list, checking it twice
Tired of staying in, shoppers are eager to give the gift of experiences this year. Top gifts consumers plan to buy more of this holiday season include:
- 34% Experiences with friends and family
- 30% Fashion apparel
- 29% Gift cards
- 29% Beauty/personal care products
- 28% Footwear
- 28% Electronics
- 26% Toys
- 20% Non-fungible tokens (NFTs) or digital collectables
Stores are back, will the inventory be there?
With restrictions largely lifted, people are heading back to stores to holiday shop, but expectations for inventory availability remain high.
- 43% of people plan to shop mostly in store and 23% in store and online
- 29% of people said out-of-stock items would constitute a bad experience
- 22% said they would simply go to another retailer if a product was not in stock
“Merchandise in the wrong place at the wrong time can be the biggest cost to a retailer,” added Webster. “We know that out-of-stock inventory compromises top line growth and customer satisfaction. Equally as important is its impact on margins. Retailers must be proactive in their placement of inventory as they consider size, style and color of the assortment to avoid massive store-to-store transfer costs.”
Home delivery (56%) is still by far the most popular method to collect items bought online, compared to curbside (21%) or in-store pick up (16%). This creates urgency for retailers to ensure gifts are delivered on time, while providing clear transparency along the way.
- 47% of people said fast delivery often determines who they will order from
- 11% of people expect same day delivery
- 40% 1-2 day delivery
- 35% 3-5 day delivery
- 25% fear that gifts won’t arrive on time
- 62% are willing to pay more for expedited/guaranteed delivery
- 61% would consider booking a standalone delivery/collection service (like a DoorDash) to ensure they get their gifts on time
“With consumers headed back to stores, retailers must create an endless aisle experience,” said Webster. “Whether this means an associate helping an in-store shopper find an item online and shipping it to their home or giving online shoppers an accurate view of product availability at their nearest physical location. To maintain loyalty, nearly every interaction needs to end with the consumer getting the product they want in time for the holidays. And that execution begins with order transparency.”
Influencers not that influential
Social media continues to play a larger role in how consumers discover new offers, products and brands. In 2022, social media jumped to the top spot (21%) in how consumers find the most compelling offers and products, followed by email at 19% (up from 10% in 2021) and in-store promotions at 15%.
Shoppers preferred social platforms include:
- 26% Facebook
- 25% Instagram (33% for GenZ)
- 15% YouTube
- 14% TikTok (22% for GenZ)
Despite the hype, less than 1% of consumers turn to the metaverse to discover new products. And despite the rise in influencer B2C marketing, only 12% of consumers noted that seeing their favorite influencers suggest a product as the reason for them to hit the buy.
Returns in, regifting out
More than half of consumers said they anticipate returning some gifts this year, with 30% saying they would return half to all of them.
- 48% of people prefer to take their returns to the store, with 29% choosing to mail returns to the retailer
- 54% of global consumers make their returns within a week, 24% return immediately, 14% return within a month, 8% of shoppers rarely make returns, often forgetting to make them at all
- Parents (33%) more likely to mail back their returns than shoppers without kids (24%)
- Men (32%) are more likely to make their returns immediately than women (26%)
“With many retailers beginning to charge for returns and over a quarter of shoppers already planning to make them, this holiday season could be end up as a detriment to customer loyalty,” noted Webster. “While a return fee makes economic sense, retailers are likely to meet resistance from buyers who will be annoyed by the added cost and less likely to use the return opportunity to browse and buy additional items.”
Source: Retail Dive