Next week Retail’s Big Show will convene in New York City from January 12th to 15th. The industry is coming off a mildly disappointing holiday season. The National Retail Federation (NRF) projected sales would be up 3.9 percent, but at least one post-holiday forecast showed sales only rose 2.3 percent. The only bright spots are in emerging areas, like online shopping and purchases on mobile devices and tablets, where double-digit increases have been the norm for years. Looking back to 2013 and ahead to 2014, there are a few areas for retailers to take note of consumer behavior.
Consumers were hard to read this season. Foot traffic data by Euclid showed a skittish shopping season, filled with hot and cold periods. The company, which monitors signals sent by smartphones looking for wifi networks, noticed traffic was up 8.6 percent from last year, a much higher increase than actual sales. That’s because more people entered a store and left within five minutes. Euclid itself noticed many spikes and dips in foot traffic, citing periods with heavy promotions and inclement weather as two forces affecting traffic. Retailers can only control one of those two things. The calendar was also not on their side this year, with almost every article citing the short distance between Thanksgiving and Christmas.
Luxury goods are an online holdout. Walker Sands surveyed one thousand consumers for its “2014 Future of Retail” study. Their results reveal that most consumers are willing to shop online, but only in key product categories. Only six percent would buy luxury goods online, for example, indicating that for big-ticket purchases, consumers like to experience the goods before they buy or enjoy the equally luxurious in-store experience.
They’re only following your brand for the coupons. All the retailers trying to engage their customers on social networks should be aware that for many of the people they reach, it’s purely mercenary. It’s all about the coupons for most of the people polled, with 78 percent citing promotions as the reason they followed a brand on Facebook, Twitter, or Pinterest. Still, not far behind is using social media for product news (65 percent) or customer support (24 percent).
Consumers are finding more goods to rent than ever. If they’re young, that is. The trend of renting dresses (Rent the Runway), cars (ZipCar), and beauty samples (BirchBox) continues, with 51 percent of people saying they would prefer to rent, not buy items in order to try them out or save money. Younger consumers are the most keen on the trend, with 37 percent of those 18-28 years old saying they had rented, not bought. As age went up, participation declined. Only 11 percent of those 46-60 and 60+ had rented items, and roughly a quarter of those in the 26-45 age range had rented items.
I’ll be covering the NRF show in the news and blog section next week, so check back for updates from the retail world.