First Insight, a leader in predictive analytics and Voice of Customer (VoC) solutions, has published its new report titled “Retailers’ Blind Spot for Holiday 2024.” This report sheds light on the key challenges retailers face as they gear up for the holiday season, underscoring the importance of integrating predictive analytics with consumer insights to refine pricing, promotions, and marketing strategies.
Based on a survey conducted in May 2024 among U.S. retail decision-makers, the report highlights significant concerns about promotional effectiveness, inventory management, and customer engagement. The primary issues identified include:
- Promotional Strategies: Retailers worry their promotional efforts might be reactive rather than strategically planned.
- Inventory Management: There is considerable concern over whether they have enough of the right merchandise.
- Customer Alignment: Retailers are uncertain if their product assortments will meet consumer expectations.
“With rising inflation costs, retailers face significant challenges, particularly concerning whether their inventory aligns with consumer spending habits,” said Greg Petro, CEO of First Insight. “It’s crucial for retailers to ensure their offerings meet consumer expectations.”
The report reveals that retailers predominantly rely on historical data and third-party sources for insights. Specifically, 53% use previous season sales data, 49% rely on trend services and reports, and 42% use customer feedback from their websites.
External pressures such as inflation and competition from online marketplaces, including TikTok Shop, are also highlighted. Inflation, in particular, is a major concern, with 81% of respondents indicating it could negatively affect consumer spending on discretionary items.
Key Findings from the Report:
- Inflation Impact: Rising prices for essentials like groceries and gas are expected to reduce consumer spending on discretionary items.
- Promotional Timing and Depth: Retailers are challenged by determining the optimal timing and depth of markdowns to attract consumers while maintaining profit margins.
- Customer Acquisition and Retention: Attracting new customers and retaining existing ones remain significant hurdles.
Voice of Customer Insights
The report points to a misalignment between marketing and merchandising teams, often due to operating in silos. This disconnect can lead to ineffective promotions and inventory mismatches. By sharing insights on pre-season items, customer-valued products, and initial pricing expectations, these teams can better coordinate their strategies. Combining VoC data with AI and predictive analytics can help retailers shift from a reactive to a proactive approach.
“Retailers have a crucial opportunity this holiday season to reassess their strategies for future success,” Petro added. “By leveraging customer insights and integrating AI-driven predictive analytics, they can focus on future goals rather than past performance.”
To access the full report, visit firstinsight.com.
Methodology
The findings are based on a survey conducted in May 2024 using InsightSUITE, involving 104 U.S. retail decision-makers. The analysis considered responses from merchandising, marketing, and consumer insights management professionals at retailers and vertically integrated brands in apparel, footwear, and home décor. Further details are available upon request.
