First Insight Highlights Key Retailer Concerns for Holiday 2024
First Insight, a leader in predictive analytics and Voice of Customer (VoC) solutions, has unveiled its latest report, “Retailers’ Blind Spot for Holiday 2024.” The report sheds light on the major uncertainties retailers face as they gear up for the upcoming holiday season, emphasizing the importance of integrating predictive analytics with consumer insights to enhance pricing, promotions, and marketing strategies.
Based on a May 2024 survey of U.S. retail decision-makers, the report reveals key concerns including promotional effectiveness, inventory management, and customer engagement. The primary issues identified are:
- Promotional Strategies: Retailers are uncertain if their promotional tactics will be proactive and strategic enough.
- Inventory Management: There is substantial concern over having the right amount of merchandise.
- Customer Alignment: Retailers are unsure if their product assortments will meet consumer expectations.
“With rising inflation, retailers face significant challenges, especially regarding whether their inventory will align 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 also notes that many retailers rely on historical data and third-party sources for insights. Over half (53%) use past sales data, 49% rely on trend reports, and 42% consider customer reviews and feedback.
External pressures, such as inflation and competition from online marketplaces like TikTok Shop, are also highlighted. Inflation is identified as a top concern, potentially diminishing consumer spending on discretionary items.
Key Findings from the Report:
- Inflation Impact: 81% of respondents believe rising costs for essentials will negatively affect spending on non-essential holiday items.
- Promotional Challenges: Retailers are struggling with the timing and depth of markdowns, essential for drawing in consumers while protecting margins.
- Customer Dynamics: Both acquiring new customers and retaining existing ones remain significant challenges.
Voice of Customer Insights
A major insight from the report is the misalignment between marketing and merchandising teams. Often working in isolation, these teams struggle to synchronize their strategies, leading to ineffective promotions and inventory mismatches. By sharing insights on pre-season items, customer-valued products, and initial pricing expectations, both teams can align their efforts more effectively. The report suggests that integrating VoC data with AI and predictive analytics can help retailers shift from a reactive to a proactive approach.
“Preparing for the upcoming holiday season is a critical moment for retailers to reassess their strategies for future seasons,” added Petro. “By focusing on customer insights and leveraging AI-driven predictive analytics, retailers can better anticipate and meet consumer needs.”
To access the full report, visit First Insight’s website.
Methodology
The findings are based on a May 2024 survey conducted via InsightSUITE, involving 104 U.S. retail decision-makers. Responses were analyzed by role, title, company size, and retail sector, focusing on feedback from merchandising, marketing, and consumer insights management teams within apparel, footwear, and home décor sectors. For more details, please contact First Insight.
