Retail: senior executives do not know their customers well enough

A recent survey by US merchandising platform First Insight found out that there is a significant perception gap among consumers and senior retail executives. For instance, whereas the latter dismiss the impact pricing has on purchasing decisions, consumers regard it as quite important.

While 40 percent of consumers felt that low pricing ranked as most important, only 20 percent of senior retail executives agreed. Both groups named quality as the most important factor in purchase decisions though (roughly 50 percent of both sets of survey respondents).

“While everyone agrees that quality of products is the most important factor in purchase decisions right now, these data show consumers are more concerned with pricing than many senior decision makers in the retail industry suspect,” commented Greg Petro, CEO and founder of First Insight. “The impact of this disconnect will only continue to grow as prices rise due to tariffs. Retailer and brand decision makers need to understand consumers’ perceptions to ensure they are able to continually attract today’s consumers with the right price-value equation.”

The disconnect shows up also when it comes to the comparison of online and offline shopping: While 70 percent of senior retail executives believe that consumers make more purchases in-store than online, which is correct, it should be noted that the gap is closing. The consumers surveyed make about 60 percent of purchases in-store versus 40 percent online.

Senior retail executives got it wrong in terms of in-store discounts, promotions and coupons, which they ranked as almost last important when asked. However, they are among the top three most important factors driving consumers in-store to make purchases.

When it comes to shopping on mobile devices like smartphones, 78 percent of senior executives believe that consumers do this “occasionally” to “very frequently” (6 or more times a month), but only 47 percent of consumers reported shopping that often via mobile devices. However, the number of consumers who are making one or more purchases online per month is increasing. Compared to last December, the number of consumers who responded that they never shop using mobile devices dropped from 34 percent to 19 percent.

First Insight’s findings are based on three separate consumer surveys, which are based on targeted samples of 1,000 respondents each and were fielded in December of 2017 and in September and October of 2018.

Infographic: First Insight